THE JAMESTOWN
BOND FUNDS
No-Load Funds
INSTITUTIONAL SHARES
PROSPECTUS
JULY 31, 1997
Investment Advisor
Lowe, Brockenbrough & Tattersall Strategic Advisors, Inc.
Richmond, Virginia
<PAGE>
THE JAMESTOWN BOND FUNDS
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
Countrywide Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
LEGAL COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt, III
OFFICERS
Fred T. Tattersall, President
Craig D. Truitt, Vice President
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Funds. This Prospectus does not constitute an offer by the Funds to sell
shares in any State to any person to whom it is unlawful for the Funds to make
such offer in such State.
<PAGE>
PROSPECTUS
July 31, 1997
THE JAMESTOWN BOND FUNDS
INSTITUTIONAL SHARES
No-Load Funds
===============================================================================
The investment objective of THE JAMESTOWN BOND FUND (the "Bond Fund") is to
maximize total return, consisting of current income and capital appreciation
(both realized and unrealized), consistent with the preservation of capital
through active management of investment grade fixed income securities.
The investment objective of THE JAMESTOWN SHORT TERM BOND FUND (the "Short Term
Fund") is identical to that of the Bond Fund, with the distinction that the
Short Term Fund intends to achieve this objective by investing in a portfolio of
investment grade fixed income securities having a shorter average duration.
The Jamestown Bond Fund and The Jamestown Short Term Bond Fund are designed
primarily for institutional investors who wish to take advantage of the
professional investment management expertise of Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc., which serves as investment advisor to the Funds.
The Funds offer two classes of shares: Service Group Shares, sold subject to a
12b-1 fee up to .15% of average daily net assets, and Institutional Shares, sold
without a 12b-1 fee. Each Service Group and Institutional Share of the Fund
represents identical interests in the Fund's investment portfolio and has the
same rights, except that (i) Service Group Shares bear the expenses of
distribution fees, which will cause Service Group Shares to have a higher
expense ratio and to pay lower dividends than Institutional Shares; (ii) certain
class specific expenses will be borne solely by the class to which such expenses
are attributable; and (iii) each class has exclusive voting rights with respect
to matters affecting only that class.
INVESTMENT ADVISOR
LOWE, BROCKENBROUGH & TATTERSALL STRATEGIC ADVISORS, INC.
RICHMOND, VIRGINIA
The Jamestown Bond Fund and the Jamestown Short Term Bond Fund (the "Funds") are
NO-LOAD, diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company. This Prospectus provides you with the
basic information you should know before investing in the Funds. You should read
it and keep it for future reference. While there is no assurance that the Funds
will achieve their investment objectives, they endeavor to do so by following
the investment policies described in this Prospectus. Service Group Shares are
offered in a separate prospectus and additional information about Service Group
Shares may be obtained by calling 1-800-443-4249.
A Statement of Additional Information, dated July 31, 1997 containing additional
information about the Funds, has been filed with the Securities and Exchange
Commission and is incorporated by reference in this Prospectus in its entirety.
The Funds' address is P.O. Box 5354, Cincinnati, Ohio 45201-5354, and their
telephone number is 1-800-443-4249. A copy of the Statement of Additional
Information may be obtained at no charge by calling or writing the Funds.
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
===============================================================================
Prospectus Summary..................................................... 3
Synopsis of Costs and Expenses......................................... 4
Financial Highlights................................................... 5
Investment Objectives, Investment Policies and Risk Considerations..... 7
How to Purchase Shares................................................. 12
How to Redeem Shares................................................... 13
How Net Asset Value is Determined...................................... 15
Management of the Funds................................................ 15
Dividends, Distributions, Taxes and Other Information.................. 17
Application............................................................ 21
<PAGE>
PROSPECTUS SUMMARY
===============================================================================
THE FUNDS. The Jamestown Bond Fund (the "Bond Fund") and the Jamestown Short
Term Bond Fund (the "Short Term Fund") are NO-LOAD, diversified, open-end series
of the Williamsburg Investment Trust, a registered management investment company
commonly known as a "mutual fund." Each represents a separate mutual fund with
its own objectives and policies. An investor may elect one or both of the Funds
to meet individual investment objectives, and may switch from one Fund to the
other without charge when a shareholder's investment objectives or plans change.
While there is no assurance that the Funds will achieve their investment
objectives, they each endeavor to do so by following the investment policies
described in this Prospectus. The Funds are primarily designed for tax exempt
institutional investors such as pension and profit-sharing plans, endowments,
foundations, and employee benefit trusts. Corporations and individual investors
may invest in either Fund, although it should be noted that investment decisions
of the Funds will not be influenced by any federal tax considerations, other
than those considerations which apply to the Funds themselves.
INVESTMENT OBJECTIVES. The Bond Fund and the Short Term Fund are governed by
virtually identical investment objectives and policies, WITH THE EXCEPTION of
the average duration range of the individual Funds. Each Fund seeks to maximize
total return, consisting of current income and capital appreciation (both
realized and unrealized), consistent with the preservation of capital through
active management of investment grade fixed income securities. For a more
detailed explanation of the definition of "investment grade" securities, see
"Investment Objectives, Investment Policies and Risk Considerations."
INVESTMENT APPROACH. The Advisor's philosophy in managing fixed income
portfolios is to emphasize a disciplined balance between sector selection and
moderate portfolio duration shifts to maximize total return. Duration is an
important concept in the Advisor's fixed income management philosophy and, in
the Advisor's opinion, provides a better measure of interest rate sensitivity
than maturity for many fixed income securities. Each Fund intends to invest only
in investment grade securities. Due to their controlled duration and quality
standards, the Funds expect to exhibit less volatility than would mutual funds
with longer average maturities and lower quality portfolios.
INVESTMENT ADVISOR. Lowe, Brockenbrough & Tattersall Strategic Advisors, Inc.
(the "Advisor") serves as investment advisor to each of the Funds. For its
services, the Advisor receives compensation of 0.375% of the average daily net
assets of each Fund. (See "Management of the Funds.")
PURCHASE OF SHARES. Institutional Shares are offered "No-Load," which means they
may be purchased directly from the Funds without the imposition of any sales or
12b-1 charges.
The minimum initial purchase for the Bond Fund is $500,000.
The minimum initial purchase for the Short Term Fund is $100,000.
Subsequent investments in both Funds must be $1,000 or more. Shares may be
purchased by individuals or organizations and may be appropriate for use in Tax
Sheltered Retirement Plans. (See "How to Purchase Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions from either
Fund. Shares may be redeemed at any time in which the Funds are open for
business at the net asset value next determined after receipt of a redemption
request by the Funds. (See "How to Redeem Shares.")
DIVIDENDS AND DISTRIBUTIONS.
Net investment income of the Funds is distributed quarterly. Net capital gains,
if any, are distributed annually. Shareholders may elect to receive dividends
and capital gain distributions in cash or the dividends and capital gain
distributions may be reinvested in additional Fund shares. (See "Dividends,
Distributions, Taxes and Other Information.")
MANAGEMENT. The Funds are series of the Williamsburg Investment Trust (the
"Trust"), the Board of Trustees of which is responsible for overall management
of the Trust and the Funds. The Trust has employed Countrywide Fund Services,
Inc. (the "Administrator") to provide administration, accounting and transfer
agent services. (See "Management of the Funds.")
<PAGE>
SYNOPSIS OF COSTS AND EXPENSES
===============================================================================
THE JAMESTOWN BOND FUND
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES: .................... None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of net assets)
Investment Advisory Fees.............................. 0.375%
Administrator's Fees.................................. 0.075%
Other Expenses........................................ 0.080%
-----------
Total Fund Operating Expenses......................... 0.53%
-----------
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether or
not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$ 5 $ 17 $ 30 $ 66
THE JAMESTOWN SHORT TERM BOND FUND
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES: ..................... None
ANNUAL FUND OPERATING EXPENSES:
(As a percentage of net assets)
Investment Advisory Fees (after waivers)............... 0.00%
Administrator's Fees................................... 0.25%
Other Expenses (after expense reimbursements).......... 0.25%
-----------
Total Fund Operating Expenses.......................... 0.50%
-----------
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether or
not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$ 5 $ 16 $ 28 $ 63
The purpose of the foregoing tables is to assist investors in the Funds in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Funds" for more information about the fees
and costs of operating the Funds. The Annual Fund Operating Expenses shown above
are based upon actual operating history for the fiscal year ended March 31,
1997. Absent the fee waivers and expense reimbursements by the Advisor, the
Short Term Fund's investment advisory fees would have been 0.375% of average
daily net assets, other expenses would have been 0.32% of average net assets and
total fund operating expenses would have been 0.94% of average daily net assets.
THE EXAMPLES SHOWN SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR LESS THAN THOSE SHOWN.
The footnotes to the Financial Highlights table contain information concerning a
decrease in the Bond Fund's expense ratio as a result of a directed brokerage
arrangement.
<PAGE>
FINANCIAL HIGHLIGHTS
===============================================================================
The following audited financial information with respect to Institutional Shares
of the Fund has been audited by Tait, Weller & Baker, independent accountants,
whose report covering the fiscal year ended March 31, 1997 is contained in the
Statement of Additional Information. This information should be read in
conjunction with the Funds' latest audited annual financial statements and notes
thereto, which are also contained in the Statement of Additional Information, a
copy of which may be obtained at no charge by calling the Funds.
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years Ended March 31, Ended
March 31,
1997 1996 1995 1994 1993 1992 1991(a)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 10.39 $ 9.97 $ 10.15 $ 10.82 $ 10.42 $ 9.97 $10.00
------- --------- ------- ------- --------- ------- --------
Income from investment operations:
Net investment income........................ 0.68 0.70 0.62 0.55 0.64 0.54 0.20
Net realized and unrealized gains
(losses) on investments................... ( 0.12) 0.41 ( 0.18) ( 0.30) 0.55 0.48 ( 0.03 )
-------- -------- ------- ------- --------- ------- --------
Total from investment operations............... 0.56 1.11 0.44 0.25 1.19 1.02 0.17
-------- -------- ------- ------- --------- ------- --------
Less distributions:
Dividends from net investment income......... ( 0.69 ) ( 0.69) ( 0.62) ( 0.55) ( 0.64) ( 0.54) ( 0.20 )
Distributions from net realized gains........ -- -- -- ( 0.19) ( 0.15) ( 0.03) --
Distributions in excess of net realized gains -- -- -- ( 0.18 ) -- -- --
-------- -------- ------- ------- --------- ------- --------
Total distributions............................ ( 0.69 ) ( 0.69) ( 0.62) ( 0.92) ( 0.79) ( 0.57) ( 0.20 )
-------- -------- ------- ------- --------- ------- --------
Net asset value at end of period............... $ 10.26 $ 10.39 $ 9.97 $ 10.15 $ 10.82 $ 10.42 $ 9.97
======== ======== ======= ======= ========= ======= ========
Total return................................... 5.52% 11.23% 4.56% 2.12% 11.69% 10.33% 5.70% (c)
======== ======== ======= ======= ========= ======= ========
Net assets at end of period (000's)............ $76,499 $74,774 $72,029 $64,029 $55,718 $29,727 $ 794
======== ======== ======= ======= ========= ======= ========
Ratio of expenses to average net assets (b) ... 0.53% 0.56% 0.53% 0.60% 0.59% 0.60% 0.90% (c)
Ratio of net investment income to
average net assets......................... 6.48% 6.54% 6.28% 5.03% 6.09% 6.67% 7.07% (c)
Portfolio turnover rate........................ 207% 268% 381% 381% 454% 484% 54%
<FN>
(a) Represents the period from the commencement of operations (December 13,
1990) through March 31, 1991.
(b) For the years ended March 31, 1997 and 1996, the ratio of expenses to
average net assets was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement. For periods prior to
March 31, 1996, the ratio was determined based on net expenses after expense
reimbursements through the directed brokerage arrangement. Absent such expense
reimbursements, the ratio of expenses to average net assets would have been
0.57% for the year ended March 31, 1995. Absent investment advisory fees
waived by the Advisor, the ratio of expenses to average net assets would have
been 0.80% and 3.08%(c) for the periods ended March 31, 1992 and 1991.
(c) Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years Ended March 31, Ended
March 31,
1997 1996 1995 1994 1993 1992(a)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period..... $ 9.72 $ 9.64 $ 9.82 $ 10.07 $ 9.93 $ 10.00
---------- ---------- --------- --------- --------- ----------
Income from investment operations:
Net investment income................... 0.58 0.62 0.60 0.51 0.50 0.09
Net realized and unrealized gains (losses)
on investments........................ ( 0.11) 0.08 ( 0.17 ) ( 0.23 ) 0.13 ( 0.07 )
---------- ---------- --------- --------- --------- ----------
Total from investment operations........... 0.47 0.70 0.43 0.28 0.63 0.02
---------- ---------- --------- --------- --------- ----------
Less distributions:
Dividends from net investment income.... ( 0.58) ( 0.62) ( 0.61 ) ( 0.51 ) ( 0.49 ) ( 0.09 )
Distributions from net realized gains... -- -- -- ( 0.02 ) -- --
---------- ---------- --------- --------- --------- ----------
Total distributions........................ ( 0.58) ( 0.62) ( 0.61 ) ( 0.53 ) ( 0.49 ) ( 0.09 )
---------- ---------- --------- --------- --------- ----------
Net asset value at end of period........... $ 9.61 $ 9.72 $ 9.64 $ 9.82 $ 10.07 $ 9.93
========== ========== ========= ========= ========= ==========
Total return............................... 5.01% 7.38% 4.53% 2.76% 6.40% 0.99% (c)
========== ========== ========= ========= ========= ==========
Net assets at end of period (000's)........ $ 9,924 $ 9,426 $ 14,122 $ 18,715 $15,580 $ 5,320
========== ========== ========= ========= ========= ==========
Ratio of expenses to average
net assets (b)........................ 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% (c)
Ratio of net investment income
to average net assets................. 5.96% 6.27% 6.04% 5.22% 5.24% 4.86% (c)
Portfolio turnover rate.................... 62% 157% 144% 324% 289% 97%
<FN>
(a) Represents the period from the commencement of operations (January 21,
1992) through March 31, 1992.
(b) Absent investment advisory fees waived and expenses reimbursed by the
Advisor, the ratios of expenses to average net assets would have been 0.94%,
0.85%, 0.85%, 0.81%, 0.82% and 0.81%(c) for the periods ended March 31, 1997,
1996, 1995, 1994, 1993 and 1992, respectively.
(c) Annualized.
</FN>
</TABLE>
Further information about the performance of the Funds is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Funds.
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND RISK CONSIDERATIONS
===============================================================================
The investment objective of each Fund is to maximize total return, consisting of
current income and capital appreciation, both realized and unrealized, through
active management of a portfolio of investment grade fixed income securities.
Any investment involves risk, and there can be no assurance that the Funds will
achieve their investment objectives. The investment objective of each Fund may
not be altered without the prior approval of a majority (as defined by the
Investment Company Act of 1940) of the Fund's shares.
The Advisor's philosophy in the management of fixed income securities utilizes a
disciplined balance between sector selection and moderate portfolio duration
shifts to maximize total return. The Advisor's determination of optimal duration
for each Fund is based on economic indicators, inflation trends, credit demands,
monetary policy and global influences as well as psychological and technical
factors. The Funds endeavor to invest in securities and market sectors which the
Advisor believes are undervalued by the marketplace. The selection of
undervalued bonds by the Advisor is based on, among other things, historical
yield relationships, credit risk, market volatility and absolute levels of
interest rates, as well as supply and demand factors.
The Funds are designed primarily to allow institutional investors to take
advantage of the professional investment management expertise of Lowe,
Brockenbrough & Tattersall, Inc. Each Fund will be managed in a manner that
closely resembles that of other bond portfolios of similar maturity and duration
managed by the Advisor. The Advisor uses a wide variety of securities and
techniques in managing fixed income portfolios. As the fixed income markets
evolve, the Advisor may invest in other types of securities than those
specifically identified in this Prospectus if the Advisor views these
investments to be consistent with the overall investment objectives and policies
of the Funds. The securities and techniques the Advisor currently expects to
utilize are described below.
DURATION. Duration is an important concept in the Advisor's fixed income
management philosophy. "Duration" and "maturity" are different concepts and
should not be substituted for one another for purposes of understanding the
investment philosophy of either Fund. The Advisor believes that for most fixed
income securities "duration" provides a better measure of interest rate
sensitivity than maturity. Whereas maturity takes into account only the final
principal payments to determine the risk of a particular bond, duration weights
all potential cash flows (principal, interest and reinvestment income) on an
expected present value basis, to determine the "effective life" of the security.
The Advisor intends to limit the portfolio duration of the Bond Fund to a 2 year
minimum and a 6 year maximum. The Advisor intends to maintain a portfolio
duration for the Short Term Fund of less than 3 years. In addition, the Advisor
intends to limit the duration of any one single security of the Short Term Fund
to a maximum duration of 5 years. The precise point of each Fund's duration
within these ranges will depend on the Advisor's view of the market. For the
purposes of the Funds, the duration calculation used is Macaulay duration
adjusted for option features (such as call features or prepayment options).
Adjusting for option features requires assumptions with respect to the
probability of that option being exercised. These assumptions will be determined
by the Advisor based on then current market conditions.
The Funds expect the average maturity of their portfolios to be longer than the
average duration. How much longer will depend upon, among other factors, the
composition of coupons (higher coupons imply shorter duration), as well as
overall interest rate levels (higher interest rates generally will result in
shorter duration relative to maturity). It should be noted that for some
securities the standard duration calculation does not accurately reflect
interest rate sensitivity. For example, mortgage pass-through securities,
Collateralized Mortgage Obligations and Asset Backed Securities require
estimates of principal prepayments which are critical in determining interest
rate sensitivity. Floating rate securities, because of the interest rate
adjustment feature, are not appropriate for the standard duration calculation.
In these and other similar situations, the Advisor will use more sophisticated
techniques to determine interest rate sensitivity of securities of the Funds.
<PAGE>
INVESTMENT GRADE SECURITIES. Each Fund intends to limit its investment purchases
to investment grade securities. The Funds define investment grade securities as
those securities which, in the Advisor's opinion, have the characteristics
described by any of the nationally recognized statistical rating organizations
("NRSROs"), Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Group ("S&P"), Fitch Investors Service, Inc. ("Fitch") or Duff & Phelps
("D&P"), in their four highest rating grades. For S&P, Fitch and D&P those
ratings are AAA, AA, A and BBB. For Moody's those ratings are Aaa, Aa, A and
Baa. For a description of each rating grade, see the Statement of Additional
Information.
Each Fund invests exclusively in those securities rated investment grade by one
or more of the NRSROs or, if not rated, are considered by the Advisor to have
essentially the same characteristics and quality as securities having such
ratings. There may also be instances where the Advisor purchases securities
which are rated investment grade by one NRSRO and which are not rated or rated
below investment grade by other NRSROs, and such securities would be eligible
for purchase by the Funds. Issues rated within the fourth highest grade (those
rated lower than A) are considered speculative in certain respects and changes
in economic conditions or other circumstances are more likely to lead to a
weakened capacity to pay principal and interest than is the case with higher
grade securities. The final determination of quality and value will remain with
the Advisor. Although the Advisor utilizes the ratings of various credit rating
services as one factor in establishing creditworthiness, it relies primarily
upon it own analysis of factors establishing creditworthiness. For as long as
the Funds hold a fixed income issue, the Advisor monitors the issuer's credit
standing. In the event a security's rating is reduced below a Fund's minimum
requirements, the Fund will sell the security, subject to market conditions and
the Advisor's assessment of the most opportune time for sale. Although lower
rated securities will generally provide higher yields than higher rated
securities of similar maturities, they are subject to a greater degree of market
fluctuation.
U.S. GOVERNMENT SECURITIES. U.S. Government Securities include direct
obligations of the U.S. Treasury, securities issued or guaranteed as to interest
and principal by agencies or instrumentalities of the U.S. Government, or any of
the foregoing subject to repurchase agreements (See "Repurchase Agreements.")
While obligations of some U.S. Government sponsored entities are supported by
the full faith and credit of the U.S. Government, several are supported by the
right of the issuer to borrow from the U.S. Government, and still others are
supported only by the credit of the issuer itself. The guarantee of the U.S.
Government does not extend to the yield or value of the U.S. Government
Securities held by the Funds or to either Fund's shares. See the Statement of
Additional Information for a more detailed description.
MORTGAGE PASS-THROUGH CERTIFICATES. Obligations of the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC") include direct
pass-through certificates representing undivided ownership interests in pools of
mortgages. Such certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the issuer. In the case of
securities issued by GNMA, the payment of principal and interest would be backed
by the full faith and credit of the U.S. Government. Mortgage pass-through
certificates issued by FNMA or FHLMC would be guaranteed as to payment of
principal and interest by the credit of the issuing U.S. Government agency.
Securities issued by other non-governmental entities (such as commercial banks
or mortgage bankers) may offer credit enhancement such as guarantees, insurance,
or letters of credit. Mortgage pass-through certificates are subject to more
rapid prepayment than their stated maturity date would indicate; their rate of
prepayment tends to accelerate during periods of declining interest rates or
increased property transfers and, as a result, the proceeds from such
prepayments may be reinvested in instruments which have lower yields. To the
extent such securities were purchased at a premium, such prepayments could
result in capital losses. The issuer of a pass-through mortgage certificate does
not guarantee premiums or market value of its issue.
COLLATERALIZED MORTGAGE OBLIGATIONS. The Funds intend to invest in
collateralized mortgage obligations ("CMOs") which are generally backed by
mortgage pass-through securities or whole mortgage loans. CMOs are usually
structured into classes of varying maturities and principal payment priorities.
The prepayment sensitivity of each class may or may not resemble that of the
CMOs' collateral depending on the maturity and structure of that class. CMOs pay
interest and principal (including prepayments) monthly, quarterly or
semiannually. Most CMOs are AAA rated, reflecting the credit quality of the
underlying collateral; however, some classes carry greater price risk than that
of their underlying collateral. The Advisor will invest in CMO classes only if
their characteristics and interest rate sensitivity fit the investment
objectives and policies of the individual Fund.
<PAGE>
OTHER MORTGAGE RELATED SECURITIES. In addition to the mortgage pass-through
securities and the CMOs mentioned above, the Funds may also invest in other
mortgage derivative products if the Advisor views them to be consistent with the
overall policies and objectives of the Funds. Current offerings include
"principal only" (PO) and "interest only" (IO) Stripped Mortgage Backed
Securities ("SMBS"). POs and IOs are created when a mortgage pass-through
certificate is separated into two securities - one security representing a claim
to principal distributions and the other representing a claim to the
corresponding interest payments. As prepayments on the underlying mortgage loans
rise (typically when interest rates fall), the PO security holders receive their
principal sooner than expected, which serves to increase the POs' yield. The IO
security holders receive interest payments only on the outstanding principal
amount of the underlying mortgage loans. Therefore, if prepayments on the
notional principal of the IO rise, the IOs' price will fall. As POs generally
benefit from declining interest rates and IOs generally benefit from rising
interest rates, these securities can provide an effective way to stabilize
portfolio value.
SMBS are much more sensitive to prepayment fluctuations than are regular
mortgage-backed securities and therefore involve more risk. Due to the deep
discounted prices of SMBS, any mismatch in actual versus anticipated prepayments
of principal will significantly increase or decrease the yield to maturity. In
general, changes in interest rate levels will have the greatest effect on
prepayments. Sufficiently high prepayment rates could result in purchasers of
IOs not recovering the full amount of their initial investment. The Funds will
not invest more than 10% of their total assets in SMBS.
The Advisor expects that governmental, government related and private entities
may create other mortgage related securities offering mortgage pass-through and
mortgage collateralized instruments in addition to those described herein. As
new types of mortgage related securities are developed and offered to the
investment community, the Advisor will, consistent with the particular Fund's
investment objectives, policies and quality standards, consider making
investments in such new types of mortgage related securities.
ASSET BACKED SECURITIES. Other Asset Backed Securities have been offered to
investors backed by loans such as automobile loans, home equity loans, credit
card receivables, marine loans, recreational vehicle loans and manufactured
housing loans. Typically, Asset Backed Securities represent undivided fractional
interests in a fund whose assets consist of a pool of loans and security
interests in the collateral securing the loans. Payments of principal and
interest on Asset Backed Securities are passed through monthly to certificate
holders. In some cases Asset Backed Securities are divided into senior and
subordinated classes so as to enhance the quality of the senior class.
Underlying loans are subject to prepayment, which may reduce the overall return
to certificate holders. If the subordinated classes are exhausted and the full
amounts due on underlying loans are not received because of unanticipated costs,
depreciation, damage or loss of the collateral securing the contracts, or other
factors, certificate holders may experience delays in payment or losses on Asset
Backed Securities. The Funds may invest in other Asset Backed Securities that
may be developed in the future.
ZERO COUPON AND ORIGINAL ISSUE DISCOUNT ("OID") BONDS. Some securities may be
offered without coupons or with very low coupons. These bonds will typically be
more interest rate sensitive than a comparable maturity current coupon bond. The
majority of zero coupon bonds have been created when a qualified U.S. Government
Security is exchanged for a series of "Strips" through the Federal Reserve Bank.
Strips have been created from, among others, U.S. Treasury, Resolution Trust
Corporation and Financing Corporation securities. A number of U.S. Government
Securities have also been repackaged by broker-dealers or commercial banks into
trusts which issue zero coupon receipts such as U.S. Treasury Receipts ("TRs")
or Treasury Investment Growth Receipts ("TIGRs"). Zero coupon and original issue
discount bonds generate income under generally accepted accounting principles,
but do not generate cash flow, resulting in the possibility that the Funds may
be required to sell portfolio securities to make distributions as required under
Subchapter M of the Internal Revenue Code.
<PAGE>
CORPORATE BONDS. The Funds' investments in corporate debt securities will be
based on credit analysis and value determination by the Advisor. The Advisor's
selection of bonds or industries within the corporate bond sector is determined
by, among other factors, historical yield relationships between bonds or
industries, the current and anticipated credit of the borrower, and call
features, as well as supply and demand factors.
VARIABLE AND FLOATING RATE SECURITIES. The Funds may invest in variable or
floating rate securities which adjust the interest rate paid at periodic
intervals based on an interest rate index. Typically floating rate securities
use as their benchmark an index such as the 1, 3 or 6 month LIBOR, 3, 6 or 12
month Treasury bills, or the Federal Funds rate. Resets of the rates can occur
at predetermined intervals or whenever changes in the benchmark index occur.
MONEY MARKET INSTRUMENTS. Money market instruments will typically represent a
portion of each Fund's portfolio, as funds awaiting investment, to accumulate
cash for anticipated purchases of portfolio securities and to provide for
shareholder redemptions and operational expenses of the Funds. Money market
instruments mature in thirteen months or less from the date of purchase and
include U.S. Government Securities (defined above) and corporate debt securities
(including those subject to repurchase agreements), bankers' acceptances and
certificates of deposit of domestic branches of U.S. banks, and commercial paper
(including variable amount demand master notes). At the time of purchase, money
market instruments will have a short-term rating in the highest category from
any NRSRO or, if not so rated, issued by a corporation having an outstanding
unsecured debt issue rated in the three highest categories of any NRSRO or, if
not so rated, of equivalent quality in the Advisor's opinion. See the Statement
of Additional Information for a further description of money market instruments.
INVESTMENT COMPANIES. The Bond Fund may invest in the securities of open-end and
closed-end investment companies which are generally authorized to invest in
securities eligible for purchase by the Fund. To the extent the Fund does so,
Fund shareholders would indirectly pay a portion of the operating costs of the
underlying investment companies. These costs include management, brokerage,
shareholder servicing and other operational expenses. Indirectly, then,
shareholders may pay higher operational costs than if they owned the underlying
investment companies directly. In addition, shares of closed-end investment
companies frequently trade at a discount from their net asset values. This
characteristic of shares of a closed-end investment company is a risk separate
and distinct from the risk that its net asset value will decrease.
The Bond Fund does not presently intend to invest more than 10% of its total
assets in securities of other investment companies. In addition, the Fund will
not invest more than 5% of its total assets in securities of any single
investment company, nor will it purchase more than 3% of the outstanding voting
securities of any investment company.
FACTORS TO CONSIDER. Neither Fund is intended to be a complete investment
program and there can be no assurance that the Funds will achieve their
investment objectives. The fixed income securities in which the Funds will
invest are subject to fluctuation in value. Such fluctuations may be based on
movements in interest rates or on changes in the creditworthiness of the
issuers, which may result from adverse business and economic developments or
proposed corporate transactions, such as a leveraged buy-out or recapitalization
of the issuer. The value of the Funds' fixed income securities will generally
vary inversely with the direction of prevailing interest rate movements.
Consequently, should interest rates increase or the creditworthiness of an
issuer deteriorate, the value of the Funds' fixed income securities would
decrease in value, which would have a depressing influence on the Funds' net
asset values. The Funds may borrow using their assets as collateral, but only
under certain limited conditions. Borrowing, if done, would tend to exaggerate
the effects of market fluctuations on a Fund's net asset value until repaid.
(See "Borrowing.")
<PAGE>
SECURITIES LENDING. Each Fund may lend up to 33% of its portfolio securities to
broker-dealers or other institutional investors. Since there could be a delay in
the recovery of loaned securities or even a loss of rights in collateral
supplied should the borrower fail financially, loans will not be made unless, in
the judgment of the Advisor, the consideration to be earned from such loans
would justify the risk. Collateral will be maintained in excess of 100% of the
value of the underlying securities, determined by marking to market daily those
securities involved in the lending program. It is expected that the Funds will
use the cash portions of loan collateral to invest in short-term
income-producing securities. These practices may be amended from time to time as
regulatory provisions permit. Securities lending for purposes of discussion in
this Prospectus should not be confused with "Borrowing" below.
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 15% of its total assets to
meet redemption requests which might otherwise require untimely disposition of
portfolio holdings. To the extent the Funds borrow for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the particular
Fund's assets declines, the Fund would be forced to liquidate portfolio
securities when it is disadvantageous to do so. The Funds would incur interest
and other transaction costs in connection with such borrowing. A Fund will not
make any additional investments while its outstanding borrowings exceed 5% of
the current value of its total assets.
PORTFOLIO TURNOVER. Portfolio turnover will not be a limiting factor when the
Advisor deems changes appropriate. While portfolio turnover is difficult to
predict in an active fixed income portfolio, it is expected that annual
portfolio turnover will vary between 100% and 500% with respect to each Fund.
Market conditions may dictate, however, a higher rate of turnover in a
particular year. The degree of portfolio turnover affects the brokerage costs of
the Funds and may have an impact on the amount of taxable distributions to
shareholders. The portfolio turnover of the Bond Fund and of the Short Term Fund
for the fiscal year ended March 31, 1997 was 207% and 62%, respectively.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities or other
high-grade debt securities subject to repurchase agreements. A repurchase
agreement transaction occurs when the Funds acquire a security and
simultaneously resell it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an agreed
upon future date. The repurchase price exceeds the purchase price by an amount
which reflects an agreed upon market interest rate earned by the Funds effective
for the period of time during which the repurchase agreement is in effect.
Delivery pursuant to the resale typically will occur within one to five days of
the purchase. For purposes of the Investment Company Act of 1940 (the "1940
Act"), a repurchase agreement is considered to be a loan collateralized by the
securities subject to the repurchase agreement. Neither Fund will enter into a
repurchase agreement which will cause more than 10% of its assets to be invested
in repurchase agreements which extend beyond seven days and other illiquid
securities.
INVESTMENT LIMITATIONS. For the purpose of limiting the Funds' exposure to risk,
each Fund has adopted certain limitations which, together with its investment
objective, are considered fundamental policies which may not be changed without
shareholder approval. Each Fund will not: (1) issue senior securities, borrow
money or pledge its assets, except that it may borrow from banks as a temporary
measure (a) for extraordinary or emergency purposes, in amounts not exceeding 5%
of either Fund's total assets, or (b) in order to meet redemption requests which
might otherwise require untimely disposition of portfolio securities, in amounts
not exceeding 15% of either Fund's total assets, and may pledge its assets to
secure all such borrowings; (2) invest more than 10% of a Fund's assets in other
illiquid securities, including repurchase agreements maturing in over seven
days, and other securities for which there is no established market or for which
market quotations are not readily available; (3) write, acquire or sell puts,
calls or combinations thereof, or purchase or sell commodities, commodities
contracts, futures contracts or related options; and (4) invest more than 5% of
its total assets in the securities of any one issuer. Other fundamental
investment limitations are listed in the Statement of Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
===============================================================================
There are NO SALES COMMISSIONS CHARGED TO INVESTORS. Assistance in opening
accounts may be obtained from the Administrator by calling 1-800-443-4249, or by
writing to the Funds at the address shown below for regular mail orders.
Assistance is also available through any broker-dealer authorized to sell shares
of the Funds. Such broker-dealer may charge you a fee for its services. Payment
for shares purchased may be made through your account at the broker-dealer
processing your application and order to purchase. Your investment will purchase
shares at a Fund's net asset value next determined after your order is received
by the Funds in proper order as indicated herein. Shares of the Funds purchased
prior to July 31, 1997 are Institutional Shares.
The minimum initial investment in the Bond Fund is $500,000. The
minimum initial investment in the Short Term Fund is $100,000.
The Funds may, in the Advisor's sole discretion, accept certain accounts with
less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable in
U.S. dollars. All orders received by the Administrator, whether by mail, bank
wire or facsimile order from a qualified broker-dealer, prior to 4:00 p.m.,
Eastern time, will purchase shares at the net asset value next determined on
that business day. If your order is not received by 4:00 p.m. Eastern time, your
order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Funds are required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Funds within 60 days.
Investors should be aware that the Funds' account application contains
provisions in favor of the Funds, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating to
the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the
Funds or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, and mail it to:
The Jamestown Bond Funds
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish a
new account or add to an existing account by wire, please call the Funds, at
1-800-443-4249, before wiring funds, to advise the Funds of the investment, the
dollar amount and the account registration. This will ensure prompt and accurate
handling of your investment. Please have your bank use the following wiring
instructions to purchase by wire:
<PAGE>
Star Bank, N.A.
Cincinnati Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For either: The Jamestown Bond Fund or
The Jamestown Short Term Bond Fund
(Shareholder name and account number)
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit. Once your wire is
sent you should, as soon as possible thereafter, complete and mail your Account
Application to the Funds as described under "Regular Mail Orders," above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $1,000) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional investments
by bank wire, please call the Funds at 1-800-443-4249 to alert the Funds that
your wire is to be sent. Follow the wire instructions above to send your wire.
When calling for any reason, please have your account number ready, if known.
Mail orders should include, when possible, the "Invest by Mail" stub which is
attached to your Fund confirmation statement. Otherwise, be sure to identify
your account in your letter.
EXCHANGE PRIVILEGE. You may use proceeds from the redemption of shares of either
Fund to purchase Institutional Shares of the other Fund offering shares for sale
in your state of residence. There is no charge for this exchange privilege.
Before making an exchange, you should read the portion of the Prospectus
relating to the Fund into which the shares are to be exchanged. The shares of
the Fund to be acquired will be purchased at the net asset value next determined
after acceptance of the exchange request in writing by the Administrator. The
exchange of shares of one Fund for shares of the other Fund is treated, for
federal income tax purposes, as a sale on which you may realize taxable gain or
loss. To prevent the abuse of the exchange privilege to the disadvantage of
other shareholders, each Fund reserves the right to terminate or modify the
exchange offer upon 60 days' notice to shareholders.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The minimum purchase requirement is not
applicable to accounts of Trustees, officers or employees of the Funds or
certain parties related thereto. The minimum initial investment for such
accounts is $5,000. See the Statement of Additional Information for further
details.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
HOW TO REDEEM SHARES
===============================================================================
Shares of the Funds may be redeemed on each day that the Funds are open for
business by sending a written request to the Funds. The Funds are open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of your
shares depending on the market value of the Funds' portfolio securities. All
redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem your
shares through a broker-dealer who may charge you a fee for its services.
<PAGE>
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $100,000 (due to redemptions, exchanges or
transfers, and not due to market action) upon 60 days' written notice. If the
shareholder brings his account value up to $100,000 or more during the notice
period, the account will not be redeemed. Redemptions from retirement plans may
be subject to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds, at 1-800-443-4249, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to The Jamestown Bond
Funds, P.O. Box 5354, Cincinnati, Ohio 45201-5354. Your request for redemption
must include:
1) your letter of instruction or a stock assignment specifying the Bond Fund
or the Short Term Fund, the account number, and the number of shares or
dollar amount to be redeemed. This request must be signed by all registered
shareholders in the exact names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension
or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days after
receipt of your redemption request. However, a Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. Such delay (which may take up to 15 days) may
be reduced or avoided if the purchase is made by certified check, government
check or wire transfer. In such cases, the net asset value next determined after
receipt of the request for redemption will be used in processing the redemption
and your redemption proceeds will be mailed to you upon clearance of your check
to purchase shares. The Funds may suspend redemption privileges or postpone the
date of payment (i) during any period that the Exchange is closed, or trading on
the Exchange is restricted as determined by the Securities and Exchange
Commission (the "Commission"), (ii) during any period when an emergency exists
as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Funds to dispose of securities owned by them, or
to fairly determine the value of their assets, and (iii) for such other periods
as the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Funds
may not be redeemed by wire on days in which your bank is not open for business.
Redemption proceeds will only be sent to the bank account or person named in
your Account Application currently on file with the Funds. You can change your
redemption instructions anytime you wish by filing a letter including your new
redemption instructions with the Funds. (See "Signature Guarantees.")
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your account.
Signature guarantees are required for (1) change of registration requests, and
(2) requests to establish or change redemption services other than through your
initial account application. Signature guarantees are acceptable from a member
bank of the Federal Reserve System, a savings and loan institution, credit
union, registered broker-dealer or a member firm of a U.S. Stock Exchange, and
must appear on the written request for redemption, or change of registration.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
===============================================================================
The net asset value of each Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily. See
the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale price,
if available, otherwise, at the last quoted bid price. Securities traded on a
national exchange will be valued based upon the closing price on the valuation
date on the principal exchange where the security is traded. It is expected that
fixed income securities will ordinarily be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service. The prices provided by the pricing service are determined with
consideration given to institutional bid and last sale prices and take into
account securities prices, yields, maturities, call features, ratings,
institutional trading in similar groups of securities and developments related
to specific securities. The Trustees will satisfy themselves that such pricing
services consider all appropriate factors relevant to the value of such
securities in determining their fair value. Securities and other assets for
which no quotations are readily available will be valued in good faith at fair
value using methods determined by the Board of Trustees.
MANAGEMENT OF THE FUNDS
===============================================================================
The Funds are diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Funds under
the laws of Massachusetts governing the responsibilities of trustees of business
trusts. The Statement of Additional Information identifies the Trustees and
officers of the Trust and the Funds and provides information about them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Lowe,
Brockenbrough & Tattersall Strategic Advisors, Inc. (the "Advisor") provides the
Funds with a continuous program of supervision of each Fund's assets, including
the composition of its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to Investment Advisory Agreements with the Trust. The
Advisor is also responsible for the selection of broker-dealers through which
the Funds execute portfolio transactions, subject to brokerage policies
established by the Trustees, and provides certain executive personnel to the
Funds.
The Advisor is a Virginia corporation controlled by Fred T. Tattersall. Prior to
February 28, 1997, the investment advisor to each Fund was Lowe, Brockenbrough &
Tattersall, Inc. ("LB&T"), of which Mr. Tattersall and Austin Brockenbrough III
were the controlling shareholders. On February 28, 1997, LB&T was reorganized by
means of a corporate restructuring into two separate legal entities: LB&T, owned
by Mr. Brockenbrough, and the Advisor, owned by Mr. Tattersall. The Advisor
manages the fixed-income accounts (including the Funds) formerly managed by
LB&T. In addition to acting as Advisor to the Funds, the Advisor provides
investment advice to corporations, trusts, pension and profit sharing plans,
other business and institutional accounts and individuals. The Advisor also
serves as sub-advisor to The Jamestown Balanced Fund (another series of the
Trust), the subject of a separate prospectus.
Both the Bond Fund and the Short Term Fund are managed on a day to day basis by
a committee comprised of the Advisor's fixed income portfolio management
professionals, with each portfolio professional responsible for designated
specific sectors of the fixed income market. Prior to February 28, 1997, the
Funds were managed by the same group of professionals, but such professionals
were employed by LB&T.
<PAGE>
Compensation of the Advisor is at the annual rate of 0.375% of each Fund's
average daily net assets. For the fiscal year ended March 31, 1997, the Advisor
and LB&T received $289,094 in investment advisory fees from the Bond Fund, which
represented 0.375% of the Bond Fund's average daily net assets. For the fiscal
year ended March 31, 1997, the Advisor and LB&T each waived its entire
investment advisory fee from the Short Term Fund and reimbursed the Fund for
$6,864 of other operating expenses.
The Advisor currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of Institutional Shares
of the Short Term Fund to 0.50% per annum of its average daily net assets.
However, there is no assurance that any voluntary fee waivers will continue in
the current or future fiscal years, and expenses of Institutional Shares of the
Short Term Fund may therefore exceed 0.50% of its average daily net assets.
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
ADMINISTRATOR. The Funds have retained Countrywide Fund Services, Inc. (the
"Administrator"), P.O. Box 5354, Cincinnati, Ohio 45201, to provide
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services. The Administrator is a wholly-owned indirect
subsidiary of Countrywide Credit Industries, Inc., a New York Stock Exchange
listed company principally engaged in the business of residential mortgage
lending. The Administrator supplies executive, administrative and regulatory
services, supervises the preparation of tax returns, and coordinates the
preparation of reports to shareholders and reports to and filings with the
Securities and Exchange Commission and state securities authorities. In
addition, the Administrator calculates daily net asset value per share and
maintains such books and records as are necessary to enable it to perform its
duties.
Each Fund pays the Administrator a base fee for these services at the annual
rate of 0.075% of the average value of its daily net assets up to $200 million
and 0.05% of such assets in excess of $200 million (subject to a minimum fee of
$2,000 per month with respect to each Fund) plus a surcharge of $1,000 per
month. The Administrator also charges the Funds for certain costs involved with
the daily valuation of investment securities and is reimbursed for out-of-pocket
expenses.
CUSTODIAN. The Custodian of the Funds' assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street, Cincinnati,
Ohio 45202. The Advisor, Administrator or interested persons thereof may have
banking relationships with the Custodian.
OTHER FUND COSTS. The Funds pay all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and expenses,
if any, of the Trustees and officers who are not "affiliated persons" of the
Advisor, fees of the Funds' Custodian, interest expense, taxes, brokerage fees
and commissions, fees and expenses of the Funds' shareholder servicing
operations, fees and expenses of qualifying and registering the Funds' shares
under federal and state securities laws, expenses of preparing, printing and
distributing prospectuses and reports to existing shareholders, auditing and
legal expenses, insurance expenses, association dues, and the expense of
shareholders' meetings and proxy solicitations. The Funds are also liable for
any nonrecurring expenses that may arise such as litigation to which the Funds
may be a party. The Funds may be obligated to indemnify the Trustees and
officers with respect to such litigation. All expenses of a Fund are accrued
daily on the books of such Fund at a rate which, to the best of its belief, is
equal to the actual expenses expected to be incurred by the Fund in accordance
with generally accepted accounting practices. For the fiscal year ended March
31, 1997, the expense ratio of the Bond Fund was 0.53% of its average daily net
assets and the expense ratio of the Short Term Fund was 0.50% of its average
daily net assets after expense reimbursements.
BROKERAGE. The Funds have adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the Advisor
and/or the Funds. In all cases, the primary consideration for selection of
broker-dealers through which to execute brokerage transactions will be to obtain
the most favorable price and execution for the Funds. Research services obtained
through the Funds' brokerage transactions may be used by the Advisor for its
other clients; conversely, the Funds may benefit from research services obtained
through the brokerage transactions of the Advisor's other clients. The Statement
of Additional Information contains more information about the management and
brokerage practices of the Funds. It is anticipated that most securities
transactions of the Funds will be handled on a principal, rather than agency,
basis. Fixed income securities are normally traded on a net basis (without
commission) through broker-dealers and banks acting for their own account. Such
firms attempt to profit from buying at the bid price and selling at the higher
asked price of the market, the difference being referred to as the spread.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND
OTHER INFORMATION
===============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Funds in general
and, particularly, with respect to dividends and distributions and other
matters. Shareholders should be aware that dividends from the Funds which are
derived in whole or in part from interest on U.S. Government Securities may not
be taxable for state income tax purposes. Other state income tax implications
are not covered, nor is this discussion exhaustive on the subject of federal
income taxation. Consequently, investors should seek qualified tax advice.
Each Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Funds but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed to
them. The Funds intend to declare dividends quarterly, payable in March, June,
September and December, on a date selected by the Trustees. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. Each Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Funds at the end of each year. The Funds intend to
withhold 30% on taxable dividends and any other payments that are subject to
such withholding and are neither citizens nor residents of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the payment
of any dividends or the realization of any gains for either Fund. Current
practice of the Funds, subject to the discretion of the Board of Trustees, is
for declaration and payment of income dividends during the last week of each
calendar quarter. All dividends and capital gains distributions are reinvested
in additional shares of the Funds unless the shareholder requests in writing to
receive dividends and/or capital gains distributions in cash. That request must
be received by the Funds prior to the record date to be effective as to the next
dividend. Tax consequences to shareholders of dividends and distributions are
the same if received in cash or if received in additional shares of the Funds.
TAX STATUS OF THE FUNDS. If a Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to qualify.
For a more detailed discussion of the tax status of the Funds, see "Additional
Tax Information" in the Statement of Additional Information.
PRINCIPAL SHAREHOLDERS. Rockingham Health Care, Inc., 235 Cantrell Avenue,
Harrisonburg, Virginia, owned of record 54.4% of the Short Term Fund's
outstanding shares as of May 23, 1997 and may be deemed to control the Fund.
<PAGE>
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven funds,
or series, to be issued. Shares of all eleven series have currently been issued,
in addition to the Bond Fund and the Short Term Fund described in this
Prospectus: shares of the FBP Contrarian Balanced Fund and the FBP Contrarian
Equity Fund, which are managed by Flippin, Bruce & Porter, Inc. of Lynchburg,
Virginia; shares of The Government Street Equity Fund, The Government Street
Bond Fund and The Alabama Tax Free Bond Fund, which are managed by T. Leavell &
Associates, Inc. of Mobile, Alabama; and shares of The Jamestown Balanced Fund,
The Jamestown Equity Fund, The Jamestown International Equity Fund and The
Jamestown Tax Exempt Virginia Fund, which are managed by Lowe, Brockenbrough &
Tattersall, Inc. The Trustees are permitted to create additional series at any
time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust or
a particular Fund of the Trust, holders of the outstanding shares of the Fund
being liquidated shall be entitled to receive, in proportion to the number of
shares of the Fund held by them, the excess of that Fund's assets over its
liabilities. Each outstanding share is entitled to one vote for each full share
and a fractional vote for each fractional share, on all matters which concern
the Trust as a whole. On any matter submitted to a vote of shareholders, all
shares of the Trust then issued and outstanding and entitled to vote,
irrespective of the Fund, shall be voted in the aggregate and not by Fund,
except (i) when required by the 1940 Act, shares shall be voted by individual
Fund; and (ii) when the matter does not affect any interest of a particular
Fund, then only shareholders of the affected Fund or Funds shall be entitled to
vote thereon. Examples of matters which affect only a particular Fund could be a
proposed change in the fundamental investment objectives or policies of that
Fund or a proposed change in the investment advisory agreement for a particular
Fund. Each class of shares of the Funds shall vote separately on matters
relating to its own distribution arrangements. The shares of the Funds have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect all of the Trustees if
they so choose.
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by shareholders
holding not less than two-thirds of the outstanding shares of the Trust and
filed with the Trust's custodian. In case a vacancy or an anticipated vacancy
shall for any reason exist, the vacancy shall be filled by the affirmative vote
of a majority of the remaining Trustees, subject to the provisions of Section
16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more information.
Shareholder inquiries may be made in writing, addressed to the Funds at the
address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional Information
for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time each Fund may advertise its
total return. Each Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate future
performance. Total return and yield are computed separately for Service Group
and Institutional Shares. The yield of Institutional Shares is expected to be
higher than the yield of Service Group Shares due to the distribution fees
imposed on Service Group Shares.
<PAGE>
The "total return" of a Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of all
dividends and distributions, includes all recurring fees that are charged to all
shareholder accounts and deducts all nonrecurring charges at the end of each
period. If a Fund has been operating less than 1, 5 or 10 years, the time period
during which the Fund has been operating is substituted.
In addition, the Funds may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same or
different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of a Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses of
the Funds all recurring fees that are charged to all shareholder accounts and
any nonrecurring charges for the period stated.
<PAGE>
THE JAMESTOWN BOND FUNDS
INSTITUTIONAL SHARES
Send completed application to:
THE JAMESTOWN BOND FUNDS
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
===============================================================================
ACCOUNT REGISTRATION
o INDIVIDUAL ________________________________________________________________
(First Name)(Middle Initial) (Last Name) (Birthdate) (SS#)
o JOINT* ________________________________________________________________
(First Name)(Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship
unless otherwise indicated.
o UGMA/UTMA ________________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial)(Last Name) (State) Transfers to
Minors Act
____________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o For Corporations, Partnerships, Trusts,
Retirements Plans and Third Party IRAs
________________________________________________________________
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and the
date of the Trust instrument.
________________________________________________________________
(Taxpayer Identification Number)
===============================================================================
ADDRESS
Street or P.O. Box_____________________________________________________________
City________________________________________State____________Zip_______________
Telephone_____________________________U.S. Citizen___Resident Alien__
Non Resident (Country of Residence)______
===============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name___________________________________________________________________________
Street or P.O. Box_____________________________________________________________
City_________________________________________State____________Zip______________
===============================================================================
INITIAL INVESTMENT (Minimum initial investment: $500,000 for Bond Fund; $100,000
for Short Term Bond Fund)
o Enclosed is a check payable to the applicable Fund for $____________________
(Please indicate Fund below)
o Jamestown Bond Fund (82) o Jamestown Short Term Bond Fund (83)
o Funds were wired to Star Bank on____________________________________in the
amount of $_____________________
By Mail:You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire:You may purchase shares by wire. PRIOR TO SENDING THE WIRE, PLEASE
CONTACT THE FUNDS AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER IS
PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Funds. The wire should
be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE JAMESTOWN BOND FUND OR THE JAMESTOWN SHORT TERM BOND FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
<PAGE>
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
===============================================================================
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS Please retain a copy of this document for your files. Any
modification of the information contained in this section will require an
Amendment to this Application Form.
o New Application o Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner_______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
JAMESTOWN BOND FUNDS for the Registered Owner and to execute and deliver any
instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
_______________________________ __________________ _________________________
_______________________________ __________________ _________________________
_______________________________ __________________ _________________________
THE JAMESTOWN BOND FUNDS, or any agent of the Funds may, without inquiry, rely
upon the instruction of any person(s) purporting to be an authorized person
named above, or in any Amendment received by the Funds or their agent. The Funds
and their Agent shall not be liable for any claims, expenses or losses resulting
from having acted upon any instruction reasonably believed to be genuine.
===============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
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)
Name as it appears on the account______________________________________________
Commercial bank account #______________________________________________________
ABA Routing #__________________________________________________________________
City, State and Zip in which bank is located___________________________________
===============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Funds and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release Countrywide Fund
Services, Inc., Williamsburg Investment Trust, Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc., and their respective officers, employees, agents and
affiliates from any and all liability in the performance of the acts instructed
herein provided that such entities have exercised due care to determine that the
instructions are genuine. I certify under the penalties of perjury that (1) the
Social Security Number or Tax Identification Number shown is correct and (2) I
am not subject to backup withholding. The certifications in this paragraph are
required from all non-exempt persons to prevent backup withholding of 31% of all
taxable distributions and gross redemption proceeds under the federal income tax
law. The Internal Revenue Service does not require your consent to any provision
of this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) o.
_____________________________________ ______________________________________
APPLICANT DATE JOINT APPLICANT DATE
_____________________________________ ______________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
THE JAMESTOWN
BOND FUNDS
No-Load Funds
SERVICE GROUP SHARES
PROSPECTUS
JULY 31, 1997
Investment Advisor
Lowe, Brockenbrough & Tattersall Strategic Advisors, Inc.
Richmond, Virginia
<PAGE>
THE JAMESTOWN BOND FUNDS
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
Countrywide Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
LEGAL COUNSEL
Sullivan & Worcester, LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt, III
OFFICERS
Fred T. Tattersall, President
Craig D. Truitt, Vice President
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offering contained in this Prospectus, and if given or made, such
information or representations must not be relied upon as being authorized by
the Funds. This Prospectus does not constitute an offer by the Funds to sell
shares in any State to any person to whom it is unlawful for the Funds to make
such offer in such State.
<PAGE>
PROSPECTUS
July 31, 1997
THE JAMESTOWN BOND FUNDS
SERVICE GROUP SHARES
No-Load Funds
===============================================================================
The investment objective of The Jamestown Bond Fund (the "Bond Fund") is to
maximize total return, consisting of current income and capital appreciation
(both realized and unrealized), consistent with the preservation of capital
through active management of investment grade fixed income securities.
The investment objective of The Jamestown Short Term Bond Fund (the "Short Term
Fund") is identical to that of the Bond Fund, with the distinction that the
Short Term Fund intends to achieve this objective by investing in a portfolio of
investment grade fixed income securities having a shorter average duration.
The Jamestown Bond Fund and The Jamestown Short Term Bond Fund are designed
primarily for institutional investors who wish to take advantage of the
professional investment management expertise of Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc., which serves as investment advisor to the Funds.
The Funds offer two classes of shares: Service Group Shares, sold subject to a
12b-1 fee up to .15% of average daily net assets, and Institutional Shares, sold
without a 12b-1 fee. Each Service Group and Institutional Share of the Fund
represents identical interests in the Fund's investment portfolio and has the
same rights, except that (i) Service Group Shares bear the expenses of
distribution fees, which will cause Service Group Shares to have a higher
expense ratio and to pay lower dividends than Institutional Shares; (ii) certain
class specific expenses will be borne solely by the class to which such expenses
are attributable; and (iii) each class has exclusive voting rights with respect
to matters affecting only that class.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall Strategic Advisors, Inc.
Richmond, Virginia
The Jamestown Bond Fund and the Jamestown Short Term Bond Fund (the "Funds") are
NO-LOAD, diversified, open-end series of the Williamsburg Investment Trust, a
registered management investment company. This Prospectus provides you with the
basic information you should know before investing in the Funds. You should read
it and keep it for future reference. While there is no assurance that the Funds
will achieve their investment objectives, they endeavor to do so by following
the investment policies described in this Prospectus. Institutional Shares are
offered in a separate prospectus and additional information about Institutional
Shares may be obtained by calling 1-800-443-4249.
A Statement of Additional Information, dated July 31, 1997 containing additional
information about the Funds, has been filed with the Securities and Exchange
Commission and is incorporated by reference in this Prospectus in its entirety.
The Funds' address is P.O. Box 5354, Cincinnati, Ohio 45201-5354, and their
telephone number is 1-800-443-4249. A copy of the Statement of Additional
Information may be obtained at no charge by calling or writing the Funds.
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
===============================================================================
Prospectus Summary....................................................... 3
Synopsis of Costs and Expenses........................................... 4
Financial Highlights..................................................... 5
Investment Objectives, Investment Policies and Risk Considerations....... 7
How to Purchase Shares................................................... 12
How to Redeem Shares..................................................... 13
How Net Asset Value is Determined........................................ 15
Management of the Funds.................................................. 15
Plan of Distribution..................................................... 17
Dividends, Distributions, Taxes and Other Information.................... 17
Application.............................................................. 21
<PAGE>
PROSPECTUS SUMMARY
===============================================================================
THE FUNDS. The Jamestown Bond Fund (the "Bond Fund") and the Jamestown Short
Term Bond Fund (the "Short Term Fund") are NO-LOAD, diversified, open-end series
of the Williamsburg Investment Trust, a registered management investment company
commonly known as a "mutual fund." Each represents a separate mutual fund with
its own objectives and policies. An investor may elect one or both of the Funds
to meet individual investment objectives, and may switch from one Fund to the
other without charge when a shareholder's investment objectives or plans change.
While there is no assurance that the Funds will achieve their investment
objectives, they each endeavor to do so by following the investment policies
described in this Prospectus. The Funds are primarily designed for tax exempt
institutional investors such as pension and profit-sharing plans, endowments,
foundations, and employee benefit trusts. Corporations and individual investors
may invest in either Fund, although it should be noted that investment decisions
of the Funds will not be influenced by any federal tax considerations, other
than those considerations which apply to the Funds themselves.
INVESTMENT OBJECTIVES. The Bond Fund and the Short Term Fund are governed by
virtually identical investment objectives and policies, WITH THE EXCEPTION of
the average duration range of the individual Funds. Each Fund seeks to maximize
total return, consisting of current income and capital appreciation (both
realized and unrealized), consistent with the preservation of capital through
active management of investment grade fixed income securities. For a more
detailed explanation of the definition of "investment grade" securities, see
"Investment Objectives, Investment Policies and Risk Considerations."
INVESTMENT APPROACH. The Advisor's philosophy in managing fixed income
portfolios is to emphasize a disciplined balance between sector selection and
moderate portfolio duration shifts to maximize total return. Duration is an
important concept in the Advisor's fixed income management philosophy and, in
the Advisor's opinion, provides a better measure of interest rate sensitivity
than maturity for many fixed income securities. Each Fund intends to invest only
in investment grade securities. Due to their controlled duration and quality
standards, the Funds expect to exhibit less volatility than would mutual funds
with longer average maturities and lower quality portfolios.
INVESTMENT ADVISOR. Lowe, Brockenbrough & Tattersall Strategic Advisors,
Inc. (the "Advisor") serves as investment advisor to each of the Funds. For its
services, the Advisor receives compensation of 0.375% of the average daily net
assets of each Fund. (See "Management of the Funds.")
PURCHASE OF SHARES. Service Group Shares are offered "No-Load," which means they
may be purchased directly from the Funds without the imposition of any front-end
or contingent deferred sales charges. However, Service Group Shares are subject
to the imposition of a 12b-1 fee of up to .15% of average daily net assets. (See
"Plan of Distribution.")
The minimum initial purchase for the Bond Fund is $500,000.
The minimum initial purchase for the Short Term Fund is $100,000.
Subsequent investments in both Funds must be $1,000 or more. Shares may be
purchased by individuals or organizations and may be appropriate for use in Tax
Sheltered Retirement Plans. (See "How to Purchase Shares.")
REDEMPTION OF SHARES. There is currently no charge for redemptions from
either Fund. Shares may be redeemed at any time in which the Funds are open for
business at the net asset value next determined after receipt of a redemption
request by the Funds. (See "How to Redeem Shares.")
DIVIDENDS AND DISTRIBUTIONS. Net investment income of the Funds is distributed
quarterly. Net capital gains, if any, are distributed annually. Shareholders may
elect to receive dividends and capital gain distributions in cash or the
dividends and capital gain distributions may be reinvested in additional Fund
shares. (See "Dividends, Distributions, Taxes and Other Information.")
MANAGEMENT. The Funds are series of the Williamsburg Investment Trust (the
"Trust"), the Board of Trustees of which is responsible for overall management
of the Trust and the Funds. The Trust has employed Countrywide Fund Services,
Inc. (the "Administrator") to provide administration, accounting and transfer
agent services. (See "Management of the Funds.")
<PAGE>
SYNOPSIS OF COSTS AND EXPENSES
================================================================================
THE JAMESTOWN BOND FUND
SERVICE GROUP SHARES
Shareholder Transaction Expenses: ................................. None
Annual Fund Operating Expenses:
(As a percentage of net assets)
Investment Advisory Fees........................................... 0.375%
Administrator's Fees.............................................. 0.075%
12b-1 Fees......................................................... 0.150%
Other Expenses..................................................... 0.080%
----------
Total Fund Operating Expenses...................................... 0.68%
===========
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether or
not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------------------------------------------------------
$ 7 $22 $38 $85
THE JAMESTOWN SHORT TERM BOND FUND
SERVICE GROUP SHARES
Shareholder Transaction Expenses: ................................ None
Annual Fund Operating Expenses:
(As a percentage of net assets)
Investment Advisory Fees (after waivers).......................... 0.00%
Administrator's Fees.............................................. 0.25%
12b-1 Fees........................................................ 0.15%
Other Expenses (after expense reimbursements)..................... 0.25%
----------
Total Fund Operating Expenses..................................... 0.65%
===========
EXAMPLE: You would pay the following expenses on a $1,000 investment, whether or
not you redeem at the end of the period, assuming 5% annual return:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------
$ 7 $21 $36 $81
The purpose of the foregoing tables is to assist investors in the Funds in
understanding the various costs and expenses that they will bear directly or
indirectly. See "Management of the Funds" for more information about the fees
and costs of operating the Funds. The Annual Fund Operating Expenses shown above
are based upon actual operating history of Institutional Shares of the Fund for
the fiscal year ended March 31, 1997, adjusted to reflect the imposition of
12b-1 fees applicable to Service Group Shares. Absent the fee waivers and
expense reimbursements by the Advisor, the Short Term Fund's investment advisory
fees would have been 0.375% of average daily net assets, other expenses would
have been 0.32% of average net assets and total fund operating expenses would
have been 1.09% of average daily net assets. THE EXAMPLES SHOWN SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN THE
FUTURE MAY BE GREATER OR LESS THAN THOSE SHOWN.
The footnotes to the Financial Highlights table contain information concerning a
decrease in the Bond Fund's expense ratio as a result of a directed brokerage
arrangement.
<PAGE>
FINANCIAL HIGHLIGHTS
===============================================================================
The following audited financial information with respect to Institutional Shares
of the Fund has been audited by Tait, Weller & Baker, independent accountants,
whose report covering the fiscal year ended March 31, 1997 is contained in the
Statement of Additional Information. This information should be read in
conjunction with the Funds' latest audited annual financial statements and notes
thereto, which are also contained in the Statement of Additional Information, a
copy of which may be obtained at no charge by calling the Funds. As of the date
of this Prospectus, Service Group Shares of the Fund have not been previously
offered to the public.
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years Ended March 31, Ended
March 31,
1997 1996 1995 1994 1993 1992 1991(a)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 10.39 $ 9.97 $ 10.15 $ 10.82 $ 10.42 $ 9.97 $10.00
-------- -------- ------- ------- -------- -------- --------
Income from investment operations:
Net investment income........................ 0.68 0.70 0.62 0.55 0.64 0.54 0.20
Net realized and unrealized gains (losses)
on investments............................ ( 0.12) 0.41 ( 0.18) ( 0.30) 0.55 0.48 ( 0.03)
-------- -------- ------- ------- --------- ------- --------
Total from investment operations............... 0.56 1.11 0.44 0.25 1.19 1.02 0.17
-------- -------- ------- ------- --------- ------- --------
Less distributions:
Dividends from net investment income......... ( 0.69 ) ( 0.69) ( 0.62) ( 0.55) ( 0.64) ( 0.54) ( 0.20 )
Distributions from net realized gains........ -- -- -- ( 0.19) ( 0.15) ( 0.03) --
Distributions in excess of net realized gains -- -- -- ( 0.18) -- -- --
-------- -------- ------- ------- --------- ------- --------
Total distributions............................ ( 0.69 ) ( 0.69) ( 0.62) ( 0.92) ( 0.79) ( 0.57) ( 0.20 )
-------- -------- ------- ------- --------- ------- --------
Net asset value at end of period............... $ 10.26 $ 10.39 $ 9.97 $ 10.15 $ 10.82 $ 10.42 $ 9.97
======== ======== ======= ======= ========= ======= ========
Total return................................... 5.52% 11.23% 4.56% 2.12% 11.69% 10.33% 5.70%(c)
======== ======== ======= ======= ========= ======= ========
Net assets at end of period (000's)............ $76,499 $74,774 $72,029 $64,029 $55,718 $29,727 $ 794
======== ======== ======= ======= ========= ======= ========
Ratio of expenses to average net assets (b) ... 0.53% 0.56% 0.53% 0.60% 0.59% 0.60% 0.90% (c)
Ratio of net investment income to average
net assets................................ 6.48% 6.54% 6.28% 5.03% 6.09% 6.67% 7.07% (c)
Portfolio turnover rate........................ 207% 268% 381% 381% 454% 484% 54%
<FN>
(a) Represents the period from the commencement of operations (December 13,
1990) through March 31, 1991.
(b) For the years ended March 31, 1997 and 1996, the ratio of expenses to
average net assets was determined based on gross expenses prior to expense
reimbursements through a directed brokerage arrangement. For periods prior to
March 31, 1996, the ratio was determined based on net expenses after expense
reimbursements through the directed brokerage arrangement. Absent such expense
reimbursements, the ratio of expenses to average net assets would have been
0.57% for the year ended March 31, 1995. Absent investment advisory fees
waived by the Advisor, the ratio of expenses to average net assets would have
been 0.80% and 3.08%(c) for the periods ended March 31, 1992 and 1991.
(c) Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years Ended March 31, Ended
March 31,
1997 1996 1995 1994 1993 1992(a)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period..... $ 9.72 $ 9.64 $ 9.82 $ 10.07 $ 9.93 $ 10.00
---------- ---------- --------- --------- --------- ----------
Income from investment operations:
Net investment income................... 0.58 0.62 0.60 0.51 0.50 0.09
Net realized and unrealized gains (losses)
on investments........................ ( 0.11) 0.08 ( 0.17 ) ( 0.23 ) 0.13 ( 0.07 )
---------- ---------- --------- --------- --------- ----------
Total from investment operations........... 0.47 0.70 0.43 0.28 0.63 0.02
---------- ---------- --------- --------- --------- ----------
Less distributions:
Dividends from net investment income.... ( 0.58) ( 0.62) ( 0.61 ) ( 0.51 ) ( 0.49 ) ( 0.09 )
Distributions from net realized gains... -- -- -- ( 0.02 ) -- --
---------- ---------- --------- --------- --------- ----------
Total distributions........................ ( 0.58) ( 0.62) ( 0.61 ) ( 0.53 ) ( 0.49 ) ( 0.09 )
---------- ---------- --------- --------- --------- ----------
Net asset value at end of period........... $ 9.61 $ 9.72 $ 9.64 $ 9.82 $ 10.07 $ 9.93
========== ========== ========= ========= ========= ==========
Total return............................... 5.01% 7.38% 4.53% 2.76% 6.40% 0.99% (c)
========== ========== ========= ========= ========= ==========
Net assets at end of period (000's)........ $ 9,924 $ 9,426 $ 14,122 $ 18,715 $15,580 $ 5,320
========== ========== ========= ========= ========= ==========
Ratio of expenses to average net assets (b) 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%(c)
Ratio of net investment income to average
net assets............................ 5.96% 6.27% 6.04% 5.22% 5.24% 4.86%(c)
Portfolio turnover rate.................... 62% 157% 144% 324% 289% 97%
<FN>
(a) Represents the period from the commencement of operations (January 21, 1992)
through March 31, 1992.
(b) Absent investment advisory fees waived and expenses reimbursed by the
Advisor, the ratios of expenses to average net assets would have been 0.94%,
0.85%, 0.85%, 0.81%, 0.82% and 0.81%(c) for the periods ended March 31, 1997,
1996, 1995, 1994, 1993 and 1992, respectively.
(c) Annualized.
</FN>
</TABLE>
Further information about the performance of the Funds is contained in the
Annual Report, a copy of which may be obtained at no charge by calling the
Funds.
<PAGE>
INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND RISK CONSIDERATIONS
===============================================================================
The investment objective of each Fund is to maximize total return, consisting of
current income and capital appreciation, both realized and unrealized, through
active management of a portfolio of investment grade fixed income securities.
Any investment involves risk, and there can be no assurance that the Funds will
achieve their investment objectives. The investment objective of each Fund may
not be altered without the prior approval of a majority (as defined by the
Investment Company Act of 1940) of the Fund's shares.
The Advisor's philosophy in the management of fixed income securities utilizes a
disciplined balance between sector selection and moderate portfolio duration
shifts to maximize total return. The Advisor's determination of optimal duration
for each Fund is based on economic indicators, inflation trends, credit demands,
monetary policy and global influences as well as psychological and technical
factors. The Funds endeavor to invest in securities and market sectors which the
Advisor believes are undervalued by the marketplace. The selection of
undervalued bonds by the Advisor is based on, among other things, historical
yield relationships, credit risk, market volatility and absolute levels of
interest rates, as well as supply and demand factors.
The Funds are designed primarily to allow institutional investors to take
advantage of the professional investment management expertise of Lowe,
Brockenbrough & Tattersall, Inc. Each Fund will be managed in a manner that
closely resembles that of other bond portfolios of similar maturity and duration
managed by the Advisor. The Advisor uses a wide variety of securities and
techniques in managing fixed income portfolios. As the fixed income markets
evolve, the Advisor may invest in other types of securities than those
specifically identified in this Prospectus if the Advisor views these
investments to be consistent with the overall investment objectives and policies
of the Funds. The securities and techniques the Advisor currently expects to
utilize are described below.
DURATION. Duration is an important concept in the Advisor's fixed income
management philosophy. "Duration" and "maturity" are different concepts and
should not be substituted for one another for purposes of understanding the
investment philosophy of either Fund. The Advisor believes that for most fixed
income securities "duration" provides a better measure of interest rate
sensitivity than maturity. Whereas maturity takes into account only the final
principal payments to determine the risk of a particular bond, duration weights
all potential cash flows (principal, interest and reinvestment income) on an
expected present value basis, to determine the "effective life" of the security.
The Advisor intends to limit the portfolio duration of the Bond Fund to a 2 year
minimum and a 6 year maximum. The Advisor intends to maintain a portfolio
duration for the Short Term Fund of less than 3 years. In addition, the Advisor
intends to limit the duration of any one single security of the Short Term Fund
to a maximum duration of 5 years. The precise point of each Fund's duration
within these ranges will depend on the Advisor's view of the market. For the
purposes of the Funds, the duration calculation used is Macaulay duration
adjusted for option features (such as call features or prepayment options).
Adjusting for option features requires assumptions with respect to the
probability of that option being exercised. These assumptions will be determined
by the Advisor based on then current market conditions.
The Funds expect the average maturity of their portfolios to be longer than the
average duration. How much longer will depend upon, among other factors, the
composition of coupons (higher coupons imply shorter duration), as well as
overall interest rate levels (higher interest rates generally will result in
shorter duration relative to maturity). It should be noted that for some
securities the standard duration calculation does not accurately reflect
interest rate sensitivity. For example, mortgage pass-through securities,
Collateralized Mortgage Obligations and Asset Backed Securities require
estimates of principal prepayments which are critical in determining interest
rate sensitivity. Floating rate securities, because of the interest rate
adjustment feature, are not appropriate for the standard duration calculation.
In these and other similar situations, the Advisor will use more sophisticated
techniques to determine interest rate sensitivity of securities of the Funds.
<PAGE>
INVESTMENT GRADE SECURITIES. Each Fund intends to limit its investment purchases
to investment grade securities. The Funds define investment grade securities as
those securities which, in the Advisor's opinion, have the characteristics
described by any of the nationally recognized statistical rating organizations
("NRSROs"), Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Group ("S&P"), Fitch Investors Service, Inc. ("Fitch") or Duff & Phelps
("D&P"), in their four highest rating grades. For S&P, Fitch and D&P those
ratings are AAA, AA, A and BBB. For Moody's those ratings are Aaa, Aa, A and
Baa. For a description of each rating grade, see the Statement of Additional
Information.
Each Fund invests exclusively in those securities rated investment grade by one
or more of the NRSROs or, if not rated, are considered by the Advisor to have
essentially the same characteristics and quality as securities having such
ratings. There may also be instances where the Advisor purchases securities
which are rated investment grade by one NRSRO and which are not rated or rated
below investment grade by other NRSROs, and such securities would be eligible
for purchase by the Funds. Issues rated within the fourth highest grade (those
rated lower than A) are considered speculative in certain respects and changes
in economic conditions or other circumstances are more likely to lead to a
weakened capacity to pay principal and interest than is the case with higher
grade securities. The final determination of quality and value will remain with
the Advisor. Although the Advisor utilizes the ratings of various credit rating
services as one factor in establishing creditworthiness. For as long as the
Funds hold a fixed income issue, the Advisor monitors the issuer's credit
standing. In the event a security's rating is reduced below a Fund's minimum
requirements, the Fund will sell the security, subject to market conditions and
the Advisor's assessment of the most opportune time for sale. Although lower
rated securities will generally provide higher yields than higher rated
securities of similar maturities, they are subject to a greater degree of market
fluctuation.
U.S. GOVERNMENT SECURITIES. U.S. Government Securities include direct
obligations of the U.S. Treasury, securities issued or guaranteed as to interest
and principal by agencies or instrumentalities of the U.S. Government, or any of
the foregoing subject to repurchase agreements (See "Repurchase Agreements.")
While obligations of some U.S. Government sponsored entities are supported by
the full faith and credit of the U.S. Government, several are supported by the
right of the issuer to borrow from the U.S. Government, and still others are
supported only by the credit of the issuer itself. The guarantee of the U.S.
Government does not extend to the yield or value of the U.S. Government
Securities held by the Funds or to either Fund's shares. See the Statement of
Additional Information for a more detailed description.
MORTGAGE PASS-THROUGH CERTIFICATES. Obligations of the Government National
Mortgage Association ("GNMA"), the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC") include direct
pass-through certificates representing undivided ownership interests in pools of
mortgages. Such certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the issuer. In the case of
securities issued by GNMA, the payment of principal and interest would be backed
by the full faith and credit of the U.S. Government. Mortgage pass-through
certificates issued by FNMA or FHLMC would be guaranteed as to payment of
principal and interest by the credit of the issuing U.S. Government agency.
Securities issued by other non-governmental entities (such as commercial banks
or mortgage bankers) may offer credit enhancement such as guarantees, insurance,
or letters of credit. Mortgage pass-through certificates are subject to more
rapid prepayment than their stated maturity date would indicate; their rate of
prepayment tends to accelerate during periods of declining interest rates or
increased property transfers and, as a result, the proceeds from such
prepayments may be reinvested in instruments which have lower yields. To the
extent such securities were purchased at a premium, such prepayments could
result in capital losses. The issuer of a pass-through mortgage certificate does
not guarantee premiums or market value of its issue.
COLLATERALIZED MORTGAGE OBLIGATIONS. The Funds intend to invest in
collateralized mortgage obligations ("CMOs") which are generally backed by
mortgage pass-through securities or whole mortgage loans. CMOs are usually
structured into classes of varying maturities and principal payment priorities.
The prepayment sensitivity of each class may or may not resemble that of the
CMOs' collateral depending on the maturity and structure of that class. CMOs pay
interest and principal (including prepayments) monthly, quarterly or
semiannually. Most CMOs are AAA rated, reflecting the credit quality of the
underlying collateral; however, some classes carry greater price risk than that
of their underlying collateral. The Advisor will invest in CMO classes only if
their characteristics and interest rate sensitivity fit the investment
objectives and policies of the individual Fund.
<PAGE>
OTHER MORTGAGE RELATED SECURITIES. In addition to the mortgage pass-through
securities and the CMOs mentioned above, the Funds may also invest in other
mortgage derivative products if the Advisor views them to be consistent with the
overall policies and objectives of the Funds. Current offerings include
"principal only" (PO) and "interest only" (IO) Stripped Mortgage Backed
Securities ("SMBS"). POs and IOs are created when a mortgage pass-through
certificate is separated into two securities - one security representing a claim
to principal distributions and the other representing a claim to the
corresponding interest payments. As prepayments on the underlying mortgage loans
rise (typically when interest rates fall), the PO security holders receive their
principal sooner than expected, which serves to increase the POs' yield. The IO
security holders receive interest payments only on the outstanding principal
amount of the underlying mortgage loans. Therefore, if prepayments on the
notional principal of the IO rise, the IOs' price will fall. As POs generally
benefit from declining interest rates and IOs generally benefit from rising
interest rates, these securities can provide an effective way to stabilize
portfolio value.
SMBS are much more sensitive to prepayment fluctuations than are regular
mortgage-backed securities and therefore involve more risk. Due to the deep
discounted prices of SMBS, any mismatch in actual versus anticipated prepayments
of principal will significantly increase or decrease the yield to maturity. In
general, changes in interest rate levels will have the greatest effect on
prepayments. Sufficiently high prepayment rates could result in purchasers of
IOs not recovering the full amount of their initial investment. The Funds will
not invest more than 10% of their total assets in SMBS.
The Advisor expects that governmental, government related and private entities
may create other mortgage related securities offering mortgage pass-through and
mortgage collateralized instruments in addition to those described herein. As
new types of mortgage related securities are developed and offered to the
investment community, the Advisor will, consistent with the particular Fund's
investment objectives, policies and quality standards, consider making
investments in such new types of mortgage related securities.
ASSET BACKED SECURITIES. Other Asset Backed Securities have been offered to
investors backed by loans such as automobile loans, home equity loans, credit
card receivables, marine loans, recreational vehicle loans and manufactured
housing loans. Typically, Asset Backed Securities represent undivided fractional
interests in a fund whose assets consist of a pool of loans and security
interests in the collateral securing the loans. Payments of principal and
interest on Asset Backed Securities are passed through monthly to certificate
holders. In some cases Asset Backed Securities are divided into senior and
subordinated classes so as to enhance the quality of the senior class.
Underlying loans are subject to prepayment, which may reduce the overall return
to certificate holders. If the subordinated classes are exhausted and the full
amounts due on underlying loans are not received because of unanticipated costs,
depreciation, damage or loss of the collateral securing the contracts, or other
factors, certificate holders may experience delays in payment or losses on Asset
Backed Securities. The Funds may invest in other Asset Backed Securities that
may be developed in the future.
ZERO COUPON AND ORIGINAL ISSUE DISCOUNT ("OID") BONDS. Some securities may be
offered without coupons or with very low coupons. These bonds will typically be
more interest rate sensitive than a comparable maturity current coupon bond. The
majority of zero coupon bonds have been created when a qualified U.S. Government
Security is exchanged for a series of "Strips" through the Federal Reserve Bank.
Strips have been created from, among others, U.S. Treasury, Resolution Trust
Corporation and Financing Corporation securities. A number of U.S. Government
Securities have also been repackaged by broker-dealers or commercial banks into
trusts which issue zero coupon receipts such as U.S. Treasury Receipts ("TRs")
or Treasury Investment Growth Receipts ("TIGRs"). Zero coupon and original issue
discount bonds generate income under generally accepted accounting principles,
but do not generate cash flow, resulting in the possibility that the Funds may
be required to sell portfolio securities to make distributions as required under
Subchapter M of the Internal Revenue Code.
<PAGE>
CORPORATE BONDS. The Funds' investments in corporate debt securities will be
based on credit analysis and value determination by the Advisor. The Advisor's
selection of bonds or industries within the corporate bond sector is determined
by, among other factors, historical yield relationships between bonds or
industries, the current and anticipated credit of the borrower, and call
features, as well as supply and demand factors.
VARIABLE AND FLOATING RATE SECURITIES. The Funds may invest in variable or
floating rate securities which adjust the interest rate paid at periodic
intervals based on an interest rate index. Typically floating rate securities
use as their benchmark an index such as the 1, 3 or 6 month LIBOR, 3, 6 or 12
month Treasury bills, or the Federal Funds rate. Resets of the rates can occur
at predetermined intervals or whenever changes in the benchmark index occur.
MONEY MARKET INSTRUMENTS. Money market instruments will typically represent a
portion of each Fund's portfolio, as funds awaiting investment, to accumulate
cash for anticipated purchases of portfolio securities and to provide for
shareholder redemptions and operational expenses of the Funds. Money market
instruments mature in thirteen months or less from the date of purchase and
include U.S. Government Securities (defined above) and corporate debt securities
(including those subject to repurchase agreements), bankers' acceptances and
certificates of deposit of domestic branches of U.S. banks, and commercial paper
(including variable amount demand master notes). At the time of purchase, money
market instruments will have a short-term rating in the highest category from
any NRSRO or, if not so rated, issued by a corporation having an outstanding
unsecured debt issue rated in the three highest categories of any NRSRO or, if
not so rated, of equivalent quality in the Advisor's opinion. See the Statement
of Additional Information for a further description of money market instruments.
INVESTMENT COMPANIES. The Bond Fund may invest in the securities of open-end and
closed-end investment companies which are generally authorized to invest in
securities eligible for purchase by the Fund. To the extent the Fund does so,
Fund shareholders would indirectly pay a portion of the operating costs of the
underlying investment companies. These costs include management, brokerage,
shareholder servicing and other operational expenses. Indirectly, then,
shareholders may pay higher operational costs than if they owned the underlying
investment companies directly. In addition, shares of closed-end investment
companies frequently trade at a discount from their net asset values. This
characteristic of shares of a closed-end investment company is a risk separate
and distinct from the risk that its net asset value will decrease.
The Bond Fund does not presently intend to invest more than 10% of its total
assets in securities of other investment companies. In addition, the Fund will
not invest more than 5% of its total assets in securities of any single
investment company, nor will it purchase more than 3% of the outstanding voting
securities of any investment company.
FACTORS TO CONSIDER. Neither Fund is intended to be a complete investment
program and there can be no assurance that the Funds will achieve their
investment objectives. The fixed income securities in which the Funds will
invest are subject to fluctuation in value. Such fluctuations may be based on
movements in interest rates or on changes in the creditworthiness of the
issuers, which may result from adverse business and economic developments or
proposed corporate transactions, such as a leveraged buy-out or recapitalization
of the issuer. The value of the Funds' fixed income securities will generally
vary inversely with the direction of prevailing interest rate movements.
Consequently, should interest rates increase or the creditworthiness of an
issuer deteriorate, the value of the Funds' fixed income securities would
decrease in value, which would have a depressing influence on the Funds' net
asset values. The Funds may borrow using their assets as collateral, but only
under certain limited conditions. Borrowing, if done, would tend to exaggerate
the effects of market fluctuations on a Fund's net asset value until repaid.
(See "Borrowing.")
SECURITIES LENDING. Each Fund may lend up to 33% of its portfolio securities to
broker-dealers or other institutional investors. Since there could be a delay in
the recovery of loaned securities or even a loss of rights in collateral
supplied should the borrower fail financially, loans will not be made unless, in
the judgment of the Advisor, the consideration uo be earned from such loans
would justify the risk. Collateral will be maintained in excess of 100% of the
value of the underlying securities, determined by marking to market daily those
securities involved in the lending program. It is expected that the Funds will
use the cash portions of loan collateral to invest in short-term
income-producing securities. These practices may be amended from time to time as
regulatory provisions permit. Securities lending for purposes of discussion in
this Prospectus should not be confused with "Borrowing" below.
<PAGE>
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 15% of its total assets to
meet redemption requests which might otherwise require untimely disposition of
portfolio holdings. To the extent the Funds borrow for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the particular
Fund's assets declines, the Fund would be forced to liquidate portfolio
securities when it is disadvantageous to do so. The Funds would incur interest
and other transaction costs in connection with such borrowing. A Fund will not
make any additional investments while its outstanding borrowings exceed 5% of
the current value of its total assets.
PORTFOLIO TURNOVER. Portfolio turnover will not be a limiting factor when the
Advisor deems changes appropriate. While portfolio turnover is difficult to
predict in an active fixed income portfolio, it is expected that annual
portfolio turnover will vary between 100% and 500% with respect to each Fund.
Market conditions may dictate, however, a higher rate of turnover in a
particular year. The degree of portfolio turnover affects the brokerage costs of
the Funds and may have an impact on the amount of taxable distributions to
shareholders. The portfolio turnover of the Bond Fund and of the Short Term Fund
for the fiscal year ended March 31, 1997 was 207% and 62%, respectively.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities or other
high-grade debt securities subject to repurchase agreements. A repurchase
agreement transaction occurs when the Funds acquire a security and
simultaneously resell it to the vendor (normally a member bank of the Federal
Reserve or a registered Government Securities dealer) for delivery on an agreed
upon future date. The repurchase price exceeds the purchase price by an amount
which reflects an agreed upon market interest rate earned by the Funds effective
for the period of time during which the repurchase agreement is in effect.
Delivery pursuant to the resale typically will occur within one to five days of
the purchase. For purposes of the Investment Company Act of 1940 (the "1940
Act"), a repurchase agreement is considered to be a loan collateralized by the
securities subject to the repurchase agreement. Neither Fund will enter into a
repurchase agreement which will cause more than 10% of its assets to be invested
in repurchase agreements which extend beyond seven days and other illiquid
securities.
INVESTMENT LIMITATIONS. For the purpose of limiting the Funds' exposure to risk,
each Fund has adopted certain limitations which, together with its investment
objective, are considered fundamental policies which may not be changed without
shareholder approval. Each Fund will not: (1) issue senior securities, borrow
money or pledge its assets, except that it may borrow from banks as a temporary
measure (a) for extraordinary or emergency purposes, in amounts not exceeding 5%
of either Fund's total assets, or (b) in order to meet redemption requests which
might otherwise require untimely disposition of portfolio securities, in amounts
not exceeding 15% of either Fund's total assets, and may pledge its assets to
secure all such borrowings; (2) invest more than 10% of a Fund's assets in other
illiquid securities, including repurchase agreements maturing in over seven
days, and other securities for which there is no established market or for which
market quotations are not readily available; (3) write, acquire or sell puts,
calls or combinations thereof, or purchase or sell commodities, commodities
contracts, futures contracts or related options; and (4) invest more than 5% of
its total assets in the securities of any one issuer. Other fundamental
investment limitations are listed in the Statement of Additional Information.
<PAGE>
HOW TO PURCHASE SHARES
===============================================================================
There are NO FRONT-END OR CONTINGENT DEFERRED SALES COMMISSIONS CHARGED TO
INVESTORS. Assistance in opening accounts may be obtained from the Administrator
by calling 1-800-443-4249, or by writing to the Funds at the address shown below
for regular mail orders. Assistance is also available through any broker-dealer
authorized to sell shares of the Funds. Such broker-dealer may charge you a fee
for its services. Payment for shares purchased may be made through your account
at the broker-dealer processing your application and order to purchase. Your
investment will purchase shares at a Fund's net asset value next determined
after your order is received by the Funds in proper order as indicated herein.
Shares of the Funds purchased prior to July 31, 1997 are Institutional Shares.
The minimum initial investment in the Bond Fund is $500,000. The
minimum initial investment in the Short Term Fund is $100,000.
The Funds may, in the Advisor's sole discretion, accept certain accounts with
less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable in
U.S. dollars. All orders received by the Administrator, whether by mail, bank
wire or facsimile order from a qualified broker-dealer, prior to 4:00 p.m.,
Eastern time, will purchase shares at the net asset value next determined on
that business day. If your order is not received by 4:00 p.m. Eastern time, your
order will purchase shares at the net asset value determined on the next
business day. (See "How Net Asset Value is Determined.")
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Funds are required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Funds within 60 days.
Investors should be aware that the Funds' account application contains
provisions in favor of the Funds, the Administrator and certain of their
affiliates, excluding such entities from certain liabilities (including, among
others, losses resulting from unauthorized shareholder transactions) relating to
the various services made available to investors.
Should an order to purchase shares be cancelled because your check does not
clear, you will be responsible for any resulting losses or fees incurred by the
Funds or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, and mail it to:
The Jamestown Bond Funds
c/o Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
BANK WIRE ORDERS. Investments can be made directly by bank wire. To establish a
new account or add to an existing account by wire, please call the Funds, at
1-800-443-4249, before wiring funds, to advise the Funds of the investment, the
dollar amount and the account registration. This will ensure prompt and accurate
handling of your investment. Please have your bank use the following wiring
instructions to purchase by wire:
<PAGE>
Star Bank, N.A.
Cincinnati Trust
ABA# 042000013
For Williamsburg Investment Trust #485777056
For either: The Jamestown Bond Fund or
The Jamestown Short Term Bond Fund
(Shareholder name and account number)
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit. Once your wire is
sent you should, as soon as possible thereafter, complete and mail your Account
Application to the Funds as described under "Regular Mail Orders," above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire (minimum
additional investment of $1,000) at any time by purchasing shares at the then
current net asset value as aforementioned. Before making additional investments
by bank wire, please call the Funds at 1-800-443-4249 to alert the Funds that
your wire is to be sent. Follow the wire instructions above to send your wire.
When calling for any reason, please have your account number ready, if known.
Mail orders should include, when possible, the "Invest by Mail" stub which is
attached to your Fund confirmation statement. Otherwise, be sure to identify
your account in your letter.
EXCHANGE PRIVILEGE. You may use proceeds from the redemption of shares of either
Fund to purchase Service Group Shares of the other Fund offering shares for sale
in your state of residence. There is no charge for this exchange privilege.
Before making an exchange, you should read the portion of the Prospectus
relating to the Fund into which the shares are to be exchanged. The shares of
the Fund to be acquired will be purchased at the net asset value next determined
after acceptance of the exchange request in writing by the Administrator. The
exchange of shares of one Fund for shares of the other Fund is treated, for
federal income tax purposes, as a sale on which you may realize taxable gain or
loss. To prevent the abuse of the exchange privilege to the disadvantage of
other shareholders, each Fund reserves the right to terminate or modify the
exchange offer upon 60 days' notice to shareholders.
STOCK CERTIFICATES. Stock certificates will not be issued for your shares.
Evidence of ownership will be given by issuance of periodic account statements
which will show the number of shares owned.
HOW TO REDEEM SHARES
===============================================================================
Shares of the Funds may be redeemed on each day that the Funds are open for
business by sending a written request to the Funds. The Funds are open for
business on each day the New York Stock Exchange (the "Exchange") is open for
business. Any redemption may be for more or less than the purchase price of your
shares depending on the market value of the Funds' portfolio securities. All
redemption orders received in proper form, as indicated herein, by the
Administrator prior to 4:00 p.m. Eastern time will redeem shares at the net
asset value determined as of that business day's close of trading. Otherwise,
your order will redeem shares on the next business day. You may also redeem your
shares through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $100,000 (due to redemptions, exchanges or
transfers, and not due to market action) upon 60 days' written notice. If the
shareholder brings his account value up to $100,000 or more during the notice
period, the account will not be redeemed. Redemptions from retirement plans may
be subject to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds, at 1-800-443-4249, or write to the address shown below.
<PAGE>
REGULAR MAIL REDEMPTIONS. Your request should be addressed to The Jamestown Bond
Funds, P.O. Box 5354, Cincinnati, Ohio 45201-5354. Your request for redemption
must include:
1) your letter of instruction or a stock assignment specifying the Bond
Fund or the Short Term Fund, the account number, and the number of
shares or dollar amount to be redeemed. This request must be signed by
all registered shareholders in the exact names in which they are
registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships,
pension or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within three business days after
receipt of your redemption request. However, a Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. Such delay (which may take up to 15 days) may
be reduced or avoided if the purchase is made by certified check, government
check or wire transfer. In such cases, the net asset value next determined after
receipt of the request for redemption will be used in processing the redemption
and your redemption proceeds will be mailed to you upon clearance of your check
to purchase shares. The Funds may suspend redemption privileges or postpone the
date of payment (i) during any period that the Exchange is closed, or trading on
the Exchange is restricted as determined by the Securities and Exchange
Commission (the "Commission"), (ii) during any period when an emergency exists
as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Funds to dispose of securities owned by them, or
to fairly determine the value of their assets, and (iii) for such other periods
as the Commission may permit.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Funds
may not be redeemed by wire on days in which your bank is not open for business.
Redemption proceeds will only be sent to the bank account or person named in
your Account Application currently on file with the Funds. You can change your
redemption instructions anytime you wish by filing a letter including your new
redemption instructions with the Funds. (See "Signature Guarantees.")
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a change in registration, or standing instructions, for your account.
Signature guarantees are required for (1) change of registration requests, and
(2) requests to establish or change redemption services other than through your
initial account application. Signature guarantees are acceptable from a member
bank of the Federal Reserve System, a savings and loan institution, credit
union, registered broker-dealer or a member firm of a U.S. Stock Exchange, and
must appear on the written request for redemption, or change of registration.
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
===============================================================================
The net asset value of each Fund is determined on each business day that the
Exchange is open for trading, as of the close of the Exchange (currently 4:00
p.m., Eastern time). Net asset value per share is determined by dividing the
total value of all Fund securities (valued at market value) and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily. See
the Statement of Additional Information for further details.
Securities which are traded over-the-counter are priced at the last sale price,
if available, otherwise, at the last quoted bid price. Securities traded on a
national exchange will be valued based upon the closing price on the valuation
date on the principal exchange where the security is traded. It is expected that
fixed income securities will ordinarily be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service. The prices provided by the pricing service are determined with
consideration given to institutional bid and last sale prices and take into
account securities prices, yields, maturities, call features, ratings,
institutional trading in similar groups of securities and developments related
to specific securities. The Trustees will satisfy themselves that such pricing
services consider all appropriate factors relevant to the value of such
securities in determining their fair value. Securities and other assets for
which no quotations are readily available will be valued in good faith at fair
value using methods determined by the Board of Trustees.
MANAGEMENT OF THE FUNDS
===============================================================================
The Funds are diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988, which was formerly known as The Nottingham Investment Trust. The
Board of Trustees has overall responsibility for management of the Funds under
the laws of Massachusetts governing the responsibilities of trustees of business
trusts. The Statement of Additional Information identifies the Trustees and
officers of the Trust and the Funds and provides information about them.
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Lowe,
Brockenbrough & Tattersall Strategic Advisors, Inc. (the "Advisor") provides the
Funds with a continuous program of supervision of each Fund's assets, including
the composition of its portfolio, and furnishes advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities, pursuant to Investment Advisory Agreements with the Trust. The
Advisor is also responsible for the selection of broker-dealers through which
the Funds execute portfolio transactions, subject to brokerage policies
established by the Trustees, and provides certain executive personnel to the
Funds.
The Advisor is a Virginia corporation controlled by Fred T. Tattersall. Prior to
February 28, 1997, the investment advisor to each Fund was Lowe, Brockenbrough &
Tattersall, Inc. ("LB&T"), of which Mr. Tattersall and Austin Brockenbrough III
were the controlling shareholders. On February 28, 1997, LB&T was reorganized by
means of a corporate restructuring into two separate legal entities: LB&T, owned
by Mr. Brockenbrough, and the Advisor, owned by Mr. Tattersall. The Advisor
manages the fixed-income accounts (including the Funds) formerly managed by
LB&T. In addition to acting as Advisor to the Funds, the Advisor provides
investment advice to corporations, trusts, pension and profit sharing plans,
other business and institutional accounts and individuals. The Advisor also
serves as sub-advisor to The Jamestown Balanced Fund (another series of the
Trust), the subject of a separate prospectus.
Both the Bond Fund and the Short Term Fund are managed on a day to day basis by
a committee comprised of the Advisor's fixed income portfolio management
professionals, with each portfolio professional responsible for designated
specific sectors of the fixed income market. Prior to February 28, 1997, the
Funds were managed by the same group of professionals, but such professionals
were employed by LB&T.
<PAGE>
Compensation of the Advisor is at the annual rate of 0.375% of each Fund's
average daily net assets. For the fiscal year ended March 31, 1997, the Advisor
and LB&T received $289,094 in investment advisory fees from the Bond Fund, which
represented 0.375% of the Bond Fund's average daily net assets. For the fiscal
year ended March 31, 1997, the Advisor and LB&T each waived its entire
investment advisory fee from the Short Term Fund and reimbursed the Fund for
$6,864 of other operating expenses.
The Advisor currently intends to waive its investment advisory fees to the
extent necessary to limit the total operating expenses of Service Group Shares
of the Short Term Fund to 0.65% per annum of its average daily net assets.
However, there is no assurance that any voluntary fee waivers will continue in
the current or future fiscal years, and expenses of Service Group Shares of the
Short Term Fund may therefore exceed 0.65% of its average daily net assets.
The Advisor's address is 6620 West Broad Street, Suite 300, Richmond, Virginia
23230.
ADMINISTRATOR. The Funds have retained Countrywide Fund Services, Inc. (the
"Administrator"), P.O. Box 5354, Cincinnati, Ohio 45201, to provide
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services. The Administrator is a wholly-owned indirect
subsidiary of Countrywide Credit Industries, Inc., a New York Stock Exchange
listed company principally engaged in the business of residential mortgage
lending. The Administrator supplies executive, administrative and regulatory
services, supervises the preparation of tax returns, and coordinates the
preparation of reports to shareholders and reports to and filings with the
Securities and Exchange Commission and state securities authorities. In
addition, the Administrator calculates daily net asset value per share and
maintains such books and records as are necessary to enable it to perform its
duties.
Each Fund pays the Administrator a base fee for these services at the annual
rate of 0.075% of the average value of its daily net assets up to $200 million
and 0.05% of such assets in excess of $200 million (subject to a minimum fee of
$2,000 per month with respect to each Fund) plus a surcharge of $1,000 per
month. The Administrator also charges the Funds for certain costs involved with
the daily valuation of investment securities and is reimbursed for out-of-pocket
expenses.
CUSTODIAN. The Custodian of the Funds' assets is Star Bank, N.A. (the
"Custodian"). The Custodian's mailing address is 425 Walnut Street, Cincinnati,
Ohio 45202. The Advisor, Administrator or interested persons thereof may have
banking relationships with the Custodian.
OTHER FUND COSTS. The Funds pay all expenses not assumed by the Advisor,
including its fees. Fund expenses include, among others, the fees and expenses,
if any, of the Trustees and officers who are not "affiliated persons" of the
Advisor, fees of the Funds' Custodian, interest expense, taxes, brokerage fees
and commissions, fees and expenses of the Funds' shareholder servicing
operations, fees and expenses of qualifying and registering the Funds' shares
under federal and state securities laws, expenses of preparing, printing and
distributing prospectuses and reports to existing shareholders, auditing and
legal expenses, insurance expenses, association dues, and the expense of
shareholders' meetings and proxy solicitations. The Funds are also liable for
any nonrecurring expenses that may arise such as litigation to which the Funds
may be a party. The Funds may be obligated to indemnify the Trustees and
officers with respect to such litigation. All expenses of a Fund are accrued
daily on the books of such Fund at a rate which, to the best of its belief, is
equal to the actual expenses expected to be incurred by the Fund in accordance
with generally accepted accounting practices.
BROKERAGE. The Funds have adopted brokerage policies which allow the Advisor to
prefer brokers which provide research or other valuable services to the Advisor
and/or the Funds. In all cases, the primary consideration for selection of
broker-dealers through which to execute brokerage transactions will be to obtain
the most favorable price and execution for the Funds. Research services obtained
through the Funds' brokerage transactions may be used by the Advisor for its
other clients; conversely, the Funds may benefit from research services obtained
through the brokerage transactions of the Advisor's other clients. The Statement
of Additional Information contains more information about the management and
brokerage practices of the Funds. It is anticipated that most securities
transactions of the Funds will be handled on a principal, rather than agency,
basis. Fixed income securities are normally traded on a net basis (without
commission) through broker-dealers and banks acting for their own account. Such
firms attempt to profit from buying at the bid price and selling at the higher
asked price of the market, the difference being referred to as the spread.
<PAGE>
PLAN OF DISTRIBUTION
===============================================================================
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, Service Group
Shares of the Fund have adopted a plan of distribution (the "Plan") under which
such shares may directly incur or reimburse the Advisor for certain
distribution-related expenses, including payments to securities dealers and
others who are engaged in the sale of such shares and who may be advising
investors regarding the purchase, sale or retention of such shares; expenses of
maintaining personnel who engage in or support distribution of shares or who
render shareholder support services not otherwise provided by the Transfer
Agent; expenses of formulating and implementing marketing and promotional
activities, including direct mail promotions and mass media advertising;
expenses of preparing, printing and distributing sales literature and
prospectuses and statements of additional information and reports for recipients
other than existing shareholders of the Funds; expenses of obtaining such
information, analyses and reports with respect to marketing and promotional
activities as the Trust may, from time to time, deem advisable; and any other
expenses related to the distribution of such shares.
The annual limitation for payment of expenses pursuant to the Plan is .15% of
the average daily net assets allocable to Service Group Shares. Unreimbursed
expenditures will not be carried over from year to year. In the event the Plan
is terminated by the Funds in accordance with its terms, the Funds will not be
required to make any payments for expenses incurred by the Advisor after the
date the Plan terminates.
Pursuant to the Plan, the Funds may also make payments to banks or other
financial institutions that provide shareholder services and administer
shareholder accounts. The Glass-Steagall Act prohibits banks from engaging in
the business of underwriting, selling or distributing securities. Although the
scope of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, management of the
Trust believes that the Glass-Steagall Act should not preclude a bank from
providing such services. However, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and financial
institutions may be required to register dealers pursuant to state law. If a
bank were prohibited from continuing to perform all or a part of such services,
management of the Trust believes that there would be no material impact on the
Funds or their shareholders. Banks may charge their customers fees for offering
these services to the extent permitted by regulatory authorities, and the
overall return to those shareholders availing themselves of bank services will
be lower than to those shareholders who do not. The Funds may from time to time
purchase securities issued by banks which provide such services; however, in
selecting investments for the Funds, no preference will be shown for such
securities.
<PAGE>
DIVIDENDS, DISTRIBUTIONS, TAXES AND
OTHER INFORMATION
===============================================================================
The Statement of Additional Information contains additional information about
the federal income tax implications of an investment in the Funds in general
and, particularly, with respect to dividends and distributions and other
matters. Shareholders should be aware that dividends from the Funds which are
derived in whole or in part from interest on U.S. Government Securities may not
be taxable for state income tax purposes. Other state income tax implications
are not covered, nor is this discussion exhaustive on the subject of federal
income taxation. Consequently, investors should seek qualified tax advice.
<PAGE>
Each Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Funds but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed to
them. The Funds intend to declare dividends quarterly, payable in March, June,
September and December, on a date selected by the Trustees. In addition,
distributions may be made annually in December out of any net short-term or
long-term capital gains derived from the sale of securities realized through
October 31 of that year. Each Fund may make a supplemental distribution of
capital gains at the end of its fiscal year. The nature and amount of all
dividends and distributions will be identified separately when tax information
is distributed by the Funds at the end of each year. The Funds intend to
withhold 30% on taxable dividends and any other payments that are subject to
such withholding and are neither citizens nor residents of the U.S.
There is no fixed dividend rate, and there can be no assurance as to the payment
of any dividends or the realization of any gains for either Fund. Current
practice of the Funds, subject to the discretion of the Board of Trustees, is
for declaration and payment of income dividends during the last week of each
calendar quarter. All dividends and capital gains distributions are reinvested
in additional shares of the Funds unless the shareholder requests in writing to
receive dividends and/or capital gains distributions in cash. That request must
be received by the Funds prior to the record date to be effective as to the next
dividend. Tax consequences to shareholders of dividends and distributions are
the same if received in cash or if received in additional shares of the Funds.
TAX STATUS OF THE FUNDS. If a Fund is qualified as a "regulated investment
company" under the Code, it will not be liable for federal income taxes on
amounts paid as dividends and distributions. The Code contains a number of
complex requirements which an investment company must meet in order to qualify.
For a more detailed discussion of the tax status of the Funds, see "Additional
Tax Information" in the Statement of Additional Information.
PRINCIPAL SHAREHOLDERS. Rockingham Health Care, Inc., 235 Cantrell Avenue,
Harrisonburg, Virginia, owned of record 54.4% of the Short Term Fund's
outstanding shares as of May 23, 1997 and may be deemed to control the Fund.
DESCRIPTION OF FUND SHARES AND OTHER MATTERS. The Declaration of Trust of the
Williamsburg Investment Trust currently provides for the shares of eleven funds,
or series, to be issued. Shares of all eleven series have currently been issued,
in addition to the Bond Fund and the Short Term Fund described in this
Prospectus: shares of the FBP Contrarian Balanced Fund and the FBP Contrarian
Equity Fund, which are managed by Flippin, Bruce & Porter, Inc. of Lynchburg,
Virginia; shares of The Government Street Equity Fund, The Government Street
Bond Fund and The Alabama Tax Free Bond Fund, which are managed by T. Leavell &
Associates, Inc. of Mobile, Alabama; and shares of The Jamestown Balanced Fund,
The Jamestown Equity Fund, The Jamestown International Equity Fund and The
Jamestown Tax Exempt Virginia Fund, which are are managed by Lowe, Brockenbrough
& Tattersall, Inc. The Trustees are permitted to create additional series at any
time.
Shares are freely transferable, have no preemptive or conversion rights and,
when issued, are fully paid and non-assessable. Upon liquidation of the Trust or
a particular Fund of the Trust, holders of the outstanding shares of the Fund
being liquidated shall be entitled to receive, in proportion to the number of
shares of the Fund held by them, the excess of that Fund's assets over its
liabilities. Each outstanding share is entitled to one vote for each full share
and a fractional vote for each fractional share, on all matters which concern
the Trust as a whole. On any matter submitted to a vote of shareholders, all
shares of the Trust then issued and outstanding and entitled to vote,
irrespective of the Fund, shall be voted in the aggregate and not by Fund,
except (i) when required by the 1940 Act, shares shall be voted by individual
Fund; and (ii) when the matter does not affect any interest of a particular
Fund, then only shareholders of the affected Fund or Funds shall be entitled to
vote thereon. Examples of matters which affect only a particular Fund could be a
proposed change in the fundamental investment objectives or policies of that
Fund or a proposed change in the investment advisory agreement for a particular
Fund. Service Group Shares of the Funds shall vote separately on matters
relating to the plan of distribution pursuant to Rule 12b-1 (see "Plan of
Distribution"). The shares of the Funds have noncumulative voting rights, which
means that the holders of more than 50% of the shares voting for the election of
Trustees can elect all of the Trustees if they so choose.
<PAGE>
The Declaration of Trust provides that the Trustees may hold office
indefinitely, except that: (1) any Trustee may resign or retire; and (2) any
Trustee may be removed with or without cause at any time: (a) by a written
instrument, signed by at least two-thirds of the number of Trustees prior to
such removal; (b) by vote of shareholders holding not less than two-thirds of
the outstanding shares of the Trust, cast in person or by proxy at a meeting
called for that purpose; or (c) by a written declaration signed by shareholders
holding not less than two-thirds of the outstanding shares of the Trust and
filed with the Trust's custodian. In case a vacancy or an anticipated vacancy
shall for any reason exist, the vacancy shall be filled by the affirmative vote
of a majority of the remaining Trustees, subject to the provisions of Section
16(a) of the 1940 Act.
Any group of shareholders representing 10% or more of the shares then
outstanding may call a meeting for the purpose of removing one or more of the
Trustees. If shareholders desire to call a meeting to consider the removal of
one or more Trustees, they will be assisted in communicating with other
shareholders. See the Statement of Additional Information for more information.
Shareholder inquiries may be made in writing, addressed to the Funds at the
address shown on the cover.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability. See the Statement of Additional Information
for further information about the Trust and its shares.
CALCULATION OF PERFORMANCE DATA. From time to time each Fund may advertise its
total return. Each Fund may also advertise yield. Both yield and total return
figures are based on historical earnings and are not intended to indicate future
performance. Total return and yield are computed separately for Service Group
and Institutional Shares. The yield of Institutional Shares is expected to be
higher than the yield of Service Group Shares due to the distribution fees
imposed on Service Group Shares.
The "total return" of a Fund refers to the average annual compounded rates of
return over 1, 5 and 10 year periods that would equate an initial amount
invested at the beginning of a stated period to the ending redeemable value of
the investment. The calculation of total return assumes the reinvestment of all
dividends and distributions, includes all recurring fees that are charged to all
shareholder accounts and deducts all nonrecurring charges at the end of each
period. If a Fund has been operating less than 1, 5 or 10 years, the time period
during which the Fund has been operating is substituted.
In addition, the Funds may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may be quoted for the same or
different periods as those for which standardized return is quoted.
Nonstandardized Return may consist of a cumulative percentage rate of return,
actual year-by-year rates or any combination thereof.
The "yield" of a Fund is computed by dividing the net investment income per
share earned during a thirty-day (or one month) period stated in the
advertisement by the maximum offering price per share on the last day of the
period (using the average number of shares entitled to receive dividends). The
yield formula assumes that net investment income is earned and reinvested at a
constant rate and annualized at the end of a six-month period. For the purpose
of determining net investment income, the calculation includes among expenses of
the Funds all recurring fees that are charged to all shareholder accounts and
any nonrecurring charges for the period stated.
<PAGE>
THE JAMESTOWN BOND FUNDS
SERVICE GROUP SHARES
Send completed application to:
THE JAMESTOWN BOND FUNDS
Shareholder Services
FUND SHARES APPLICATION P.O. Box 5354
(Please type or print clearly) Cincinnati, OH 45201-5354
===============================================================================
ACCOUNT REGISTRATION
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.
0 UGMA/UTMA _________________________________ under the_______ Uniform Gifts/
(First Name)(Middle Initial) (Last Name) (State) Transfers to
Minors Act
_____________________________________________________as Custodian
(First Name) (Middle Name) (Last Name)
_________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
o For Corporations, Pertnerships, Trusts,
Retirement Plans and Third Party IRAs
_________________________________________________________________
Name of Corporation or Partnership. If a Trust, include the
name(s) of Trustees in which account will be registered, and the
date of the Trust instrument.
_________________________________________________________________
(Taxpayer Identification Number)
===============================================================================
ADDRESS
Street or P.O. Box_____________________________________________________________
City_________________________________________State____________Zip______________
Telephone_____________________________U.S. Citizen___Resident Alien__
Non Resident (Country of Residence)______
===============================================================================
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name___________________________________________________________________________
Street or P.O. Box_____________________________________________________________
City_________________________________________State____________Zip______________
===============================================================================
INITIAL INVESTMENT (Minimum initial investment: $500,000 for Bond Fund; $100,000
for Short Term Bond Fund)
o Enclosed is a check payable to the applicable Fund for $____________________
(Please indicate Fund below)
o Jamestown Bond Fund o Jamestown Short Term Bond Fund
o Funds were wired to Star Bank on____________________________________in the
amount of $_____________________
By Mail:You may purchase shares by mail by completing and signing this
application. Please mail with your check to the address above.
By Wire:You may purchase shares by wire. PRIOR TO SENDING THE WIRE, PLEASE
CONTACT THE FUNDS AT 1-800-443-4249 SO THAT YOUR WIRE TRANSFER IS
PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed
application by mail immediately thereafter to the Funds. The wire should
be routed as follows:
STAR BANK, N.A.
CINTI/TRUST
ABA #042000013
FOR CREDIT WILLIAMSBURG INVESTMENT TRUST #485777056
FOR THE JAMESTOWN BOND FUND OR THE JAMESTOWN SHORT TERM BOND FUND
FOR (SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER)
<PAGE>
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
o Reinvest all dividends and capital gains distributions
o Reinvest all capital gain distributions; dividends to be paid in cash
o Pay all dividends and capital gain distributions in cash
o By Check o By ACH to my bank checking or savings account.
PLEASE ATTACH A VOIDED CHECK.
===============================================================================
SIGNATURE AUTHORIZATION - FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND
OTHER INSTITUTIONS
Please retain a copy of this document for your files. Any modification of the
information contained in this section will require an Amendment to this
Application Form.
o New Application o Amendment to previous Application dated______
Account No.______________________________
Name of Registered Owner_______________________________________________________
The following named person(s) are currently authorized signatories of the
Registered Owner. Any of them is/are authorized under the applicable governing
document to act with full power to sell, assign or transfer securities of THE
JAMESTOWN BOND FUNDS for the Registered Owner and to execute and deliver any
instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
_______________________________ __________________ _________________________
_______________________________ __________________ _________________________
_______________________________ __________________ _________________________
THE JAMESTOWN BOND FUNDS, or any agent of the Funds may, without inquiry, rely
upon the instruction of any person(s) purporting to be an authorized person
named above, or in any Amendment received by the Funds or their agent. The Funds
and their Agent shall not be liable for any claims, expenses or losses resulting
from having acted upon any instruction reasonably believed to be genuine.
===============================================================================
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile
believed to be authentic.
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)
Name as it appears on the account______________________________________________
Commercial bank account #______________________________________________________
ABA Routing #__________________________________________________________________
City, State and Zip in which bank is located___________________________________
===============================================================================
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase
shares of the Funds and affirm that I have received a current prospectus and
understand the investment objectives and policies stated therein. The investor
hereby ratifies any instructions given pursuant to this Application and for
himself and his successors and assigns does hereby release Countrywide Fund
Services, Inc., Williamsburg Investment Trust, Lowe, Brockenbrough & Tattersall
Strategic Advisors, Inc., and their respective officers, employees, agents and
affiliates from any and all liability in the performance of the acts instructed
herein provided that such entities have exercised due care to determine that the
instructions are genuine. I certify under the penalties of perjury that (1) the
Social Security Number or Tax Identification Number shown is correct and (2) I
am not subject to backup withholding. The certifications in this paragraph are
required from all non-exempt persons to prevent backup withholding of 31% of all
taxable distributions and gross redemption proceeds under the federal income tax
law. The Internal Revenue Service does not require your consent to any provision
of this document other than the certifications required to avoid backup
withholding. (Check here if you are subject to backup withholding) q.
_____________________________________ ______________________________________
APPLICANT DATE JOINT APPLICANT DATE
_____________________________________ ______________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN BOND FUNDS
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
July 31, 1997
Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES........................................2
DESCRIPTION OF BOND RATINGS...............................................5
INVESTMENT LIMITATIONS....................................................8
TRUSTEES AND OFFICERS....................................................10
INVESTMENT ADVISOR.......................................................14
ADMINISTRATOR............................................................15
OTHER SERVICES...........................................................16
BROKERAGE................................................................16
SPECIAL SHAREHOLDER SERVICES.............................................17
PLAN OF DISTRIBUTION.....................................................18
PURCHASE OF SHARES.......................................................20
REDEMPTION OF SHARES.....................................................21
NET ASSET VALUE DETERMINATION............................................21
ALLOCATION OF TRUST EXPENSES.............................................21
ADDITIONAL TAX INFORMATION...............................................22
CAPITAL SHARES AND VOTING................................................23
CALCULATION OF PERFORMANCE DATA..........................................24
FINANCIAL STATEMENTS AND REPORTS.........................................27
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of The Jamestown Bond Funds (the
"Funds") dated July 31, 1997. The Prospectus may be obtained from the Funds, at
the address and phone number shown above, at no charge.
August 6, 1997
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Jamestown Bond Fund (the
"Bond Fund") and The Jamestown Short Term Bond Fund (the "Short Term Fund")
unless otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time a
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during which the
repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Funds hold a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Advisor will carefully consider the creditworthiness during the
term of the repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times as least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Funds' custodian either directly or through a securities depository.
- 2 -
<PAGE>
SECURITIES OF UNSEASONED COMPANIES. The securities of unseasoned companies
(those in business less than three years, including predecessors and, in the
case of bonds, guarantors) may have a limited trading market, which may
adversely affect disposition. If other investors attempt to dispose of such
holdings when the Funds desire to do so, the Funds could receive lower prices
than might otherwise be obtained. Because of the increased risk over larger,
better known companies, each Fund limits its investments in the securities of
unseasoned issuers to no more than 5% of its total assets.
U.S. GOVERNMENT SECURITIES. Each Fund may invest in debt obligations which are
issued or guaranteed by the U.S. Government, its agencies and instrumentalities
("U.S. Government Securities") as described herein. U.S. Government Securities
include the following securities: (1) U.S. Treasury obligations of various
interest rates, maturities and issue dates, such as U.S. Treasury bills (mature
in one year or less), U.S. Treasury notes (mature in one to seven years), and
U.S. Treasury bonds (mature in more than seven years), the payments of principal
and interest of which are all backed by the full faith and credit of the U.S.
Government; (2) obligations issued or guaranteed by U.S. Government agencies or
instrumentalities, some of which are backed by the full faith and credit of the
U.S. Government, e.g., obligations of the Government National Mortgage
Association ("GNMA"), the Farmers Home Administration and the Export Import
Bank; some of which do not carry the full faith and credit of the U.S.
Government but which are supported by the right of the issuer to borrow from the
U.S. Government, e.g., obligations of the Tennessee Valley Authority, the U.S.
Postal Service, the Federal National Mortgage Association ("FNMA"), and the
Federal Home Loan Mortgage Corporation ("FHLMC"); and some of which are backed
only by the credit of the issuer itself, e.g., obligations of the Student Loan
Marketing Association, the Federal Home Loan Banks and the Federal Farm Credit
Bank; and (3) any of the foregoing purchased subject to repurchase agreements as
described herein. The Funds do not intend to invest in "zero coupon" Treasury
securities. The guarantee of the U.S. Government does not extend to the yield or
value of the Funds' shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have lower
yields. To the extent such securities were purchased at a
- 3 -
<PAGE>
premium, such prepayments could result in capital losses. The U.S.
Government does not guarantee premiums and market value of U.S. Government
Securities.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they mature
in thirteen months or less from the date of acquisition and are otherwise
eligible for purchase by the Funds. Money market instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks, Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and "accepted" by a bank,
are the customary means of effecting payment for merchandise sold in
import-export transactions and are a source of financing used extensively in
international trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Funds acquire a Bankers' Acceptance, the
bank which "accepted" the time draft is liable for payment of interest and
principal when due. The Bankers' Acceptance, therefore, carries the full faith
and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured
interest-bearing debt obligation of a bank. CDs acquired by the Funds would
generally be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured,
short-term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity generally ranges from two to 270 days and is usually sold on a
discounted basis rather than as an interest-bearing instrument. The Funds will
invest in Commercial Paper only if it is rated in the highest rating category by
any nationally recognized statistical rating organization ("NRSRO") or, if not
rated, the issuer must have an outstanding unsecured debt issue rated in the
three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Advisor's assessment. Commercial Paper may include Master Notes
of the same quality. MASTER NOTES are unsecured obligations which are redeemable
upon demand of the holder and which permit the investment of fluctuating amounts
at varying rates of interest. Master Notes are acquired by the Funds only
through the Master Note program of the Funds' custodian, acting as administrator
thereof. The Advisor will monitor, on a continuous basis, the earnings power,
cash flow and other liquidity ratios of the issuer of a Master Note held by the
Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Funds may purchase securities
on a when-issued basis or for settlement at a future date if the Funds hold
sufficient assets to meet the purchase price. In such purchase transactions the
Funds will not accrue interest on the purchased security until the actual
settlement. Similarly, if a security is sold for a forward date,
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<PAGE>
the Funds will accrue the interest until the settlement of the sale. When-issued
security purchases and forward commitments have a higher degree of risk of price
movement before settlement due to the extended time period between the execution
and settlement of the purchase or sale. As a result, the exposure to the
counterparty of the purchase or sale is increased. Although the Funds would
generally purchase securities on a forward commitment or when-issued basis with
the intention of taking delivery, the Funds may sell such a security prior to
the settlement date if the Advisor felt such action was appropriate. In such a
case, the Funds could incur a short-term gain or loss.
RESTRICTED SECURITIES. Each Fund may purchase securities that are not registered
("restricted securities") under the 1933 Act, but can be offered and sold to
"qualified institutional buyers" under Rule 144A of the 1933 Act. However, a
Fund will not invest more than 10% of its assets in illiquid investments, which
includes securities that are not readily marketable and restricted securities,
unless the Board of Trustees determines, based upon a continuing review of the
trading markets for the specific restricted security, that such restricted
securities are liquid. The Board of Trustees may adopt guidelines and delegate
to the Advisor the daily function of determining and monitoring liquidity of
restricted securities. It is not possible to predict with accuracy how the
markets for certain restricted securities will develop. Investing in restricted
securities could have the effect of increasing the level of a Fund's illiquidity
to the extent that qualified institutional buyers become, for a time,
uninterested in purchasing these securities. Each Fund currently intends to
limit its investments in restricted securities to no more than 5% of its net
assets.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an NRSRO
represents the organization's opinion as to the credit quality of the security
being traded. However, the ratings are general and are not absolute standards of
quality or guarantees as to the creditworthiness of an issuer. Consequently, the
Advisor believes that the quality of fixed-income securities in which the Funds
may invest should be continuously reviewed and that individual analysts give
different weightings to the various factors involved in credit analysis. A
rating is not a recommendation to purchase, sell or hold a security because it
does not take into account market value or suitability for a particular
investor. When a security has received a rating from more than one NRSRO, each
rating is evaluated independently. Ratings are based on current information
furnished by the issuer or obtained by the NRSROs from other sources that they
consider reliable. Ratings may be changed, suspended or withdrawn as a result of
changes in or unavailability of such information, or for other reasons.
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<PAGE>
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
AAA: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large in Aa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements that make the long term
risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to
be considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present that
suggest a susceptibility to impairment sometime in the future.
BAA: Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated Aa,
A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower end of
its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
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<PAGE>
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore,
impair timely payment.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within a rating category.
DESCRIPTION OF DUFF & PHELPS CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk factors are
negligible, being only slightly more than for risk- free U.S. Treasury debt.
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<PAGE>
AA: Bonds rated AA are considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
A: Bonds rated A have average protection factors. However risk factors are
more variable and greater in periods of economic stress.
BBB: Bonds rated BBB have below average protection factors, but are
considered sufficient for prudent investment. There is considerable variability
in risk during economic cycles.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's outstanding
shares represented in person or by proxy at a meeting at which more than 50% of
its outstanding shares are represented, or (ii) more than 50% of its outstanding
shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities of
any one issuer or acquire more than 10% of the outstanding voting
securities of any one issuer (except that securities of the U.S.
Government, its agencies or instrumentalities are not subject to these
limitations);
(2) Invest 25% or more of the value of its total assets in any one industry
or group of industries (except that securities of the U.S. Government,
its agencies and instrumentalities are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or trustees
of the Trust or its Advisor who own beneficially more than 1/2 of 1% of
the outstanding securities of such issuer together own more than 5% of
the outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management of another
issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil, gas
or other mineral exploration or development programs, except that the
Funds may invest in the securities of companies (other than those which
are not readily marketable) which own or deal in such things, and the
Funds may invest in certain mortgage backed securities as described in
the Prospectus under "Investment Objectives, Investment Policies and Risk
Considerations";
- 8 -
<PAGE>
(6) Underwrite securities issued by others, except to the extent a Fund may
be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such short-term
credits as may be necessary for the clearance of transactions);
(8) Make short sales of securities or maintain a short position, except short
sales "against the box." (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short.);
(9) Participate on a joint or joint and several basis in any trading account
in securities;
(10) Purchase real estate or interests in real estate, except that securities
in which the Funds invest may themselves have investment in real estate
or interests in real estate (the Funds do invest in securities composed
of mortgages against real estate);
(11) Invest more than 10% in the aggregate in illiquid securities (potentially
including repurchase agreements with a maturity of greater than 7 days,
Interest Only or Principal Only securities, and mortgage backed strips
which may not be readily marketable); or
(12) Write, purchase or sell puts, calls or combinations thereof, or purchase
or sell commodities, commodities contracts, futures contracts or related
options, or purchase, sell or write warrants.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
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<PAGE>
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg Investment
Trust (the "Trust"), their present position with the Trust or Funds, age,
principal occupation during the past 5 years and their aggregate compensation
from the Trust for the fiscal year ended March 31, 1997:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
- ------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (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 Tredegar Industries, Inc.
6620 West Broad Street (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, Virgiinia
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 Mutual
Insurance Co.
Richard Mitchell (age 48) Principal of None
Trustee** T. Leavell & Associates, Inc.
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
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<PAGE>
Richard L. Morrill (age 58) President of $8,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Central Fidelity Banks, Inc.
and Tredegar Industries, Inc.
Harris V. Morrissette (age 37) President of $7,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 President of Azalea Aviation, Inc
(airplane fueling); Director of
Bank of Mobile
Fred T. Tattersall (age 48) Managing Director of None
Trustee** Lowe, Brockenbrough & Tattersall
President Strategic Advisors, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 64) Chief Investment Officer of None
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
Samuel B. Witt III (age 61) Senior Vice President and $6,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetic Fund, Inc. (closed-end
investment company)
Charles M. Caravati III (age 31) Assistant Portfolio Manager of
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John M. Flippin (age 55) Principal of
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
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<PAGE>
Timothy S. Healey (age 44) Vice President of
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
R. Gregory Porter, III (age 56) Principal of
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 35) Vice President of Countrywide Fund Services,
Treasurer Inc. and Countrywide Financial Services, Inc.;
312 Walnut Street, 21st Floor Treasurer, Countrywide Investment Trust,
Cincinnati, Ohio 45202 Countrywide Tax-Free Trust and Countrywide
Strategic Trust
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 59) Executive Vice President of
President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund & Tattersall, Inc.
The Jamestown Equity Fund Richmond, Virginia
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, Ince.; General
312 Walnut Street, 21st Floor Counsel and Secretary, Countrywide
Cincinnati, Ohio 45202 Investments, Inc. and Countrywide Financial
Services, Inc.; Secretary, Countrywide Investment
Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust.
Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 52) Vice President
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
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<PAGE>
Connie R. Taylor (age 46) Administrator
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Craig D. Truitt (age 38) Senior Vice President
Vice President Lowe, Brockenbrough & Tattersall
The Jamestown Bond Fund Strategic Advisors, Inc.
The Jamestown Short Term Bond Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 38) Portfolio Manager of
Vice President Lowe, Brockenbrough & Tattersall, Inc.
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- -----------------------------
</TABLE>
**Indicates that Trustee is an Interested Person for purposes of the 1940 Act.
Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee. Messrs. Caravati, Lee, Morrill, Morrissette, Will and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually the
nature and cost of the professional services rendered by the Trust's independent
accountants, the results of their year-end audit and their findings and
recommendations as to accounting and financial matters, including the adequacy
of internal controls. On the basis of this review the Audit Committee makes
recommendations to the Trustees as to the appointment of independent accountants
for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of May 23, 1997, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 1.1% of the then outstanding shares of the Bond Fund and 10.6%
of the then outstanding shares of the Short Term Fund. On the same date,
Rockingham Health Care, Inc., 235 Cantrell Avenue, Harrisonburg, Virginia 22801,
owned of record 54.4% of the then outstanding shares of the Short Term Fund and
may therefore be deemed to control the Short Term Fund. On the same date,
Halifax Regional Hospital, 2204 Wilborn Avenue, South Boston, Virginia 24592,
owned of record 13.3% of the then outstanding shares of the Bond
- 13 -
<PAGE>
Fund; Crestar Bank as Trustee for Hourly Employees Norshipco Pension Plans, P.O.
Box 2642, Norfolk, Virginia 23501, owned of record 6.5% of the then outstanding
shares of the Bond Fund; Crestar Bank as Trustee for Norfolk Dredging Company
Profit Sharing Plan, P.O. Box 26246, Richmond, Virginia 23260, owned of record
5.9% of the then outstanding shares of the Bond Fund; Rockingham Health Care,
Inc., 235 Cantrell Avenue, Harrisonburg, Virginia 22801, owned of record 12.6%
of the then outstanding shares of the Bond Fund; Rockingham Memorial Hospital
Retirement Plan, 235 Cantrell Avenue, Harrisonburg, Virginia 22801, owned of
record 8.4% of the then outstanding shares of the Bond Fund; Calvert Memorial
Hospital, 100 Hospital Road, Prince Frederick, Maryland 20678, owned of record
10.1% of the then outstanding shares of the Bond Fund; Virginia International
Terminals, Inc. Pension Plan, P.O. Box 1387, Norfolk, Virginia 23501, owned of
record 11.6% of the then outstanding shares of the Bond Fund; The Lincoln Lane
Foundation, 112 Granby Street, Norfolk, Virginia 23510, owned of record 5.1% of
the then outstanding shares of the Bond Fund; the Lowe, Brockenbrough &
Tattersall Money Purchase Pension Plan, 6620 West Broad Street, Richmond,
Virginia 23230, owned of record 10.6% of the then outstanding shares of the
Short Term Fund; the McKay-Dee Foundation, 3939 Harrison Boulevard, Ogden, Utah
84403, owned of record 8.5% of the then outstanding shares of the Short Term
Fund; and Centura Investment Management & Trust Services, P.O. Box 1220, Rocky
Mount, North Carolina 27802, owned of record 10.7% of the then outstanding
shares of the Short Term Fund.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Tattersall, Strategic Advisors, Inc. (the "Advisor")
supervises each Fund's investments pursuant to an Investment Advisory Agreement
(the "Advisory Agreement") described in the Prospectus. The Advisory Agreement
is effective until February 28, 1999 and will be renewed thereafter for one year
periods only so long as such renewal and continuance is specifically approved at
least annually by the Board of Trustees or by vote of a majority of the Funds'
outstanding voting securities, provided the continuance is also approved by a
majority of the Trustees who are not "interested persons" of the Trust or the
Advisor by vote cast in person at a meeting called for the purpose of voting on
such approval. The Advisory Agreement is terminable without penalty on sixty
days notice by the Board of Trustees of the Trust or by the Advisor. The
Advisory Agreement provides that it will terminate automatically in the event of
its assignment.
The Advisor is a Virginia corporation controlled by its sole
shareholder, Fred T. Tattersall. Prior to February 28, 1997, the
investment advisor to each Fund was Lowe, Brockenbrough &
Tattersall, Inc. ("LB&T"), of which Mr. Tattersall and Austin
Brockenbrough III were the controlling shareholders. On February
28, 1997, LB&T was reorganized by means of a corporate
restructuring into two separate legal entities: LB&T, owned by
- 14 -
<PAGE>
Mr. Brockenbrough, and the Advisor, owned by Mr. Tattersall. The Advisor manages
the fixed-income accounts formerly managed by LB&T. In addition to acting as
Advisor to the Funds, the Advisor provides investment advice to corporations,
trusts, pension and profit sharing plans, other business and institutional
accounts and individuals.
Compensation of the Advisor, with respect to each Fund, is at the annual rate of
0.375% of such Fund's average daily net assets. For the fiscal years ended March
31, 1997, 1996 and 1995, the Advisor and/or LB&T received investment advisory
fees of $289,094, $305,247 and $242,915, respectively, from the Bond Fund. For
the fiscal year ended March 31, 1997, the Advisor and LB&T each waived its
entire investment advisory fee from the Short Term Fund and reimbursed the Fund
for $6,864 of other operating expenses. For the fiscal years ended March 31,
1996 and 1995, LB&T received investment advisory fees of $3,786 (which was net
of voluntary fee waivers of $43,635) and $3,372 (net of voluntary fee waivers of
$49,560), respectively, from the Short Term Fund.
The Advisor provides a continuous investment program for the Funds, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Funds. The Advisor determines what securities
and other investments will be purchased, retained or sold by the Funds, and does
so in accordance with the investment objectives and policies of the Funds as
described herein and in the Prospectus. The Advisor places all securities orders
for the Funds, determining with which broker, dealer, or issuer to place the
orders.
The Advisor must adhere to the brokerage policies of the Funds in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to the
Trust.
ADMINISTRATOR
Countrywide Fund Services, Inc. (the "Administrator") maintains the records of
each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Funds and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
- 15 -
<PAGE>
For the performance of these administrative services, each Fund pays the
Administrator a base fee at the annual rate of 0.075% of the average value of
its daily net assets up to $200,000,000 and 0.05% of such assets in excess of
$200,000,000 (subject to a minimum fee of $2,000 per month for each Fund) plus a
surcharge of $1,000 per month. In addition, the Funds pay out-of-pocket
expenses, including but not limited to, postage, envelopes, checks, drafts,
forms, reports, record storage and communication lines.
For the fiscal years ended March 31, 1997, 1996 and 1995, the Administrator
received fees of $57,859, $61,029 and $49,025, respectively, from the Bond Fund
and $24,000, $24,000 and $23,301, respectively, from the Short Term Fund.
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Funds'
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
The Custodian of the Funds' assets is Star Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Funds
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all portfolio
securities transactions. The Advisor (subject to the general supervision of the
Board of Trustees) directs the execution of the Funds' portfolio transactions.
The Trust has adopted a policy which prohibits the Advisor from effecting Fund
portfolio transactions with broker-dealers which may be interested persons of
either Fund, the Trust, any Trustee, officer or director of the Trust or its
investment advisors or any interested person of such persons.
The Funds' portfolio transactions will normally be principal transactions
executed in over-the-counter markets and will be executed on a "net" basis,
which may include a dealer markup. However, the Bond Fund typically transacts in
shares of closed-end investment companies on an agency basis, and pays
commissions in connection with these transactions.
- 16 -
<PAGE>
For the fiscal years ended March 31, 1997, 1996 and 1995, the total amount of
brokerage commissions paid by the Bond Fund was $25,248, $126,787 and $0,
respectively. No brokerage commissions were paid by the Short Term Fund for the
last three fiscal years.
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of either Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic, political,
fundamental and technical market and interest rate data, and other statistical
or research services. Much of the information so obtained may also be used by
the Advisor for the benefit of the other clients it may have. Conversely, the
Funds may benefit from such transactions effected for the benefit of other
clients. In all cases, the Advisor is obligated to effect transactions for the
Funds based upon obtaining the most favorable price and execution. Factors
considered by the Advisor in determining whether the Funds will receive the most
favorable price and execution include, among other things: the size of the
order, the broker's ability to effect and settle the transaction promptly and
efficiently and the Advisor's perception of the broker's reliability, integrity
and financial condition.
In an effort to reduce the total operating expenses of the Bond Fund, a portion
of the Fund's custodian fees have been reimbursed through an arrangement with a
third party broker-dealer who is compensated through security trades. Total
custodian expenses reimbursed by the broker-dealer for the year ended March 31,
1997 were $22,926.
During the fiscal year ended March 31, 1997, the Bond Fund acquired bonds issued
by Lehman Brothers Holdings (having a market value of $1,821,417 as of March 31,
1997) and Morgan Stanley Group (having a market value of $658,281 as of March
31, 1997), the parents of two of the Trust's "regular broker-dealers" as defined
in the 1940 Act.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder
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<PAGE>
account, such as an additional investment or the reinvestment of a dividend or
distribution, the shareholder will receive a statement showing the current
transaction and all prior transactions in the shareholder account during the
calendar year to date.
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is at
the sole discretion of the Advisor based upon the suitability of the securities
accepted for inclusion as a long term investment of the Funds, the marketability
of such securities, and other factors which the Advisor may deem appropriate. If
accepted, the securities will be valued using the same criteria and methods as
described in "How Net Asset Value is Determined" in the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Funds to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Funds. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Funds who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on
the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PLAN OF DISTRIBUTION
As described in the Prospectus, Service Group Shares of the Fund have adopted a
plan of distribution (the "Plan") pursuant to Rule 12b-1 under the Investment
Company Act of 1940 which permits Service Group Shares to pay for expenses
incurred in the distribution and promotion of the Funds' Service Group Shares,
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<PAGE>
including but not limited to, the printing of prospectuses, statements of
additional information and reports used for sales purposes, advertisements,
expenses of preparation and printing of sales literature, promotion, marketing
and sales expenses, and other distribution related expenses, including any
distribution fees paid to securities dealers or other firms who have executed a
distribution or service agreement with the Advisor. The Plan expressly limits
payment of distribution expenses listed above in any fiscal year to a maximum of
.15% of the average daily net assets of Service Group Shares of the Fund.
Unreimbursed expenses will not be carried over from year to year.
Agreements implementing the Plan (the "Implementation Agreements"), including
agreements with financial consultants and other intermediaries wherein such
financial consultants and other intermediaries agree for a fee to act as agents
for the sale of the Fund's Service Group Shares, are in writing and have been
approved by the Board of Trustees. All payments made pursuant to the Plan are
made in accordance with written agreements.
The continuance of the Plan and the Implementation Agreements must be
specifically approved at least annually by a vote of the Trustees who are not
interested persons of the Trust and have no direct or indirect financial
interest in the Plan or any Implementation Agreement (the "Independent
Trustees") at a meeting called for the purpose of voting on such continuance.
The Plan may be terminated at any time by a vote of the majority of the
Independent Trustees or by a vote of the holders of a majority of the
outstanding Service Group Shares of the Fund. In the event the Plan is
terminated in accordance with its terms, Service Group Shares will not be
required to make any payments for expenses incurred by the Advisor after the
termination date. Each Implementation Agreement terminates automatically in the
event of its assignment and may be terminated at any time by a vote of a
majority of the Independent Trustees or by a vote of the holders of a majority
of the outstanding Service Group Shares on not more than 60 days' written notice
to any other party to the Implementation Agreement.The Plan may not be amended
to increase materially the amount to be spent for distribution without
shareholder approval. All material amendments to the Plan must be approved by a
vote of the Independent Trustees.
In approving the Plan, the Trustees determined, in the exercise of their
business judgment and in light of their fiduciary duties as Trustees, that there
is a reasonable likelihood that the Plan will benefit the Funds and the holders
of their Service Group Shares. The Board of Trustees believes that the
expenditure of assets of Service Group Shares for distribution expenses under
the Plan should assist in the growth of such shares which will benefit the Funds
and the holders of their Service Group Shares through increased economies of
scale, greater investment
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<PAGE>
flexibility, greater portfolio diversification and less chance of disruption of
planned investment strategies. The Plan will be renewed only if the Trustees
make a similar determination for each subsequent year of the Plan. There can be
no assurance that the benefits anticipated from the expenditure of Service Group
Shares' assets for distribution will be realized. While the Plan is in effect,
all amounts spent by Service Group Shares pursuant to the Plan and the purposes
for which such expenditures were made must be reported quarterly to the Board of
Trustees for its review. The selection and nomination of those Trustees who are
not interested persons of the Trust are committed to the discretion of the
Independent Trustees during such period.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next determined
after the order is received. An order received prior to 4:00 p.m., Eastern time
will be executed at the price computed on the date of receipt; and an order
received after that time will be executed at the price computed on the next
Business Day. An order to purchase shares is not binding on the Funds until
confirmed in writing (or unless other arrangements have been made with the
Funds, for example in the case of orders utilizing wire transfer of funds) and
payment has been received.
Each Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial investment
minimums for the purpose of reducing the cost to the Funds (and consequently to
the shareholders) of communicating with and servicing their shareholders.
However, a reduced minimum initial investment requirement of $5,000 applies to
Trustees, officers and employees of the Funds, the Advisor and certain parties
related thereto, including clients of the Advisor or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
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<PAGE>
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the New York Stock Exchange (the "Exchange") is closed,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an emergency
exists as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it, or to
fairly determine the value of its assets, and (iii) for such other periods as
the Commission may permit.
No charge is made by the Funds for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities held
by the Funds.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.,
Eastern time) on each "Business Day." A Business Day means any day, Monday
through Friday, except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Fourth of July, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day and Christmas. Net asset value per share is
determined by dividing the total value of all Fund securities and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of shares (including
registration and qualification fees and expenses); costs and expenses of
membership and attendance at meetings of certain associations which may be
deemed by the Trustees to be of overall benefit to the Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Funds. General Trust expenses are allocated among
the series, or funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each fund (on the date the
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<PAGE>
expense is paid) or the nature of the services performed and the relative
applicability to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In addition
to this distribution requirement, each Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities' loans, gains from the disposition of stock or securities, and
certain other income. Each Fund will also be required to derive less than 30% of
its gross income from the sale or other disposition of securities held for less
than 90 days.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter M,
they will not be subject to federal income tax to the extent they distribute
their taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on each Fund to the extent
it does not distribute at least 98% of its ordinary taxable income for a
calendar year, plus 98% of its capital gain net taxable income for the one year
period ending each October 31, plus certain undistributed amounts from prior
years. While each Fund intends to distribute its taxable income and capital
gains in a manner so as to avoid imposition of the federal excise and income
taxes, there can be no assurance that the Funds indeed will make sufficient
distributions to avoid entirely imposition of federal excise or income taxes.
As of March 31, 1997, the Bond Fund and the Short Term Fund had capital loss
carryforwards for federal income tax purposes of $1,440,604 and $508,929,
respectively, which expire on March 31, 2004. These capital loss carryforwards
may be utilized in future years to offset net realized gains prior to
distributing such gains to shareholders.
Should additional series, or funds, be created by the Trustees, each fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are
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<PAGE>
taxable to shareholders as long-term capital gains, whether received in cash or
reinvested in additional shares, regardless of how long Fund shares have been
held. For information on "backup" withholding, see "How to Purchase Shares" in
the Prospectus.
Each Fund will send shareholders information each year on the tax status of
dividends and disbursements. A dividend or capital gains distribution paid
shortly after shares have been purchased, although in effect a return of
investment, is subject to federal income taxation. Dividends from net investment
income, along with capital gains, will be taxable to shareholders, whether
received in cash or shares and no matter how long you have held Fund shares,
even if they reduce the net asset value of shares below your cost and thus in
effect result in a return of part of your investment.
CAPITAL SHARES AND VOTING
Shares of the Funds, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust, cast in person or by proxy at a meeting called for that purpose; or (c)
by a written declaration signed by shareholders holding not less than two-thirds
of the outstanding shares of the Trust and filed with the Trust's custodian.
Shareholders have certain rights, as set forth in the Declaration of Trust,
including the right to call a meeting of the shareholders for the purpose of
voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
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<PAGE>
Both Service Group Shares and Institutional Shares of a Fund represent an
interest in the same assets of the Fund, have the same rights and are identical
in all material respects except that (i) Service Group Shares bear the expenses
of distribution fee; (ii) certain class specific expenses will be borne solely
by the class to which such expenses are attributable, including transfer agent
fees attributable to a specific class of shares, printing and postage expenses
related to preparing and distributing materials to current shareholders of a
specific class, registration fees incurred by a specific class of shares, the
expenses of administrative personnel and services required to support the
shareholders of a specific class, litigation or other legal expenses relating to
a class of shares, Trustees' fees or expenses incurred as a result of issues
relating to a specific class of shares and accounting fees and expenses relating
to a specific class of shares; and (iii) each class has exclusive voting rights
with respect to matters affecting only that class. The Board of Trustees may
classify and reclassify shares of the Funds into additional classes of shares at
a future date.
Prior to January 24, 1994 the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of a Fund ("T") is computed by using the redeemable value at the end of a
specified period of time ("ERV") of a hypothetical initial investment of $1,000
("P") over a period of time ("n") according to the formula P(l+T)n=ERV. The
average annual total return quotations for the Bond Fund for the one year period
ended March 31, 1997, for the five year period ended March 31, 1997 and for the
period since inception (December 13, 1990) to March 31, 1997 are 5.52%, 6.96%
and 7.43%, respectively. The average annual total return quotations for the
Short Term Fund for the one year period ended March 31, 1997, for the five year
period ended March 31, 1997 and for the period since inception (January 21,
1992) to March 31, 1997 are 5.01%, 5.21% and 5.04%, respectively.
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or
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<PAGE>
depreciation); it assumes reinvestment of all dividends and capital gain
distributions. Nonstandardized Return may consist of a cumulative percentage of
return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
Yield = 2[(a-b/cd + 1)6 - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period
Generally, interest earned (for the purpose of "a" above) on debt obligations is
computed by reference to the yield to maturity of each obligation held based on
the market value of the obligation (including actual accrued interest) at the
close of business on the last business day prior to the start of the 30-day (or
one month) period for which yield is being calculated, or, with respect to
obligations purchased during the month, the purchase price (plus actual accrued
interest). The yields of the Bond Fund and the Short Term Fund for the 30 days
ended March 31, 1997 were 6.59% and 5.58%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Bond Fund may compare its performance to the
Lehman Brothers Government/Corporate Index and the Lehman Brothers Aggregate
Index, which are generally considered to be representative of the performance of
taxable bonds, and the Short Term Fund may compare its performance to the
Merrill Lynch 1-3 Year Treasury Index. Comparative performance may also be
expressed by reference to a ranking prepared by a mutual fund monitoring
service, such as Lipper Analytical Services, Inc. or Morningstar, Inc., or by
one or more newspapers, newsletters or financial periodicals. Performance
comparisons may be useful to investors who wish to compare the Funds' past
performance to that of other mutual funds and investment products. Of course,
past performance is not a guarantee of future results.
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
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<PAGE>
capital gains distributions and income dividends and takes into account
any change in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain a
more complete view of the Funds' performance before investing. Of course, when
comparing the Funds' performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Funds may quote total returns that are calculated
on non-standardized base periods. The total returns represent the historic
change in the value of an investment in the Funds based on monthly reinvestment
of dividends over a specified period of time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Funds may also disclose from time to
time information about its portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Funds may also depict the historical performance
of the securities in which the Funds may invest over periods reflecting a
variety of market or economic conditions either alone or in comparison with
alternative investments, performance indices of those investments, or economic
indicators. The Funds may also include in advertisements and in materials
furnished to present and prospective shareholders statements or illustrations
relating to the appropriateness of types of securities and/or mutual funds that
may be employed to meet specific financial goals, such as saving for retirement,
children's education, or other future needs.
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<PAGE>
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Funds as of March 31, 1997, together with the report of the independent
accountants thereon, are included on the following pages.
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<PAGE>
THE JAMESTOWN BOND FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LB&T STRATEGIC ADVISORS. INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN BOND FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN BOND FUND
FIRST QUARTER 1997
Chairman Greenspan was clearly in the spotlight this quarter - and with good
reason! The economy started the year on a roll and gained momentum throughout
the quarter, defying all expectations for a slowdown. With each monthly release
of statistics came fresh revisions of economists' forecasts for GDP growth and
renewed concerns about expectations for inflation. This did not go unnoticed by
Mr. Greenspan, who, in uncharacteristically clear text, took every opportunity
to warn the financial markets that a change in Federal Reserve policy was
imminent. Despite the warning, markets, both here and abroad, reacted negatively
to the 25 basis point increase that was announced as a result of the March 25th
FOMC meeting and investors sent both bond and stock prices tumbling just as the
quarter was ending. This was not an unusual event for bonds since yields had
generally been rising each month since the year began, causing the total return
of the Lehman Aggregate Index to be -0.56% and the return of the Govt/Corp Index
to be -0.86% for the quarter. Falling prices were quite unusual for stocks,
however, and the S&P 500 fell over 4% in March to end the quarter up only 2.7%.
Our interest rate disciplines kept us close to neutral during the quarter as
yields remained range bound. We started the year in the mid-point of the 6.35%
to 7.20% range and finished March toward the upper end of it, with little
opportunity for significant outperformance. Sectors also provided little
opportunity for outperformance as yield spreads versus Treasuries remained
narrow all quarter. Your portfolio did benefit from owning closed end funds,
however, as discounts narrowed and NAVs outperformed. Security selection,
especially in mortgages and asset-backed securities, was also a contributing
factor to outperformance.
FISCAL YEAR ENDED MARCH 31, 1997
The optimism that characterized the bond market at the beginning of the year
quickly faded as reports of strong economic growth and a declining unemployment
rate fueled concerns over rising inflation. As a result, bond prices fell and
yields rose dramatically. While most of this move occurred between mid-February
and mid-April, long Treasury yields, which began the year under 6%, peaked at
over 7% in early July. Inflation concerns proved unwarranted, however, as growth
moderated and wage gains remained subdued. A shrinking budget deficit and
inflows from foreign investors seeking higher yields than what was available in
their countries, also supported the U.S. bond market as yields fell about 60
basis points from their July peak by year-end. The domestic investment grade
market thus posted rather anemic returns for the year as the Lehman Brothers
Aggregate Index rose 3.6% and the Government/Corprate Index rose 2.9%. Investors
willing to assume high levels of risk were rewarded as junk bonds returned over
13% and emerging markets debt surged almost 40%.
During most of 1996, our interest rate disciplines kept portfolio durations near
neutral. Except for a brief time early in the year, there was little opportunity
for us or for any manager to impact performance significantly from duration
strategies. Corporates began the year with historically tight spreads and ended
the year with historically tight spreads. We maintained a cautious approach all
year, focusing on short maturities and a few special situations. We are pleased
that, despite underweighting the sector, we are able to capture essentially all
of the excess return in corporates with about one-half of the duration risk.
<PAGE>
LOOKING AHEAD
We have been here before. In fact, we were experiencing similar rates just nine
months ago, right before the market dropped between 50 and 75 basis points. What
is different this time around is that economic growth is clearly stronger, the
fears of impending inflation are clearly stronger, the dollar is stronger and
the Federal Reserve has already raised interest rates. What is similar is that
by most popular measures, inflation still has not appeared and pricing power is
most likely as limited now as it was then. We believe that the most recent rate
hike will be one of a few instead of one of many, and that there is an
opportunity developing in which having a duration longer than the Index will
result in outperformance. Our conviction in this belief is limited, however,
until we see evidence that the economy is cooling off or inflation is dormant.
As for sectors, we are somewhat frustrated by what we perceive as a lack of
opportunity in them right now, although we realize that this is only a temporary
condition. With the backup in interest rates and weakness in the stock market,
there has been some spread widening, or underperformance from corporates,
especially long maturing, weak credits; but not nearly enough to peak our
interest in them so late in this economic cycle. Mortgages appear to be only
fair value, but we have concentrated our holdings in discount coupons with the
added benefit of increased convexity. Within the asset-backed market, we have
identified manufactured housing as an attractive area. Credit quality is high
with these securities, and liquidity is increasing. They are also structured to
provide prepayment and average life stability, and we anticipate outperformance
from our overweighting in them. Closed end bond funds should continue to do
well, although we are lowering our expectations as their discounts narrow.
Although the bond market has not performed particularly well so far this year,
we do get excited about yields in excess of 7.00%. In our continual quest for
situations in which we believe reward outweighs risk, we see more value building
from maturity strategies than we do from sectors. We will look to our
disciplines to indicate when to buy the market.
The Jamestown Bond Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown Bond
Fund, the Lehman Government/Corporate Index, the Lehman Aggregate Index and the
Consumer Price Index
<TABLE>
THE JAMESTOWN BOND FUND
LEHMAN BROTHERS GOVERNMENT THE JAMESTOWN BOND FUND:
CORPORATE INDEX:
<CAPTION>
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C> <C>
12/31/90 10,000 12/31/90 10,000
03/31/91 2.52% 10,252 03/31/91 1.63% 10,163
06/30/91 1.78% 10,434 06/30/91 1.39% 10,305
09/30/91 4.77% 10,932 09/30/91 5.02% 10,822
12/31/91 5.33% 11,515 12/31/91 5.18% 11,382
03/31/92 -1.50% 11,342 03/31/92 -1.49% 11,213
06/30/92 4.06% 11,803 06/30/92 3.35% 11,588
09/30/92 4.88% 12,379 09/30/92 3.83% 12,033
12/31/92 0.07% 12,387 12/31/92 0.27% 12,065
03/31/93 4.66% 12,965 03/31/93 3.81% 12,524
06/30/93 3.01% 13,355 06/30/93 2.26% 12,807
09/30/93 3.32% 13,798 09/30/93 2.22% 13,091
12/31/93 -0.29% 13,758 12/31/93 0.25% 13,124
03/31/94 -3.15% 13,325 03/31/94 -2.55% 12,789
06/30/94 -1.24% 13,160 06/30/94 -1.04% 12,656
09/30/94 0.50% 13,225 09/30/94 0.51% 12,719
12/31/94 0.37% 13,274 12/31/94 0.26% 12,752
03/31/95 4.98% 13,935 03/31/95 4.87% 13,372
06/30/95 6.49% 14,840 06/30/95 5.87% 14,157
09/30/95 1.91% 15,123 09/30/95 2.45% 14,505
12/31/95 4.66% 15,828 12/31/95 4.49% 15,156
03/31/96 -2.34% 15,458 03/31/96 -1.86% 14,874
06/30/96 0.47% 15,530 06/30/96 0.82% 14,996
09/30/96 1.76% 15,804 09/30/96 1.84% 15,272
12/31/96 3.06% 16,287 12/31/96 3.29% 15,775
03/31/97 -0.86% 16,147 03/31/97 -0.50% 15,696
<CAPTION>
LEHMAN BROTHERS AGGREGATE INDEX: CONSUMER PRICE INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
12/31/90 10,000 12/31/90 10,000
03/31/91 2.81% 10,281 03/31/91 0.90% 10,090
06/30/91 1.62% 10,448 06/30/91 0.40% 10,130
09/30/91 5.68% 11,041 09/30/91 0.60% 10,191
12/31/91 5.07% 11,601 12/31/91 0.90% 10,283
03/31/92 -1.27% 11,453 03/31/92 0.70% 10,355
06/30/92 4.04% 11,916 06/30/92 0.80% 10,438
09/30/92 4.30% 12,429 09/30/92 0.70% 10,511
12/31/92 0.26% 12,461 12/31/92 0.80% 10,595
03/31/93 4.14% 12,977 03/31/93 0.90% 10,690
06/30/93 2.66% 13,322 06/30/93 0.60% 10,754
09/30/93 2.61% 13,670 09/30/93 0.40% 10,797
12/31/93 0.05% 13,676 12/31/93 0.70% 10,873
03/31/94 -2.87% 13,284 03/31/94 0.50% 10,927
06/30/94 -1.03% 13,147 06/30/94 0.60% 10,993
09/30/94 0.61% 13,227 09/30/94 0.90% 11,092
12/31/94 0.38% 13,278 12/31/94 0.60% 11,158
03/31/95 5.04% 13,947 03/31/95 0.80% 11,248
06/30/95 6.09% 14,796 06/30/95 0.90% 11,349
09/30/95 1.96% 15,086 09/30/95 0.40% 11,395
12/31/95 4.26% 15,729 12/31/95 0.50% 11,452
03/31/96 -1.77% 15,450 03/31/96 0.80% 11,544
06/30/96 0.57% 15,538 06/30/96 1.10% 11,671
09/30/96 1.85% 15,826 09/30/96 0.44% 11,723
12/31/96 3.00% 16,301 12/31/96 0.82% 11,819
03/31/97 -0.56% 16,209 03/31/97 0.69% 11,901
Past performance is not predictive of future performance.
The Jamestown Bond Fund Average Annual Total Returns
1 Year 5 Years Since Inception*
5.52% 6.96% 7.43%
* Initial offering of shares was December 13, 1990.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 73,579,798
===============
At value (Note 1) $ 73,069,249
Investments in repurchase agreements (Note 1) 4,033,000
Cash 77
Receivable for securities sold 1,587,168
Interest receivable 743,228
Dividends receivable 2,683
Other assets 2,411
---------------
TOTAL ASSETS 79,437,816
---------------
LIABILITIES
Payable for securities purchased 2,868,614
Dividends payable 32,135
Accrued advisory fees (Note 3) 24,528
Accrued administration fees (Note 3) 4,800
Other accrued expenses 8,245
---------------
TOTAL LIABILITIES 2,938,322
---------------
NET ASSETS $ 76,499,494
===============
Net assets consist of:
Paid in capital $ 78,515,550
Accumulated net realized losses from security transactions (1,528,983)
Undistributed net investment income 23,476
Net unrealized depreciation on investments (510,549)
---------------
Net assets $ 76,499,494
===============
Shares of beneficial interest outstanding
(unlimited number of shares
authorized, no par value) 7,454,249
===============
Net asset value, offering price and redemption
price per share (Note 1) $ 10.26
===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
INVESTMENT INCOME
<S> <C>
Interest
$ 4,858,959
Dividends 533,969
---------------
TOTAL INVESTMENT INCOME 5,392,928
---------------
EXPENSES
Investment advisory fees (Note 3) 289,094
Administration fees (Note 3) 57,859
Custodian fees 19,740
Professional fees 14,287
Pricing costs 7,667
Insurance expense 5,485
Trustees' fees and expenses 5,002
Registration fees 2,704
Other expenses 8,065
---------------
TOTAL EXPENSES 409,903
Expenses reimbursed through a directed brokerage
arrangement (Note 4) (22,926)
---------------
NET EXPENSES 386,977
---------------
NET INVESTMENT INCOME 5,005,951
---------------
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
Net realized losses from security transactions (391,414)
Net change in unrealized appreciation/depreciation of
investments (405,910)
---------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (797,324)
---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 4,208,627
===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1997
Year Year
Ended Ended
March 31, March 31,
1997 1996
-------------------- -------------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 5,005,951 $ 5,309,480
Net realized gains (losses) from security transactions (391,414) 3,596,533
Net change in unrealized appreciation/depreciation
on investments (405,910) (949,624)
------------------ ------------------
Net increase in net assets from operations 4,208,627 7,956,389
------------------ ------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (5,104,234) (5,212,243)
------------------ ------------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 9,262,915 16,330,832
Net asset value of shares issued in reinvestment
of distributions to shareholders 4,238,186 4,066,804
Payments for shares redeemed (10,880,119) (20,396,366)
Net increase in net assets from capital share transactions 2,620,982 1,270
TOTAL INCREASE IN NET ASSETS 1,725,375 2,745,416
NET ASSETS:
Beginning of year 74,774,119 72,028,703
------------------ ------------------
End of year - (including undistributed net investment
income of $23,476 and $121,759, respectively) $ 76,499,494 $ 74,774,119
------------------ ------------------
(a) Number of shares:
Sold 892,247 1,534,918
Reinvested 409,635 386,962
Redeemed (1,043,163) (1,951,756)
------------------ ------------------
Net increase (decrease) in shares outstanding 258,719 (29,876)
Shares outstanding, beginning of year 7,195,530 7,225,406
------------------ ------------------
Shares outstanding, end of year 7,454,249 7,195,530
================== ==================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
Years Ended March 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
-------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $10.39 $9.97 $10.15 $10.82 $10.42
-------- ------- -------- -------- --------
Income from investment operations:
Net investment income 0.68 0.70 0.62 0.55 0.64
Net realized and unrealized gains (losses) on investments (0.12) 0.41 (0.18) (0.30) 0.55
-------- ------- -------- -------- --------
Total from investment operations 0.56 1.11 0.44 0.25 1.19
-------- ------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.69) (0.69) (0.62) (0.55) (0.64)
Distributions from net realized gains -- -- -- (0.19) (0.15)
Distributions in excess of net realized gains -- -- -- (0.18) --
-------- ------- -------- -------- --------
Total distributions (0.69) (0.69) (0.62) (0.92) (0.79)
Net asset value at end of year $10.26 $10.39 $9.97 $10.15 $10.82
======== ======= ======== ======== ========
Total return 5.52% 11.23% 4.56% 2.12% 11.69%
======== ======= ======== ======== ========
Net assets at end of year (000's) $76,499 $74,774 $72,029 $64,029 $55,718
======== ======= ======== ======== ========
Ratio of expenses to average net assets (a) 0.53% 0.56% 0.53% 0.60% 0.59%
Ratio of net investment income to average net assets 6.48% 6.54% 6.28% 5.03% 6.09%
Portfolio turnover rate 207% 268% 381% 381% 454%
<FN>
(a) For the years ended March 31, 1997 and 1996, the ratio of expenses to
average net assets was determined based on gross expenses prior to
expense reimbursements through a directed brokerage arrangement. For
periods prior to March 31, 1996, the ratio was determined based on net
expenses after expense reimbursements through the directed brokerage
arrangement. Absent such expense reimbursements, the ratio of expenses to
average net assets would have been 0.57% for the year ended March 31,
1995 (Note 4).
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Par Value Value
<S> <C> <C>
U.S. TREASURY AND AGENCY OBLIGATIONS - 26.0%
U.S. Treasury Bonds - 11.7%
$ 7,875,000 8.50%, due 02/15/2020 $ 8,975,059
---------------------
U.S. Treasury Notes - 14.3%
6,195,000 7.75%, due 11/30/1999 6,368,274
165,000 6.50%, due 05/31/2001 163,505
4,175,000 5.75%, due 08/15/2003 3,940,824
475,000 3.375%, due 01/15/2007 466,982
---------------------
10,939,585
---------------------
Total U.S. Treasury and Agency Obligations
(Cost $19,766,671) $ 19,914,644
---------------------
MORTGAGE-BACKED SECURITIES - 36.4%
Federal Home Loan Mortgage Corporation - 7.9%
$ 825,000 Pool #1655-HB, 6.50%, due 10/15/2008 $ 789,162
1,187,179 Pool #T-3-B1, 6.375, due 12/25/2010 1,143,403
950,000 Pool #1610-PE, 6.00%, due 04/15/2017 931,000
700,000 Pool #1699-TB, 6.00%, due 07/15/2022 614,026
80,744 Pool #D69139, 6.50%, due 03/01/2026 75,344
2,702,701 Pool #D70628, 6.50%, due 04/01/2026 2,521,945
---------------------
6,074,880
---------------------
Federal National Mortgage Association - 12.1%
2,125,000 Series #93-55-E, 6.20%, due 04/25/2005 2,097,099
495,177 Series #92-61-ZB, 7.50%, due 05/25/2007 481,248
804,252 Pool #267412, 5.50%, due 01/01/2009 743,990
1,128,905 Pool #368365, 5.50%, due 05/01/2009 1,043,876
600,000 Series #93-29-PE, 6.00%, due 11/25/2019 589,500
750,000 Series #90-63-H, 9.50%, due 06/25/2020 800,857
689,115 Series #G92-44-Z, 8.00%, due 07/25/2022 678,779
885,000 Series #G93-13-H, 6.00%, due 09/25/2022 777,411
650,000 Series #94-18-B, 6.75%, due 10/25/2022 599,417
761,178 Pool #67694, 6.085%, adjustable rate, due 10/01/2028 750,240
695,672 Pool #339016, 6.086%, adjustable rate, due 11/01/2035 685,676
--------------------
9,248,093
--------------------
Government National Mortgage Association - 10.4%
1,249,068 Pool #780215, 8.50%, due 10/15/2017 1,303,865
476,755 Pool #327273, 7.50%, due 08/15/2022 470,486
410,996 Pool #325612, 7.50%, due 10/15/2022 405,592
444,154 Pool #333658, 7.50%, due 01/15/2023 437,892
963,569 Pool #342526, 7.50%, due 02/15/2023 949,982
1,128,021 Pool #349314, 7.50%, due 02/15/2023 1,112,116
853,797 Pool #352143, 7.50%, due 07/15/2023 841,758
872,823 Pool #372822, 7.50%, due 11/15/2023 860,516
1,088,626 Pool #359451, 7.50%, due 12/15/2023 1,073,276
469,553 Pool #354831, 7.50%, due 06/15/2024 462,492
-------------------
7,917,975
-------------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
Other Mortgage-Backed Securities - 6.0%
Chase Commercial Mortgage Securities Corporation #96-1-A1,
$ 845,359 7.60%, due 12/18/2005 $ 857,511
FDIC REMIC Trust #96-C1-1A,
477,457 6.75%, due 05/25/2026 469,998
Lehman Brothers Mortgage Trust #91-2-A1,
753,547 8.00%, due 03/20/1999 763,909
Morgan Stanley Capital #97-C1-A1B,
890,000 7.46%, due 02/15/2020 895,841
Multi-Family Capital Access One, Inc. #1-A,
880,348 6.65%, due 01/15/2024 822,025
Resolution Funding Mortgage Security I #94-S12-A2,
800,000 6.50%, due 04/25/2009 785,744
--------------------
4,595,028
--------------------
Total Mortgage-Backed Securities (Cost $28,328,624) $ 27,835,976
---------------------
ASSET-BACKED SECURITIES - 8.0%
BankAmerica Manufactured Housing Contract #96-1-A6,
$ 650,000 8.00%, due 10/10/2026 $ 651,300
CIT RV Trust #95-B-A1,
346,391 6.50%, due 04/15/2011 344,971
CIT RV Trust #96-A-A1,
858,697 5.40%, due 12/15/2011 842,726
Contimortgage Home Equity Loan Trust #95-4-A3,
1,061,942 6.20%, due 10/15/2010 1,060,774
Fleetwood Credit Corporation Grantor Trust #94-A-A,
620,491 4.70%, due 07/15/2009 597,607
Fleetwood Credit Corporation Grantor Trust #96-A-A,
626,185 6.75%, due 10/15/2011 623,931
Green Tree Financial Corporation, #96-8-A7,
1,275,000 8.05%, due 10/15/2027 1,295,719
Green Tree Financial Corporation, #97-2-A7,
700,000 7.62%, due 04/15/2028 687,820
---------------------
Total Asset-Backed Securities (Cost $6,188,209) $ 6,104,848
---------------------
CORPORATE BONDS - 16.6%
Allmerica Financial Corporation,
$ 375,000 7.625%, due 10/15/2025 $ 355,087
Associates Corporation,
700,000 5.75%, due 10/15/2003 644,539
Baltimore Gas & Electric Corporation,
1,000,000 8.90%, due 07/01/1998 1,027,580
Beneficial Corporation Medium Term Notes,
900,000 8.27%, due 11/30/1998 923,139
Ford Motor Credit Medium Term Note,
950,000 7.45%, due 04/13/2000 963,281
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
CORPORATE BONDS - Continued
General Motors Acceptance Corporation Medium Term Notes,
$ 1,725,000 6.65%, due 05/24/2000 $ 1,709,510
International Lease Finance Medium Term Notes,
1,315,000 6.42%, due 09/11/2000 1,291,396
Lehman Brothers Holdings,
1,850,000 6.40%, due 12/27/1999 1,821,417
May Department Stores Company,
950,000 7.45%, due 09/15/2011 930,145
Mellon Financial Company,
915,000 7.625%, due 11/15/1999 930,454
Morgan Stanley Group,
690,000 6.875%, due 03/01/2007 658,281
Nationwide Financial Services,
725,000 8.00%, due 03/01/2027 703,127
Sears Roebuck & Company,
750,000 6.86%, due 07/03/2001 743,250
---------------------
Total Corporate Bonds (Cost $12,812,630) $ 12,701,206
---------------------
Shares
CLOSED-END MUTUAL FUNDS - 8.5%
13,400 Blackrock 1999 Term Trust, Inc. $ 118,925
162,200 Blackrock 2001 Term Trust, Inc. 1,297,600
1,500 Blackrock Broad Investment Grade 2009 Term Trust, Inc. 16,875
53,900 Blackrock Investment Quality Term Trust, Inc. 417,725
100,300 Blackrock Strategic Term Trust, Inc. 789,862
12,000 Dean Witter Government Inc. Trust 97,500
7,400 Excelsior Income Shares, Inc. 115,625
16,800 Hyperion 1997 Term Trust, Inc. 119,700
137,200 Hyperion 1999 Term Trust, Inc. 874,650
164,200 Hyperion 2002 Term Trust, Inc. 1,190,450
51,300 Hyperion 2005 Investment Grade Opportunity Term Trust, Inc. 378,338
36,400 Income Opportunities Fund, Inc. - 1999 327,600
9,900 Kemper Intermediate Government Trust 71,775
3,600 Liberty Term Trust, Inc. - 1999 28,350
28,900 MFS Government Markets Income Trust 187,850
16,000 MFS Intermediate Income Trust 110,000
51,000 Putnam Intermediate Government Trust 369,750
---------------------
Total Closed-End Funds (Cost $6,483,664) $ 6,512,575
---------------------
Total Investments at Value (Cost $73,579,798) - 95.5% $ 73,069,249
---------------------
<CAPTION>
Face
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 5.3%
Star Bank, N.A., 5.25%, dated 03/31/1997, due 04/01/1997
$ 4,033,000 repurchase proceeds $4,033,588 (Cost $4,033,000) $ 4,033,000
---------------------
Total Investments and Repurchase Agreements
at Value - 100.8% $ 77,102,249
Liabilities in Excess of Other Assets - (.8)% (602,755)
---------------------
Net Assets - 100.0% $ 76,499,494
---------------------
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/2 The aggregate market value of the collateral
at March 31, 1997 was $20,897,370. The Fund's pro-rata inte in the
collateral at March 31, 1997 was $4,378,590.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Bond Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on December 13, 1990.
The Fund's investment objective is to maximize total return, consisting of
current income and capital appreciation (both realized and unrealized),
consistent with the preservation of capital through active management of
investment grade fixed income securities.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national exchange are valued
based upon the closing price on the principal exchange where the security is
traded. It is expected that fixed income securities of the Fund will ordinarily
be traded on the over-the-counter market. When market quotations are not readily
available, securities may be valued on the basis of prices provided by an
independent pricing service. If a pricing service cannot provide a valuation,
securities will be valued in good faith at fair market value using methods
consistent with those determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market. At the time the Fund enters
into the joint repurchase agreement, the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal to
or exceed the face amount of the repurchase agreement. In addition, the Fund
actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Dividend income is
recorded on the ex-dividend date. Interest income is accrued as earned.
Discounts and premiums on securities purchased are amortized in accordance with
income tax regulations. Dividends arising from net investment income are
declared and paid quarterly to shareholders of the Fund. Net realized short-term
capital gains, if any, may be distributed throughout the year and net realized
long-term capital gains, if any, are distributed at least once each year. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
Securities traded on a "to-be-announced" basis -- The Fund occasionally trades
securities on a "to-be-announced" (TBA) basis. In a TBA transaction, the Fund
has committed to purchase securities for which all specific information is not
yet known at the time of the trade, particularly the face amount in
mortgage-backed securities transactions. Securities purchased on a TBA basis are
not settled until they are delivered to the Fund, normally 15 to 45 days later.
These transactions are subject to market fluctuations and their current value is
determined in the same manner as for other portfolio securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting priciples requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $73,668,177 as of March 31, 1997:
Gross unrealized appreciation............. $ 473,437
Gross unrealized depreciation.............. (1,072,365)
-----------
Net unrealized depreciation............... $ (598,928)
===========
As of March 31, 1997, the Fund had capital loss carryforwards for federal income
tax purposes of $1,440,604 which expire on March 31, 2004. These capital loss
carryforwards may be utilized in the current and future years to offset net
realized capital gains prior to distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $151,729,558 and $152,600,144, respectively.
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by LB&T Strategic Advisors, Inc. (the
Advisor), formerly Lowe, Brockenbrough & Tattersall, Inc., under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement, the Fund
pays the Advisor a fee, which is computed and accrued daily and paid monthly at
an annual rate of .375% of its average daily net assets. Certain trustees and
officers of the Trust are also officers of the Advisor.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc., (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .075% of its average daily net
assets up to $200 million and .05% of such net assets in excess of $200 million,
subject to a $2,000 minimum monthly fee. In addition, the Fund pays
out-of-pocket expenses including, but not limited to, postage, supplies, and
cost of pricing the Fund's portfolio securities. Certain officers of the Trust
are also officers of CFS.
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of the Fund, a portion of the
Fund's custodian fees have been paid through an arrangement with a third-party
broker-dealer who is compensated through security trades. Expenses reimbursed
through the directed brokerage arrangement totaled $22,926 for the year ended
March 31, 1997.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Bond Fund (a series of The Williamsburg Investment Trust),
including the portfolio of investments, as of March 31, 1997, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Bond Fund as of March 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LB&T STRATEGIC ADVISORS, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN SHORT TERM BOND FUND
FIRST QUARTER 1997
Chairman Greenspan was clearly in the spotlight this quarter - and with good
reasoning! The economy started the year on a roll and gained momentum throughout
the quarter, defying all expectations for a slowdown. With each monthly release
or statistics came fresh revisions of economists' forecasts for GDP growth and
renewed concerns about expectations for inflation. This did not go unnoticed by
Mr. Greenspan, who, in uncharacteristically clear text, took every opportunity
to warn the financial markets that a change in Federal Reserve policy was
imminent. Despite the warning, markets, both here and abroad, reacted negatively
to the 25 basis point increase that was announced as a result of the March 25th
FOMC meeting and investors sent both bond and stock prices tumbling just as the
quarter was ending. This was not an unusual event for bonds since yields had
generally been rising each month since the year began, causing the total return
of Treasury Bills to have the highest return along the yield curve at 1.30%.
Falling prices were quite unusual for stocks, however, and the S&P 500 fell over
4% in March to end the quarter up only 2.7%.
Our interest rates disciplines kept us slightly longer with a 0.75 year average
maturity during the quarter as yields remained range bound. We started the year
in the mid-point of the 4.90% to 5.40% range and finished March toward the upper
end of it, with little opportunity for significant outperformance. Sectors also
provided little opportunity for outperformance as yield spreads versus
Treasuries remained narrow all quarter.
FISCAL YEAR ENDED MARCH 31, 1997
The optimism that characterized the bond market at the beginning of the year
quickly faded as reports of strong economic growth and a declining unemployment
rate fueled concerns over rising inflation. As a result, bond prices fell and
yields rose. Treasury Bills started the year yielding 5.06%, peaked in early
September at 5.35% before closing 1996 at 5.17%. Yields of longer maturities
were even more volatile. Inflation concerns proved unwarranted, however, as
growth moderated and wage gains remained subdued. A shrinking budget deficit and
inflows from foreign investors seeking higher yields than what was available in
their countries, also supported the U.S. bond market as yields fell about 60
basis points from their July peak by the end of 1996. Anchored by a stable
Federal Funds rate, Treasury Bill yields traded in a narrow range of 4.9% to
5.4% throughout 1996 and provided a total return of 5.35%.
During most of 1996, our interest rate disciplines kept portfolio durations near
neutral. Except for a brief time early in the year, there was little opportunity
for us or for any manager to impact performance significantly from duration
strategies. This is especially true for portfolios benchmarked to a short term
index. Corporates began the year with historically tight spreads and ended the
year with historically tight spreads. The advantage from owning corporates this
year, therefore, was attributable to their extra yield.
<PAGE>
LOOKING AHEAD
We have been here before. In fact, we were experiencing similar rates just nine
months ago, right before the market dropped between 50 and 75 basis points. What
is different this time around is that economic growth is clearly stronger, the
fears of impending inflation are clearly stronger, the dollar is stronger and
the Federal Reserve has already raised interest rates. What is similar is that
by most popular measures, inflation still has not appeared and pricing power is
most likely as limited now as it was then. We believe that the most recent rate
hike will be one of a few instead of one of many, and that there is an
opportunity developing in which having a duration longer than the Index will
result in outperformance. Our conviction in this belief is limited, however,
until we see evidence that the economy is cooling off or inflation is dormant.
As for sectors, we are somewhat frustrated by what we perceive as a lack of
opportunity in them right now, although we realize that this is only a temporary
condition. With the backup in interest rates and weakness in the stock market,
there has been some spread widening, or underperformance from Corporates,
especially long maturing, weak credits; but not nearly enough to peak our
interest in them so late in this economic cycle. Mortgages appear to be only
fair value, but we have concentrated our holdings in discount coupons with the
added benefit of increased convexity. Closed end bond funds should continue to
do well, although we are lowering our expectations as their discounts narrow.
Although the bond market has not performed particularly well so far this year,
we do get excited abut real short term yields in excess of 3.00%. In our
continual quest for situations in which we believe reward outweighs risk, we see
more value building from maturity strategies than we do from sectors. We will
look to our disciplines to indicate when to buy the market.
The Jamestown Short Term Bond Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Short Term Bond Fund, the Merrill Lynch 1-3 Year Treasury Index, the 90-Day
Treasury Bill Index and the Consumer Price Index
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
MERRILL LYNCH 1-3 YEAR TREASURY INDEX: THE JAMESTOWN SHORT TERM
BOND FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
01/31/92 10,000 01/31/92 10,000
03/31/92 0.31% 10,031 03/31/92 0.25% 10,025
06/30/92 2.88% 10,319 06/30/92 2.03% 10,229
09/30/92 2.98% 10,627 09/30/92 2.14% 10,448
12/31/92 0.18% 10,646 12/31/92 0.15% 10,463
03/31/93 2.21% 10,882 03/31/93 1.95% 10,667
06/30/93 1.08% 10,999 06/30/93 1.27% 10,803
09/30/93 1.44% 11,157 09/30/93 1.34% 10,947
12/31/93 0.59% 11,222 12/31/93 0.61% 11,015
03/31/94 -0.50% 11,166 03/31/94 -0.48% 10,962
06/30/94 0.08% 11,176 06/30/94 0.23% 10,987
09/30/94 0.99% 11,286 09/30/94 0.93% 11,090
12/31/94 0.00% 11,286 12/31/94 -0.05% 11,084
03/31/95 3.36% 11,665 03/31/95 3.38% 11,458
06/30/95 3.21% 12,039 06/30/95 3.01% 11,803
09/30/95 1.50% 12,220 09/30/95 1.33% 11,960
12/31/95 2.52% 12,528 12/31/95 2.62% 12,273
03/31/96 0.33% 12,570 03/31/96 0.25% 12,304
06/30/96 1.01% 12,696 06/30/96 0.77% 12,399
09/30/96 1.65% 12,906 09/30/96 1.56% 12,592
12/31/96 1.90% 13,151 12/31/96 1.56% 12,788
03/31/97 0.66% 13,239 03/31/97 1.04% 12920.45
<CAPTION>
CONSUMER PRICE INDEX: 90-DAY TREASURY BILL INDEX:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
01/31/92 10,000 01/31/92 10,000
03/31/92 0.40% 10,040 03/31/92 0.64% 10,064
06/30/92 0.80% 10,120 06/30/92 1.10% 10,174
09/30/92 0.70% 10,191 09/30/92 1.01% 10,277
12/31/92 0.80% 10,273 12/31/92 0.77% 10,357
03/31/93 0.90% 10,365 03/31/93 0.78% 10,437
06/30/93 0.60% 10,427 06/30/93 0.77% 10,518
09/30/93 0.40% 10,469 09/30/93 0.82% 10,604
12/31/93 0.70% 10,542 12/31/93 0.78% 10,687
03/31/94 0.50% 10,595 03/31/94 0.77% 10,768
06/30/94 0.60% 10,659 06/30/94 0.96% 10,872
09/30/94 0.90% 10,755 09/30/94 1.08% 10,989
12/31/94 0.60% 10,819 12/31/94 1.33% 11,135
03/31/95 0.80% 10,906 03/31/95 1.50% 11,302
06/30/95 0.90% 11,004 06/30/95 1.50% 11,472
09/30/95 0.40% 11,048 09/30/95 1.42% 11,635
12/31/95 0.50% 11,104 12/31/95 1.47% 11,806
03/31/96 0.80% 11,193 03/31/96 1.23% 11,951
06/30/96 1.10% 11,316 06/30/96 1.29% 12,105
09/30/96 0.44% 11,366 09/30/96 1.38% 12,273
12/31/96 0.82% 11,460 12/31/96 1.30% 12,433
03/31/97 0.69% 11,539 03/31/97 1.28% 12,591
Past performance is not predictive of future performance
The Jamestown Short Term Bond Fund Average Annual Total returns
1 Year 1 Years Since Inception*
5.01% 5.21% 5.04%
* Initial public offering of shares was January 21, 1992.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 9,115,914
================
At value (Note 1) $ 9,064,978
Investments in repurchase agreements (Note 1) 767,000
Cash 156
Receivable from securities sold 7,738
Interest receivable 86,289
Due from Adviser (Note 3) 966
Other assets 351
----------------
TOTAL ASSETS 9,927,478
================
LIABILITIES
Accrued administration fees 2,000
Other accrued expenses 1,000
----------------
TOTAL LIABILITIES 3,000
----------------
NET ASSETS $ 9,924,478
================
Net assets consist of:
Paid-in capital $ 10,519,030
Accumulated net realized losses from security transactions (546,248)
----------------
Undistributed net investment income 2,632
Net unrealized depreciation on investments (50,936)
----------------
Net assets $ 9,924,478
================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 1,032,909
================
Net asset value, offering price and redemption price per share (Note 1) $ 9.61
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
<S> <C>
INVESTMENT INCOME
Interest $ 630,476
----------------
EXPENSES
Investment advisory fees (Note 3) 36,481
Administration fees (Note 3) 24,000
Professional fees 10,788
Custodian fees 6,387
Trustees' fees and expenses 5,002
Pricing costs 3,697
Printing of shareholder reports 1,496
Registration fees 1,185
Insurance expense 1,143
Other expenses 1,808
----------------
TOTAL EXPENSES 91,987
Fees waived and expenses reimbursed by the Adviser (Note 3) (43,345)
----------------
NET EXPENSES 48,642
----------------
NET INVESTMENT INCOME 581,834
----------------
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
Net realized losses from security transactions (101,843)
Net change in unrealized appreciation/depreciation on investments (3,365)
----------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (105,208)
----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 476,626
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
-------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 581,834 $ 790,385
Net realized gains (losses) from security transactions (101,843) 192,225
Net change in unrealized appreciation/depreciation
on investments (3,365) (10,516)
-------------- --------------
Net increase in net assets from operations 476,626 972,094
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (582,861) (793,655)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 2,203,737 2,046,872
Net asset value of shares issued in reinvestment
of distributions to shareholders 582,861 563,410
Payments for shares redeemed (2,181,641) (7,485,406)
-------------- --------------
Net increase (decrease) in net assets from capital share transact 604,957 (4,875,124)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 498,722 (4,696,685)
NET ASSETS:
Beginning of year 9,425,756 14,122,441
-------------- --------------
End of year - (including undistributed net investment
income of $2,632 and $3,659, respectively) $ 9,924,478 $ 9,425,756
(a)Number of Shares:
Sold 226,810 208,453
Reinvested 60,494 57,652
Redeemed (224,329) (761,014)
-------------- --------------
Net increase (decrease) in shares outstanding 62,975 (494,909)
Shares outstanding, beginning of year 969,934 1,464,843
-------------- --------------
Shares outstanding, end of year 1,032,909 969,934
============== ==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
Years Ended March 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
------ ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $9.72 $9.64 $9.82 $10.07 $9.93
------ ------ ----- ------ ------
Income from investment operations:
Net investment income 0.58 0.62 0.60 0.51 0.50
Net realized and unrealized gains (losses)
on investments (0.11) 0.08 (0.17) (0.23) 0.13
------ ------ ----- ------ ------
Total from investment operations 0.47 0.70 0.43 0.28 0.63
------ ------ ----- ------ ------
Less distributions:
Dividends from net investment income (0.58) (0.62) (0.61) (0.51) (0.49)
Distributions from net realized gains (0.02) --
------ ------ ----- ------ ------
Total distributions (0.58) (0.62) (0.61) (0.53) (0.49)
------ ------ ----- ------ ------
Net asset value at end of year $9.61 $9.72 $9.64 $9.82 $10.07
====== ====== ===== ====== ======
Total return 5.01% 7.38% 4.53% 2.76% 6.40%
Net assets at end of year (000's) $9,924 $9,426 $14,122 $18,715 $15,580
Ratio of expenses to average net assets (a) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets 5.96% 6.27% 6.04% 5.22% 5.24%
Portfolio turnover rate 62% 157% 144% 324% 289%
<FN>
(a)Absent investment advisory fees waived and expenses reimbursed by the Adviser,
the ratios of expenses to average net assets
0.85%, 0.85%, 0.81%, and 0.82% for the years ended
March 31, 1997, 1996, 1995, 1994, and 1993, respectively (Note 3).
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Par Value Value
<S> <C> <C>
COMMERCIAL PAPER - 39.5%
$ 400,000 American Express Company, due 07/15/1997 $ 393,875
400,000 American General Financial, due 06/17/1997 395,380
400,000 AT&T Corporation, due 10/16/1997 387,856
400,000 E. I. DuPont de Nemours & Company, due 08/14/1997 392,155
400,000 Lucent Technologies, Inc., due 08/19/1997 391,724
375,000 McMcormick Capital, Inc., 08/22/1997 367,031
400,000 Prudential Funding Corporation, due 05/14/1997 397,496
400,000 United Parcel Service of America, Inc., due 04/24/1997 398,651
400,000 The Walt Disney Company, due 04/10/1997 399,471
400,000 Xerox Corporation, due 05/23/1997 396,967
-----------
Total Commercial Paper (Cost $3,920,606) $ 3,920,606
-----------
U.S. TREASURY AND AGENCY OBLIGATIONS - 18.9%
U.S. Treasury Notes - 14.6%
$ 200,000 5.125%, due 04/30/1998 $ 197,938
1,215,000 7.75%, due 11/30/1999 1,248,983
-----------
1,446,921
-----------
Student Loan Marketing Association - 4.3 %
425,000 5.71%, floating rate, due 02/17/1998 425,786
-----------
Total U.S. Treasury and Agency Obligations (Cost $1,890,247$ 1,872,707
-----------
MORTGAGE-BACKED SECURITIES - 14.0%
Federal Home Loan Mortgage Corporation - 3.0%
$ 175,000 Series #1272-D, 7.50%, due 11/15/2005 $ 177,242
122,956 Series #162-E, 7.00%, due 02/15/2020 122,956
300,198
Federal National Mortgage Association - 4.4%
225,000 Series #91-131-E, 7.709%, due 10/25/1998 227,531
202,207 Pool #124029, 8.00%, due 12/01/2002 204,312
-----------
431,843
-----------
Other Mortgage-Backed Securities - 6.6%
Lehman Brothers Mortgage Trust #91-2-A1,
113,944 8.00%, due 03/20/1999 115,511
CMC Securities Corporation #93-E-S4,
400,000 5.75%, due 11/25/2008 395,500
GE Capital Mortgage Services, Inc. #93-4A-A1,
148,860 6.3875%, floating rate, due 03/25/2023 149,556
-----------
660,567
-----------
Total Mortgage-Backed Securities (Cost $1,400,770) $ 1,392,608
-----------
<PAGE>
<CAPTION>
Par Value Value
<S> <C>
ASSET-BACKED SECURITIES - 3.2%
CIT RV Trust #96-A-A1,
$ 321,078 5.40%, due 12/15/2011 $ 315,106
-----------
Total Asset-Backed Securities (Cost $317,165) $ 315,106
-----------
CORPORATE BONDS - 15.8%
Beneficial Corporation Medium Term Notes,
$ 400,000 8.27%, due 11/30/1998 $ 410,284
Ford Motor Credit Corporation,
40,000 8.00%, due 12/01/1997 40,443
International Bank Reconstruction and Development,
265,000 5.10%, due 09/15/1999 255,866
Mellon Financial Corporation,
375,000 6.50%, due 12/01/1997 375,409
J.C. Penny & Company,
300,000 10.00%, due 10/15/1997 305,832
Xerox Corporation Medium Term Notes,
175,000 7.13%, due 04/30/1999 176,117
-----------
Total Corporate Bonds (Cost $1,587,126) $ 1,563,951
-----------
Total Investments at Value (Cost $9,115,914) - 91.4% $ 9,064,978
-----------
<CAPTION>
Face
Amount
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 7.7%
$ 767,000 Star Bank, N.A., 5.25%, dated 03/31/1997, due 04/01/1997
repurchase proceeds $767,112 (Cost $767,000) $ 767,000
-----------
Total Investments and Repurchase Agreements
at Value - 99.1% $ 9,831,978
Other Assets in Excess of Liabilities - .9% 92,500
-----------
Net Assets - 100.0% $ 9,924,478
===========
<FN>
(a) Joint repurchase agreement is fully collaterized by $20,650,000 GNMA
II, Pool #8373, 6.50%, due 02/20/2024. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $832,725.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Short Term Bond Fund (the Fund) is a no-load, diversified series
of the Williamsburg Investment Trust (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Trust was organized as a Massachusetts business trust on July 18,
1988. The Fund began operations on January 21, 1992.
The Fund's investment objective is to maximize total return, consisting of
current income and capital appreciation (both realized and unrealized),
consistent with the preservation of capital through active management of high
quality short-term fixed income securities.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national exchange are valued
based upon the closing price on the principal exchange where the security is
traded. It is expected that securities of the Fund will ordinarily be traded on
the over-the-counter market. When market quotations are not readily available,
securities may be valued on the basis of prices provided by an independent
pricing service. If a pricing service cannot provide a valuation, securities
will be valued in good faith at fair market value using methods consistent with
those determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market. At the time the Fund enters
into the joint repurchase agreement, the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal to
or exceed the face amount of the repurchase agreement. In addition, the Fund
actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Discounts and premiums on securities purchased are amortized
in accordance with income tax regulations. Dividends arising from net investment
income are declared and paid quarterly to shareholders of the Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
Securities traded on a "to-be-announced" basis -- The Fund occasionally trades
securities on a "to-be-announced" (TBA) basis. In a TBA transaction, the Fund
has committed to purchase securities for which all specific information is not
yet known at the time of the trade, particularly the face amount in
mortgage-backed securities transactions. Securities purchased on a TBA basis are
not settled until they are delivered to the Fund, normally 15 to 45 days later.
These transactions are subject to market fluctuations and their current value is
determined in the same manner as for other portfolio securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of the Fund as of March 31, 1997:
Gross unrealized appreciation.................. $ 23,256
Gross unrealized depreciation................... (74,192)
----------
Net unrealized depreciation....................$ (50,936)
==========
The tax basis of investments of the Fund is equal to the acquisition cost as
shown on the Statement of Assets and Liabilities. As of March 31, 1997, the Fund
had capital loss carryforwards for federal income tax purposes of $508,929 which
expire on March 31, 2004. In addition, the Fund had net realized capital losses
of $37,319 during the period from November 1, 1996 through March 31, 1997, which
are treated for federal income tax purposes as arising during the Fund's tax
year ending March 31, 1998. These capital loss carryforwards and "post-October"
losses may be utilized in the current and future years to offset net realized
capital gains prior to distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $3,952,270 and $8,238,064, respectively.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by LB&T Strategic Advisors, Inc. (the
Advisor), formerly Lowe, Brockenbrough & Tattersall, Inc., under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement, the Fund
pays the Advisor a fee, which is computed and accrued daily and paid monthly at
an annual rate of .375% of its average daily net assets. The Advisor currently
intends to limit the total operating expenses of the Fund to .50% of its average
daily net assets; accordingly, the Advisor waived its entire investment advisory
fee of $36,481 and reimbursed the Fund for $6,864 of other operating expenses
for the year ended March 31, 1997. Certain trustees and officers of the Trust
are also officers of the Advisor.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc. (CFS), formerly MGF Service, Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .075% of its average daily net
assets up to $200 million and .05% of such net assets in excess of $200 million,
subject to a $2,000 minimum monthly fee. In addition, the Fund pays
out-of-pocket expenses including, but not limited to, postage, supplies and cost
of pricing the Fund's portfolio securities. Certain officers of the Trust are
also officers of CFS.
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Short Term Bond Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 1997, and the
related statement of operations for the year then ended, and the statement of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Short Term Bond Fund as of March 31, 1997, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period then ended, in conformity with generally
accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
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