THE
FLIPPIN, BRUCE & PORTER
FUNDS
ANNUAL REPORT
MARCH 31, 1997
FBP Contrarion Equity Fund
FBP Contrarion Balanced Fund
<PAGE>
LETTER TO SHAREHOLDERS MAY 22, 1997
==============================================================================
We are pleased to report on the progress of your Fund and its investments
for the fiscal year ending March 31, 1997. The following table displays the
total return (capital change plus income) of the Funds for the past six months
and one year.
Six Twelve
Months Months
FBP Contrarian Equity Fund 9.9% 17.7%
FBP Contrarian Balanced Fund 7.6% 13.2%
REVIEW AND OUTLOOK
The past year has been a very favorable period to be invested in financial
assets. Economic growth in the U. S. has provided the environment for healthy
corporate profit growth with low inflation. Consumer confidence remained high
and unemployment remained low by historical standards. Mutual funds continued to
receive record inflows of funds throughout the year.
However, the financial markets displayed a bit of uneasiness as the first
quarter of 1997 came to an end. The S&P 500 stock index was up only 2.7% after
rising as much as 10% earlier in the period. The NASDAQ index, heavily weighted
with technology issues, was down 5.1%. Bond returns, except for the shortest
maturities, were negative as interest rates rose approximately .50% across most
maturities. The yield curve flattened as 2 to 5 year issues saw the largest
increase in yield.
A combination of factors triggered the decline in stocks. Alan Greenspan,
Chairman of the Federal Reserve, began cautioning investors last December of his
belief that stock prices had risen ahead of earnings gains. Increased personal
income and spending, high consumer confidence, strong economic growth, a
somewhat overvalued stock market and concern over future wage gains prompted the
Federal Reserve's decision to raise the Federal Funds rate .25% on March 25th.
This was a pre-emptive measure to head off inflation not only in wages and
producer prices, but also in stock prices.
Despite these concerns, the S&P 500 index returned 19.8% and the Lipper
Balanced Fund index returned 11.0% for the year ending March 1997. However,
there was quite a divergence in returns depending on the companies chosen for
investment. The equity market was led by large capitalization companies
displaying consistent and growing earnings, whereas the average stock
performance was much lower. For example, the Valueline Composite, a much broader
but equal weighted index, was up only 7.5% for the same time period.
<PAGE>
We expect economic growth to moderate later this year and inflation to stay
under control. As ten year U.S. Treasury issues approach 7%, longer term bonds
are attractive and our focus for the Balanced Fund will be noncallable issues in
the 7 to 10 year maturity range. This is a shift from our previous successful
strategy, which was very defensive and focused on short to intermediate issues
and high coupon, callable corporate bonds.
After strong equity returns in 1995, 1996 and through May of this year,
stocks are susceptible to further corrections and continued volatility. We are
using periods of strength to reduce weightings in stocks that are approaching
our full value targets and are in vogue with Wall Street. We are constantly
searching for new investment opportunities, and the divergence discussed
previously is providing many potential candidates. Also, market selloffs, such
as occurred during April, provided the opportunity for the Equity Fund to invest
new cash received.
COMPARATIVE CHARTS
Performance for each Fund is compared on the next page to the most
appropriate broad-based index, the S&P 500, an unmanaged index of 500 large
common stocks. Over time, this index has outpaced the FBP Contrarian Balanced
Fund which maintains at least 25% bonds. Balanced funds have the growth
potential to outpace inflation, but they will typically be outperformed by a
100% stock index over the long term because of the bond portion of their
portfolios. However, the advantage of the bond portion is that it can make the
return and principal of a balanced fund more stable than a portfolio completely
invested in stocks. Results are also compared to the Consumer Price Index, a
measure of inflation.
Thank you for your continued confidence and investment in The Flippin, Bruce
& Porter Funds.
/s/ John T. Bruce
John T. Bruce, CFA
Vice President - Portfolio Manager
<PAGE>
<TABLE>
<CAPTION>
[line chart]
FBP Contrarian Equity Fund
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
FBP Standard & Consumer
Contrarion Poor's Price
Fund 500 Index Index
<S> <C> <C> <C>
Jul 93 10000 10000 10000
10305 10299 10040
10510 10538 10110
Mar 94 10308 10139 10161
10379 10181 10222
11141 10678 10314
10996 10676 10376
Mar 95 11702 11716 10460
12798 12834 10554
13890 13854 10596
14340 14688 10649
Mar 96 15158 15477 10735
15846 16171 10853
16229 16671 10901
17604 18061 10991
Mar 97 17833 18545 11067
Past performance is not predictive of future performance.
FBP Contrarian Equity Fund Average Annual Total Returns
1 Year Since Inception*
17.65% 17.06%
* Initial public offering of shares was July 30, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
FBP Contrarian Balanced Fund
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Balanced Fund, the Standard & Poor's 500 Index and the Consumer Price Index
FBP Standard & Consumer
Contrarion Poor's Price
Balanced Fund 500 Index Index
<S> <C> <C> <C>
Jul 89 10000 10000 10000
9892 11071 10075
9897 11299 10176
Mar 90 9867 10960 10380
10059 11648 10474
8749 10047 10653
9118 10948 10835
Mar 91 10555 12539 10933
10683 12510 10977
11130 13179 11043
11607 14284 11142
Mar 92 12214 13922 11221
12434 14187 11311
12545 14634 11390
13275 15370 11481
Mar 93 13772 16040 11585
13875 16117 11654
14448 16533 11701
14598 16916 11783
Mar 94 14306 16275 11842
14324 16343 11913
15015 17141 12020
14870 17138 12093
Mar 95 15814 18807 12190
17031 20602 12300
18126 22240 12349
18689 23579 12411
Mar 96 19429 24844 12510
20089 25959 12649
20431 26762 12704
21784 28992 12809
Mar 97 21983 29769 12897
Past Performance is not predictive of future performance.
FBP Contrarian Balanced Fund Average Annual Total Returns
1 Year 5 Years Since Inception*
13.15% 12.47% 10.71%
* Initial public offering of shares was July 3, 1989.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
=============================================================================================================
SHARES COMMON STOCKS -- 82.7% VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS INFORMATION SERVICES -- 1.4%
4,200 Cognizant Corporation...................................................... $ 122,325
4,200 Dun & Bradstreet Corporation............................................... 106,575
---------------
228,900
---------------
CHEMICALS -- 3.8%
4,100 Dow Chemical Company....................................................... 328,000
11,500 Ethyl Corporation.......................................................... 99,188
4,000 Great Lakes Chemical Corporation........................................... 184,000
---------------
611,188
---------------
COMMERCIAL BANKING -- 12.0%
8,400 Banc One Corporation....................................................... 333,900
4,200 Chase Manhattan Corporation................................................ 393,225
4,600 Citicorp................................................................... 497,950
5,090 First Chicago NBD Corporation.............................................. 275,496
8,400 NationsBank Corporation.................................................... 465,150
---------------
1,965,721
---------------
COMMUNICATIONS -- 4.3%
7,600 GTE Corporation............................................................ 354,350
2,700 Harris Corporation......................................................... 207,563
16,600 Paging Network, Inc.(b) ................................................... 134,875
---------------
696,788
---------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 6.1%
2,600 Hewlett-Packard Company.................................................... 138,450
4,800 International Business Machines(c) ....................................... 659,400
16,100 Tandem Computers, Inc.(b) ................................................. 191,187
---------------
989,037
---------------
CONSUMER GOODS & SERVICES -- 6.2%
7,500 Dean Foods Company......................................................... 259,687
5,400 Philip Morris Companies, Inc............................................... 616,275
5,000 UST, Inc................................................................... 139,375
---------------
1,015,337
---------------
DRUGS/MEDICAL EQUIPMENT -- 8.3%
11,100 Allergan, Inc.............................................................. 323,288
6,800 Bristol-Myers Squibb Company(c) ........................................... 401,200
3,400 Johnson & Johnson ........................................................ 179,775
2,500 Merck & Company, Inc....................................................... 210,625
6,700 Pharmacia & Upjohn, Inc.................................................... 245,387
---------------
1,360,275
---------------
DURABLE GOODS -- 5.4%
11,000 Digital Equipment Corporation(b) ......................................... 301,125
1,200 General Electric Company................................................... 119,100
4,600 Genuine Parts Company...................................................... 214,475
8,300 WMX Technologies, Inc...................................................... 254,187
---------------
888,887
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
==============================================================================================================
SHARES COMMON STOCKS -- 82.7% VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRICITY -- 1.9%
16,000 Unicom Corporation ........................................................ $ 312,000
---------------
FINANCE -- 2.8%
4,800 Student Loan Marketing Association......................................... 457,200
---------------
INSURANCE -- 3.7%
4,100 Aetna Life & Casualty Company(c) .......................................... 352,088
2,200 Marsh & McLennan Companies, Inc............................................ 249,150
---------------
. 601,238
---------------
MANAGEMENT SERVICES -- 1.2%
4,000 PHH Corporation............................................................ 184,500
---------------
OIL & OIL DRILLING -- 6.4%
8,000 Equitable Resources, Inc................................................... 245,000
17,000 Oryx Energy Company(b) .................................................... 327,250
6,400 Pennzoil Company........................................................... 331,200
1,400 Schlumberger Limited ..................................................... 150,150
---------------
1,053,600
---------------
PAPER & FOREST PRODUCTS -- .8%
3,000 Weyerhaeuser Company....................................................... 133,875
---------------
PHOTOGRAPHICAL PRODUCTS -- 1.2%
2,500 Eastman Kodak Company...................................................... 189,688
---------------
PRINTING -- 2.3%
11,000 R. R. Donnelley & Sons Company............................................. 383,625
---------------
RETAIL STORES -- 11.8%
20,900 Apple South, Inc........................................................... 274,312
6,900 Circuit City Stores, Inc................................................... 230,288
12,000 Cracker Barrel Old Country Store, Inc...................................... 313,500
27,000 K-Mart Corporation(b) ..................................................... 327,375
11,000 The Limited, Inc. ......................................................... 202,125
8,900 Toys R Us, Inc.(b) ........................................................ 249,200
11,800 Wal-Mart Stores, Inc....................................................... 328,925
---------------
1,925,725
---------------
TRANSPORTATION -- 2.4%
4,800 Alexander & Baldwin, Inc................................................... 124,200
5,000 Federal Express Corporation(b) ........................................... 260,625
---------------
384,825
---------------
TRAVEL & INVESTMENT SERVICES -- .7%
2,000 American Express Company................................................... 119,750
---------------
TOTAL COMMON STOCKS (COST $10,351,893) ................................... $ 13,502,159
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
==============================================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(A) -- 19.1% VALUE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,126,000 Star Bank N.A., 5.25%, dated 03/31/97, due 04/01/97,
repurchase proceeds $3,126,456 (Cost $3,126,000)........................... $ 3,126,000
---------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 101.8% ............. $ 16,628,159
LIABILITIES IN EXCESS OF OTHER ASSETS-- (1.8)% ............................ (287,891)
---------------
NET ASSETS-- 100.0% ....................................................... $ 16,340,268
===============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/24. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata
interest in the collateral at March 31, 1997 was $3,393,868.
(b) Non-income producing security.
(c) Security covers a call option.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1997
=============================================================================================================
MARKET
VALUE OF PREMIUMS
SHARES COVERED CALL OPTIONS OPTION RECEIVED
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Life & Casualty Company,
1,000 07/19/97 at $95...................................... $ 1,625 $ 4,960
Bristol-Myers Squibb Company,
2,200 06/21/97 at $67.50................................... 1,788 8,691
International Business Machines,
500 04/19/97 at $170..................................... 31 4,522
-------------- ---------------
$ 3,444 $ 18,173
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997
================================================================================================================
SHARES COMMON STOCKS -- 64.6% VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS INFORMATION SERVICES -- 1.2%
9,000 Cognizant Corporation...................................................... $ 262,125
9,000 Dun & Bradstreet Corporation............................................... 228,375
---------------
490,500
---------------
CHEMICALS -- 2.8%
8,000 Dow Chemical Company....................................................... 640,000
20,000 Ethyl Corporation.......................................................... 172,500
7,000 Great Lakes Chemical Corporation........................................... 322,000
---------------
1,134,500
---------------
COMMERCIAL BANKING -- 7.4%
13,590 Banc One Corporation....................................................... 540,202
7,500 Chase Manhattan Corporation................................................ 702,188
6,000 Citicorp .................................................................. 649,500
5,430 First Chicago NBD Corporation.............................................. 293,899
14,800 NationsBank Corporation.................................................... 819,550
---------------
3,005,339
---------------
COMMUNICATIONS -- 3.7%
15,000 GTE Corporation............................................................ 699,375
8,500 Harris Corporation......................................................... 653,437
22,000 Paging Network, Inc.(b) ................................................... 178,750
---------------
1,531,562
---------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 5.2%
6,000 Hewlett-Packard Company.................................................... 319,500
10,000 International Business Machines(c) ....................................... 1,373,750
37,000 Tandem Computers, Inc.(b) ................................................. 439,375
---------------
2,132,625
---------------
CONSUMER GOODS & SERVICES -- 4.2%
10,000 Dean Foods Company......................................................... 346,250
10,000 Philip Morris Companies, Inc.(c) .......................................... 1,141,250
8,500 UST, Inc. ................................................................. 236,938
---------------
1,724,438
---------------
DRUGS/MEDICAL EQUIPMENT -- 6.9%
19,000 Allergan, Inc.............................................................. 553,375
9,400 Bristol-Myers Squibb Company(c) ........................................... 554,600
14,400 Johnson & Johnson ......................................................... 761,400
4,000 Merck & Company, Inc....................................................... 337,000
16,400 Pharmacia & Upjohn, Inc.................................................... 600,650
---------------
2,807,025
---------------
DURABLE GOODS -- 4.4%
20,000 Digital Equipment Corporation(b) .......................................... 547,500
5,600 General Electric Company................................................... 555,800
4,300 Genuine Parts Company...................................................... 200,487
16,000 WMX Technologies, Inc...................................................... 490,000
---------------
1,793,787
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================================================
SHARES COMMON STOCKS -- 64.6% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRICITY -- 1.3%
27,000 Unicom Corporation......................................................... $ 526,500
---------------
FINANCE -- 2.3%
10,000 Student Loan Marketing Association(c) ..................................... 952,500
---------------
INSURANCE -- 4.4%
8,300 Aetna Life & Casualty Company(c) .......................................... 712,763
4,275 American International Group(c) ........................................... 501,778
5,000 Marsh & McLennan Companies, Inc............................................ 566,250
---------------
1,780,791
---------------
MANAGEMENT SERVICES -- 1.0%
9,000 PHH Corporation............................................................ 415,125
---------------
OIL & OIL DRILLING -- 3.7%
6,800 Equitable Resources, Inc................................................... 208,250
25,000 Oryx Energy Company(b) .................................................... 481,250
9,600 Pennzoil Company........................................................... 496,800
3,000 Schlumberger Limited ...................................................... 321,750
---------------
1,508,050
---------------
PAPER & FOREST PRODUCTS -- 1.1%
10,000 Weyerhaeuser Company....................................................... 446,250
---------------
PHOTOGRAPHICAL PRODUCTS -- .9%
5,200 Eastman Kodak Company ..................................................... 394,550
---------------
PRINTING -- 1.5%
17,000 R. R. Donnelley & Sons Company............................................. 592,875
---------------
RETAIL STORES -- 9.2%
33,300 Apple South, Inc........................................................... 437,062
10,400 Circuit City Stores, Inc................................................... 347,100
25,200 Cracker Barrel Old Country Store, Inc...................................... 658,350
68,000 K-Mart Corporation(b) ..................................................... 824,500
20,000 The Limited, Inc. ......................................................... 367,500
19,000 Toys R Us, Inc.(b) ........................................................ 532,000
21,500 Wal-Mart Stores, Inc....................................................... 599,313
---------------
3,765,825
---------------
TRANSPORTATION -- 2.2%
8,600 Alexander & Baldwin, Inc................................................... 222,525
13,000 Federal Express Corporation(b) ............................................ 677,625
---------------
900,150
---------------
TRAVEL & INVESTMENT SERVICES -- 1.2%
8,000 American Express Company(c) ............................................... 479,000
---------------
TOTAL COMMON STOCKS (COST $16,811,073) ................................... $ 26,381,392
---------------
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS-- 20.0% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 16.3%
$ 500,000 5.625%, due 06/30/97.................................................... $ 500,157
200,000 5.50%, due 09/30/97..................................................... 199,688
500,000 5.375%, due 05/31/98.................................................... 495,156
500,000 5.875%, due 08/15/98.................................................... 497,031
500,000 5.50%, due 02/28/99..................................................... 491,719
500,000 6.75%, due 06/30/99..................................................... 502,656
500,000 7.75%, due 01/31/00..................................................... 514,375
500,000 5.625%, due 02/28/01.................................................... 481,563
750,000 6.125%, due 12/31/01.................................................... 730,547
500,000 6.375%, due 08/15/02.................................................... 490,782
500,000 6.25%, due 02/15/03..................................................... 486,250
500,000 7.25%, due 05/15/04..................................................... 509,844
750,000 7.00%, due 07/15/06..................................................... 751,406
---------------
6,651,174
---------------
FEDERAL HOME LOAN BANK -- 1.8%
750,000 8.00%, due 01/10/12..................................................... 733,060
---------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.9%
750,000 8.625%, due 10/18/21.................................................... 782,349
---------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (COST $8,219,688) ............ $ 8,166,583
---------------
<CAPTION>
===============================================================================================================
PAR VALUE CORPORATE BONDS -- 6.6% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 2.9%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/08.................................................... $ 733,686
Signet Banking Corporation,
150,000 9.625%, due 06/01/99.................................................... 157,347
United Dominion Realty,
300,000 7.25%, due 04/01/99..................................................... 301,150
---------------
1,192,183
---------------
INDUSTRIAL -- 2.5%
Baxter International, Inc.,
75,000 9.25%, due 12/15/99..................................................... 79,245
Boise Cascade Corporation,
175,000 10.125%, due 12/15/97................................................... 179,462
Dayton Hudson Corporation,
27,000 9.25%, due 11/15/16..................................................... 27,583
113,000 9.875%, due 06/01/17.................................................... 119,446
<PAGE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================================================
PAR VALUE CORPORATE BONDS -- 6.6% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Georgia Pacific Corporation,
$ 300,000 9.75%, due 01/15/18..................................................... $ 313,186
Hilton Hotels,
300,000 7.70%, due 07/15/02..................................................... 300,472
---------------
1,019,394
---------------
UTILITIES -- 1.2%
Niagara Mohawk Power,
500,000 9.50%, due 03/01/21..................................................... 505,693
---------------
TOTAL CORPORATE BONDS (COST $2,664,540) .................................. $ 2,717,270
---------------
TOTAL INVESTMENTS AT VALUE (COST $27,695,301)-- 91.2% .................... $ 37,265,245
---------------
<CAPTION>
===============================================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(A) -- 8.3% VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 3,371,000 Star Bank N.A., 5.25%, dated 03/31/97, due 04/01/97,
repurchase proceeds $3,371,492 (Cost $3,371,000)........................ $ 3,371,000
---------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 99.5% .............. $ 40,636,245
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.5% .............................. 218,107
---------------
NET ASSETS-- 100.0% ....................................................... $ 40,854,352
===============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/24. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata
interest in the collateral at March 31, 1997 was $3,659,863.
(b) Non-income producing security.
(c) Security covers a call option.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1997
===============================================================================================================
MARKET
VALUE OF PREMIUMS
SHARES COVERED CALL OPTIONS OPTION RECEIVED
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aetna Life & Casualty Company,
2,000 07/19/97 at $95...................................... $ 3,250 $ 9,920
American Express Company,
2,000 04/19/97 at $70...................................... 0 4,920
American International Group,
1,500 05/17/97 at $130..................................... 844 6,690
Bristol-Myers Squibb,
3,400 06/21/97 at $67.50................................... 2,762 13,106
International Business Machines,
1,000 04/19/97 at $170..................................... 63 9,085
Phillip Morris Companies, Inc.,
2,000 06/21/97 at $135..................................... 2,750 15,919
Student Loan Marketing Association,
2,500 07/19/97 at $115..................................... 3,750 18,649
-------------- ---------------
$ 13,419 $ 78,289
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
===============================================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................................. $ 10,351,893 $ 27,695,301
============== ===============
At value (Note 1)................................................... $ 13,502,159 $ 37,265,245
Investments in repurchase agreements (Note 1)......................... 3,126,000 3,371,000
Cash.................................................................. 874 2
Receivable for securities sold........................................ 21,251 45,538
Interest receivable................................................... 456 192,587
Dividends receivable.................................................. 31,233 56,220
Receivable for capital shares sold.................................... 133,450 8,842
Other assets.......................................................... -- 1,808
-------------- ---------------
TOTAL ASSETS........................................................ 16,815,423 40,941,242
-------------- ---------------
LIABILITIES
Payable for securities purchased...................................... 440,501 --
Payable for capital shares redeemed................................... 1,500 7,568
Dividends payable..................................................... 8,998 19,891
Accrued advisory fees (Note 3)........................................ 10,582 27,614
Accrued administration fees (Note 3).................................. 2,800 6,900
Other accrued expenses................................................ 7,330 11,498
Covered call options, at value (Notes 1 and 4)
(premiums received $18,173 and $78,289, respectively) .............. 3,444 13,419
-------------- ---------------
TOTAL LIABILITIES................................................... 475,155 86,890
-------------- ---------------
NET ASSETS .............................................................. $ 16,340,268 $ 40,854,352
============== ===============
Net assets consist of:
Paid-in capital....................................................... $ 13,012,026 $ 30,527,779
Undistributed net investment income................................... 1,308 7,701
Accumulated net realized gains from security transactions............. 161,939 684,058
Net unrealized appreciation on investments............................ 3,164,995 9,634,814
-------------- ---------------
Net assets............................................................... $ 16,340,268 $ 40,854,352
============== ===============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value)............................................. 1,016,083 2,573,969
============== ===============
Net asset value, offering price and redemption price per share (Note 1).. $ 16.08 $ 15.87
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1997
===============================================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest.............................................................. $ 128,149 $ 977,544
Dividends............................................................. 215,221 488,130
-------------- ---------------
TOTAL INVESTMENT INCOME............................................. 343,370 1,465,674
-------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................................... 94,590 293,819
Administration fees (Note 3).......................................... 26,614 75,049
Custodian fees........................................................ 8,103 12,316
Professional fees..................................................... 7,295 10,795
Registration fees..................................................... 5,924 6,574
Trustees' fees and expenses........................................... 5,002 5,002
Printing of shareholder reports....................................... 4,346 5,189
Postage and supplies.................................................. 3,302 4,725
Pricing costs......................................................... 1,233 4,747
Other expenses........................................................ 1,997 4,947
-------------- ---------------
TOTAL EXPENSES...................................................... 158,406 423,163
Fees waived by the Adviser (Note 3)................................... (5,300) --
-------------- ---------------
NET EXPENSES........................................................ 153,106 423,163
-------------- ---------------
NET INVESTMENT INCOME ................................................... 190,264 1,042,511
-------------- ---------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions......................... 309,235 1,386,944
Net realized gains on option contracts written........................ 11,061 41,494
Net change in unrealized appreciation/depreciation on investments..... 1,419,505 2,379,725
-------------- ---------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ........................ 1,739,801 3,808,163
-------------- ---------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .............................. $ 1,930,065 $ 4,850,674
============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 1997 AND 1996
===============================================================================================================
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income....................... $ 190,264 $ 124,921 $ 1,042,511 $ 959,151
Net realized gains on:
Security transactions..................... 309,235 162,612 1,386,944 1,151,459
Option contracts written.................. 11,061 5,145 41,494 17,162
Net change in unrealized appreciation/
depreciation on investments............... 1,419,505 1,328,851 2,379,725 4,142,023
------------ -------------- ------------- --------------
Net increase in net assets from operations..... 1,930,065 1,621,529 4,850,674 6,269,795
------------ -------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income.................. (190,839) (124,493) (1,041,994) (958,803)
From net realized gains..................... (303,199) (22,509) (1,212,659) (863,702)
------------ -------------- ------------- --------------
Decrease in net assets from
distributions to shareholders............... (494,038) (147,002) (2,254,653) (1,822,505)
------------ -------------- ------------- --------------
FROM CAPITAL SHARE TRANSACTIONS(a)
Proceeds from shares sold................... 7,247,789 3,064,694 5,369,393 6,203,415
Net asset value of shares issued in reinvestment
of distributions to shareholders.......... 415,382 105,309 2,148,852 1,739,955
Payments for shares redeemed................ (1,848,844) (877,596) (4,900,645) (2,725,615)
------------ -------------- ------------- --------------
Net increase in net assets from
capital share transactions.................. 5,814,327 2,292,407 2,617,600 5,217,755
------------ -------------- ------------- --------------
TOTAL INCREASE IN NET ASSETS .................. 7,250,354 3,766,934 5,213,621 9,665,045
NET ASSETS
Beginning of year........................... 9,089,914 5,322,980 35,640,731 25,975,686
------------ -------------- ------------- --------------
End of year - (including undistributed net
investment income of $1,308, $1,883,
$7,701 and $7,184, respectively).......... $ 16,340,268 $ 9,089,914 $40,854,352 $35,640,731
============ ============== ============= ==============
(a) Summary of capital share activity:
Shares sold................................. 467,711 227,338 346,188 437,108
Shares issued in reinvestment of distributions
to shareholders........................... 27,437 7,962 140,100 122,643
Shares redeemed............................. (118,787) (70,241) (310,312) (191,450)
------------ -------------- ------------- --------------
Net increase in shares outstanding.......... 376,361 165,059 175,976 368,301
Shares outstanding, beginning of year....... 639,722 474,663 2,397,993 2,029,692
------------ -------------- ------------- --------------
Shares outstanding, end of year............. 1,016,083 639,722 2,573,969 2,397,993
============ ============== ============= ==============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
===================================================================================================================
YEAR YEAR YEAR JULY 30,
ENDED ENDED ENDED 1993(A) TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period......... $ 14.21 $ 11.21 $ 10.15 $ 10.00
------------ -------------- ------------- --------------
Income from investment operations:
Net investment income....................... 0.22 0.24 0.21 0.12
Net realized and unrealized gains on investments 2.24 3.05 1.14 0.19
------------ -------------- ------------- --------------
Total from investment operations............... 2.46 3.29 1.35 0.31
------------ -------------- ------------- --------------
Less distributions:
Dividends from net investment income........ (0.22) (0.24) (0.23) (0.10)
Distributions from net realized gains....... (0.37) (0.05) (0.06) (0.06)
------------ -------------- ------------- --------------
Total distributions............................ (0.59) (0.29) (0.29) (0.16)
------------ -------------- ------------- --------------
Net asset value at end of period............... $ 16.08 $ 14.21 $ 11.21 $ 10.15
============ ============== ============= ==============
Total return................................... 17.65% 29.54% 13.52% 4.59%(c)
============ ============== ============= ==============
Net assets at end of period (000's)............ $ 16,340 $ 9,090 $ 5,323 $ 3,135
============ ============== ============= ==============
Ratio of expenses to average net assets(b) .... 1.21% 1.25% 1.25% 1.25%(c)
Ratio of net investment income to average
net assets.................................... 1.50% 1.89% 2.15% 1.98%(c)
Portfolio turnover rate........................ 9% 12% 9% 7%
Average commission rate per share.............. $ 0.0925 $ -- $ -- $ --
<FN>
(a) Commencement of operations.
(b) Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.25%, 1.67%, 2.27% and
3.10%(c) for the periods ended March 31, 1997, 1996, 1995 and 1994,
respectively (Note 3).
(c) Annualized.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
===================================================================================================================
YEARS ENDED MARCH 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year............ $ 14.86 $ 12.80 $ 12.19 $ 12.10 $ 11.10
----------- ---------- ---------- --------- ----------
Income from investment operations:
Net investment income........................ 0.42 0.43 0.38 0.33 0.34
Net realized and unrealized gains
on investments............................. 1.49 2.44 0.87 0.15 1.06
----------- ---------- ---------- --------- ----------
Total from investment operations................ 1.91 2.87 1.25 0.48 1.40
----------- ---------- ---------- --------- ----------
Less distributions:
Dividends from net investment income......... (0.42) (0.43) (0.39) (0.32) (0.35)
Distributions from net realized gains........ (0.48) (0.38) (0.25) (0.07) (0.05)
----------- ---------- ---------- --------- ----------
Total distributions............................. (0.90) (0.81) (0.64) (0.39) (0.40)
----------- ---------- ---------- --------- ----------
Net asset value at end of year.................. $ 15.87 $ 14.86 $ 12.80 $ 12.19 $ 12.10
=========== ========== ========== ========= ==========
Total return.................................... 13.15% 22.86% 10.54% 3.88% 12.76%
=========== ========== ========== ========= ==========
Net assets at end of year (000's)............... $ 40,854 $ 35,641 $ 25,976 $ 21,969 $ 16,435
=========== ========== ========== ========= ==========
Ratio of expenses to average net assets......... 1.08% 1.17% 1.17%(a) 1.25%(b) 1.31%(b)
Ratio of net investment income
to average net assets........................ 2.65% 3.04% 3.10% 2.64% 3.09%
Portfolio turnover rate......................... 24% 17% 14% 28% 27%
Average commission rate per share............... $ 0.0779 $ -- $ -- $ -- $ --
<FN>
(a) In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's custodian fees for the year ended March 31, 1995 was paid
through an arrangement with a third-party broker-dealer who was compensated
through commission trades. Payment of the fees was based on a percentage of
commissions earned. Absent expenses reimbursed through the directed brokerage
arrangement, the ratio of expenses to average net assets would have been 1.20%
for the year ended March 31, 1995.
(b) Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.36% and 1.43% and for the
years ended March 31, 1994 and 1993, respectively (Note 3).
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
==============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund (the Funds)
are no-load, diversified series of the Williamsburg Investment Trust (the
Trust), an open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Trust was organized as a
Massachusetts business trust on July 18, 1988.
The FBP Contrarian Equity Fund seeks long-term growth of capital through
investment in a diversified portfolio comprised primarily of equity securities,
with current income as a secondary objective.
The FBP Contrarian Balanced Fund seeks long-term capital appreciation and
current income through investment in a balanced portfolio of equity and fixed
income securities assuming a moderate level of investment risk.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national stock exchange are
valued based upon the closing price on the principal exchange where the security
is traded. It is expected that fixed income securities of the FBP Contrarian
Balanced Fund will ordinarily be traded on the over-the-counter market, and
common stocks of each Fund will ordinarily be traded on a national securities
exchange, but may also be traded on the over-the-counter market. When market
quotations are not readily available, fixed income securities may be valued on
the basis of prices provided by an independent pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market value. At the time the Funds
enter into the joint repurchase agreement, the Funds take possession of the
underlying securities and the seller agrees that the value of the underlying
securities, including accrued interest, will at all times be equal to or exceed
the face amount of the repurchase agreement. In addition, each Fund actively
monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of each Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Options transactions -- The Funds may write covered call options for which
premiums are received and are recorded as liabilities, and are subsequently
valued daily at the closing prices on their primary exchanges. Premiums received
from writing options which expire are treated as realized gains. Premiums
received from writing options which are exercised increase the proceeds used to
calculate the realized gain or loss on the sale of the security. If a closing
<PAGE>
purchase transaction is used to terminate the Funds' obligation on a call, a
gain or loss will be realized, depending upon whether the price of the closing
purchase transaction is more or less than the premium previously received on the
call written.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 1997:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
- -----------------------------------------------------------------------------------
<S> <C> <C>
Gross unrealized appreciation............... $ 3,507,323 $ 10,377,445
Gross unrealized depreciation............... (342,328) (742,631)
-------------- ---------------
Net unrealized appreciation................. $ 3,164,995 $ 9,634,814
============== ===============
- -----------------------------------------------------------------------------------
</TABLE>
The tax basis of investments for each Fund is equal to the acquisition cost as
shown on the Statements of Assets and Liabilities.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $5,429,535 and $915,391, respectively, for the FBP Contrarian Equity Fund and
$9,799,373 and $8,122,848, respectively, for the FBP Contrarian Balanced Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by Flippin, Bruce & Porter, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, each Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .75% of its
average daily net assets up to $250 million; .65% of the next $250 million of
such net assets; and .50% of such net assets in excess of $500 million.
The Adviser currently intends to limit the total operating expenses of the FBP
Contrarian Equity Fund to 1.25% of average daily net assets. Accordingly, the
Adviser voluntarily waived $5,300 of its investment advisory fees from the FBP
Contrarian Equity Fund for the year ended March 31, 1997.
Certain trustees and officers of the Trust are also officers of the Adviser.
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Funds Services, Inc. (CFS), formerly MGF Service Corp., CFS provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Funds. For these services, CFS receives a
monthly fee from each Fund at an annual rate of .20% on its average daily net
assets up to $25 million; .175% on the next $25 million of such net assets; and
.15% on such net assets in excess of $50 million, subject to a $2,000 minimum
monthly fee. In addition, each Fund pays out-of-pocket expenses including, but
not limited to, postage, supplies, and costs of pricing the Funds' portfolio
securities.
Certain officers of the Trust are also officers of CFS.
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31, 1997
is as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
NUMBER OF OPTION NUMBER OF OPTION
OPTIONS PREMIUMS OPTIONS PREMIUMS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding at beginning of year....... 21 $ 13,224 100 $ 56,127
Options written................................ 37 18,173 194 96,274
Options cancelled in closing purchase
transactions................................ (3) (1,573) (22) (11,549)
Options expired................................ (14) (9,791) (75) (38,413)
Options exercised.............................. (4) (1,860) (53) (24,150)
------------ -------------- ------------- --------------
Options outstanding at end of year............. 37 $ 18,173 144 $ 78,289
============ ============== ============= ==============
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
==============================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities
of the FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund, (each a
series of The Williamsburg Investment Trust), including the portfolios of
investments, as of March 31, 1997, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, the financial highlights for the periods
indicated thereon. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund
as of March 31, 1997, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for the periods referred to above, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
INVESTMENT ADVISER
Flippin, Bruce & Porter, Inc.
800 Main Street, Suite 202
P.O. Box 6138
Lynchburg, Virginia 24505
800-FBP-9375
TRANSFER AGENT AND
SHAREHOLDER SERVICING AGENT
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
800-443-4249
OFFICERS
John M. Flippin, President
John T. Bruce, Vice President
and Portfolio Manager
R. Gregory Porter, III, Vice President
TRUSTEES
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
No Load Mutual Funds
Annual Report
March 31, 1997
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT
==============================================================================
May 22, 1997
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report of The
Government Street Funds and of The Alabama Tax Free Bond Fund for the year
ending March 31, 1997.
THE GOVERNMENT STREET EQUITY FUND
With a nearly ideal environment of moderate economic growth, rising corporate
profits and continued low inflation, the U.S. stock market continued its advance
through the end of 1996 and into 1997's first quarter. Despite falling stock
prices in March, the Standard & Poor's 500 Index turned in a total return of
19.8% for the twelve month period ending March 31, 1997. For its fiscal year
ending March 31, 1997, The Government Street Equity Fund achieved a total return
of 16.9%.
Due to the decline in the stock market in March, the average fund investing in
diversified U.S. stocks lost 2.0% in 1997's first quarter; during this same
period, however, The Government Street Equity Fund achieved a positive return of
1.6%.
12/31/96- 3/31/96-
3/31/97 3/31/97
The Government Street Equity Fund 1.6% 16.9%
General Equity Funds Average -2.0% 10.8%
(source: Lipper Analytical Services)
Historically, the return of common stocks for shorter periods depends to a large
degree on prevailing interest rates. The Federal Reserve Board currently appears
poised to tighten credit further; yet, economic indicators continue to suggest a
continuing low rate of inflation. This uncertainty regarding the direction of
interest rates is likely to create an environment of stock market volatility.
Regardless of what the U.S. stock market may experience in the short term,
though, investors in The Government Street Equity Fund - with its broad
diversification of quality stocks, its low expenses and its tax efficiency will
be rewarded over extended periods.
As of March 31, 1997, the net assets of the Fund were $49,628,951; net asset
value was $32.59. The ratio of expenses to average net assets was 0.89%. The
Fund's portfolio consisted of 79 individual equity issues divided almost equally
between growth and value stocks. No single investment in the portfolio exceeded
3% of the total value of the Fund.
THE GOVERNMENT STREET BOND FUND
As the expansion of the U.S. economy reached its seventh year, most economists
were predicting a slow down during the first calendar quarter of 1997. And
though bond prices did rise during the first six weeks of the quarter, the
economy continued to grow. The anticipation of renewed inflation concerned bond
investors, and, in March, bond prices began to fall as a result. When the
Federal Reserve Board raised the federal funds rate to 5.5% from 5.25% on March
25, interest rates rose to their highest level in more than a year.
Fortunately, this year-end decline in bond prices did not completely undermine
what had been achieved in the bond market earlier in the year.
<PAGE>
For the fiscal year ending March 31, 1997, the total return of The Government
Street Bond Fund was 4.6%. This compares favorably both with the 4.5% return of
the average intermediate corporate debt fund (source: Lipper Analytical
Services) and with the 4.8% return of the Lehman Government Corporate
Intermediate Bond Index achieved during the same twelve month period. The ratio
of net investment income to average net assets was 6.44%.
On March 31, 1997, the Fund had a weighted average maturity of 5.1 years. The
portfolio consisted of 89 individual issues with no single investment exceeding
4% of the total value of the Fund. U.S. Treasury obligations and securities
issued or guaranteed by agencies of the U.S. Government represented
approximately 40.5% of the Fund's total net assets; high quality corporate bonds
comprised 53.7% of the portfolio. The net assets of the Fund were $29,442,465;
net asset value was $20.47. The ratio of expenses to average net assets was
0.75%.
THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund continues to provide a tax free option for those
investors seeking current income exempt from both Federal and Alabama income
tax. It remains the only no-load Alabama municipal bond fund.
For its fiscal year ending March 31, 1997, the ratio of net investment income to
average net assets was 4.24%. To an Alabama investor in the maximum combined
federal and state tax brackets (42.6%), the taxable equivalent of this ratio was
7.39%.
The total return of the Fund for the year ending March 31, 1997 was 3.82%. This
return compares favorably with the 4.27% return of the Lehman 3-Year Municipal
Bond Index and with the 4.61% return of the Lehman 7-Year Municipal Bond Index
over the same period.
On March 31, 1997, the net assets of the Fund were $16,800,658; net asset value
was $10.18. The weighted average maturity of the Fund's portfolio was 6.9 years.
All bonds were rated A or better by Standard & Poor's or Moody's Investors
Service; more than 60% of the Fund's assets were rated AAA.
Thank you for your continued confidence in The Government Street Funds and in
The Alabama Tax Free Bond Fund. Please call us if we can be of further service
to you.
Very truly yours,
/s/ Thomas W. Leavell
Thomas W. Leavell
President
T. Leavell & Associates, Inc.
/s/ Richard Mitchell
Richard Mitchell
President
The Government Street Funds
The Alabama Tax Free Bond Fund
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Government Street Equity Fund
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
The Government Standard & Consumer
Street Equity Poor's 500 Price
Fund Index Index
<S> <C> <C> <C>
Jun 91 10000 10000 10000
9795 9813 10030
10297 10337 10090
11147 11203 10181
Mar 92 10812 10920 10253
10822 11127 10335
11214 11478 10407
11821 12056 10491
Mar 93 11857 12582 10586
11682 12642 10649
11971 12968 10692
12194 13269 10767
Mar 94 11825 12766 10821
11471 12820 10886
12086 13446 10984
11855 13443 11050
Mar 95 12655 14752 11138
13564 16161 11239
14385 17445 11284
15106 18495 11340
Mar 96 15941 19488 11431
16399 20363 11558
17247 20992 11609
18351 22742 11704
Mar 97 18642 23352 11785
Past performance is not predictive of future performance.
The Government Street Equity Fund Average Annual Total Return
1 Year 5 Years Since Inception*
16.94% 11.50% 11.36%
*Initial public offering of shares was June 3, 1991.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Government Steet Bond Fund
Comparison of the Change in Value of a $10,000 Investment in the Government
Street Bond Fund, the Lehman Government/Corporate Intermediate Bond Index and
the 90-Day Treasury Bill Index
Lehman
Government/Corporate 90-Day
The Government Intermediate Treasury
Street Bond Bond Bill
Fund Index Index
<S> <C> <C> <C>
Jun 91 10000 10000 10000
10045 10007 10039
10444 10488 10193
10931 10992 10342
Mar 92 10813 10892 10445
11218 11323 10559
11706 11822 10666
11627 11780 10748
Mar 93 12125 12249 10832
12366 12513 10916
12673 12796 11005
12650 12818 11091
Mar 94 12350 12558 11176
12261 12452 11283
12347 12585 11405
12310 12571 11556
Mar 95 12859 13123 11729
13533 13778 11905
13727 14006 12075
14213 14499 12253
Mar 96 14072 14378 12404
14158 14469 12563
14403 14726 12737
14731 15087 12903
Mar 97 14719 15070 13067
Past performance is not predictive of future performance.
The Government Street Bond Fund Average Annual Total Return
1 Year 5 Years Since Inception*
4.60% 6.36% 6.87%
* Initial public offering of shares was June 3, 1991.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[line chart]
The Alabama Tax Free Bond Fund
Comparison of the Change in Value of a $10,000 Investment in The Alabama
Tax Free Bond Fund, the Lehman 7-Year G.O. Municipal Bond Index and the Lehman
3-Year Municipal Bond Index
The Alabama Lehman 7-Year Lehman 3-Year
Tax Free G.O. Municipal Municipal
Bond Fund Bond Index Bond Index
<S> <C> <C> <C>
10000 10000 10000
Mar 93 10096 10255 10168
10380 10547 10321
10670 10856 10467
10781 11004 10585
Mar 94 10440 10527 10445
10506 10673 10558
10562 10755 10657
10439 10647 10658
Mar 95 10927 11224 10957
11219 11526 11189
11459 11905 11428
11735 12198 11603
Mar 96 11693 12172 11668
11724 12208 11763
11921 12437 11918
12178 12757 12118
Mar 97 12140 12738 12168
Past performance is not predictive of future performance.
The Alabama Tax Free Bond Fund Average Total Return
1 Year Since Inception*
3.82% 4.71%
* Initial public offering of shares was January 15, 1993.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
March 31,1997
==============================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost................................... $ 32,714,617 $ 28,448,442 $ 16,395,277
=============== =============== ===============
At value (Note 1)..................................... $ 46,966,682 $ 27,928,563 $ 16,579,721
Investments in repurchase agreements (Note 1)............ 2,618,000 1,064,000 --
Cash .................................................... 197 618 20
Receivable for securities sold........................... 126,626 -- --
Receivable for capital shares sold....................... 7,530 1,039 28,660
Interest receivable...................................... 382 529,039 220,629
Dividends receivable..................................... 78,841 -- --
Other assets............................................. 1,609 1,270 444
--------------- --------------- ---------------
TOTAL ASSETS.......................................... 49,799,867 29,524,529 16,829,474
--------------- --------------- ---------------
LIABILITIES
Payable for securities purchased......................... 79,705 -- --
Payable for capital shares redeemed...................... 47,325 46,398 2,500
Dividends payable........................................ 7,274 17,530 16,623
Accrued advisory fees (Note 3)........................... 26,325 12,598 5,093
Accrued administration fees (Note 3)..................... 8,000 2,000 2,100
Other accrued expenses and liabilities................... 2,287 3,538 2,500
--------------- --------------- ---------------
TOTAL LIABILITIES..................................... 170,916 82,064 28,816
--------------- --------------- ---------------
NET ASSETS .............................................. $ 49,628,951 $ 29,442,465 $ 16,800,658
=============== =============== ===============
Net assets consist of:
Paid-in capital ......................................... $ 34,220,612 $ 30,348,441 $ 16,816,229
Accumulated net realized gains (losses)
from security transactions............................ 1,144,252 (397,824) (200,015)
Undistributed net investment income...................... 12,022 11,727 --
Net unrealized appreciation (depreciation)
on investments........................................ 14,252,065 (519,879) 184,444
--------------- --------------- ---------------
Net assets............................................... $ 49,628,951 $ 29,442,465 $ 16,800,658
=============== =============== ===============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value)............ 1,523,001 1,438,620 1,649,601
=============== =============== ===============
Net asset value, offering price and
redemption price per share (Note 1)................... $ 32.59 $ 20.47 $ 10.18
=============== =============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Year Ended March 31, 1997
==============================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest.............................................. $ 125,441 $ 2,123,021 $ 795,132
Dividends............................................. 820,461 -- --
--------------- --------------- ---------------
TOTAL INVESTMENT INCOME............................. 945,902 2,123,021 795,132
--------------- --------------- ---------------
EXPENSES
Investment advisory fees (Note 3)..................... 275,299 147,268 56,628
Administrative fees (Note 3).......................... 86,708 24,000 24,513
Professional fees..................................... 10,295 10,295 7,258
Pricing costs......................................... 1,881 10,848 13,653
Custodian fees........................................ 12,087 6,801 5,456
Printing of shareholder reports....................... 6,801 6,309 6,507
Trustees' fees and expenses........................... 5,002 5,002 5,002
Postage and supplies.................................. 4,242 4,150 2,762
Registration fees..................................... 3,448 3,885 2,521
Other expenses........................................ 3,717 3,234 2,288
--------------- --------------- ---------------
TOTAL EXPENSES...................................... 409,480 221,792 126,588
Fees waived by the Adviser (Note 3)................... -- -- (19,812)
--------------- --------------- ---------------
NET EXPENSES........................................ 409,480 221,792 106,776
--------------- --------------- ---------------
NET INVESTMENT INCOME ................................... 536,422 1,901,229 688,356
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses)
from security transactions.......................... 2,262,399 (201,643) 6,155
Net change in unrealized appreciation/depreciation
on investments...................................... 4,313,961 (362,072) (76,770)
--------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS ....................................... 6,576,360 (563,715) (70,615)
--------------- --------------- ---------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................................... $ 7,112,782 $ 1,337,514 $ 617,741
=============== =============== ===============
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
==================================================================================================================================
Government Street Government Street Alabama Tax Free
Equity Fund Bond Fund Bond Fund
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31, March 31,
1997 1996 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income................. $ 536,422 $ 553,483 $1,901,229 $1,830,191 $ 688,356 $583,437
Net realized gains (losses)
from security transactions.......... 2,262,399 1,093,838 (201,643) (43,990) 6,155 (3,107)
Net change in unrealized appreciation/
depreciation on investments.......... 4,313,961 6,795,880 (362,072) 791,184 (76,770) 340,163
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from operations 7,112,782 8,443,201 1,337,514 2,577,385 617,741 920,493
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (526,528) (552,981) (1,892,341) (1,829,817) (688,356) (583,437)
From net realized gains............... (1,910,988) ( 280,943) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from
distributions to shareholders........ (2,437,516) (833,924) (1,892,341) (1,829,817) (688,356) (583,437)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS(A):
Proceeds from shares sold............. 5,118,742 7,310,859 3,531,544 2,484,795 2,068,564 2,543,833
Net asset value of shares issued in
reinvestment of distributions
to shareholders...................... 2,347,971 798,493 1,663,544 1,597,448 480,364 410,869
Payments for shares redeemed.......... (3,933,851) (5,771,194) (3,915,554) (3,891,999) (1,158,134) (627,496)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from
capital share transactions............ 3,532,862 2,338,158 1,279,534 190,244 1,390,794 2,327,206
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS ........... 8,208,128 9,947,435 724,707 937,812 1,320,179 2,664,262
NET ASSETS:
Beginning of year..................... 41,420,823 31,473,388 28,717,758 27,779,946 15,480,479 12,816,217
----------- ----------- ----------- ----------- ----------- -----------
End of year........................... $49,628,951 $ 41,420,823 $ 29,442,465 $ 28,717,758 $ 16,800,658 $15,480,479
=========== =========== ============ ============= =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME .................... $ 12,022 $ 2,128 $ 11,727 $ 2,839 $ -- $ --
=========== =========== ============ ============= ============ ===========
(a) Summary of capital share activity:
Shares sold.......................... 162,325 273,855 170,003 117,710 202,023 247,956
Shares issued in reinvestment of
distributions to shareholders 76,331 29,243 80,355 75,860 46,910 40,072
Shares redeemed...................... (124,086) (213,229) (188,067) (183,993) (112,871) (61,341)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in shares outstanding 114,570 89,869 62,291 9,577 136,062 226,687
Shares outstanding, beginning of year 1,408,431 1,318,562 1,376,329 1,366,752 1,513,539 1,286,852
----------- ----------- ----------- ----------- ----------- -----------
Shares outstanding, end of year...... 1,523,001 1,408,431 1,438,620 1,376,329 1,649,601 1,513,539
=========== =========== =========== =========== =========== ===========
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
==========================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
==========================================================================================================================
Years Ended March 31,
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 29.41 $ 23.87 $ 22.69 $ 23.06 $ 21.37
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.37 0.40 0.38 0.30 0.34
Net realized and unrealized
gains (losses) on investments........ 4.50 5.75 1.19 (0.37) 1.71
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 4.87 6.15 1.57 (0.07) 2.05
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (0.36) (0.40) (0.39) (0.30) (0.36)
Distributions from net realized gains.. (1.33) (0.21) -- -- --
----------- ----------- ---------- ---------- -----------
Total distributions....................... (1.69) (0.61) (0.39) (0.30) (0.36)
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 32.59 $ 29.41 $ 23.87 $ 22.69 $ 23.06
=========== =========== ========== ========== ===========
Total return.............................. 16.94% 25.96% 7.02% (0.31%) 9.66%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 49,629 $ 41,421 $ 31,473 $ 27,101 $ 21,735
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets (a) 0.89% 0.94% 0.91% 1.00% 1.00%
Ratio of net investment income
to average net assets.................. 1.17% 1.50% 1.71% 1.33% 1.55%
Portfolio turnover rate................... 20% 31% 55% 63% 59%
Average commission rate per share......... $ 0.0410 $ -- $ -- $ -- $ --
<FN>
(a) In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's administrative and custodian fees for periods ended prior to
March 31, 1996 were paid through an arrangement with a third-party
broker-dealer who was compensated through commission trades. Payment of the
fees was based on a percentage of commissions earned. Absent expenses
reimbursed through the directed brokerage arrangement, the ratios of expenses
to average net assets would have been 1.00%, 1.16% and 1.20% for the years
ended March 31, 1995, 1994 and 1993, respectively.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
===================================================================================================================
Years Ended March 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year...... $ 20.87 $ 20.33 $ 20.87 $ 21.77 $ 20.67
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 1.34 1.35 1.35 1.32 1.34
Net realized and unrealized
gains (losses) on investments........ (0.40) 0.54 (0.53) (0.90) 1.10
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 0.94 1.89 0.82 0.42 2.44
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (1.34) (1.35) (1.36) (1.32) (1.33)
Distributions from net realized gains.. -- -- -- -- (0.01)
----------- ----------- ---------- ---------- -----------
Total distributions....................... (1.34) (1.35) (1.36) (1.32) (1.34)
----------- ----------- ---------- ---------- -----------
Net asset value at end of year............ $ 20.47 $ 20.87 $ 20.33 $ 20.87 $ 21.77
=========== =========== ========== ========== ===========
Total return.............................. 4.60% 9.43% 4.12% 1.85% 12.14%
=========== =========== ========== ========== ===========
Net assets at end of year (000's)......... $ 29,442 $ 28,718 $ 27,780 $ 22,633 $ 15,955
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(a) 0.75% 0.76% 0.85% 0.86% 0.88%
Ratio of net investment income
to average net assets.................. 6.44% 6.38% 6.68% 6.15% 6.44%
Portfolio turnover rate................... 20% 10% 11% 10% 17%
<FN>
(a) Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 1.03% and 1.09% for the years
ended March 31, 1994 and 1993, respectively (Note 3).
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
===================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================================
Seven
Months January 15,
Years Ended March 31, Ended 1993(b) to
March 31, August 31,
1997 1996 1995 1994(a) 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period.... $ 10.23 $ 9.96 $ 9.96 $ 10.30 $ 10.00
----------- ----------- ---------- ---------- -----------
Income from investment operations:
Net investment income.................. 0.43 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments........ (0.05) 0.27 -- (0.34) 0.30
----------- ----------- ---------- ---------- -----------
Total from investment operations.......... 0.38 0.69 0.45 (0.08) 0.53
----------- ----------- ---------- ---------- -----------
Less distributions:
Dividends from net investment income... (0.43) (0.42) (0.45) (0.26) (0.23)
----------- ----------- ---------- ---------- -----------
Net asset value at end of period.......... $ 10.18 $ 10.23 $ 9.96 $ 9.96 $ 10.30
=========== =========== ========== ========== ===========
Total return.............................. 3.82% 7.02% 4.66% (1.50%)(d) 8.79%(d)
=========== =========== ========== ========== ===========
Net assets at end of period (000's)....... $ 16,801 $ 15,480 $ 12,816 $ 9,716 $ 3,429
=========== =========== ========== ========== ===========
Ratio of expenses to average net assets(c) 0.66% 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets.................. 4.24% 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate................... 6% 4% 36% 3% 2%
<FN>
(a) Effective April 1, 1994, the Fund was reorganized and changed its
fiscal year end from August 31 to March 31.
(b) Commencement of operations.
(c) Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been 0.78%,
0.86%, 1.05%, 1.76%(d) and 2.75%(d) for the periods ended March 31, 1997,
1996, 1995, 1994 and August 31, 1993, respectively (Note 3).
(d) Annualized.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CHEMICALS AND DRUGS -- 16.5%
20,000 Becton Dickinson & Company................................................. $ 900,000
13,000 Biomet, Inc.(a) ........................................................... 219,375
20,000 Cardinal Health, Inc....................................................... 1,087,527
20,000 ChemFirst, Inc............................................................. 425,000
13,200 duPont (E.I.) de Nemours & Company......................................... 1,399,200
6,500 Eli Lilly & Company........................................................ 534,625
18,000 Goodrich (B.F.) Company.................................................... 659,250
15,000 Johnson & Johnson.......................................................... 793,125
3,500 Merck & Company, Inc....................................................... 294,875
6,679 Mississippi Chemical Corporation........................................... 159,484
10,000 Schering-Plough Corporation................................................ 727,500
16,000 Schulman (A.), Inc......................................................... 304,000
22,000 Sigma-Aldrich.............................................................. 679,250
--------------
8,183,211
--------------
CONSTRUCTION -- 5.6%
12,750 Blount, Inc. - Class A..................................................... 525,937
12,000 Caterpiller, Inc........................................................... 963,000
20,312 Clayton Homes, Inc......................................................... 258,984
5,000 Florida Rock Industries, Inc............................................... 163,750
4,000 Lowe's Companies, Inc...................................................... 149,500
25,600 Valspar Corporation........................................................ 736,000
--------------
2,797,171
--------------
CONSUMER PRODUCTS -- 11.7%
20,632 Archer-Daniels-Midland Company............................................. 368,797
13,500 Belo (A.H.) Corporation - Class A.......................................... 499,500
12,000 General Motors Corporation................................................. 664,500
15,000 Gillette Company........................................................... 1,089,375
10,000 Kimberly-Clark Corporation................................................. 993,750
10,000 Motorola, Inc.............................................................. 603,750
12,000 Polygram NV................................................................ 591,000
8,500 Procter & Gamble Company................................................... 977,500
--------------
5,788,172
--------------
DURABLE GOODS -- 15.0%
10,000 AMP, Inc................................................................... 343,750
12,000 Cabletron Systems, Inc.(a) ................................................ 351,000
26,000 Cisco Systems, Inc.(a) .................................................... 1,251,250
4,000 Compaq Computer Corp.(a) .................................................. 306,500
7,000 Cummins Engine Company, Inc. .............................................. 358,750
7,000 Deere & Company............................................................ 304,500
11,500 General Electric Company .................................................. 1,141,375
2,500 Intel Corporation.......................................................... 347,812
4,600 International Business Machines Corporation................................ 631,925
10,000 Loral Space & Communications(a) ........................................... 141,250
14,000 McDonnell Douglas Corporation.............................................. 854,000
16,000 Philips Electronics NV..................................................... 712,000
11,500 Raytheon Company........................................................... 518,938
4,000 Shared Medical Systems, Inc................................................ 186,000
--------------
7,449,050
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- 12.0%
9,195 Aetna, Inc................................................................. $ 789,621
15,000 AFLAC, Inc................................................................. 562,500
10,000 American Express Company................................................... 598,750
3,000 Citicorp................................................................... 324,750
22,000 Federal Home Loan Mortgage Corporation..................................... 599,500
8,000 Fleet Financial Group, Inc................................................. 458,000
14,000 Mellon Bank Corporation.................................................... 1,018,500
35,000 Star Banc Corporation...................................................... 1,395,625
4,000 Travelers, Inc............................................................. 191,500
--------------
5,938,746
--------------
FOOD/BEVERAGES -- 2.9%
20,000 Coca-Cola Enterprises...................................................... 1,147,500
20,000 Hudson Foods, Inc. - Class A............................................... 312,500
--------------
1,460,000
--------------
METAL AND MINING -- 2.7%
9,000 Aluminum Company of America................................................ 612,000
17,400 Broken Hill Proprietary Company, LTD....................................... 461,100
9,543 Freeport McMoran Copper & Gold, Inc. - Class B............................. 289,869
--------------
1,362,969
--------------
OIL/ENERGY -- 10.7%
12,500 Amoco Corporation.......................................................... 1,082,812
13,000 Chevron Corporation........................................................ 905,125
7,325 Exxon Corporation.......................................................... 789,269
3,000 Halliburton Company........................................................ 203,250
12,500 Kerr McGee Corporation..................................................... 773,437
9,500 Shell Transport & Trading PLC.............................................. 992,750
10,000 Sonat, Inc................................................................. 545,000
--------------
5,291,643
--------------
PAPER AND FOREST PRODUCTS -- 1.3%
9,000 Georgia Pacific Corporation................................................ 652,500
--------------
RETAIL -- 6.0%
6,000 American Stores Company.................................................... 267,000
11,800 Home Depot, Inc............................................................ 631,300
15,000 Nike, Inc. - Class B....................................................... 930,000
12,000 Pep Boys - Manny, Moe & Jack............................................... 360,000
5,000 Wal-Mart Stores, Inc....................................................... 139,375
15,000 Walgreen Company........................................................... 628,125
--------------
2,955,800
--------------
SERVICES - COMPUTER -- 1.7%
11,100 Automatic Data Processing, Inc............................................. 464,813
6,000 Computer Sciences Corporation(a) .......................................... 370,500
--------------
835,313
--------------
TELECOMMUNICATION EQUIPMENT -- .8%
6,000 Corning, Inc............................................................... 266,250
10,000 Scientific - Atlanta, Inc.................................................. 152,500
--------------
418,750
--------------
TRANSPORTATION -- 1.7%
16,000 Federal Express Corporation(a) ............................................ 834,000
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares COMMON STOCKS -- 94.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES -- 5.9%
14,500 Ameritech Corporation...................................................... $ 891,750
20,000 DPL, Inc................................................................... 482,500
15,490 Duke Power Company......................................................... 683,496
8,000 Hong Kong Telecommunications, LTD.......................................... 131,000
14,000 SBC Communications, Inc.................................................... 736,750
--------------
2,925,496
--------------
TOTAL COMMON STOCKS (COST $32,661,488) ...................................... $46,892,821
--------------
<CAPTION>
===================================================================================================================
Shares PREFERRED STOCKS -- .1% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL -- .1%
898 Aetna Inc., Convertible.................................................... $ 73,861
--------------
TOTAL PREFERRED STOCKS (COST $53,129)........................................ $ 73,861
--------------
TOTAL INVESTMENTS AT VALUE (COST $32,714,617) - 94.6%........................ $ 46,966,682
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 5.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank,
$ 2,618,000 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $2,618,382 (Cost $2,618,000)......................... $ 2,618,000
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE 99.9% ................. $ 49,584,682
OTHER ASSETS IN EXCESS OF LIABILITIES-- .1% ................................. 44,269
--------------
NET ASSETS-- 100.0% ......................................................... $ 49,628,951
==============
<FN>
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA
II, Pool #8373, 6.50%, due 02/20/2024. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,842,338.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS-- 39.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 12.0%
$ 975,000 6.75%, due 05/31/1997...................................................... $ 976,524
40,000 8.50%, due 07/15/1997...................................................... 40,325
65,000 8.75%, due 10/15/1997...................................................... 65,975
10,000 7.875%, due 01/15/1998..................................................... 10,137
70,000 7.875%, due 04/15/1998..................................................... 71,203
50,000 8.25%, due 07/15/1998...................................................... 51,219
855,000 7.125%, due 10/15/1998..................................................... 864,619
225,000 7.00%, due 04/15/1999...................................................... 227,320
150,000 6.375%, due 07/15/1999..................................................... 149,672
100,000 8.00%, due 08/15/1999...................................................... 103,187
200,000 6.00%, due 10/15/1999...................................................... 197,688
250,000 7.50%, due 10/31/1999...................................................... 255,391
50,000 7.875%, due 11/15/1999..................................................... 51,547
100,000 8.50%, due 02/15/2000...................................................... 104,875
20,000 8.75%, due 08/15/2000...................................................... 21,244
50,000 8.50%, due 11/15/2000...................................................... 52,875
140,000 8.00%, due 05/15/2001...................................................... 146,300
125,000 7.875%, due 08/15/2001..................................................... 130,234
--------------
3,520,335
--------------
U.S. TREASURY STRIPS -- .1%
Coupon Treasury Investment Growth Security,
11,000 due 08/15/1998........................................................... 10,103
--------------
FEDERAL HOME LOAN BANK BONDS -- 1.7%
500,000 7.57%, due 08/19/2004...................................................... 513,600
--------------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS -- 8.8%
240,000 7.12%, due 09/30/2005...................................................... 232,825
200,000 6.73%, due 01/05/2006...................................................... 191,458
300,000 7.52%, due 04/21/2006...................................................... 298,351
500,000 7.55%, due 04/26/2006...................................................... 494,646
800,000 7.44%, due 09/20/2006...................................................... 792,443
600,000 7.04%, due 01/09/2007...................................................... 582,475
--------------
2,592,198
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS -- 10.3%
750,000 7.85%, due 09/10/1998...................................................... 764,785
100,000 8.45%, due 07/12/1999...................................................... 103,850
100,000 5.98%, due 03/22/2000...................................................... 98,138
650,000 6.85%, due 05/04/2001...................................................... 647,204
175,000 7.90%, due 04/10/2002...................................................... 175,000
250,000 7.00%, due 08/12/2002...................................................... 245,219
500,000 8.00%, due 06/15/2006...................................................... 506,462
500,000 7.36%, due 02/07/2007...................................................... 489,737
--------------
3,030,395
--------------
PRIVATE EXPORT FUNDING BONDS -- 1.6%
470,000 7.90%, due 03/31/2000...................................................... 484,854
--------------
TENNESSEE VALLEY AUTHORITY BONDS -- 5.2%
799,000 7.45%, due 10/15/2001...................................................... 807,963
745,000 6.875%, due 01/15/2002..................................................... 740,396
--------------
1,548,359
--------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS (COST $11,906,301) ............... $ 11,699,844
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value MORTGAGE-BACKED SECURITIES -- 1.5% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- .3%
$ 100,000 Series #G92-40, Class G, 7.00%, due 07/25/2002............................. $ 99,916
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- .5%
32,247 Pool #15032, 7.50%, due 02/15/2007......................................... 31,592
22,855 Pool #176413, 7.50%, due 09/15/2016........................................ 22,392
43,908 Pool #170784, 8.00%, due 12/15/2016........................................ 44,115
32,518 Pool #181540, 8.00%, due 02/15/2017........................................ 32,671
--------------
130,770
--------------
OTHER MORTGAGE-BACKED SECURITIES -- .7%
Collateralized Mortgage Securities Corporation,
200,000 Series 1991-8PF, 7.30%, due 08/20/2020................................ 200,902
--------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $437,575) ............................ $ 431,588
--------------
<CAPTION>
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 26.6%
American Express Company,
$ 350,000 8.50%, due 08/15/2001.................................................... $ 367,987
--------------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999................................................... 445,200
300,000 7.75%, due 05/15/2004.................................................... 302,356
--------------
747,556
--------------
Associates Corporation, N.A.,
300,000 8.80%, due 08/01/1998.................................................... 308,546
--------------
Banc One Corporation,
600,000 7.00%, due 07/15/2005.................................................... 585,532
--------------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002................................................... 518,319
--------------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001................................................... 183,246
--------------
Chevron Capital Corporation,
500,000 7.45%, due 08/15/2004.................................................... 498,056
--------------
General Electric Capital Corporation,
100,000 7.24%, due 01/15/2002.................................................... 101,071
150,000 7.50%, due 03/15/2002.................................................... 153,182
--------------
254,253
--------------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002................................................... 751,566
--------------
J.P. Morgan & Company,
500,000 7.25%, due 01/15/2002.................................................... 502,630
--------------
NationsBank,
550,000 7.625%, due 04/15/2005................................................... 555,208
--------------
Regions Financial Corporation,
350,000 7.80%, due 12/01/2002.................................................... 353,102
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Salomon, Inc.,
$ 400,000 7.25%, due 01/15/2000.................................................... $ 401,993
480,000 7.50%, due 02/01/2003.................................................... 479,841
--------------
881,834
--------------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004.................................................... 787,846
--------------
Wachovia Corporation,
535,000 7.00%, due 12/15/1999.................................................... 537,047
--------------
TOTAL FINANCE CORPORATE BONDS ............................................... 7,832,728
--------------
INDUSTRIAL -- 23.2%
BP America Inc.,
265,000 8.50%, due 04/15/2001................................................... 278,731
--------------
Campbell Soup Company,
500,000 6.90%, due 10/15/2006.................................................... 487,866
--------------
Coca-Cola Company,
401,000 7.875%, due 09/15/1998.................................................. 408,274
--------------
duPont (E.I.) de Nemours & Company,
150,000 9.15%, due 04/15/2000.................................................... 159,201
300,000 6.75%, due 10/15/2002.................................................... 295,334
--------------
454,535
--------------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003................................................... 1,100,075
--------------
International Business Machines Corporation,
1,000,000 7.25%, due 11/01/2002.................................................... 1,005,990
--------------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001................................................... 253,824
--------------
Limited, Inc.,
150,000 8.875%, due 08/15/1999................................................... 154,742
--------------
Mobil Corporation,
100,000 8.375%, due 02/12/2001................................................... 104,691
--------------
Philip Morris Companies, Inc.,
150,000 8.75%, due 06/15/1997.................................................... 150,856
305,000 7.375%, due 02/15/1999................................................... 307,605
175,000 7.75%, due 05/01/1999.................................................... 177,660
--------------
636,121
--------------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001.................................................... 159,232
--------------
Raytheon Company,
800,000 6.50%, due 07/15/2005.................................................... 749,411
--------------
<PAGE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Par Value CORPORATE BONDS -- 53.7% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wal-Mart Stores, Inc.,
$ 170,000 9.10%, due 07/15/2000.................................................... $ 180,863
100,000 8.625%, due 04/01/2001................................................... 105,545
745,000 7.50%, due 05/15/2004.................................................... 755,890
--------------
1,042,298
--------------
TOTAL INDUSTRIAL CORPORATE BONDS ............................................ 6,835,790
--------------
UTILITY -- 3.9%
Consolidated Edison,
785,000 7.60%, due 01/15/2000.................................................... 797,871
--------------
Emerson Electric Company,
352,000 6.30%, due 11/01/2005.................................................... 330,742
--------------
TOTAL UTILITY CORPORATE BONDS ............................................... 1,128,613
--------------
TOTAL CORPORATE BONDS (COST $16,104,566) .................................... $ 15,797,131
--------------
TOTAL INVESTMENTS AT VALUE (COST $28,448,442)-- 94.9% ...................... $ 27,928,563
--------------
<CAPTION>
===================================================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) -- 3.6% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Star Bank,
$ 1,064,000 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $1,064,155 (Cost $1,064,000)......................... $ 1,064,000
--------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS AT VALUE-- 98.5% ................ $ 28,992,563
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.5% ................................ 449,902
--------------
NET ASSETS-- 100.0% ......................................................... $ 29,442,465
==============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/2004. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $1,155,175.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Alabama Housing Finance Auth. Rev.,
$ 15,000 6.00%, due 10/01/1997...................................................... $ 15,091
245,000 4.90%, due 10/01/1998...................................................... 247,553
--------------
262,644
--------------
Alabama Mental Health Finance Auth. Special Tax,
300,000 5.00%, due 05/01/2006...................................................... 296,541
--------------
Alabama State GO,
200,000 5.90%, due 03/01/1999...................................................... 205,700
100,000 5.70%, due 12/01/2002...................................................... 104,563
--------------
310,263
--------------
Alabama State Corrections Institutions Rev.,
100,000 4.20%, due 04/01/1998...................................................... 100,369
--------------
Alabama State Industrial Access Road & Bridge Corp. GO,
100,000 4.00%, due 06/01/1998...................................................... 99,893
85,000 5.25%, due 06/01/2003...................................................... 85,885
--------------
185,778
--------------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000..................................................... 154,661
340,000 5.75%, due 09/01/2001...................................................... 353,661
400,000 6.50%, due 09/01/2005, prerefunded 09/01/2001 at 101....................... 431,156
--------------
939,478
--------------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000...................................................... 99,300
250,000 5.25%, due 11/01/2005...................................................... 252,915
50,000 5.00%, due 12/01/2005...................................................... 49,753
--------------
401,968
--------------
Alabama Water Pollution Control Rev.,
160,000 3.75%, due 08/15/1997...................................................... 159,974
25,000 7.00%, due 08/15/2001...................................................... 26,223
200,000 6.25%, due 08/15/2004...................................................... 215,244
--------------
401,441
--------------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004...................................................... 258,948
--------------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
30,000 7.375%, due 07/01/2006, ETM................................................ 32,438
--------------
Auburn University, Alabama Rev.,
25,000 6.10%, due 06/01/1999...................................................... 25,820
50,000 4.90%, due 06/01/2001...................................................... 50,427
150,000 5.20%, due 06/01/2004...................................................... 151,868
325,000 5.25%, due 04/01/2005...................................................... 328,595
--------------
556,710
--------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003...................................................... 210,668
400,000 5.00%, due 02/01/2007...................................................... 393,572
--------------
604,240
--------------
Baldwin Co., AL, Board of Education Rev.,
50,000 5.40%, due 12/01/1998...................................................... 50,880
300,000 5.90%, due 12/01/2001...................................................... 309,087
--------------
359,967
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Birmingham, AL, GO,
$ 100,000 5.80%, due 04/01/2002...................................................... $ 104,038
200,000 5.90%, due 04/01/2003...................................................... 209,548
--------------
313,586
--------------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999...................................................... 100,015
--------------
Birmingham, AL, Industrial Water Board Rev.,
100,000 5.00%, due 03/01/2001...................................................... 100,987
100,000 6.00%, due 07/01/2007...................................................... 106,449
--------------
207,436
--------------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM................................................. 65,339
--------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
50,000 5.90%, due 01/01/2003...................................................... 52,424
400,000 6.15%, due 01/01/2006...................................................... 422,152
--------------
474,576
--------------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004...................................................... 54,800
--------------
Fairhope, AL, Utility, Rev.,
200,000 5.10%, due 12/01/2008...................................................... 195,348
--------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009...................................................... 290,727
--------------
Hoover, AL, Board of Education GO,
400,000 6.00%, due 02/15/2006...................................................... 423,652
--------------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded 02/01/2001 at 102...................... 216,804
--------------
Houston Co., AL, GO,
100,000 4.20%, due 10/01/1998...................................................... 100,052
250,000 5.00%, due 07/01/2002...................................................... 251,585
--------------
351,637
--------------
Huntsville, AL, GO,
115,000 5.15%, due 08/01/2000...................................................... 116,891
100,000 5.20%, due 11/01/2000...................................................... 101,924
500,000 5.50%, due 11/01/2002...................................................... 516,695
100,000 5.90%, due 11/01/2005...................................................... 105,231
--------------
840,741
--------------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000...................................................... 157,089
150,000 5.00%, due 12/01/2003...................................................... 150,243
--------------
307,332
--------------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004...................................................... 151,410
150,000 5.25%, due 05/01/2005...................................................... 151,494
--------------
302,904
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Jefferson Co., AL, GO,
$ 150,000 5.55%, due 04/01/2002...................................................... $ 154,278
100,000 5.00%, due 04/01/2004...................................................... 99,650
--------------
253,928
--------------
Jefferson Co., AL, Board of Education Capital Outlay Warrants,
300,000 5.70%, due 02/15/2011...................................................... 302,727
--------------
Jefferson Co., AL, Sewer Rev
140,000 5.15%, due 09/01/2002...................................................... 142,227
50,000 5.50%, due 09/01/2003...................................................... 51,800
300,000 5.75%, due 09/01/2005...................................................... 314,730
--------------
508,757
--------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007...................................................... 306,606
--------------
Madison, AL, Board of Education School Warrants,
100,000 5.00%, due 02/01/1999...................................................... 101,210
--------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007...................................................... 335,062
--------------
Madison Co., AL, Board of Education Capital Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004...................................................... 177,898
--------------
Mobile, AL, GO,
200,000 5.00%, due 08/15/1998...................................................... 202,662
150,000 5.20%, due 02/15/1999...................................................... 152,347
200,000 5.40%, due 08/15/2000...................................................... 205,122
25,000 6.25%, due 08/01/2001...................................................... 26,295
25,000 6.30%, due 08/01/2001...................................................... 26,520
275,000 6.20%, due 02/15/2007, ETM................................................. 294,687
--------------
907,633
--------------
Mobile, AL, Water & Sewer Commissioners Rev.,
55,000 6.30%, due 01/01/2003...................................................... 58,580
--------------
Mobile Co., AL, GO,
50,000 6.10%, due 02/01/2002, prerefunded 02/01/2000 at 102....................... 52,852
160,000 6.70%, due 02/01/2011, prerefunded 02/01/2000 at 102....................... 171,816
--------------
224,668
--------------
Mobile Co., AL., Board of Education Capital Outlay Warrants,
400,000 5.00%, due 03/01/2008...................................................... 389,808
--------------
Mobile Co., AL, Gas Tax Antic. Warrants Rev.,
100,000 3.80%, due 02/01/1998...................................................... 99,980
100,000 4.50%, due 02/01/2003...................................................... 97,540
--------------
197,520
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS-- 96.3% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Montgomery, AL, GO,
$ 200,000 4.25%, due 05/01/1999, ETM................................................. $ 199,128
200,000 4.70%, due 05/01/2002...................................................... 198,478
--------------
397,606
--------------
Montgomery, AL, Waterworks & Sanitation Rev.,
200,000 5.85%, due 03/01/2003...................................................... 208,564
400,000 5.60%, due 09/01/2009...................................................... 405,524
--------------
614,088
--------------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006...................................................... 100,306
--------------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010...................................................... 402,548
--------------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003...................................................... 98,552
100,000 5.30%, due 07/01/2003...................................................... 102,339
--------------
200,891
--------------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000...................................................... 208,938
50,000 5.35%, due 08/01/2001...................................................... 51,316
--------------
260,254
--------------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM................................................. 37,212
25,000 6.60%, due 02/01/2002, ETM................................................. 26,814
40,000 6.60%, due 02/01/2003, ETM................................................. 43,263
--------------
107,289
--------------
Shelby Co., AL, Board of Education Capital Outlay Special Tax Warrants,
100,000 4.80%, due 02/01/1998...................................................... 100,791
--------------
Tuscaloosa, AL, Board of Education GO,
100,000 5.10%, due 02/01/2004...................................................... 100,623
--------------
Tuscaloosa, AL, Board of Education Special Tax Warrants,
75,000 5.70%, due 02/15/2005...................................................... 77,981
125,000 6.00%, due 02/15/2009...................................................... 130,259
--------------
208,240
--------------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999...................................................... 248,197
50,000 5.00%, due 11/01/2000...................................................... 50,586
200,000 5.10%, due 10/01/2002...................................................... 202,484
400,000 5.25%, due 06/01/2010...................................................... 391,052
--------------
892,319
--------------
Vestavia Hills, AL, Board of Education Capital Outlay Rev.,
55,000 5.25%, due 02/01/2004...................................................... 55,816
--------------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005...................................................... 123,004
--------------
TOTAL ALABAMA (COST $15,999,410) ............................................ $ 16,183,854
--------------
<PAGE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===================================================================================================================
Shares MONEY MARKETS -- 2.4% Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 395,867 Star Tax-Free Money Market Fund (Cost $395,867).............................. $ 395,867
-------------
TOTAL INVESTMENTS AT VALUE (COST $16,395,277)-- 98.7% ...................... $ 16,579,721
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.3% ................................ 220,937
--------------
NET ASSETS-- 100.0% ......................................................... $ 16,800,658
==============
<FN>
ETM - Escrowed to maturity.
</FN>
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
==============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Government Street Equity Fund, The Government Street Bond Fund, and The
Alabama Tax Free Bond Fund (the Funds) are each a no-load series of The
Williamsburg Investment Trust (the Trust). The Trust, an open-end management
investment company registered under the Investment Company Act of 1940, as
amended, was organized as a Massachusetts business trust on July 18, 1988.
The Government Street Equity Fund's investment objective is to seek capital
appreciation through the compounding of dividends and capital gains, both
realized and unrealized, on its investments in common stocks. Current income is
of secondary importance.
The Government Street Bond Fund's investment objectives are to preserve capital,
to provide current income and to protect the value of the portfolio against the
effects of inflation by limiting investments to fixed income securities in the
four highest quality ratings. Capital appreciation is of secondary importance.
The Alabama Tax Free Bond Fund's investment objectives are to provide current
income exempt from both federal income taxes and the personal income taxes of
Alabama and to preserve capital. Capital appreciation is of secondary
importance.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national stock exchange are
valued based upon the closing price on the principal exchange where the security
is traded. It is expected that fixed income securities will ordinarily be traded
on the over-the-counter market, and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded on the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market value. At the time the Funds
enter into the joint repurchase agreement, the Funds take possession of the
underlying securities and the seller agrees that the value of the underlying
securities, including accrued interest, will at all times be equal to or exceed
the face amount of the repurchase agreement. In addition, each Fund actively
monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of The Government Street Equity
Fund; declared and paid monthly to shareholders of The Government Street Bond
Fund; and declared daily and paid monthly to shareholders of The Alabama Tax
Free Bond Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and capital
gain distributions are determined in accordance with income tax regulations.
<PAGE>
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies,
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 1997:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized appreciation............................ $ 14,593,143 $ 206,157 $ 256,957
Gross unrealized depreciation............................ (341,078) (726,036) (72,513)
--------------- --------------- ---------------
Net unrealized appreciation (depreciation)............... $ 14,252,065 $ (519,879) $ 184,444
=============== =============== ===============
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The tax basis of investments for each Fund is equal to the acquisition cost as
shown on the Statements of Assets and Liabilities.
As of March 31, 1997, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$307,540, and $200,015, respectively, which expire through the year 2005. In
addition, The Government Street Bond Fund realized net capital losses of $90,284
during the period from November 1, 1996 through March 31, 1997, which are
treated for federal income tax purposes as arising in the tax year ending March
31, 1998. These capital loss carryforwards and "post-October" losses may be
utilized in future years to offset net realized capital gains prior to
distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $9,860,380 and $8,804,209, respectively, for The Government Street Equity
Fund, $6,894,444 and $5,758,302, respectively, for The Government Street Bond
Fund, and $2,372,120 and $1,008,079, respectively, for The Alabama Tax Free Bond
Fund.
<PAGE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly at an annual
rate of .60% of its average daily net assets up to $100 million and .50% of such
assets in excess of $100 million. The Government Street Bond Fund pays the
Adviser a fee at an annual rate of .50% of its average daily net assets up to
$100 million and .40% of such net assets in excess of $100 million. The Alabama
Tax Free Bond Fund pays the Adviser a fee at an annual rate of .35% of its
average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
The Adviser currently intends to limit the total operating expenses of the
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $19,812 of its investment advisory fees from the
Fund during the year ended March 31, 1997.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., CFS provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Funds. For these services, CFS receives a
monthly fee from The Government Street Equity Fund at an annual rate of .20% of
its average daily net assets up to $25 million; .175% of the next $25 million of
such assets; and .15% of such net assets in excess of $50 million. From The
Government Street Bond Fund, CFS receives a monthly fee of .075% of its average
daily net assets up to $200 million and .05% of such assets in excess of $200
million. From The Alabama Tax Free Bond Fund, CFS receives a monthly fee of .15%
of its average daily net assets up to $200 million and .10% of such assets in
excess of $200 million. The fee for each Fund is subject to a $2,000 monthly
minimum. In addition, each Fund pays out-of-pocket expenses including, but not
limited to, postage, supplies, and costs of pricing the Funds' portfolio
securities.
Certain officers of the Trust are also officers of CFS.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
==============================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities
of The Government Street Equity Fund, The Government Street Bond Fund and The
Alabama Tax Free Bond Fund, (each a series of The Williamsburg Investment
Trust), including the portfolios of investments, as of March 31, 1997, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Government Street Equity Fund, The Government Street Bond Fund
and The Alabama Tax Free Bond Fund, as of March 31, 1997, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended and their financial highlights for the
periods referred to above, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
No Load Mutual Funds
INVESTMENT ADVISER
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, AL 36633
ADMINISTRATOR
Countrywide Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, OH 45201-5354
1-800-443-4249
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
BOARD OF TRUSTEES
Richard Mitchell, President
Jack E. Brinson
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr. M.D.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Samuel B. Witt, III
PORTFOLIO MANAGERS
Thomas W. Leavell,
The Government Street Funds
Timothy S. Healey,
The Alabama Tax Free Bond Fund
<PAGE>
THE JAMESTOWN BALANCED FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN BALANCED FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN BALANCED FUND
The fiscal year ended March 31, 1997, has been another good year for The
Jamestown Balanced Fund. For the 12 month period, the total return for the
Balanced Fund was 12.29% after expenses. This compared quite favorably to the
Lipper Balanced Fund Index which was up 11.02% for the same time period. The
Standard & Poor's 500 Index, which of course is 100% in common stocks, had a
return of 19.82%. Since only 70% of your fund is normally invested in stocks and
the remaining 30% is allocated to bonds and cash equivalents, we are pleased
with the comparative total return results.
Our equity sector allocations were mostly in line with those of the S&P 500 with
only slight underweightings and overweightings. The two exceptions to this are
the utility and transportation sectors, in which we were not invested during the
year. During the 12 month period, the outstanding sector was technology
(+35.7%), followed by finance (+30.4%). Other sectors outperforming the S&P 500
were staples, energy, and health care, in that order. Sectors underperforming
the market were transportation, consumer cyclicals, basic industries, and
utilities. The capital goods sector fell just 100 basis points short of matching
the S&P.
The bond portion of the Fund provided positive returns for the year, although
less so than did stocks. The Lehman Intermediate Bond Index was up 4.8% during
our fiscal year.
Looking forward to the following year, we are somewhat cautious on both the
stock and bond markets. The increase in the Federal Funds rate instituted on
March 25 has caused consternation in both stock and bond markets. The good new
is that inflation appears to be well contained at this point in time, although
the wage component of the CPI has been creeping up for the last two years. This
slow but steady increase in wages has been offset, so far, by lower benefit
costs, so that overall compensation has remained stable.
For a comparison of the Fund's performance from inception versus the Standard
and Poor's 500 Index and the Consumer Price Index, please refer to the chart
below:
<TABLE>
<CAPTION>
The Jamestown Balanced Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Balanced Fund, the Standard & Poor's 500 Index and the Consumer price Index
THE JAMESTOWN BALANCED FUND
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN BALANCED FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
07/03/89 10,000 07/03/89 10,000
09/30/89 10.71% 11,071 09/30/89 0.00% 10,000
12/31/89 2.06% 11,299 12/31/89 6.25% 10,625
03/31/90 -3.00% 10,960 03/31/90 -2.62% 10,347
06/30/90 6.28% 11,648 06/30/90 4.90% 10,853
09/30/90 -13.75% 10,047 09/30/90 -9.33% 9,841
12/31/90 8.97% 10,948 12/31/90 5.17% 10,350
03/31/91 14.53% 12,539 03/31/91 9.96% 11,380
06/30/91 -0.23% 12,510 06/30/91 -0.91% 11,277
09/30/91 5.35% 13,179 09/30/91 5.12% 11,854
12/31/91 8.38% 14,284 12/31/91 6.97% 12,681
03/31/92 -2.53% 13,922 03/31/92 -2.03% 12,423
06/30/92 1.90% 14,187 06/30/92 2.03% 12,675
09/30/92 3.15% 14,634 09/30/92 4.46% 13,241
12/31/92 5.03% 15,370 12/31/92 3.74% 13,736
03/31/93 4.36% 16,040 03/31/93 1.75% 13,976
06/30/93 0.48% 16,117 06/30/93 -0.26% 13,941
09/30/93 2.58% 16,533 09/30/93 2.49% 14,287
12/31/93 2.32% 16,916 12/31/93 0.32% 14,333
03/31/94 -3.79% 16,275 03/31/94 -1.58% 14,107
06/30/94 0.42% 16,343 06/30/94 0.91% 14,235
09/30/94 4.88% 17,141 09/30/94 1.64% 14,469
12/31/94 -0.02% 17,137 12/31/94 -0.83% 14,349
03/31/95 9.74% 18,807 03/31/95 8.67% 15,594
06/30/95 9.55% 20,602 06/30/95 7.60% 16,779
09/30/95 7.95% 22,239 09/30/95 5.50% 17,702
12/31/95 6.02% 23,578 12/31/95 4.75% 18,542
03/31/96 5.37% 24,844 03/31/96 3.27% 19,148
06/30/96 4.49% 25,959 06/30/96 3.05% 19,731
09/30/96 3.09% 26,761 09/30/96 2.41% 20,207
12/31/96 8.34% 28,992 12/31/96 6.21% 21,462
03/31/97 2.68% 29,769 03/31/97 0.18% 21,501
<CAPTION>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
<S> <C> <C>
07/03/89 10,000
09/30/89 0.75% 10,075
12/31/89 1.00% 10,176
03/31/90 2.01% 10,380
06/30/90 0.90% 10,474
09/30/90 1.71% 10,653
12/31/90 1.71% 10,835
03/31/91 0.90% 10,933
06/30/91 0.40% 10,977
09/30/91 0.60% 11,043
12/31/91 0.90% 11,142
03/31/92 0.70% 11,221
06/30/92 0.80% 11,311
09/30/92 0.70% 11,390
12/31/92 0.80% 11,481
03/31/93 0.90% 11,585
06/30/93 0.60% 11,654
09/30/93 0.40% 11,701
12/31/93 0.70% 11,783
03/31/94 0.50% 11,842
06/30/94 0.60% 11,913
09/30/94 0.90% 12,020
12/31/94 0.60% 12,093
03/31/95 0.80% 12,190
06/30/95 0.90% 12,300
09/30/95 0.40% 12,349
12/31/95 0.50% 12,411
03/31/96 0.80% 12,510
06/30/96 1.10% 12,649
09/30/96 0.44% 12,704
12/31/96 0.82% 12,809
03/31/97 0.69% 12,897
The Jamestown Balanced Fund Average Annual Total Returns
1 Year 5 Years Since Inception*
12.29% 11.60% 10.39%
</TABLE>
* Initial public offering of shares was July 3, 1989.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost
$ 53,298,520
====================
At value (Note 1)
$ 67,064,552
Investments in repurchase
agreements (Note 1)
2,396,000
Cash
758
Receivable for securities sold
961,414
Receivable for capital shares sold
10,000
Interest receivable
274,630
Dividends receivable
52,018
Other assets
2,564
--------------------
TOTAL ASSETS
70,761,936
--------------------
LIABILITIES
Payable for capital shares redeemed
27,640
Dividends payable
20,483
Accrued advisory fees (Note 3)
40,324
Accrued administration fees (Note 3)
10,700
Other accrued expenses
9,218
-------------------
TOTAL LIABILITIES
108,365
-------------------
NET ASSETS
$ 70,653,571
===================
Net assets consist of:
Paid-in capital
$ 55,607,351
Accumulated net realized gains from
security transactions
1,254,624
Undistributed net investment income
<PAGE>
<CAPTION>
<S> <C>
25,564
Net unrealized appreciation on investments 13,766,032
--------------------
Net assets $ 70,653,571
====================
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) 4,658,602
====================
Net asset value, offering price and
redemption price per share (Note 1) $ 15.17
====================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
<S> <C>
INVESTMENT INCOME
Interest $ 1,383,876
Dividends 727,002
--------------
TOTAL INVESTMENT INCOME 2,110,878
--------------
EXPENSES
Investment advisory fees (Note 3) 430,381
Administrative fees (Note 3) 118,380
Custodian fees 15,658
Professional fees 12,288
Pricing costs 5,382
Trustees' fees and expenses 5,002
Insurance expense 4,256
Registration fees 3,594
Other expenses 6,332
-------------
TOTAL EXPENSES 601,273
Expenses reimbursed through a directed
brokerage arrangement (Note 4) (23,361)
-------------
NET EXPENSES 577,912
-------------
NET INVESTMENT INCOME 1,532,966
-------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 3,339,264
Net change in unrealized appreciation/depreciation
on investments 2,746,030
-------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 6,085,294
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 7,618,260
===========
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
---------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,532,966 $ 1,446,610
Net realized gains from security transactions 3,339,264 4,448,919
Net change in unrealized appreciation/depreciation
on investments 2,746,030 5,730,142
---------------- -------------
Net increase in net assets from operations 7,618,260 11,625,671
---------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,518,758) (1,451,395)
From net realized gains from security transactions (4,545,144) (1,982,339)
---------------- -------------
Decrease in net assets from distributions to shareholders (6,063,902) (3,433,734)
---------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 9,763,400 5,197,403
Net asset value of shares issued in reinvestment
of distributions to shareholders 5,853,635 3,265,651
Payments for shares redeemed (8,094,099) (7,140,816)
---------------- -------------
Net increase in net assets from capital share transactions 7,522,936 1,322,238
TOTAL INCREASE IN NET ASSETS 9,077,294 9,514,175
ASSETS:
Beginning of year 61,576,277 52,062,102
---------------- -------------
End of year - (including undistributed net investment
income of $25,564 and $11,356, respectively) $ 70,653,571 $ 61,576,277
================ =============
(a) Number of shares:
Sold 631,119 370,290
Reinvested 383,386 229,365
Redeemed (526,294) (510,212)
---------------- -------------
Net increase in shares outstanding 488,211 89,443
Shares outstanding, beginning of year 4,170,391 4,080,948
---------------- -------------
Shares outstanding, end of year 4,658,602 4,170,391
================ =============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
Years Ended March 31,
--------------------------------------------------------------------
1997 1996 1995 1994 1993
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $14.77 $12.76 $12.15 $12.49 $11.52
------- ------ ------ ------ ------
Income from investment operations:
Net investment income 0.35 0.36 0.33 0.30 0.31
Net realized and unrealized gains (losses)
on investments 1.45 2.50 0.90 (0.18) 1.11
------- ------ ------ ------ -----
Total from investment operations 1.80 2.86 1.23 0.12 1.42
------- ------ ------ ------ -----
Less distributions:
Dividends from net investment income (0.35) (0.36) (0.33) (0.30) (0.31)
Distributions from net realized gains (1.05) (0.49) (0.29) (0.16) (0.14)
------- ------ ------ ------ ------
Total distributions (1.40) (0.85) (0.62) (0.46) (0.45)
------- ------ ------ ------ ------
Net asset value at end of year $15.17 $14.77 $12.76 $12.15 $12.49
======= ====== ====== ====== ======
Total return 12.29% 22.79% 10.54% 0.94% 12.50%
======= ====== ====== ====== ======
Net assets at end of year (000's) $70,654 $61,576 $52,062 $46,928 $40,512
======= ====== ====== ====== ======
Ratio of gross expenses to average net assets 0.91% 0.93% 0.99% 1.01% 1.07%
Ratio of net expenses to average net assets (a) 0.87% 0.88% 0.96% 0.98% 0.99%
Ratio of net investment income to average net assets 2.31% 2.52% 2.72% 2.47% 2.59%
Portfolio turnover rate 58% 72% 95% 123% 134%
Average commission rate per share $0.0667 -- -- -- --
<FN>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Shares Value
<S> <C> <C>
COMMON STOCKS - 65.3%
Advertising - 2.1%
28,000 Interpublic Group of Companies, Inc. $ 1,477,000
---------------
Building and Construction - 1.1%
22,000 Foster Wheeler Corporation 778,250
---------------
Chemicals - 1.2%
12,000 Air Products & Chemicals, Inc. 814,500
---------------
Commercial Banking - 4.4%
24,000 Federal National Mortgage Association 867,000
15,000 First Union Corporation 1,216,875
19,000 NationsBank Corporation 1,052,125
---------------
3,136,000
---------------
Communications - 5.3%
46,000 Alltel Corporation 1,495,000
37,000 Equifax, Inc. 1,008,250
34,000 MCI Communications Corporation 1,211,250
---------------
3,714,500
---------------
Computers/Computer Technology Services - 6.8%
29,000 Cabletron Systems (b) 848,250
14,000 Cisco Systems, Inc. (b) 673,750
25,000 Computer Sciences Corporation (b) 1,543,750
12,300 Intel Corporation 1,711,237
---------------
4,776,987
---------------
Consumer Products - 10.7%
21,000 Avon Products, Inc. 1,102,500
16,000 General Electric Company 1,588,000
7,000 Gillette Company 508,375
14,000 Kimberly-Clark Corporation 1,391,250
5,000 Procter & Gamble Company 575,000
46,000 Sysco Corporation 1,569,750
35,000 Whitman Corporation 857,500
---------------
7,592,375
---------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Drugs/Medical Equipment - 6.3%
27,000 Abbott Laboratories $ 1,515,375
17,000 Merck and Company, Inc. 1,432,250
21,000 Schering-Plough Corporation 1,527,750
---------------
4,475,375
---------------
Durable Goods - 2.1%
26,000 Avnet, Inc. 1,465,750
---------------
Electronics - 1.5%
20,000 Hewlett-Packard Company 1,065,000
---------------
Entertainment - 1.9%
18,270 Walt Disney Company 1,333,710
---------------
Fast Food Restaurants - 1.8%
27,000 McDonald's Corporation 1,275,750
---------------
Fire Systems - 2.3%
29,000 Tyco International Ltd. 1,595,000
---------------
Food Productions - 1.5%
20,000 Conagra, Inc. 1,085,000
---------------
Health Care Centers - 2.8%
45,000 Columbia/HCA Healthcare Corporation 1,513,125
20,000 Manor Care, Inc. 487,500
---------------
2,000,625
---------------
Hotels - 1.3%
70,100 Choice Hotel International, Inc. (b) 946,350
---------------
Insurance - 3.2%
12,000 American International Group 1,408,500
16,000 Jefferson-Pilot Corporation 870,000
---------------
2,278,500
---------------
Oil and Gas Drilling - 4.9%
12,500 Amoco Corporation 1,082,813
28,000 Coastal Corporation 1,344,000
9,200 Texaco, Inc. 1,007,400
---------------
3,434,213
---------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Real Estate - 1.5%
72,000 United Dominion Realty Trust $ 1,053,000
---------------
Retail Stores - 2.6%
53,400 AutoZone, Inc. (b) 1,201,500
20,000 Circuit City Stores, Inc. 667,500
----------------
1,869,000
----------------
Total Common Stocks (Cost $32,248,573) $ 46,166,885
----------------
Par Value
U.S. TREASURY NOTES - 16.7%
$ 1,000,000 5.125%, due 04/30/1998 $ 989,690
3,275,000 7.75%, due 11/30/1999 3,366,602
2,065,000 6.25%, due 02/15/2003 2,008,853
5,350,000 7.25%, due 08/15/2004 5,456,144
----------------
Total U.S. Treasury Notes (Cost $11,899,361) $ 11,821,289
----------------
MORTGAGE-BACKED SECURITIES - 5.3%
Federal Home Loan Mortgage Corporation - 2.3%
$ 336,945 Pool #G50153, 4.50%, due 05/01/1999 $ 325,152
500,000 Pool #1490-PE, 5.75%, due 07/15/2006 490,000
167,668 Pool #162-E, 7.00%, due 02/15/2020 167,668
124,963 Pool #D69139, 6.50%, due 03/01/2026 116,605
538,354 Pool #D70284, 6.50%, due 04/01/2026 501,509
----------------
1,600,934
----------------
Federal National Mortgage Association - 1.8%
400,000 Series #1993-63-PE, 6.25%, due 06/25/2005 394,500
243,942 Series #70, 8.50%, due 01/01/2012 252,336
231,368 Series #88-29-B, 9.50%, due 12/25/2018 239,320
395,203 Series #1990-35-E, 9.50%, due 04/25/2020 414,097
----------------
1,300,253
----------------
Government National Mortgage Association - 1.0%
88,288 Series #327273, 7.5%, due 08/15/2022 87,127
590,177 Series #343536, 7.5%, due 02/15/2023 581,856
----------------
668,983
----------------
Other Mortgage-Backed Securities - .2%
Lehman Brothers Mortgage Trust #91-2-A1,
151,925 8.00%, due 03/20/1999 154,014
----------------
Total Mortgage-Backed Securities (Cost $3,758,959) $ 3,724,184
----------------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
ASSET-BACKED SECURITIES - 2.1%
Advanta Mortgage Loan Trust #92-2-A2,
$ 365,000 7.03%, due 03/25/2011 $ 364,927
AFG Receivables Trust #95-A-A,
225,209 6.15%, due 09/15/2000 224,150
Fleetwood Credit Corporation Grantor Trust #95-A-A,
509,683 8.45%, due 11/15/2010 522,583
Nationscredit Grantor Trust #96-1-A,
377,776 5.85%, due 09/15/2011 364,818
----------------
Total Asset-Backed Securities (Cost $1,498,341) $ 1,476,478
----------------
CORPORATE BONDS - 5.5%
Beneficial Corporation Medium Term Notes,
$ 275,000 8.05%, due 11/16/1998 $ 281,091
Caterpillar Financial Services Medium Term Notes,
450,000 6.80%, due 06/15/1999 450,230
Fleet Mortgage Group Medium Term Notes,
400,000 7.25%, due 01/15/1998 402,724
Ford Motor Credit Medium Term Notes,
225,000 7.55%, due 07/19/1999 228,679
Ford Motor Credit,
200,000 8.00%, due 12/01/1997 202,216
GMAC Medium Term Notes,
525,000 6.65%, due 05/24/2000 520,285
International Lease Finance Corporation,
425,000 6.42%, due 09/11/2000 417,371
Merrill Lynch and Company Medium Term Notes,
410,000 7.26%, due 03/25/2002 406,630
NationsBank Medium Term Notes,
500,000 5.80%, due 01/31/2001 477,775
Northern Trust Corporation,
100,000 9.00%, due 05/15/1998 102,811
Pacific Bell,
400,000 6.875%, due 08/15/2006 385,904
----------------
Total Corporate Bonds (Cost $3,893,286) $ 3,875,716
----------------
Total Investments at Value (Cost $53,298,520) - 94.9% $ 67,064,552
----------------
<PAGE>
<CAPTION>
Face
Value Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 3.4%
Star Bank, N.A., 5.25%, dated 03/31/1997, due 04/01/1997
$ 2,396,000 repurchase proceeds $2,396,349 (Cost $2,396,000 $ 2,396,000
----------------
Total Investments and Repurchase Agreements
at Value - 98.3% $ 69,460,552
Other Assets in Excess of Liabilities - 1.7% 1,193,019
----------------
Net Assets - 100.0% $ 70,653,571
================
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA II,
Pool #8373, 6.50%, due 02/20/2024. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,601,314.
(b) Non-income producing security.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Balanced Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on July 3, 1989.
The Fund's investment objectives are long-term growth of capital and income
through investment in a balanced portfolio of equity and fixed income
securities. Capital protection and low volatility are important investment
goals.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national stock exchange are
valued based upon the closing price on the principal exchange where the security
is traded. It is expected that fixed income securities of the Fund will
ordinarily be traded on the over-the-counter market, and common stocks of the
Fund will ordinarily be traded on a national securities exchange, but may also
be traded on the over-the-counter market. When market quotations are not readily
available, fixed income securities may be valued on the basis of prices provided
by an independent pricing service. If a pricing service cannot provide a
valuation, securities will be valued in good faith at fair market value using
methods consistent with those determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market. At the time the Fund enters
into the joint repurchase agreement, the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal to
or exceed the face amount of the repurchase agreement. In addition, the Fund
actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Discounts and premiums on securities purchased are amortized
in accordance with tax regulations. Dividend income is recorded on the
ex-dividend date. Discounts arising from net investment income are declared and
paid quarterly to shareholders of the Fund. Net realized short-term capital
gains, if any, may be distributed throughout the year and net realized long-term
capital gains, if any, are distributed at least once each year. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles.
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Securities traded on a "to-be-announced" basis -- The Fund occasionally trades
securities on a "to-be-announced" (TBA) basis. In a TBA transaction, the Fund
has committed to purchase securities for which all specific information is not
yet known at the time of the trade, particularly the face amount in
mortgage-backed securities transactions. Securities purchased on a TBA basis are
not settled until they are delivered to the Fund, normally 15 to 45 days later.
These transactions are subject to market fluctuations and their current value is
determined in the same manner as for other portfolio securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilites at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.
Actual results could differ from those estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $53,418,457 as of March 31, 1997:
Gross unrealized appreciation............. $14,492,285
Gross unrealized depreciation............. (846,190)
-----------
Net unrealized appreciation............... $13,646,095
===========
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $39,882,224 and $36,790,471, respectively.
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall, Inc.
(the Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .65% of its
average daily net assets up to $250 million; .60% of the next $250 million of
such net assets; and .55% of such net assets in excess of $500 million. Certain
trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .20% of its average daily net
assets up to $25 million; .175% of the next $25 million of such net assets; and
.15% of such net assets in excess of $50 million, subject to a $2,000 minimum
monthly fee. In addition, the Fund pays out-of-pocket expenses including, but
not limited to, postage, supplies, and cost of pricing the Fund's portfolio
securities. Certain officers of the Trust are also officers of CFS.
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of the Fund, the Fund's
custodian fees and a portion of other operating expenses have been paid through
an arrangement with a third-party broker-dealer who is compensated through
commission trades. Payment of expenses by the broker-dealer is based on a
percentage of commissions earned. Expenses reimbursed through the directed
brokerage arrangement totaled $23,361 for the year ended March 31, 1997.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Balanced Fund (a series of The Williamsburg Investment Trust),
including the portfolio of investments, as of March 31, 1997, and the related
statement of operations for the year then ended, and the statement of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Balanced Fund as of March 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ended March 31, 1997, The Jamestown Tax Exempt Virginia Fund
had a total return of 4.39% after operating expenses. This compared favorably to
the Lipper Intermediate Municipal Fund Index which was up 4.17%. The Lehman
Municipal Bond Index advanced 5.45% during this same period. The Fund maintained
an average maturity of approximately seven years, while the Lehman Municipal
Bond Index had an average maturity of fourteen years. With our conservative
style of management and neutral view of the bond market, we believed it was
prudent to be shorter than this Index, which resulted in our relative
underperformance.
We were experiencing similar interest rates just nine months ago, right before
municipal yields dropped between 40 and 45 basis points. What is different this
time around is that economic growth is clearly stronger, the fears of impending
inflation are clearly stronger, the dollar is stronger, and the Federal Reserve
has already raised interest rates. What is similar is that by most popular
measures, inflation still has not appeared and pricing power is most likely
limited now as it was then. It remains to be seen if the Federal Reserve is as
convinced as the markets that the best of all possible worlds of strong growth,
full employment, minimal inflation and balanced budgets has been achieved.
The Jamestown Tax Exempt Virginia Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown Tax
Exempt Virginia Fund and the Lehman Municipal Bond Index
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
LEHMAN MUNICIPAL BOND INDEX: THE JAMESTOWN TAX EXEMPT
VIRGINIA FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
09/01/93 10,000 09/01/93 10,000
09/30/93 1.14% 10,114 09/30/93 1.20% 10,120
12/31/93 1.41% 10,256 12/31/93 1.54% 10,275
03/31/94 -5.49% 9,693 03/31/94 -4.35% 9,828
06/30/94 1.11% 9,801 06/30/94 0.79% 9,906
09/30/94 0.68% 9,868 09/30/94 0.72% 9,978
12/31/94 -1.44% 9,726 12/31/94 -0.80% 9,898
03/31/95 7.07% 10,414 03/31/95 4.73% 10,366
06/30/95 2.41% 10,665 06/30/95 2.21% 10,596
09/30/95 2.87% 10,971 09/30/95 1.98% 10,806
12/31/95 4.13% 11,424 12/31/95 2.78% 11,106
03/31/96 -1.20% 11,287 03/31/96 -0.59% 11,041
06/30/96 0.76% 11,372 06/30/96 0.63% 11,110
09/30/96 2.29% 11,633 09/30/96 1.65% 11,293
12/31/96 2.55% 11,929 12/31/96 2.15% 11,536
03/31/97 -0.24% 11,901 03/31/97 -0.10% 11,525
<CAPTION>
LIPPER INTERMEDIATE MUNICIPAL FUND INDEX
QTRLY
DATE RETURN BALANCE
<S> <C> <C>
09/01/93 10,000
09/30/93 1.14% 10,114
12/31/93 1.18% 10,233
03/31/94 -3.89% 9,835
06/30/94 0.92% 9,926
09/30/94 0.59% 9,984
12/31/94 -3.54% 9,631
03/31/95 4.94% 10,107
06/30/95 1.66% 10,274
09/30/95 2.26% 10,507
12/31/95 2.58% 10,778
03/31/96 -0.66% 10,707
06/30/96 0.49% 10,759
09/30/96 1.63% 10,934
12/31/96 2.09% 11,163
03/31/97 -0.09% 11,153
Past performance is not predictive of future performance.
The Jamestown Tax Exempt Virginia Fund Average Annual Total Returns
1 Year Since Inception*
4.39% 4.04%
</TABLE>
* Initial public offering of shares was September 1, 1993.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 11,173,093
========================
At value (Note 1) $ 11,355,378
Cash 13
Interest receivable 169,652
Other assets 266
TOTAL ASSETS 11,525,309
------------------------
LIABILITIES
Dividends payable 20,246
Payable for investment securities purchased 300,862
Payable for capital shares redeemed 419
Accrued advisory fees (Note 3) 3,456
Accrued administration fees (Note 3) 2,000
Other accrued expenses 1,200
------------------------
TOTAL LIABILITIES 328,183
------------------------
NET ASSETS $ 11,197,126
========================
Net assets consist of:
Paid-in capital $ 11,071,961
Accumulated net realized losses from security transactions (57,120)
Net unrealized appreciation on investments 182,285
------------------------
Net assets $ 11,197,126
========================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 1,139,442
========================
Net asset value, offering price and redemption price per share (Note 1) $ 9.83
========================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
<S> <C>
INVESTMENT INCOME
Interest $ 546,299
------------
EXPENSES
Investment advisory fees (Note 3) 41,488
Administration fees (Note 3) 24,000
Professional fees 7,258
Pricing costs 5,202
Trustees' fees and expenses 5,002
Custodian fees 4,724
Printing of shareholder reports 1,862
Postage and supplies 1,102
Other expenses 1,247
------------
TOTAL EXPENSES 91,885
Fees waived by the Adviser (Note 3) (14,090)
------------
NET EXPENSES 77,795
------------
NET INVESTMENT INCOME 468,504
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions 16,747
Net change in unrealized appreciation/depreciation on investments (32,780)
------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (16,033)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS 452,471
============
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
--------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 468,504 $ 378,620
Net realized gains from security transactions 16,747 44,594
Net change in unrealized appreciation/depreciation
on investments (32,780) 87,707
--------------- ---------------
Net increase in net assets from operations 452,471 510,921
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (468,504) (378,620)
--------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 3,430,016 1,576,152
Net asset value of shares issued in reinvestment
of distributions to shareholders 251,004 242,402
Payments for shares redeemed (1,247,016) (883,247)
--------------- ---------------
Net increase in net assets from capital share transactions 2,434,004 935,307
--------------- ---------------
TOTAL INCREASE IN NET ASSETS 2,417,971 1,067,608
NET ASSETS:
Beginning of year 8,779,155 7,711,547
--------------- ---------------
End of year $ 11,197,126 $ 8,779,155
=============== ===============
(a)Number of shares:
Sold 349,394 159,428
Reinvested 25,420 24,511
Redeemed (126,290) (89,606)
--------------- ---------------
Net increase in shares outstanding 248,524 94,333
Shares outstanding, beginning of year 890,918 796,585
--------------- ---------------
Shares outstanding, end of year 1,139,442 890,918
=============== ===============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years ended March 31, Ended
March 31,
1997 1996 1995 1994 (a)
--------- ------- ------ ----------
<S> <C> <C> <C> <C>
Net asset value at beginning of period $9.85 $9.68 $9.61 $10.00
--------- ------- ------ ----------
Income from investment operations:
Net investment income 0.45 0.45 0.44 0.23
Net realized and unrealized gains
(losses) on investments (0.02) 0.17 0.07 (0.39)
-------- ------ ------- ----------
Total from investment operations 0.43 0.62 0.51 (0.16)
-------- ------ ------- ----------
Less distributions:
Dividends from net investment income (0.45) (0.45) (0.44) (0.23)
-------- ------ ------- ----------
Net asset value at end of period $9.83 $9.85 $9.68 $9.61
======== ======= ======= ==========
Total return 4.39% 6.51% 5.47% (2.96)%(c)
======== ======= ======= ==========
Net assets at end of period (000's) $11,197 $8,779 $7,712 $2,056
======== ====== ======= ==========
Ratio of expenses to average net assets (b) 0.75% 0.75% 0.75% 0.75%(c)
Ratio of net investment income to average net assets 4.51% 4.57% 4.64% 4.07%(c)
Portfolio turnover rate 24% 14% 97% 33%
<FN>
(a)Represents the period from the commencement of operations
(September 1, 1993) through March 31, 1994.
(b)Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assests would have been
0.88%, 1.04%, 1.62% and 4.83%(c) for the periods ended March 31, 1997,
1996, 1995 and 1994, respectively (Note 3).
(c)Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
<CAPTION>
PORTFOLIO OF INVESTMENTS
March 31, 1997
Par
Amount Value
------- -------
<S> <C>
FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS - 93.6%
Virginia - 92.2%
Arlington Co., Virginia, GO,
$ 300,000 5.60%, due 08/01/2006 $ 312,591
--------------
Brunswick Co., Virginia, Industrial Dev. Authority, Revenue,
300,000 5.45%, due 07/01/2006 306,309
--------------
Cheasapeake, Virginia, GO,
200,000 5.60%, due 05/01/2000 205,912
--------------
Chesterfield Co., Virginia, GO,
350,000 6.25%, due 07/15/2005 372,893
--------------
Fairfax Co., Virginia, GO,
350,000 5.60%, due 05/01/2003 359,551
--------------
Fairfax Co., Virginia, Park Authority, Revenue,
300,000 6.25%, due 07/15/2005 312,759
--------------
Fairfax Co., Virginia, Sewer, Revenue,
350,000 5.625%, due 07/15/2008 359,838
--------------
Hanover Co., Virginia, Industrial Dev. Authority, Revenue,
225,000 6.25%, due 10/01/2011 232,754
--------------
Harrisonburg, Virginia, GO,
250,000 5.50%, due 07/15/2000 256,700
--------------
Loudoun Co., Virginia, GO,
300,000 5.50%, due 06/01/2009 302,967
--------------
Martinsville, Virginia, Industrial Dev. Authority, Hospital Facility, Revenue,
150,000 6.50%, due 01/01/1999 154,803
--------------
Newport News, Virginia, GO,
400,000 5.40%, due 07/01/2002 407,640
--------------
Norfolk, Virginia, GO,
300,000 5.75%, due 06/01/2011 306,618
--------------
Norfolk, Virginia, Industrial Dev. Authority, Hospital, Revenue,
350,000 6.80%, due 06/01/2005 386,109
--------------
Peumansend Creek, Virginia, Regional Jail Authority, Revenue,
300,000 5.75%, due 06/01/2017 297,498
--------------
<CAPTION>
<PAGE>
Par
Amount Value
-------- -----------
<S> <C>
Virginia - Continued
Pittsylvania Co., Virginia, GO,
$ 300,000 5.65%, due 07/01/2006 $ 309,564
--------------
Portsmouth, Virginia, GO,
200,000 5.90%, due 11/01/2001 209,700
--------------
Prince William Co., Virginia, Park Authority, Revenue,
250,000 6.10%, due 10/15/2004 263,275
--------------
Prince William Co., Virginia, Service Auth. Water & Sewer, Revenue,
150,000 6.40%, due 07/01/2004 160,392
--------------
Richmond, Virginia, GO,
400,000 6.25%, due 01/15/2018 411,272
--------------
Richmond, Virginia, Metropolitan Authority, Revenue,
250,000 6.00%, due 07/15/2004 265,405
--------------
Richmond, Virginia, Public Utility, Revenue,
150,000 7.10%, due 01/15/2000 155,837
--------------
Riverside, Virginia, Regional Jail Authority, Revenue,
300,000 5.30%, due 07/01/2002 306,585
--------------
Roanoke, Virginia, GO,
300,000 6.40%, due 08/01/2012 316,254
--------------
Suffolk, Virginia, GO,
350,000 5.80%, due 06/01/2011 357,179
--------------
Virginia Beach, Virginia, GO,
325,000 6.20%, due 09/01/2013 339,827
--------------
Virginia State, GO,
300,000 5.90%, due 06/01/2005 312,831
--------------
Virginia State Housing Dev. Authority, Revenue,
150,000 5.60%, due 01/01/2002 153,078
150,000 6.60%, due 11/01/2012 157,230
150,000 6.30%, due 11/01/2015 154,272
--------------
464,580
--------------
Virginia State Public Building Authority, Revenue,
250,000 5.30%, due 08/01/1998 254,035
--------------
<PAGE>
<CAPTION>
Par
Amount Value
---------- ---------
<S> <C>
Virginia - Continued
Virginia State Public School Authority, Revenue,
$ 150,000 6.50%, due 08/01/2005 $ 161,382
250,000 5.90%, due 08/01/2006 261,155
--------------
422,537
--------------
Virginia State Transportation Board, Revenue,
350,000 6.25%, due 05/15/2012 366,383
--------------
Virginia Commonwealth University, Revenue,
250,000 5.75%, due 05/01/2006 260,393
--------------
Winchester, Virginia, Industrial Dev. Authority, Revenue
280,000 7.25%, due 01/01/2000, prerefunded at 102 303,951
--------------
York Co., Virginia, Certificates of Participation, Revenue,
250,000 6.625%, due 03/01/2012 263,955
--------------
Total Virginia 10,318,897
--------------
Puerto Rico - 1.4%
Puerto Rico Commonwealth, Highway and Transp. Authority, Revenue,
150,000 6.375%, due 07/01/2007 158,859
--------------
Total Puerto Rico 158,859
--------------
Total Fixed Rate Revenue and General Obligation Bonds
(Cost $10,295,471) $ 10,477,756
--------------
<CAPTION>
Shares
<S> <C> <C>
MONEY MARKETS - 7.8%
877,622 Star Tax Free Fund (Cost $877,622) $ 877,622
--------------
Total Investments at Value (Cost $11,173,093) - 101.4% $ 11,355,378
Liabilities in Excess of Other Assets - (1.4)% (158,252)
--------------
Net Assets - 100.0% $ 11,197,126
==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Tax Exempt Virginia Fund (the Fund) is a no-load series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on September 1, 1993.
The Fund's investment objectives are to provide current income exempt from
federal income taxes and from the personal income taxes of Virginia, to preserve
capital, to limit credit risk and to take advantage of opportunities to increase
and enhance the value of an investment in the Fund. The Fund invests primarily
in debt obligations issued by the State of Virginia and its political
subdivisions, agencies, authorities and instrumentalities and by other issuers
the interest from which is exempt from the personal income taxes of Virginia.
The marketability and market value of these obligations may be affected by
certain Virginia constitutional amendments, legislative measures, executive
orders, administrative regulations, voter initiatives and other political and
economic developments. If any such developments arise, they could adversely
affect the ability of various Virginia issuers to meet their financial
obligations and could impact the Fund's portfolio.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. The Fund's securities will ordinarily be traded on
the over-the-counter market. When market quotations are not readily available,
securities may be valued on the basis of prices provided by an independent
pricing service. If a pricing service cannot provide a valuation, securities
will be valued in good faith at fair market value using methods consistent with
those determined by the Board of Trustees.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Discounts and premiums on securities purchased are amortized
in accordance with income tax regulations. Dividends arising from net investment
income are declared daily and paid on the last business day of each month to
shareholders of the Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and capital
gain distributions are determined in accordance with income tax regulations,
which may differ from generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of the Fund as of March 31, 1997:
Gross unrealized appreciation.................... $ 201,865
Gross unrealized depreciation..................... (19,580)
---------
Net unrealized appreciation ..................... $ 182,285
=========
The tax basis of investments of the Fund is equal to the acquisition cost as
shown on the Statement of Assets and Liabilities. As of March 31, 1997, the Fund
had capital loss carryforwards for federal income tax purposes of $57,120 which
expire on March 31, 2004. These capital loss carryforwards may be utilized in
current and future years to offset net realized capital gains prior to
distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $4,524,334 and $2,355,813, respectively.
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall, Inc.
(the Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .40% of its
average daily net assets up to $250 million; .35% of the next $250 million of
such net assets; and .30% of such net assets in excess of $500 million. The
Adviser currently intends to limit the total operating expenses of the Fund to
.75% of average daily net assets. Accordingly, the Adviser voluntarily waived
$14,090 of its investment advisory fee for the year ended March 31, 1997.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc., (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .15% of its average daily net
assets up to $200 million and .10% of such net assets in excess of $200 million,
subject to a $2,000 minimum monthly fee. In addition, the Fund pays
out-of-pocket expenses including, but not limited to, postage, supplies and
costs of pricing the Fund's portfolio securities. Certain officers of the Trust
are also officers of CFS.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Tax Exempt Virginia Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 1997, and the
related statement of operations for the year then ended, and the statement of
changes in net assets for each of the two years in the period then ended and the
financial highlights for the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Tax Exempt Virginia Fund as of March 31, 1997, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for the periods referred to above, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
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 EQUITY FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN EQUITY FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN EQUITY FUND
The fiscal year ended March 31, 1997, has been a gratifying year for The
Jamestown Equity Fund. For the 12 month period, the total return for the Equity
Fund was 15.27% after expenses. This compared very favorably to the Lipper
Growth Fund Index which was up 12.03% for the same time period. The Standard &
Poor's 500 Index was up 19.82% including the reinvestment of dividends.
Our equity sector allocations were mostly in line with those of the S&P 500 with
slight underweightings and overweightings. The two exceptions to this are the
utility and transportation sectors, in which we were not invested during the
year. During the 12 month period, the outstanding sector was technology
(+35.7%), followed by finance (+30.4%). Other sectors outperforming the S&P 500
were staples, energy, and health care, in that order. Sectors underperforming
the market were transportation, consumer cyclicals, basic industries, and
utilities. The capital goods sector fell just 100 basis points short of matching
the S&P returns.
Looking forward to the following year, we are somewhat cautious on the stock
market. The increase in the Federal Funds rate instituted on March 25 has caused
consternation in the stock market. The good new is that inflation appears to be
well contained at this point in time, although the wage component of the CPI has
been creeping up for the last two years. This slow but steady increase in wages
has been offset, so far, by lower benefit costs, so that overall compensation
has remained stable. If inflation can be in check, the number of increases by
the Fed may be relatively few.
For a comparison of the Fund's performance from inception versus the Standard
and Poor's 500 Index and the Consumer Price Index, please refer to the chart
below:
The Jamestown Equity Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Equity Fund, the Standard & Poor's 500 Index and The Consumer Price Index
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C>
12/01/92 10,000 12/01/92 10,000
12/31/92 1.23% 10,123 12/31/92 1.68% 10,168
03/31/93 4.36% 10,564 03/31/93 0.54% 10,223
06/30/93 0.48% 10,615 06/30/93 -1.00% 10,121
09/30/93 2.58% 10,889 09/30/93 1.85% 10,308
12/31/93 2.32% 11,142 12/31/93 0.67% 10,377
03/31/94 -3.79% 10,719 03/31/94 -0.82% 10,291
06/30/94 0.42% 10,764 06/30/94 1.64% 10,460
09/30/94 4.88% 11,290 09/30/94 1.70% 10,637
12/31/94 -0.02% 11,287 12/31/94 -1.35% 10,493
03/31/95 9.74% 12,387 03/31/95 10.17% 11,560
06/30/95 9.55% 13,569 06/30/95 8.46% 12,538
09/30/95 7.95% 14,648 09/30/95 6.80% 13,390
12/31/95 6.02% 15,530 12/31/95 5.22% 14,089
03/31/96 5.37% 16,363 03/31/96 5.03% 14,798
06/30/96 4.49% 17,097 06/30/96 4.05% 15,397
09/30/96 3.09% 17,626 09/30/96 2.74% 15,819
12/31/96 8.34% 19,095 12/31/96 7.83% 17,057
03/31/97 2.68% 19,607 03/31/97 0.00% 17,057
<CAPTION>
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
<S> <C> <C> <C>
12/01/92 10,000
12/31/92 0.20% 10,020
03/31/93 0.90% 10,110
06/30/93 0.60% 10,171
09/30/93 0.40% 10,212
12/31/93 0.70% 10,283
03/31/94 0.50% 10,334
06/30/94 0.60% 10,396
09/30/94 0.90% 10,490
12/31/94 0.60% 10,553
03/31/95 0.80% 10,638
06/30/95 0.90% 10,734
09/30/95 0.40% 10,777
12/31/95 0.50% 10,831
03/31/96 0.80% 10,917
06/30/96 1.10% 11,038
09/30/96 0.44% 11,086
12/31/96 0.82% 11,178
03/31/97 0.69% 11,255
Past performance is not predictive of future performance.
The Jamestown Equity Fund Average Annual Total Returns
1 Year Since Inception*
15.27% 13.11%
* Initial public offering of shares was December 1, 1992.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 23,059,778
=================
At value (Note 1) $ 28,274,888
Investments in repurchase agreements (Note 1) 1,873,000
Cash 624
Receivable for securities sold 1,039,730
Receivable for capital shares sold 1,187
Dividends receivable 32,015
Interest receivable 273
Other assets 2,476
-----------------
TOTAL ASSETS 31,224,193
-----------------
LIABILITIES
Dividends payable 4,252
Payable for capital shares redeemed 15,000
Accrued advisory fees (Note 3) 18,005
Accrued administration fees (Note 3) 5,300
Other accrued expenses 1,388
-----------------
TOTAL LIABILITIES 43,945
-----------------
NET ASSETS $ 31,180,248
=================
Net assets consist of:
Paid-in capital $ 25,447,288
Accumulated net realized gains from security transactions 509,687
Undistributed net investment income 8,163
Net unrealized appreciation on investments 5,215,110
-----------------
Net assets $ 31,180,248
=================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 1,991,174
=================
Net asset value, offering price and redemption price per share (Note 1) $ 15.66
=================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1997
<S> <C>
INVESTMENT INCOME
Dividends $ 359,403
Interest 80,996
----------------
TOTAL INVESTMENT INCOME 440,399
----------------
EXPENSES
Investment advisory fees (Note 3) 160,646
Administration fees (Note 3) 49,129
Custodian fees 8,493
Professional fees 7,258
Registration fees 4,970
Trustees' fees and expenses 5,002
Postage and supplies 2,711
Insurance expense 1,516
Printing of shareholder reports 1,310
Other expenses 914
----------------
TOTAL EXPENSES 241,949
Expenses reimbursed through a directed brokerage arrangement (Note 4) (13,440)
----------------
NET EXPENSES 228,509
----------------
NET INVESTMENT INCOME 211,890
----------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 777,388
Net change in unrealized appreciation/depreciation on investments 2,328,613
----------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS 3,106,001
----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 3,317,891
================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1997 and 1996
Year Year
Ended Ended
March 31, March 31,
1997 1996
---------- ----------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 211,890 $ 155,881
Net realized gains from security transactions 777,388 567,635
Net change in unrealized appreciation/depreciation
on investments 2,328,613 2,204,131
---------- ----------
Net increase in net assets from operations 3,317,891 2,927,647
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (206,587) (153,763)
From net realized gains from security transactions (521,388) (304,491)
---------- ----------
Decrease in net assets from distributions to shareholders (727,975) (458,254)
---------- ----------
FROM CAPITAL SHARE TRANSACTIONS (a):
Proceeds from shares sold 11,827,742 7,025,441
Net asset value of shares issued in reinvestment
of distributions to shareholders 671,223 420,203
Payments for shares redeemed (1,765,155) (169,689)
---------- ----------
Net increase in net assets from capital share transactions 10,733,810 7,275,955
---------- ----------
TOTAL INCREASE IN NET ASSETS 13,323,726 9,745,348
NET ASSETS:
Beginning of year 17,856,522 8,111,174
---------- ----------
End of year - (including undistributed net investment
income of $8,163 and $2,860, respectively) $ 31,180,248 $ 17,856,522
---------- ----------
(a) Number of shares:
Sold 788,755 542,324
Reinvested 43,245 31,979
Redeemed (120,237) (13,292)
---------- ----------
Net increase in shares outstanding 711,763 561,011
Shares outstanding, beginning of year 1,279,411 718,400
---------- ----------
Shares outstanding, end of year 1,991,174 1,279,411
========== ==========
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
Period
Years ended March 31, Ended
------------------------------------------------ March 31,
1997 1996 1995 1994 1993 (a)
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $13.96 $11.29 $10.19 $10.18 $10.00
------ ------ ------ ------ -------
Income from investment operations:
Net investment income 0.13 0.15 0.10 0.08 0.04
Net realized and unrealized gains (losses)
on investments 2.00 2.98 1.15 (0.01) 0.18
------ ------ ------ ------ -------
Total from investment operations 2.13 3.13 1.25 0.07 0.22
------ ------ ------ ------ -------
Less distributions:
Dividends from net investment income (0.13) (0.15) (0.12) (0.06) (0.04)
Distributions from net realized gains (0.30) (0.31) (0.03) -- --
------ ------ ------ ------ -------
Total distributions (0.43) (0.46) (0.15) (0.06) (0.04)
------ ------ ------ ------ -------
Net asset value at end of period $15.66 $13.96 $11.29 $10.19 $10.18
====== ====== ====== ====== ======
Total return 15.27% 28.00% 12.33% 0.67% 6.81%(d)
====== ====== ====== ====== ======
Net assets at end of period (000's) $31,180 $17,857 $8,111 $2,811 $1,953
======= ======= ====== ====== ======
Ratio of gross expenses to average net assets 0.98% 1.14% 1.99% 3.16% 3.19%
Ratio of net expenses to average net assets 0.92%(b) 1.01%(b) 1.44%(c) 1.50%(c) 1.50%(c)(d)
Ratio of net investment income to average net assets 0.85% 1.27% 1.18% 0.82% 1.13%(d)
Portfolio turnover rate 44% 54% 48% 92% 54%
Average commission rate per share $0.0688 -- -- -- --
<FN>
(a) Represents the period from the commencement of operations
(December 1, 1992) through March 31, 1993.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
(c) Ratios were determined based on net expenses after the Advisor waived all
or a portion of its advisory fee and/or reimbursed the Fund for operating
expenses.
(d) Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Shares Value
<S> <C> <C>
COMMON STOCKS - 90.7%
Advertising - 2.7%
16,000 Interpublic Group of Companies, Inc. $ 844,000
------------
Building and Construction - 1.5%
13,000 Foster Wheeler Corporation 459,875
------------
Chemicals - 1.5%
6,900 Air Products & Chemicals, Inc. 468,338
------------
Commercial Banking - 6.3%
15,000 Federal National Mortgage Association 541,875
9,500 First Union Corporation 770,688
12,000 NationsBank Corporation 664,500
------------
1,977,063
------------
Communications - 7.6%
29,000 Alltel Corporation 942,500
24,300 Equifax, Inc. 662,175
2,000 Lucent Technologies, Inc. 105,500
19,000 MCI Communications Corporation 676,875
------------
2,387,050
------------
Computers/Computer Technology Services - 10.0%
21,500 Cabletron Systems (b) 628,875
9,500 Cisco Systems, Inc. (b) 457,187
15,500 Computer Sciences Corporation (b) 957,125
7,700 Intel Corporation 1,071,262
------------
3,114,449
------------
Consumer Products - 14.9%
15,500 Avon Products, Inc. 813,750
9,500 General Electric Company 942,875
4,000 Gillette Company 290,500
9,000 Kimberly-Clark Corporation 894,375
3,000 Procter & Gamble Company 345,000
24,800 Sysco Corporation 846,300
20,500 Whitman Corporation 502,250
------------
4,635,050
------------
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Drugs/Medical Equipment - 8.7%
16,500 Abbott Laboratories $ 926,063
11,000 Merck and Company, Inc. 926,750
12,000 Schering-Plough Corporation 873,000
------------
2,725,813
------------
Durable Goods - 2.8%
15,500 Avnet, Inc. 873,813
------------
Electronics - 1.9%
11,000 Hewlett-Packard Company 585,750
------------
Entertainment - 2.5%
10,500 Walt Disney Company 766,500
------------
Fast Food Restaurants - 2.7%
18,000 McDonald's Corporation 850,500
------------
Fire Systems - 2.9%
16,400 Tyco International Ltd. 902,000
------------
Food Productions - 2.6%
15,000 Conagra, Inc. 813,750
------------
Health Care Centers - 4.4%
30,000 Columbia/HCA Healthcare Corporation 1,008,750
15,000 Manor Care, Inc. 365,625
------------
1,374,375
------------
Hotels - 2.3%
53,000 Choice Hotel International, Inc. (b) 715,500
------------
Insurance - 4.6%
7,000 American International Group 821,625
11,000 Jefferson-Pilot Corporation 598,125
------------
1,419,750
------------
Oil and Gas Drilling - 6.8%
7,500 Amoco Corporation 649,687
18,000 Coastal Corporation 864,000
5,500 Texaco, Inc. 602,250
------------
2,115,937
------------
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Real Estate - 1.6%
35,000 United Dominion Realty Trust $ 511,875
------------
Retail Stores - 2.4%
32,600 AutoZone, Inc. (b) 733,500
------------
Total Common Stocks (Cost $23,059,778) $ 28,274,888
------------
<CAPTION>
Face
Value
<S> <C> <C>
REPURCHASE AGREEMENTS (a) - 6.0%
$ 1,873,000 Star Bank, N.A., 5.25%, dated 03/31/1997, due 04/01/1997,
repurchase proceeds $1,873,273 (Cost $1,873,000)$ 1,873,000
------------
Total Investments and Repurchase Agreements
at Value - 96.7% $ 30,147,888
Other Assets in Excess of Liabilties - 3.3% 1,032,360
------------
Net Assets - 100.0% $ 31,180,248
============
<FN>
(a) Joint repurchase agreement is fully collateralized by $20,650,000 GNMA
II, Pool #8373, 6.50%, due 02/20/24. The aggregate market value of the
collateral at March 31, 1997 was $20,897,370. The Fund's pro-rata interest in
the collateral at March 31, 1997 was $2,033,498..
(b) Non-income producing security.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Equity Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on December 1, 1992.
The Fund's investment objective is long-term growth of capital through
investment in a diversified portfolio composed primarily of common stocks.
Current income is incidental to this objective and may not be significant.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national stock exchange are
valued based upon the closing price on the principal exchange where the security
is traded.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market. At the time the Fund enters
into the joint repurchase agreement, the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal to
or exceed the face amount of the repurchase agreement. In addition, the Fund
actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Dividend income is recorded on the ex-dividend date.
Dividends arising from net investment income are declared and paid quarterly to
shareholders of the Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and capital
gain distributions are determined in accordance with income tax regulations,
which may differ from generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $23,081,108 as of March 31, 1997:
Gross unrealized appreciation............... $ 5,746,232
Gross unrealized depreciation............... (552,452)
Net unrealized appreciation................. $ 5,193,780
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $19,134,396 and $10,119,785, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Lowe, Brockenbrough & Tattersall, Inc.
(the Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, the Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly at an annual rate of .65% of its
average daily net assets up to $500 million and .50% of such net assets in
excess of $500 million. Certain trustees and officers of the Trust are also
officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust,
Countrywide Fund Services, Inc. (CFS), formerly MGF Service Corp., provides
administrative, pricing, accounting, dividend disbursing, shareholder servicing
and transfer agent services for the Fund. For these services, CFS receives a
monthly fee from the Fund at an annual rate of .20% of its average daily net
assets up to $25 million; .175% of the next $25 million of such net assets; and
.15% of such net assets in excess of $50 million, subject to a $2,000 minimum
monthly fee. In addition, the Fund pays out-of-pocket expenses including, but
not limited to, postage, supplies, and costs of pricing the Fund's portfolio
securities. Certain officers of the Trust are also officers of CFS.
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of the Fund, the Fund's
custodian fees and a portion of other operating expenses have been paid through
an arrangement with a third-party broker-dealer who is compensated through
commission trades. Payment of expenses by the broker-dealer is based on a
percentage of commissions earned. Expenses reimbursed through the directed
brokerage arrangement totaled $13,440 for the year ended March 31, 1997.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Equity Fund (a series of The Williamsburg Investment Trust),
including the portfolio of investments, as of March 31, 1997, and the related
statement of operations for the year then ended, and the statement of changes in
net assets for each of the two years in the period then ended and the financial
highlights for the periods indicated thereon. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown Equity Fund as of March 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for the
periods referred to above, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
<PAGE>
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.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown Short Term Bond Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 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
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
No Load Mutual Fund
ANNUAL REPORT
March 31, 1997
Investment Adviser Administrator
LOWE, BROCKENBROUGH & TATTERSALL, INC. COUNTRYWIDE FUND SERVICES, INC.
6620 West Broad Street 312 Walnut Street
Suite 300 P.O. Box 5354
Richmond, Virginia 23230 Cincinnati, Ohio 45201-5354
1.804.288.0404 1.800.443.4249
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
MANAGEMENT DISCUSSION AND ANALYSIS
March 31, 1997
PERFORMANCE OF THE JAMESTOWN INTERNATIONAL EQUITY FUND
The return on the Jamestown International Equity Fund was -1.5% since inception
on April 16, 1996. Over the same time period, the Morgan Stanley EAFE Index had
a return of -1.4%. This period was characterized by the strength in the U.S.
dollar, strong European markets, and continued weakness in Japan.
Oechsle continues to believe that the perception of the domestic situation in
Japan is worse than the reality. The imposition of new consumer taxes, the
relatively slow pace of government reforms and coporate restructurings, and
fears of a crisis in the financial system have adversely affected domestic
attitudes and caused foreigners to shy away. However, the depreciating yen
provides a more competitive base for export-oriented companies. Inventory levels
are low, and industrial production is rising. Capital investment appears to have
bottomed out, and the excesses in land prices have largely been removed.
Improving fundamentals should continue to gradually fall into place, reversing
the negative sentiment that has been built up.
Recently, Oechsle built up the emerging market compenent of the portfolio to
10%. Driven by their fundamental company research, Oechsle initiated positions
in companies in Brazil, India, Indonesia, Mexico, Phillipines, and Thailand.
Oechsle will continue to invest in emerging markets on an opportunistic basis to
add value to the Jamestown International Equity Fund.
GRAPHIC ASSET ALLOCATION
<TABLE>
<CAPTION>
The Jamestown
International Equity Morgan Stanley
Fund EAFE Index
<S> <C> <C>
Continental Europe 43.39% 40.50%
United Kingdom 13.73% 19.50%
Pacific Basin, excluding Japan 11.82% 10.90%
Japan 19.04% 29.10%
Emerging Markets 10.68% 0.00%
Other 1.34% 0.00%
------ ------
Total 100.00% 100.00%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Jamestown International Equity Fund
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
International Equity Fund and the Europe, Australia and Far East Index
(EAFE Index)
JAMESTOWN INTERNATIONAL EQUITY FUND
EUROPE, AUSTRALIA AND FAR EAST JAMESTOWN INTL EQUITY FUND
INDEX (EAFE INDEX)
MONTHLY MONTHLY
DATE RETURN BALANCE DATE RETURN BALANCE
<S> <C> <C> <C> <C> <C> <C>
04/30/96 10,000 04/30/96 10,000
05/31/96 -1.84% 9,816 05/31/96 -1.30% 9,870
06/30/96 0.56% 9,871 06/30/96 -0.51% 9,820
07/31/96 -2.92% 9,583 07/31/96 -4.49% 9,379
08/31/96 0.22% 9,604 08/31/96 0.00% 9,379
09/30/96 2.66% 9,859 09/30/96 1.71% 9,539
10/31/96 -1.02% 9,759 10/31/96 -0.21% 9,519
11/30/96 3.98% 10,147 11/30/96 3.89% 9,890
12/31/96 -1.29% 10,016 12/31/96 -1.22% 9,770
01/31/97 -3.50% 9,666 01/31/97 -0.41% 9,730
02/28/97 1.64% 9,824 02/28/97 0.52% 9,780
03/31/97 0.36% 9,860 03/31/97 0.72% 9,850
</TABLE>
Past performance is not predictive of future performance.
* Initial public offering of shares was April 16, 1996.
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 28,035,009
==============
At value (Note 1) $ 29,035,982
Cash denominated in foreign currencies (cost $3,945) 3,953
Cash 390,591
Receivable for capital shares sold 1,485
Dividends receivable 56,632
Interest receivable 1,059
--------------
TOTAL ASSETS 29,489,702
--------------
LIABILITIES
Payable for securities purchased 146,520
Accrued advisory fees (Note 3) 23,265
Accrued administration fees (Note 3) 6,000
Other accrued expenses 23,500
--------------
TOTAL LIABILITIES 199,285
--------------
NET ASSETS $ 29,290,417
==============
Net assets consist of:
Paid-in Capital $ 29,477,977
Undistributed net investment income 42,215
Accumulated net realized losses from security and foreign currency transactions (1,230,188)
Net unrealized appreciation on investments 1,000,973
Net unrealized depreciation on translation of assets and liabilities in foreign currencies (560)
--------------
Net assets $ 29,290,417
==============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 2,986,210
==============
Net asset value, offering price and redemption price per share (Note 1) $ 9.81
==============
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
For the Period Ended March 31, 1997 (a)
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $32,734) $ 267,828
Interest 80,887
-------------------
TOTAL INVESTMENT INCOME 348,715
-------------------
EXPENSES
Investment advisory fees (Note 3) 240,868
Custodian fees 66,654
Administration fees (Note 3) 59,209
Professional fees 14,884
Pricing costs 11,047
Registration fees 9,977
Trustees' fees and expenses 4,959
Shareholder report printing 3,553
Postage and supplies 2,307
Other expenses 935
-------------------
TOTAL EXPENSES 414,393
Fees waived by the Adviser (Note 3) (29,007)
-------------------
NET EXPENSES 385,386
NET INVESTMENT LOSS (36,671)
-------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (Note 4)
Net realized gains (losses) from:
Security transactions (1,230,188)
Foreign currency transactions 185,973
Net change in unrealized appreciation/depreciation on:
Investments 1,000,973
Translation of assets and liabilities in foreign currencies (560)
-------------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
AND FOREIGN CURRENCIES (43,802)
-------------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (80,473)
===================
<FN>
(a) Represents the period from the start of business (April 16, 1996)
through March 31, 1997.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Period Ended March 31, 1997 (a)
<S> <C>
FROM OPERATIONS:
Net investment loss $ (36,671)
Net realized losses from security transactions (1,230,188)
Net realized gains from foreign currency transactions 185,973
Net change in unrealized appreciation/depreciation on investments 1,000,973
Net change in unrealized appreciation/depreciation on translation
of assets and liabilities in foreign currencies (560)
-----------------
Net decrease in net assets from operations (80,473)
-----------------
DISTRIBUTIONS TO SHAREHOLDERS:
In excess of net investment income (107,087)
-----------------
FROM CAPITAL SHARE TRANSACTIONS (b):
Proceeds from shares sold 29,619,931
Net asset value of shares issued in reinvestment
of distributions to shareholders 105,780
Payments for shares redeemed (247,734)
-----------------
Net increase in net assets from capital share transactions 29,477,977
-----------------
TOTAL INCREASE IN NET ASSETS 29,290,417
NET ASSETS:
Beginning of period 0
-----------------
End of period - (including undistributed net investment
income of $42,215) $ 29,290,417
=================
<FN>
(a) Represents the period from the start of business (April 16, 1996)
through March 31, 1997.
(b) Number of capital shares:
Sold 3,000,775
Reinvested 10,836
Redeemed (25,401)
----------
Net increase in shares outstanding 2,986,210
Shares outstanding, beginning of period 0
==========
Shares outstanding, end of period 2,986,210
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding
Throughout the Period Ended March 31, 1997(a)
<S> <C>
Net asset value at beginning of period $10.00
--------
Income from investment operations:
Net investment loss (0.01)
Net realized and unrealized losses
on investments and foreign currency (0.14)
--------
Total from investment operations (0.15)
--------
Less distributions:
Dividends in excess of net investment income (0.04)
--------
Net asset value at end of period $9.81
========
Total return -1.56%(c)
========
Net assets at end of period (000's) $29,290
========
Ratio of expenses to average net assets (b) 1.60%(c)
Ratio of net investment loss to average net assets -0.15%(c)
Portfolio turnover rate 70%(c)
Average commission rate per share $0.0258
<FN>
(a) Represents the period from the start of business (April 16, 1996) through
March 31, 1997.
(b) Absent investment advisory fees waived by the Adviser, the ratio of expenses
to average net assets would have been 1.71%(c) for the period ended
March 31, 1997.
(c) Annualized.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1997
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.1%
Australia - 5.4%
73,400 Australia and New Zealand Banking Group Ltd. $ 464,877
50,000 Coca-Cola Amatil Ltd. 475,363
81,991 News Corporation Ltd. 382,396
39,193 WMC Ltd. 247,614
-----------
1,570,250
-----------
Brazil - 3.2%
7,500 Companhia Vale do Rio Doce - ADR 170,471
7,400 Telecomunicacoes Brasileiras SA - Telebras - ADR 757,575
-----------
928,046
-----------
France - 7.6%
4,284 Alcatel Alsthom (Cie Gen El) 516,043
368 Carrefour SA 228,247
8,066 Michelin SA - Class B 479,360
5,802 Total SA - Class B 501,909
7,339 Valeo SA 493,135
-----------
2,218,694
-----------
Germany - 5.9%
13,114 Hoechst AG 530,961
1,461 Mannesmann AG 558,692
1,139 Volkswagen AG 629,443
-----------
1,719,096
-----------
Hong Kong - 3.9%
57,000 Hutchison Whampoa Ltd. 428,473
85,000 New World Development 458,509
25,000 Sun Hung Kai Properties Ltd. 264,550
-----------
1,151,532
-----------
India - 1.6%
5,600 Hindalco Industries Ltd. - GDR 182,364
9,300 Reliance Industries Ltd. - GDR 133,116
13,200 Tata Engineering and Locomotive Company Ltd. - GDR 167,970
-----------
483,450
-----------
Indonesia - .9%
33,000 PT Hanjaya Mandala Sampoerna - foreign registered 154,623
4,000 PT Telekomunikasi Indonesia - ADR 120,500
-----------
275,123
-----------
<PAGE>
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Italy - 6.5%
147,925 Fiat SPA $ 469,955
229,716 Istituto Nazionale delle Assicurazioni 308,445
151,155 Pirelli SPA 328,903
186,202 Stet Societa Finanziaria Telefonica SPA 813,675
-----------
1,920,978
-----------
Japan - 19.1%
24,000 Canon, Inc. 513,690
64 DDI Corporation 403,715
7,000 Denso Corporation 137,388
500 Isetan Company 5,250
7,000 Ito-Yokado Co. Ltd. 310,960
43,000 Kawasaki Heavy Industries 167,054
3,000 Kyocera Corporation 170,099
11,000 Matsuzakaya Company 81,294
15,000 Murata Manufacturing Company Ltd. 537,921
175,000 Nippon Steel Company 480,575
53 Nippon Telegraph and Telephone Corporation 372,853
14 NTT Data Communications Systems Company 372,022
7,000 Rohm Company 515,629
41,000 Sharp Corporation 486,794
6,500 Sony Corporation 454,123
20,000 Sumitomo Bank 237,461
53,000 Sumitomo Realty & Development 356,158
-----------
5,602,986
-----------
Malaysia - 1.3%
233,000 Renong Berhad 394,709
-----------
Mexico - 3.9%
3,200 ACER Computec Latino America, SA de CV - GDR (a) 58,504
30,000 Carso Global Telecom (a) 90,026
30,500 Grupo Carso SA de CV - ADR 178,824
4,500 Grupo Televisa SA 111,938
60,000 Kimberly-Clark de Mexico, SA de CV - Class A 241,710
11,900 Telefonos De Mexico SA - ADR 458,150
-----------
1,139,152
-----------
<PAGE>
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Netherlands - 6.2%
14,933 ING Groep NV $ 588,321
34,670 VNU-Verenigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 713,450
4,169 Wolters Kluwer NV 502,077
-----------
1,803,848
-----------
Philippines - .6%
540,000 Filinvest Land Inc. (a) 172,046
-----------
Singapore - 1.2%
41,000 City Developments Ltd. 363,106
-----------
Spain - 5.4%
5,200 Banco Santander SA 357,621
6,962 Empresa Nacional de Electricidad, SA 448,353
32,007 Telefonica de Espana 770,995
-----------
1,576,969
-----------
Sweden - 6.8%
20,936 Astra AB - Class A 1,012,941
3,450 Hennes and Mauritz AB - Class B 462,065
45,360 Skandinaviska Enskilda Banken - Class A 502,751
-----------
1,977,757
-----------
Switzerland - 5.3%
846 Ciba Specialty Chemicals AG (a) 69,882
846 Novartis AG 1,048,823
50 Roche Holding AG 431,932
-----------
1,550,637
-----------
Thailand - 0.5%
15,000 Bangkok Bank Public Company Ltd. - foreign
registered 145,524
-----------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
United Kingdom - 13.8%
27,500 BOC Group PLC 431,682
34,870 British Aerospace PLC 781,266
51,258 British Petroleum Company PLC 594,631
31,892 Carlton Communications PLC 273,354
31,800 Glaxo Wellcome PLC 582,988
44,639 Orange PLC (a) 151,725
79,496 Safeway PLC 465,348
166,431 Vodafone Group PLC 761,085
-----------
4,042,079
-----------
Total Common Stocks (Cost $28,035,009) - 99.1% $ 29,035,982
Other Assets in Excess of Liabilities - 0.9% 254,435
-----------
Net Assets - 100.0% $ 29,290,417
===========
<FN>
(a) Non-income producing security.
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown International Equity Fund (the Fund) is a no-load, diversified
series of the Williamsburg Investment Trust (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on April 16, 1996.
The Fund's investment objective is to achieve superior total returns through
investment in equity securities of issuers located outside the United States.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national or foreign stock
exchange are valued based upon the closing price on the principal exchange where
the security is traded. Foreign securities are translated from the local
currency into U.S. dollars using currency exchange rates supplied by a quotation
service.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Dividend income is recorded on the ex-dividend date.
Dividends arising from net investment income are declared and paid quarterly to
shareholders of the Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and capital
gain distributions are determined in accordance with income tax regulations,
which may differ from generally accepted accounting principles.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $28,060,261 as of March 31, 1997:
Gross unrealized appreciation...................... $ 2,387,489
Gross unrealized depreciation....................... (1,411,768)
-----------
Net unrealized appreciation........................ $ 975,721
===========
As of March 31, 1997, the Fund had capital loss carryforwards for federal income
tax purposes of $137,352 which expire on March 31, 2005. In addition, the Fund
had net realized capital losses of $1,067,584 during the period from November 1,
1996 through March 31, 1997, which are treated for federal income tax purposes
as arising during the Fund's tax year ending March 31, 1998. These capital loss
carryforwards and "post-October" losses may be utilized in the current and
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the period ended March 31, 1997, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $45,751,404 and $16,485,445, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
Lowe, Brockenbrough & Tattersall, Inc. (the Adviser), under the terms of an
Investment Advisory Agreement, provides general investment supervisory services
to the Fund. Under the Investment Advisory Agreement, the Fund pays the Adviser
a fee, which is computed and accrued daily and paid monthly, at an annual rate
of 1.00% of its average daily net assets.
The Adviser retains Oechsle International Advisors, Inc. (Oechsle) to provide
the Fund with a continuous program of supervision of the Fund's assets,
including the composition of its portfolio, and to furnish advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities, pursuant to the terms of a Sub-Advisory
Agreement. Under the Sub-Advisory Agreement, the Adviser, not the Fund, pays
Oechsle a fee in the amount of one-half of the monthly advisory fee received by
the Adviser, net of any advisory fee waivers.
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
The Adviser currently intends to limit the total operating expenses of the Fund
to 1.60% of its average daily net assets. Accordingly, the Adviser waived
$29,007 of its investment advisory fees for the period ended March 31, 1997.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Fund Services, Inc. (CFS), CFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Fund. For these services, CFS receives a monthly fee from the
Fund at an annual rate of .25% of its average daily net assets up to $25
million; .225% of the next $25 million of such net assets; and .20% of such net
assets in excess of $50 million, subject to a $4,000 minimum monthly fee. In
addition, the Fund pays out-of-pocket expenses including, but not limited to,
postage, supplies, and cost of pricing the Fund's portfolio securities. Certain
officers of the Trust are also officers of CFS.
4. FOREIGN CURRENCY TRANSLATION
Amounts denominated in or expected to settle in foreign currencies are
translated into U.S. dollars based on exchange rates on the following basis:
A. The market values of investment securities and other assets and
liabilities are translated at the closing rate of exchange each day.
B. Purchases and sales of investment securities and income and
expenses are translated at the rate of exchange prevailing on the respective
dates of such transactions.
C. The Fund does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from those resulting from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gains or losses
from investments.
Reported net realized foreign exchange gains or losses arise from 1) sales of
foreign currencies, 2) currency gains or losses realized between the trade and
settlement dates on securities transactions, and 3) the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received or
paid. Reported net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities, other than investment
securities, resulting from changes in exchange rates.
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund enters into forward foreign currency exchange contracts as a way of
managing foreign exchange rate risk. The Fund may enter into these contracts for
the purchase or sale of a specific foreign currency at a fixed price on a future
date as a hedge or cross-hedge against either specific transactions or portfolio
positions. The objective of the Fund's foreign currency hedging transactions is
to reduce risk that the U.S. dollar value of the Fund's securities denominated
in foreign currency will decline in value due to changes in foreign currency
exchange rates. All foreign currency exchange contracts are "marked-to-market"
daily at the applicable translation rates resulting in unrealized gains or
losses. Realized and unrealized gains or losses are included in the Fund's
Statement of Assets and Liabilities and Statement of Operations. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At March 31, 1997, the Fund had no forward foreign currency exchange contracts
outstanding.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Jamestown International Equity Fund (a series of The Williamsburg Investment
Trust), including the portfolio of investments, as of March 31, 1997, and the
related statement of operations, changes in net assets, and financial highlights
for the period April 16, 1996 (commencement of operations) to March 31, 1997.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jamestown International Equity Fund as of March 31, 1997, the
results of its operations, the changes in its net assets, and financial
highlights for the period April 16, 1996 to March 31, 1997, in conformity with
generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 1997
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