December 1, 1998
WILLIAMSBURG INVESTMENT TRUST
The Jamestown Funds
Supplement to Prospectus Dated August 1, 1998
and Revised October 1, 1998
Effective December 1, 1998, Lowe, Brockenbrough & Company, Inc. (the "Advisor")
has assumed responsibility for management of the entire portfolio of The
Jamestown Balanced Fund (the "Balanced Fund"), including the portion of the
portfolio invested in fixed income securities. The fixed income portion of the
Balanced Fund was previously managed by Tattersall Advisory Group, Inc.
THE THIRD PARAGRAPH OF THE SECTION ON PAGE 26 ENTITLED "MANAGEMENT OF THE
FUNDS--BALANCED FUND" HAS BEEN DELETED. THE FOLLOWING REPLACES THE FIRST
PARAGRAPH OF THE SECTION ON PAGE 26 ENTITLED "MANAGEMENT OF THE FUNDS--BALANCED
FUND":
Effective as of the date of this Supplement, Henry C. Spalding, Jr. and Charles
M. Caravati, III, CFA are primarily responsible for managing that portion of the
Balanced Fund invested in equity securities. Mr. Spalding has acted in this
capacity since the Fund's inception and has been Executive Vice President of the
Advisor since 1988. Mr. Caravati is currently Vice President of the Advisor and
has been a portfolio manager of the Advisor since 1992. E. Christian Goetz, CFA
is primarily responsible for managing that portion of the Balanced Fund invested
in fixed income securities and has acted in this capacity since December 1,
1998. Mr. Goetz has been a portfolio manager of the Advisor since June 1997. He
was previously employed as a portfolio manager by Crestar Asset Management and
Virtus Capital Management.
THE FOLLOWING REPLACES THE FIRST PARAGRAPH OF THE SECTION ON PAGE 26 ENTITLED
"MANAGEMENT OF THE FUNDS--EQUITY FUND":
Effective as of the date of this Supplement, Henry C. Spalding, Jr. and Charles
M. Caravati, III, CFA are primarily responsible for managing the Equity Fund.
Mr. Spalding has acted in this capacity since the Fund's inception and has been
Executive Vice President of the Advisor since 1988. Mr. Caravati is currently
Vice President of the Advisor and has been a portfolio manager of the Advisor
since 1992.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
August 1, 1998
Revised December 1, 1998
Series of
WILLIAMSBURG INVESTMENT TRUST
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202
Telephone 1-800-443-4249
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES.......................................... 2
DESCRIPTION OF BOND RATINGS................................................. 5
INVESTMENT LIMITATIONS...................................................... 8
TRUSTEES AND OFFICERS....................................................... 10
INVESTMENT ADVISOR.......................................................... 15
ADMINISTRATOR............................................................... 16
OTHER SERVICES.............................................................. 17
BROKERAGE................................................................... 17
SPECIAL SHAREHOLDER SERVICES................................................ 18
PURCHASE OF SHARES.......................................................... 20
REDEMPTION OF SHARES........................................................ 21
NET ASSET VALUE DETERMINATION............................................... 21
ALLOCATION OF TRUST EXPENSES................................................ 22
ADDITIONAL TAX INFORMATION.................................................. 22
CAPITAL SHARES AND VOTING................................................... 23
CALCULATION OF PERFORMANCE DATA............................................. 24
FINANCIAL STATEMENTS AND REPORTS............................................ 27
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of both The Jamestown Balanced Fund and
The Jamestown Equity Fund (the "Funds") dated August 1, 1998. The Prospectus may
be obtained from the Funds, at the address and phone number shown above, at no
charge.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Jamestown Balanced Fund
(the "Balanced Fund") and The Jamestown Equity Fund (the "Equity Fund") unless
otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
WARRANTS AND RIGHTS. Warrants are essentially options to purchase equity
securities at specific prices and are valid for a specific period of time.
Prices of warrants do not necessarily move in concert with the prices of the
underlying securities. Rights are similar to warrants but generally have a short
duration and are distributed directly by the issuer to its shareholders. Rights
and warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts (ADRs). The Funds may invest
in foreign securities if the Advisor believes such investment would be
consistent with the Funds' investment objectives. The same factors would be
considered in selecting foreign securities as with domestic securities, as
discussed in the Prospectus. Foreign securities investment presents special
considerations not typically associated with investments in domestic securities.
Foreign taxes may reduce income. Currency exchange rates and regulations may
cause fluctuation in the value of foreign securities. Foreign securities are
subject to different regulatory environments than in the United States and,
compared to the United States, there may be a lack of uniform accounting,
auditing and financial reporting standards, less volume and liquidity and more
volatility, less public information, and less regulation of foreign issuers.
Countries have been known to expropriate or nationalize assets, and foreign
investments may be subject to political, financial or social instability or
adverse diplomatic developments. There may be difficulties in obtaining service
of process on foreign issuers and difficulties in enforcing judgments with
respect to claims under the U.S. securities laws against such issuers. Favorable
or unfavorable differences between U.S. and foreign economies could affect
foreign securities values. The U.S. Government has, in the past, discouraged
certain foreign investments by U.S. investors through taxation or other
restrictions and it is possible that such restrictions could be imposed again.
- 2 -
<PAGE>
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time a
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during which the
repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Funds hold a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Advisor will carefully consider the creditworthiness during the
term of the repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times as least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Funds' custodian either directly or through a securities depository.
U.S. GOVERNMENT SECURITIES. The Balanced Fund may invest in debt obligations
which are issued or guaranteed by the U.S. Government, its agencies and
instrumentalities ("U.S. Government Securities") as described herein. U.S.
Government Securities include the following securities: (1) U.S. Treasury
obligations of various interest rates, maturities and issue dates, such as U.S.
Treasury bills (mature in one year or less), U.S. Treasury notes (mature in one
to seven years), and U.S. Treasury bonds (mature in more than seven years), the
payments of principal and interest of which are all backed by the full faith and
credit of the U.S. Government; (2) obligations issued or guaranteed by U.S.
Government agencies or instrumentalities, some of which are backed by the full
faith and credit of the U.S. Government, e.g., obligations of the Government
National Mortgage Association ("GNMA"), the Farmers Home Administration and the
Export Import
- 3 -
<PAGE>
Bank; some of which do not carry the full faith and credit of the U.S.
Government but which are supported by the right of the issuer to borrow from the
U.S. Government, e.g., obligations of the Tennessee Valley Authority, the U.S.
Postal Service, the Federal National Mortgage Association ("FNMA"), and the
Federal Home Loan Mortgage Corporation ("FHLMC"); and some of which are backed
only by the credit of the issuer itself, e.g., obligations of the Student Loan
Marketing Association, the Federal Home Loan Banks and the Federal Farm Credit
Bank; and (3) any of the foregoing purchased subject to repurchase agreements as
described herein. The Balanced Fund does not intend to invest in "zero coupon"
Treasury securities. The guarantee of the U.S. Government does not extend to the
yield or value of the Fund's shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have lower
yields. To the extent such securities were purchased at a premium, such
prepayments could result in capital losses. The U.S. Government does not
guarantee premiums and market value of U.S. Government Securities.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they mature
in thirteen months or less from the date of acquisition and are otherwise
eligible for purchase by the Funds. Money market instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks, Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and "accepted" by a bank,
are the customary means of effecting payment for merchandise sold in
import-export transactions and are a source of financing used extensively in
international trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Funds acquire a Bankers' Acceptance, the
bank which "accepted" the time draft is liable for payment of interest and
principal when due. The Bankers' Acceptance, therefore, carries the full faith
and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured
interest-bearing debt obligation of a bank. CDs acquired by the Funds would
generally be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured,
short term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity
- 4 -
<PAGE>
generally ranges from two to 270 days and is usually sold on a discounted basis
rather than as an interest-bearing instrument. The Funds will invest in
Commercial Paper only if it is rated in the highest rating category by any
nationally recognized statistical rating organization (NRSRO) or, if not rated,
the issuer must have an outstanding unsecured debt issue rated in the three
highest categories by any NRSRO or, if not so rated, be of equivalent quality in
the Advisor's assessment. Commercial Paper may include Master Notes of the same
quality. MASTER NOTES are unsecured obligations which are redeemable upon demand
of the holder and which permit the investment of fluctuating amounts at varying
rates of interest. Master Notes are acquired by the Funds only through the
Master Note program of the Funds' custodian, acting as administrator thereof.
The Advisor will monitor, on a continuous basis, the earnings power, cash flow
and other liquidity ratios of the issuer of a Master Note held by the Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Balanced Fund may purchase
securities on a when-issued basis or for settlement at a future date if the Fund
holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date, the
Balanced Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period between
the execution and settlement of the purchase or sale. As a result, the exposure
to the counterparty of the purchase or sale is increased. Although the Balanced
Fund would generally purchase securities on a forward commitment or when-issued
basis with the intention of taking delivery, the Fund may sell such a security
prior to the settlement date if the Advisor felt such action was appropriate. In
such a case, the Fund could incur a short-term gain or loss.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an NRSRO
represents the organization's opinion as to the credit quality of the security
being traded. However, the ratings are general and are not absolute standards of
quality or guarantees as to the creditworthiness of an issuer. Consequently, the
Advisor believes that the quality of fixed-income securities in which the
Balanced Fund may invest should be continuously reviewed and that individual
analysts give different weightings to the various factors involved in credit
analysis. A rating is not a recommendation to purchase, sell or hold a security
because it does not take into account market value or
- 5 -
<PAGE>
suitability for a particular investor. When a security has received a rating
from more than one NRSRO, each rating is evaluated independently. Ratings are
based on current information furnished by the issuer or obtained by the NRSROs
from other sources that they consider reliable. Ratings may be changed,
suspended or withdrawn as a result of changes in or unavailability of such
information, or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
Aaa: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large in Aa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements that make the long term
risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered upper medium grade obligations. Factors giving security to principal
and interest are considered adequate but elements may be present that suggest a
susceptibility to impairment sometime in the future.
Baa: Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated Aa,
A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower end of
its generic rating category.
- 6 -
<PAGE>
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore,
impair timely payment.
- 7 -
<PAGE>
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within a rating category.
DESCRIPTION OF DUFF & PHELPS CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk factors are
negligible, being only slightly more than for risk- free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
A: Bonds rated A have average protection factors. However risk factors are
more variable and greater in periods of economic stress.
BBB: Bonds rated BBB have below average protection factors, but are
considered sufficient for prudent investment. There is considerable variability
in risk during economic cycles.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's outstanding
shares represented in person or by proxy at a meeting at which more than 50% of
its outstanding shares are represented, or (ii) more than 50% of its outstanding
shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities of
any one corporate issuer or purchase more than 10% of the outstanding
voting securities or of any class of securities of any one corporate
issuer;
(2) Invest 25% or more of the value of its total assets in any one industry or
group of industries (except that securities of the U.S. Government, its
agencies and instrumentalities are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or trustees
of the Trust or its Advisor who own beneficially more than 1/2 of 1% of the
outstanding securities of such issuer together own more than 5% of the
outstanding securities of such issuer;
- 8 -
<PAGE>
(4) Invest for the purpose of exercising control or management of another
issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Funds
may invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things, and the Funds may
invest in certain mortgage backed securities as described in the Prospectus
under "Investment Objectives, Investment Policies and Risk Considerations";
(6) Underwrite securities issued by others, except to the extent a Fund may be
deemed to be an underwriter under the federal securities laws in connection
with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such short-term
credits as may be necessary for the clearance of transactions);
(8) Make short sales of securities or maintain a short position, except short
sales "against the box." (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short.);
(9) Participate on a joint or joint and several basis in any trading account in
securities;
(10) Make loans of money or securities, except that the Funds may invest in
repurchase agreements;
(11) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors); or
(12) Write, purchase or sell commodities, commodities contracts, commodities
futures contracts, warrants on commodities or related options.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation. However, in the case of the
borrowing limitation (the first restriction in the Prospectus) each Fund will,
to the extent necessary, reduce its existing borrowings to comply with the
limitation.
- 9 -
<PAGE>
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
TRUSTEES AND OFFICERS
Following are the Trustees and executive officers of the Williamsburg Investment
Trust (the "Trust"), their present position with the Trust or Funds, age,
principal occupation during the past 5 years and their aggregate compensation
from the Trust for the fiscal year ended March 31, 1998:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
Age and Address During Past 5 Years From the Trust
- ------------------ -------------------- --------------
<S> <C> <C>
Austin Brockenbrough III (age 61) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 44) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 61) Physician $9,000
Trustee** Dermatology Associates of
5600 Grove Avenue Virginia, P.C.,
Richmond, Virginia 23226 Richmond, Virginia
J. Finley Lee (age 58) Julian Price Professor Emeritus of $9,000
Trustee Business Administration
614 Croom Court University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
- 10 -
<PAGE>
Richard Mitchell (age 49) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 59) President of $9,000
Trustee University of Richmond,
7000 River Road Richmond, Virginia;
Richmond, Virginia 23229 Director of Tredegar
Industries, Inc.
Harris V. Morrissette (age 38) President of $8,000
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling); Director of
South Alabama Bank and
South Alabama Bancorporation
Fred T. Tattersall (age 49) Managing Director of None
Trustee** Tattersall Advisory Group, Inc.,
President Richmond, Virginia
The Jamestown Bond Fund
The Jamestown Short Term Bond Fund
6802 Paragon Place
Suite 200
Richmond, Virginia 23230
Erwin H. Will, Jr. (age 65) Chief Investment Officer of $6,500
Trustee Virginia Retirement System,
P.O. Box 2500 Richmond, Virginia
Richmond, Virginia 23218
Samuel B. Witt III (age 62) Senior Vice President and $9,000
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
- 11 -
<PAGE>
John P. Ackerly IV (age 35) Portfolio Manager of
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia;
One James Center, 901 E. Cary St. prior to February 1994, a
Richmond, Virginia 23219 Portfolio Manager with
Central Fidelity Bank
Joseph L. Antrim III (age 53) Executive Vice President of
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 32) Assistant Portfolio Manager of
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John M. Flippin (age 56) Principal of
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 45) Principal of
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
150 Government Street
Mobile, Alabama 36602
J. Lee Keiger III (age 43) First Vice President and Chief Financial
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter, III (age 57) Principal of
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
- 12 -
<PAGE>
Mark J. Seger (age 36) Vice President of Countrywide Fund Services,
Treasurer Inc., (registered transfer agent and administrator
312 Walnut Street, 21st Floor to the Trust), CW Fund Distributors, Inc.
Cincinnati, Ohio 45202 (registered broker-dealer) and Countrywide
Financial Services, Inc. (financial services
company); Treasurer of Countrywide Investment
Trust, Countrywide Tax-Free Trust and Countrywide
Strategic Trust (registered investment companies),
Cincinnati, Ohio
Henry C. Spalding, Jr. (age 60) Executive Vice President of
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 41) Vice President, General Counsel and Secretary
Secretary of Countrywide Fund Services, Inc., CW Fund
312 Walnut Street, 21st Floor Distributors, Inc., Countrywide Investments, Inc.
Cincinnati, Ohio 45202 and Countrywide Financial Services, Inc.; Secretary of
Countrywide Investment Trust, Countrywide Tax-Free Trust
and Countrywide Strategic Trust, Cincinnati, Ohio
Ernest H. Stephenson, Jr. (age 53) Vice President of
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad St.
Suite 300
Richmond, Virginia 23230
Connie R. Taylor (age 47) Administrator of
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
- 13 -
<PAGE>
Craig D. Truitt (age 39) Senior Vice President of
Vice President Tattersall Advisory Group, Inc.,
The Jamestown Bond Fund Richmond, Virginia
The Jamestown Short Term Bond Fund
6802 Paragon Place
Suite 200
Richmond, Virginia 23230
Beth Ann Walk (age 39) Portfolio Manager of
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 52) President and Chief Executive
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
</TABLE>
- -----------------------------
**Indicates that Trustee is an Interested Person for purposes of the 1940 Act.
Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee. Messrs. Caravati, Lee, Morrill, Morrissette, Will and Witt
constitute the Trust's Audit Committee. The Audit Committee reviews annually the
nature and cost of the professional services rendered by the Trust's independent
accountants, the results of their year-end audit and their findings and
recommendations as to accounting and financial matters, including the adequacy
of internal controls. On the basis of this review the Audit Committee makes
recommendations to the Trustees as to the appointment of independent accountants
for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 2, 1998, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 1.4% of the then outstanding shares of the Balanced Fund and
4.1% of the then outstanding shares of the Equity Fund. On the same date,
Wachovia Bank of North Carolina as trustee for the Halifax Hospital Pension
Plans, P.O. Box 3073, Winston-Salem, North Carolina 27150, owned of record 7.0%
of the then outstanding shares of the Balanced Fund; Bova & Co., 1525 West
Harris Boulevard, Charlotte, North Carolina 28288, owned of record 6.2% of the
then outstanding shares of the Balanced Fund; John M. Street and Joanne N.
Street, 315 Cheswick Lane, Richmond, Virginia 23229, owned of record 7.1% of the
then outstanding shares of the Equity Fund; and Crestar Bank, as trustee for the
- 14 -
<PAGE>
Virginia Multispecialty Services Organization LLC 401(K) Profit Sharing Plan and
Trust and Money Purchase Pension Plan and Trust, P.O. Box 26246, Richmond
Virginia 23260, owned of record 10.1% of the then outstanding shares of the
Equity Fund.
INVESTMENT ADVISOR
Lowe, Brockenbrough & Company, Inc. (the "Advisor") supervises each Fund's
investments pursuant to an Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until February
28, 1999 and will be renewed thereafter for one year periods only so long as
such renewal and continuance is specifically approved at least annually by the
Board of Trustees or by vote of a majority of the Funds' outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Advisor by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by the
Board of Trustees of the Trust or by the Advisor. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Advisor with respect to the Balanced Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$250 million, 0.65%; on the next $250 million, 0.60%; and on assets over $500
million, 0.55%. For the fiscal years ended March 31, 1998, 1997 and 1996, the
Balanced Fund paid the Advisor advisory fees of $561,887, $430,381 and $373,945,
respectively.
Compensation of the Advisor with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$500 million, 0.65%; and on assets over $500 million, 0.50%. For the fiscal
years ended March 31, 1998, 1997 and 1996, the Equity Fund paid the Advisor
advisory fees of $259,757, $160,646 and $79,891, respectively.
The Advisor, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough, III. In addition to acting as Advisor to
the Funds, the Advisor serves as investment advisor to two additional investment
companies, the subjects of separate prospectuses, and also provides investment
advice to corporations, trusts, pension and profit sharing plans, other business
and institutional accounts and individuals.
The Advisor provides a continuous investment program for the Funds, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Funds. The Advisor determines what securities
and other
- 15 -
<PAGE>
investments will be purchased, retained or sold by the Funds, and does so in
accordance with the investment objectives and policies of the Funds as described
herein and in the Prospectus. The Advisor places all securities orders for the
Funds, determining with which broker, dealer, or issuer to place the orders. The
Advisor must adhere to the brokerage policies of the Funds in placing all
orders, the substance of which policies are that the Advisor must seek at all
times the most favorable price and execution for all securities brokerage
transactions.
The Advisor also provides, at its own expense, certain Executive Officers to the
Trust, and pays the entire cost of distributing Fund shares.
The Advisor may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
Prior to December 1, 1998, Tattersall Advisory Group, Inc. (the "Sub-Advisor")
was responsible for supervising the Balanced Fund's fixed income investments
pursuant to a Sub-Advisory Agreement among the Sub-Advisor, the Advisor and the
Trust. Compensation of the Sub-Advisor was paid by the Advisor (not the Balanced
Fund) in the amount of $5,000 per year.
ADMINISTRATOR
Countrywide Fund Services, Inc. (the "Administrator") maintains the records of
each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. The Administrator also provides accounting and pricing
services to the Funds and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Funds, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, each Fund pays the
Administrator a fee at the annual rate of 0.20% of the average value of its
daily net assets up to $25,000,000, 0.175% of such assets from $25,000,000 to
$50,000,000 and 0.15% of such assets in excess of $50,000,000; provided,
however, that the minimum fee is $2,000 per month for each Fund. In addition,
the Funds pay out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
- 16 -
<PAGE>
For the fiscal years ended March 31, 1998, 1997 and 1996, the Administrator
received fees of $148,539, $118,380 and $105,023, respectively, from the
Balanced Fund and $76,276, $49,129 and $26,514, respectively, from the Equity
Fund.
OTHER SERVICES
The firm of Tait, Weller & Baker, Two Penn Center Plaza, Philadelphia,
Pennsylvania 19102, has been retained by the Board of Trustees to perform an
independent audit of the books and records of the Trust, to review the Funds'
federal and state tax returns and to consult with the Trust as to matters of
accounting and federal and state income taxation.
The Custodian of the Funds' assets is Star Bank, N.A, 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Funds
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all portfolio
securities transactions. The Advisor (subject to the general supervision of the
Board of Trustees) directs the execution of the Funds' portfolio transactions.
The Trust has adopted a policy which prohibits the Advisor from effecting Fund
portfolio transactions with broker-dealers which may be interested persons of
either Fund, the Trust, any Trustee, officer or director of the Trust or its
investment advisors or any interested person of such persons.
The Balanced Fund's fixed income portfolio transactions will normally be
principal transactions executed in over-the-counter markets and will be executed
on a "net" basis, which may include a dealer markup. The Funds' common stock
portfolio transactions will normally be exchange traded and will be effected
through broker-dealers who will charge brokerage commissions. With respect to
securities traded only in the over-the-counter market, orders will be executed
on a principal basis with primary market makers in such securities except where
better prices or executions may be obtained on an agency basis or by dealing
with other than a primary market maker.
For the fiscal years ended March 31, 1998, 1997 and 1996, the total amount of
brokerage commissions paid by the Balanced Fund was $91,394, $63,382 and
$63,217, respectively. For the fiscal years ended March 31, 1998, 1997 and 1996,
the total amount of brokerage commissions paid by the Equity Fund was $66,628,
$47,290 and $26,512, respectively.
- 17 -
<PAGE>
While there is no formula, agreement or undertaking to do so, the Advisor may
allocate a portion of either Fund's brokerage commissions to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic, political,
fundamental and technical market and interest rate data, and other statistical
or research services. Much of the information so obtained may also be used by
the Advisor for the benefit of the other clients it may have. Conversely, the
Funds may benefit from such transactions effected for the benefit of other
clients. In all cases, the Advisor is obligated to effect transactions for the
Funds based upon obtaining the most favorable price and execution. Factors
considered by the Advisor in determining whether the Funds will receive the most
favorable price and execution include, among other things: the size of the
order, the broker's ability to effect and settle the transaction promptly and
efficiently and the Advisor's perception of the broker's reliability, integrity
and financial condition.
In order to reduce the total operating expenses of the Funds, each Fund's
custodian fees and a portion of other operating expenses have been paid through
an arrangement with a third party broker-dealer who is compensated through
commission trades. Expenses reimbursed through the directed brokerage
arrangement for the fiscal year ended March 31, 1998 were $24,000 for the
Balanced Fund and $12,000 for the Equity Fund.
As of March 31, 1998, the Balanced Fund held securities issued by Merrill Lynch
& Company, Inc. (the market value of which was $414,502). Merrill Lynch &
Company, Inc. is the parent of one of the Trust's "regular broker-dealers" (as
defined in the 1940 Act).
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
- 18 -
<PAGE>
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly or quarterly investment in shares through automatic charges
to their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
public offering price on or about the last business day of the month or quarter.
The shareholder may change the amount of the investment or discontinue the plan
at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed within three
business days of the valuation date. If the designated recipient is other than
the registered shareholder, the signature of each shareholder must be guaranteed
on the application (see "Signature Guarantees"). A corporation (or partnership)
must also submit a "Corporate Resolution" (or "Certification of Partnership")
indicating the names, titles and required number of signatures authorized to act
on its behalf. The application must be signed by a duly authorized officer(s)
and the corporate seal affixed. No redemption fees are charged to shareholders
under this plan. Costs in conjunction with the administration of the plan are
borne by the Funds. Shareholders should be aware that such systematic
withdrawals may deplete or use up entirely their initial investment and may
result in realized long-term or short-term capital gains or losses. The
Systematic Withdrawal Plan may be terminated at any time by the Funds upon sixty
days' written notice or by a shareholder upon written notice to the Funds.
Applications and further details may be obtained by calling the Funds at
1-800-443-4249, or by writing to:
The Jamestown Balanced Fund
or
The Jamestown Equity Fund
Shareholder Services
P.O. Box 5354
Cincinnati, Ohio 45201-5354
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is at
the sole discretion of the Advisor based upon the suitability of the securities
accepted for inclusion as a long term investment of the Funds, the
- 19 -
<PAGE>
marketability of such securities, and other factors which the Advisor may deem
appropriate. If accepted, the securities will be valued using the same criteria
and methods as described in "How Net Asset Value is Determined" in the
Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Funds to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Funds. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Funds who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on
the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next determined
after the order is received. An order received prior to 4:00 p.m. Eastern time
will be executed at the price computed on the date of receipt; and an order
received after that time will be executed at the price computed on the next
Business Day. An order to purchase shares is not binding on the Funds until
confirmed in writing (or unless other arrangements have been made with the
Funds, for example in the case of orders utilizing wire transfer of funds) and
payment has been received.
- 20 -
<PAGE>
Each Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial investment
minimums for the purpose of reducing the cost to the Funds (and consequently to
the shareholders) of communicating with and servicing their shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Funds, the Advisor and certain parties
related thereto, including clients of the Advisor or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the New York Stock Exchange (the "Exchange") is closed,
or trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an emergency
exists as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it, or to
fairly determine the value of its assets, and (iii) for such other periods as
the Commission may permit.
No charge is made by the Funds for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities held
by the Funds.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of trading of the Exchange (currently 4:00 p.m.
Eastern time) on each "Business Day." A Business Day means any day,
- 21 -
<PAGE>
Monday through Friday, except for the following holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Fourth of
July, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas. Net
asset value per share is determined by dividing the total value of all Fund
securities and other assets, less liabilities, by the total number of shares
then outstanding. Net asset value includes interest on fixed income securities,
which is accrued daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of shares (including
registration and qualification fees and expenses); costs and expenses of
membership and attendance at meetings of certain associations which may be
deemed by the Trustees to be of overall benefit to each Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Funds. General Trust expenses are allocated among
the series, or funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In addition
to this distribution requirement, each Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities' loans, gains from the disposition of stock or securities, and
certain other income.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter M,
they will not be subject to federal income tax to the extent they distribute
their taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on
- 22 -
<PAGE>
each Fund to the extent it does not distribute at least 98% of its ordinary
taxable income for a calendar year, plus 98% of its capital gain net taxable
income for the one year period ending each October 31, plus certain
undistributed amounts from prior years. While each Fund intends to distribute
its taxable income and capital gains in a manner so as to avoid imposition of
the federal excise and income taxes, there can be no assurance that the Funds
indeed will make sufficient distributions to avoid entirely imposition of
federal excise or income taxes.
Should additional series, or funds, be created by the Trustees, each fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "How to Purchase
Shares" in the Prospectus.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from each Fund. Each Fund will send shareholders
information each year on the tax status of dividends and disbursements. A
dividend or capital gains distribution paid shortly after shares have been
purchased, although in effect a return of investment, is subject to federal
income taxation. Dividends from net investment income, along with capital gains,
will be taxable to shareholders, whether received in cash or shares and no
matter how long you have held Fund shares, even if they reduce the net asset
value of shares below your cost and thus in effect result in a return of a part
of your investment.
CAPITAL SHARES AND VOTING
Shares of the Funds, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed
- 23 -
<PAGE>
with or without cause at any time (a) by a written instrument, signed by at
lease two-thirds of the number of Trustees prior to such removal; or (b) by vote
of shareholders holding not less than two-thirds of the outstanding shares of
the Trust, cast in person or by proxy at a meeting called for that purpose; or
(c) by a written declaration signed by shareholders holding not less than
two-thirds of the outstanding shares of the Trust and filed with the Trust's
custodian. Shareholders have certain rights, as set forth in the Declaration of
Trust, including the right to call a meeting of the shareholders for the purpose
of voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of a Fund ("T") is computed by using the redeemable value at the end of a
specified period of time ("ERV") of a hypothetical initial investment of $1,000
("P") over a period of time ("n") according to the formula P(l+T)n=ERV. The
average annual total return quotations for the Balanced Fund for the one year
period ended March 31, 1998, for the five year period ended March 31, 1998 and
for the period since inception (July 3, 1989) to March 31, 1998 are 32.42%,
15.29% and 12.71%, respectively. The average annual total return quotations for
the Equity Fund for the one year period ended March 31, 1998, for the five year
period ended March 31, 1998, and for the period since inception (December 1,
1992) to March 31, 1998 are 43.74%, 19.12% and 18.31%, respectively.
- 24 -
<PAGE>
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a Fund
owns the security. Generally, interest earned (for the purpose of "a" above) on
debt obligations is computed by reference to the yield to maturity of each
obligation held based on the market value of the obligation (including actual
accrued interest) at the close of business on the last business day prior to the
start of the 30-day (or one month) period for which yield is being calculated,
or, with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest). The yields of the Balanced Fund and the Equity
Fund for the 30 days ended March 31, 1998 were 1.91% and 0.45%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, each Fund may compare its performance to the S&P 500
Index, which is generally considered to be representative of the performance of
unmanaged common stocks that are publicly traded in the United States securities
markets. Comparative performance may also be expressed by reference to a ranking
prepared by a mutual fund monitoring service, such as Lipper Analytical
Services, Inc. or Morningstar, Inc., or by one or more newspapers, newsletters
or
- 25 -
<PAGE>
financial periodicals. Performance comparisons may be useful to investors who
wish to compare the Funds' past performance to that of other mutual funds and
investment products. Of course, past performance is not a guarantee of future
results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain a
more complete view of the Funds' performance before investing. Of course, when
comparing the Funds' performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Funds may quote total returns that are calculated
on non-standardized base periods. The total returns represent the historic
change in the value of an investment in the Funds based on monthly reinvestment
of dividends over a specified period of time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Funds may also disclose from time to
time information about their portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Funds may also depict the historical performance
of the securities in which the Funds may invest over periods reflecting a
variety of market or economic conditions either alone or in comparison with
alternative investments, performance indices of those investments, or economic
indicators. The Funds may also include in advertisements and in materials
furnished to present and prospective shareholders statements or illustrations
relating to
- 26 -
<PAGE>
the appropriateness of types of securities and/or mutual funds that may be
employed to meet specific financial goals, such as saving for retirement,
children's education, or other future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Funds as of March 31, 1998, together with the report of the independent
accountants thereon, are included on the following pages.
<PAGE>
THE JAMESTOWN BALANCED FUND
---------------------------
No Load Mutual Fund
Annual Report
March 31, 1998
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, 1998
Performance of The Jamestown Balanced Fund
The twelve months ending March 31, 1998, were rewarding ones for The Jamestown
Balanced Fund in both absolute results as well as in relative results. For the
year, your fund returned 32.4% after expenses versus 29.0% for the comparable
Lipper Balanced Index. The Standard & Poor's Index was up 48% for the same 12
month period with your fund invested approximately two-thirds in stocks and
one-third in bonds and cash.
The sectors outperforming the market were finance, communication services, and
consumer cyclicals in particular, with capital goods, health care, and
technology slightly ahead of the S&P. Those sectors lagging the market were
consumer staples, transportation, utility, energy, and basic industries. Your
fund was well represented in the finance, technology, and consumer staples
sectors. We had underweightings in the communication services, utility, and
transportation sectors.
For the past three years, the Jamestown Balanced Fund has appreciated at an
annualized rate of 22.2%, well ahead of the Lipper Balanced Fund Index of 19.9%.
With the stock market now selling at lofty price-to-earnings multiples (25x), it
is dangerous to be lulled into a belief that these strong returns will continue
each year. There will be a regression to the mean, i.e., a market correction,
but with interest rates and inflation rates staying low, we are hopeful that
this market can continue for at least a short period. Inflation appears to be
very well contained, and the same can be said for the wage component of the
consumer price index.
As in the past several years, the bond market portion of your fund provided
positive returns. The Lehman Intermediate Index was up 9.7%. While lagging the
returns of the stock portion, bonds provide an excellent source of funds for
equity employment should we see a significant market correction.
We will continue to invest in high quality stocks--those with low debt to equity
and strong earnings trends in place. Should we see a market correction in the
near future, we believe it will not be a significant one given the continued
"Goldilocks" fundamentals of the current economy.
For a comparison of the fund's performance since inception versus the Standard &
Poor's 500 Index and the Consumer Price Index, please refer to the chart below.
<PAGE>
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.
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN BALANCED FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
07/03/89 10,000 07/03/89 10,000
09/30/89 10.71% 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
06/30/97 17.46% 34,966 06/30/97 11.31% 23,932
09/30/97 7.49% 37,585 09/30/97 4.97% 25,121
12/31/97 2.87% 38,665 12/31/97 2.43% 25,731
03/31/98 13.95% 44,059 03/31/98 10.65% 28,471
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
07/03/89 10,000
09/30/89 0.75% 10,075
12/31/89 1.00% 10,176
03/31/90 2.01% 10,380
06/30/90 0.90% 10,474
09/30/90 1.71% 10,653
12/31/90 1.71% 10,835
03/31/91 0.90% 10,933
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
06/30/97 0.19% 12,922
09/30/97 0.44% 12,978
12/31/97 0.62% 13,059
03/31/98 0.12% 13,075
The Jamestown Balanced Fund Average Total Returns
1 Year 5 Years Since Inception*
28.40% 14.58% 12.31%
*Initial public offering of shares was July 3, 1989.
Past performance is not predictive of future performance.
<PAGE>
<TABLE>
THE JAMESTOWN BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1998
<CAPTION>
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 70,033,530
================
At value (Note 1) $ 96,403,552
Investments in repurchase agreements (Note 1) 4,833,000
Cash 589
Receivable for securities sold 977,601
Receivable for capital shares sold 304,390
Interest receivable 365,450
Dividends receivable 38,913
Other assets 6,639
----------------
TOTAL ASSETS 102,930,134
----------------
LIABILITIES
Dividends payable 30,345
Distributions payable 178,789
Payable for securities purchased 1,197,219
Payable for capital shares redeemed 25,180
Accrued advisory fees (Note 3) 54,647
Accrued administration fees (Note 3) 13,950
Other accrued expenses 21,717
----------------
TOTAL LIABILITIES 1,521,847
----------------
NET ASSETS $ 101,408,287
================
Net assets consist of:
Paid-in capital $ 75,047,485
Distributions in excess of net realized gains (12,198)
Undistributed net investment income 2,978
Net unrealized appreciation on investments 26,370,022
----------------
Net assets $ 101,408,287
================
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 5,835,774
================
Net asset value, offering price and redemption price per share (Note 1) $ 17.38
================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1998
<S> <C> <C>
INVESTMENT INCOME
Interest $ 1,980,449
Dividends 686,177
-------------
TOTAL INVESTMENT INCOME 2,666,626
-------------
EXPENSES
Investment advisory fees (Note 3) 561,887
Administrative fees (Note 3) 148,539
Professional fees 14,021
Custodian fees 13,983
Registration fees 11,035
Pricing costs 7,026
Trustees' fees and expenses 5,405
Postage and supplies 4,281
Insurance expense 4,163
Printing of shareholder reports 1,920
Other expenses 6,860
---------------
TOTAL EXPENSES 779,120
Expenses reimbursed through a directed
brokerage arrangement (Note 4) (24,000)
--------------
NET EXPENSES 755,120
-------------
NET INVESTMENT INCOME 1,911,506
--------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 9,533,601
Net change in unrealized appreciation/depreciation
on investments 12,603,990
--------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 22,137,591
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 24,049,097
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BALANCED FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1998 and 1997
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1998 1997
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 1,911,506 $ 1,532,966
Net realized gains from security transactions 9,533,601 3,339,264
Net change in unrealized appreciation/depreciation
on investments 12,603,990 2,746,030
------------- ------------
Net increase in net assets from operations 24,049,097 7,618,260
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,934,092) (1,518,758)
From net realized gains from security transactions (10,800,423) (4,545,144)
------------- ------------
Decrease in net assets from distributions to shareholders (12,734,515) (6,063,902)
------------- ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 17,601,307 9,763,400
Net asset value of shares issued in reinvestment
of distributions to shareholders 12,174,707 5,853,635
Payments for shares redeemed (10,335,880) (8,094,099)
------------- ------------
Net increase in net assets from capital share transactions 19,440,134 7,522,936
------------- ------------
TOTAL INCREASE IN NET ASSETS 30,754,716 9,077,294
NET ASSETS:
Beginning of year 70,653,571 61,576,277
------------- ------------
End of year - (including undistributed net investment
income of $2,978 and $25,564, respectively) $ 101,408,287 $ 70,653,571
============= ============
Capital share activity:
Sold 1,041,126 631,119
Reinvested 735,126 383,386
Redeemed (599,080) (526,294)
------------- ------------
Net increase in shares outstanding 1,177,172 488,211
Shares outstanding, beginning of year 4,658,602 4,170,391
------------- ------------
Shares outstanding, end of year 5,835,774 4,658,602
============= ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
<CAPTION>
Years Ended March 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $15.17 $14.77 $12.76 $12.15 $12.49
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.37 0.35 0.36 0.33 0.30
Net realized and unrealized gains (losses)
on investments 4.31 1.45 2.50 0.90 (0.18)
------- ------- ------- ------- -------
Total from investment operations 4.68 1.80 2.86 1.23 0.12
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.37) (0.35) (0.36) (0.33) (0.30)
Distributions from net realized gains (2.10) (1.05) (0.49) (0.29) (0.16)
------- ------- ------- ------- -------
Total distributions (2.47) (1.40) (0.85) (0.62) (0.46)
------- ------- ------- ------- -------
Net asset value at end of year $17.38 $15.17 $14.77 $12.76 $12.15
======= ======= ======= ======= =======
Total return 32.42% 12.29% 22.79% 10.54% 0.94%
======= ======= ======= ======= =======
Net assets at end of year (000's) $101,408 $70,654 $61,576 $52,062 $46,928
======== ======= ======= ======= =======
Ratio of gross expenses to average net assets 0.90% 0.91% 0.93% 0.99% 1.01%
Ratio of net expenses to average net assets (a) 0.87% 0.87% 0.88% 0.96% 0.98%
Ratio of net investment income to average net assets 2.21% 2.31% 2.52% 2.72% 2.47%
Portfolio turnover rate 90% 58% 72% 95% 123%
Average commission rate per share $0.0681 $0.0667 -- -- --
(a)Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 67.0%
Advertising - 1.1%
18,000 Interpublic Group of Companies, Inc. $ 1,118,250
-----------
Chemicals - 2.0%
24,500 Air Products & Chemicals, Inc. 2,030,438
-----------
Commercial Banking - 5.2%
25,300 Fannie Mae 1,600,225
33,400 First Union Corporation 1,895,450
25,000 NationsBank Corporation 1,823,438
-----------
5,319,113
-----------
Communications - 5.7%
61,000 Equifax, Inc. 2,226,500
11,500 Lucent Technologies, Inc. 1,470,562
42,000 MCI Communications 2,079,000
-----------
5,776,062
-----------
Computers/Computer Technology Services - 8.0%
21,000 Cisco Systems, Inc. (a) 1,435,875
28,200 Computer Sciences Corporation (a) 1,551,000
39,400 Diebold, Inc. 1,733,600
17,900 Intel Corporation 1,397,319
33,000 Sundstrand Corporation 1,996,500
-----------
8,114,294
-----------
Consumer Products - 14.5%
30,000 Avon Products, Inc. 2,340,000
15,000 Cendant Corporation (a) 594,375
38,200 Crane Company 2,024,600
27,000 General Electric Company 2,327,063
12,000 Gillette Company 1,424,250
27,000 Kimberly-Clark Corporation 1,353,375
23,000 Lilly (Eli) & Company 1,371,375
11,000 Procter & Gamble Company 928,125
35,000 Sherwin Williams Company 1,242,500
42,000 Sysco Corporation 1,076,250
-----------
14,681,913
-----------
Drugs/Medical Equipment - 5.2%
22,000 Abbott Laboratories 1,656,875
10,000 Merck and Company, Inc. 1,283,750
28,000 Schering-Plough Corporation 2,287,250
-----------
5,227,875
-----------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Electronics - 1.6%
25,000 Hewlett-Packard Company $ 1,584,375
-----------
Entertainment - 0.7%
6,400 Walt Disney Company 683,200
-----------
Fire Systems - 2.3%
42,000 Tyco International Ltd. 2,294,250
-----------
Food Productions - 1.5%
48,000 Conagra, Inc. 1,542,000
-----------
Funeral Services - 1.6%
39,500 Service Corporation International 1,676,281
-----------
Health Care Centers - 1.0%
38,000 HealthSouth Corporation (a) 1,066,375
-----------
Hotels - 1.9%
105,000 Choice Hotel International, Inc. (a) 1,929,375
-----------
Insurance - 5.1%
11,000 American International Group 1,385,313
33,300 Conseco, Inc. 1,885,612
21,000 Jefferson-Pilot Corporation 1,867,688
-----------
5,138,613
-----------
Oil and Gas Drilling - 5.4%
31,000 Coastal Corporation 2,018,875
25,600 Schlumberger Ltd. 1,939,200
24,600 Texaco, Inc. 1,482,150
-----------
5,440,225
-----------
Oil Field Machinery and Equipment - 1.7%
36,500 Dresser Industries, Inc. 1,754,281
-----------
Retail Stores - 2.5%
50,000 AutoZone, Inc. (a) 1,693,750
20,000 Circuit City Stores, Inc. 855,000
-----------
2,548,750
-----------
Total Common Stocks (Cost $41,718,591) $ 67,925,670
-----------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
U.S. TREASURY & AGENCY OBLIGATIONS - 6.6%
U.S. Treasury Notes - 6.0%
$1,075,000 7.75%, due 11/30/1999 $ 1,111,109
2,050,000 6.50%, due 05/31/2001 2,099,651
2,935,000 5.625%, due 02/15/2006 2,912,518
-----------
6,123,278
-----------
U.S. Treasury Inflation-Protection Notes - 0.6%
393,518 3.625%, due 07/15/2002 389,583
209,094 3.375%, due 01/15/2007 202,723
-----------
592,306
-----------
Total U.S. Treasury & Agency Obligations
(Cost $6,702,500) $ 6,715,584
-----------
MORTGAGE-BACKED SECURITIES - 7.0%
Federal Home Loan Mortgage Corporation - 2.0%
$ 243,617 Pool #G50153, 4.50%, due 05/01/1999 $ 242,821
489,144 Pool #1490-PE, 5.75%, due 07/15/2006 488,072
592,033 Pool #1561-ZB, 6.00%, due 08/15/2006 592,033
475,000 Pool #1471, 7.00%, due 03/15/2008 488,357
175,000 Pool #1655-HB, 6.50%, due 10/01/2008 176,475
59,531 Pool #162-E, 7.00%, due 01/15/2020 59,419
-----------
2,047,177
-----------
Federal National Mortgage Association - 2.5%
388,338 Pool #73718, 7.23%, due 11/01/2003 406,177
348,674 Pool #375448, 6.66%, due 10/01/2004 356,846
400,000 Series #93-63-PE, 6.25%, due 06/25/2005 400,248
621,957 Pool #375296, 6.92%, due 08/01/2007 648,973
201,292 Pool #70, 8.50%, due 01/01/2012 211,811
178,976 Series #88-29-B, 9.50%, due 12/25/2018 193,125
295,632 Series #90-35-E, 9.50%, due 04/25/2020 320,113
-----------
2,537,293
-----------
Government National Mortgage Association - 1.1%
520,013 Pool #343536, 7.50%, due 02/15/2023 534,485
606,243 Pool #8482, 7.00%, adjustable rate, due 08/20/2024 621,496
-----------
1,155,981
-----------
Student Loan Marketing Association - 0.9%
875,000 Series #98-1-A1, 5.173%, due 01/25/2007 875,137
-----------
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
MORTGAGE-BACKED SECURITIES - Continued
Other Mortgage-Backed Securities - 0.5%
Lehman Brothers Mortgage Trust #91-2-A1,
$ 76,671 8.00%, due 03/20/1999 $ 77,270
Morgan Stanley Capital I #97-XL1-A1,
360,857 6.59%, due 10/03/2030 367,397
-----------
444,667
-----------
Total Mortgage-Backed Securities (Cost $6,981,572) $ 7,060,255
-----------
ASSET-BACKED SECURITIES - 2.1%
Advanta Mortgage Loan Trust #92-2-A2,
$ 351,053 7.03%, due 03/25/2011 $ 351,860
AFG Receivables Trust #95-A-A,
106,201 6.15%, due 09/15/2000 106,286
Fleetwood Credit Corporation Grantor Trust #95-A-A,
391,564 8.45%, due 11/15/2010 407,349
Green Tree Financial Corporation #98-A,
500,000 6.18%, due 04/01/2018 498,900
Nomura Asset Securities Corporation #98-D6-A1B,
475,000 6.59%, due 03/15/2030 481,457
NationsCredit Grantor Trust #96-1-A,
277,240 5.85%, due 09/15/2011 275,355
-----------
Total Asset-Backed Securities (Cost $2,124,391) $ 2,121,207
-----------
CORPORATE BONDS - 12.4%
Beneficial Corporation Medium Term Notes,
$ 275,000 9.35%, due 03/15/2001 $ 297,946
Caterpillar Financial Services Medium Term Notes,
450,000 6.80%, due 06/15/1999 454,932
Chrysler Financial Corporation,
1,000,000 5.90%, due 01/26/2001 995,120
Enron Corporation,
750,000 6.45%, due 11/15/2001 752,895
Equity Residential Properties,
875,000 6.65%, due 11/15/2003 877,765
Finova Capital Corporation,
1,000,000 6.25%, due 08/15/2000 1,002,590
Ford Motor Credit Medium Term Notes,
225,000 7.55%, due 07/19/1999 229,617
280,000 5.99%, due 02/27/2001 279,135
<PAGE>
<CAPTION>
Par Value Value
<S> <C> <C>
CORPORATE BONDS - Continued
GMAC Medium Term Notes,
$525,000 6.65%, due 05/24/2000 $ 531,431
International Paper Company,
735,000 8.68%, due 09/14/2001 794,491
International Lease Finance Corporation,
425,000 6.42%, due 09/11/2000 428,268
International Lease Finance Corporation Medium Term Notes,
425,000 6.55%, due 09/15/2000 429,509
KeyCorp Medium Term Notes,
675,000 6.75%, due 05/29/2001 684,909
Merrill Lynch and Company Medium Term Notes,
410,000 7.26%, due 03/25/2002 414,502
National City Corporation,
575,000 7.20%, due 05/15/2005 602,117
NationsBank Medium Term Notes,
500,000 5.80%, due 01/31/2001 496,795
Northern Trust Corporation Medium Term Notes,
100,000 9.00%, due 05/15/1998 100,347
Norwest Financial, Inc.,
140,000 6.05%, due 11/19/1999 140,354
Norfolk Southern Corporation,
210,000 7.35%, due 05/15/2007 223,507
SBC Communications, Inc.
400,000 6.875%, due 08/15/2006 417,540
185,000 6.625%, due 11/01/2009 189,327
Sears Roebuck Acceptance Corporation,
400,000 6.99%, due 09/30/2002 411,172
Southern California Edison Company,
700,000 6.17%, due 03/25/2003 704,060
Suntrust Banks,
310,000 6.125%, due 02/15/2004 307,424
TRW, Inc.,
400,000 6.25%, due 01/15/2010 387,592
Union Camp Corporation,
425,000 6.50%, due 11/15/2007 427,491
-----------
Total Corporate Bonds (Cost $12,506,476) $ 12,580,836
-----------
Total Investments at Value
(Cost $70,033,530) - 95.1% $ 96,403,552
-----------
<PAGE>
<CAPTION>
Face
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENTS (b) - 4.8%
Star Bank, N.A., 5.25%, dated 03/31/1998, due 04/01/1998
$4,833,000 repurchase proceeds $4,833,705 (Cost $4,833,000) $ 4,833,000
Total Investments and Repurchase Agreements
at Value - 99.9% $101,236,552
Other Assets in Excess of Liabilities - 0.1% 171,735
---------
Net Assets - 100.0% $101,408,287
============
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $12,715,000 GNMA
II, Pool #8421, 7.375%, due 05/20/24; $14,335,000 GNMA II, Pool #8932, 7.00%,
due 03/20/22; and $1,120,000 GNMA II, Pool #8359, 7.00% due 01/20/24. The
aggregate market value of the collateral at March 31, 1998 was $28,948,985. The
Fund's pro-rata interest in the collateral at March 31, 1998 was $4,950,276.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
THE JAMESTOWN BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
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. 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.
<PAGE>
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined 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 income 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 $70,046,130 as of March 31, 1998:
Gross unrealized appreciation....................................$26,558,490
Gross unrealized depreciation.................................... (201,068)
------------
Net unrealized appreciation..................................... $26,357,422
=============
The difference between the Federal income tax cost of portfolio investments and
financial statement cost is due to certain timing differences in the recognition
of capital losses under generally accepted accounting principles and income tax
regulations.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1998, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $79,927,043 and $74,274,121, respectively.
<PAGE>
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) 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 $24,000 for the year ended March 31, 1998.
<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, 1998, 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, 1998 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, 1998, 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 24, 1998
<PAGE>
THE JAMESTOWN EQUITY FUND
-------------------------
No Load Mutual Fund
Annual Report
March 31, 1998
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, 1998
PERFORMANCE OF THE JAMESTOWN EQUITY FUND
The fiscal year ending March 31, 1998, was a very strong one for The Jamestown
Equity Fund in both absolute results as well as in relative results. For the 12
month period, your fund returned 43.7% after expenses versus 44.4% for the
comparable Lipper Index. The Standard & Poor's 500 Index was up 48% for the same
12 month period.
The sectors outperforming the market were finance, communication services, and
consumer cyclicals in particular, with capital goods, health care, and
technology slightly ahead of the S&P. Those sectors lagging the market were
consumer staples, transportation, utility, energy, and basic industries. Your
fund was well represented in the finance, technology, and consumer staples
sectors. We had underweightings in the communication services, utility, and
transportation sectors.
For the past three years, the Jamestown Equity Fund has appreciated at an
annualized rate of 28.5%, slightly ahead of the Lipper Growth Index of 27.9%.
With the market now selling at lofty price-to-earnings multiples (25x), it is
dangerous to be lulled into a belief that these strong returns will continue
each year. There will be a regression to the mean, but with interest rates and
inflation rates staying low, we are hopeful that this market can continue for at
least a short period. Inflation appears to be very well contained, and the same
can be said for the wage component of the consumer price index.
We will continue to invest in high quality stocks--those with low debt to equity
and strong earnings trends in place. Should we see a market correction in the
near future, we believe it will not be a significant one given the continued
"Goldilocks" fundamentals of the current economy.
For a comparison of the fund's performance since inception versus the
Standard & Poor's 500 Index and the Consumer Price Index, please refer to the
chart below.
<PAGE>
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.
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN EQUITY FUND:
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
12/01/92 10,000 12/01/92 10,000
12/31/92 1.23% 10,123 12/31/92 1.68% 10,168
03/31/93 4.36% 10,564 03/31/93 0.54% 10,223
06/30/93 0.48% 10,615 06/30/93 -1.00% 10,121
09/30/93 2.58% 10,889 09/30/93 1.85% 10,308
12/31/93 2.32% 11,142 12/31/93 0.67% 10,377
03/31/94 -3.79% 10,719 03/31/94 -0.82% 10,291
06/30/94 0.42% 10,764 06/30/94 1.64% 10,460
09/30/94 4.88% 11,290 09/30/94 1.70% 10,637
12/31/94 -0.02% 11,287 12/31/94 -1.35% 10,493
03/31/95 9.74% 12,387 03/31/95 10.17% 11,560
06/30/95 9.55% 13,569 06/30/95 8.46% 12,538
09/30/95 7.95% 14,648 09/30/95 6.80% 13,390
12/31/95 6.02% 15,530 12/31/95 5.22% 14,089
03/31/96 5.37% 16,363 03/31/96 5.03% 14,798
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
06/30/97 17.46% 23,030 06/30/97 15.33% 19,671
09/30/97 7.49% 24,755 09/30/97 5.99% 20,849
12/31/97 2.87% 25,466 12/31/97 2.70% 21,411
03/31/98 13.95% 29,018 03/31/98 14.51% 24,518
CONSUMER PRICE INDEX:
QTRLY
DATE RETURN BALANCE
12/01/92 10,000
12/31/92 0.20% 10,020
03/31/93 0.90% 10,110
06/30/93 0.60% 10,171
09/30/93 0.40% 10,212
12/31/93 0.70% 10,283
03/31/94 0.50% 10,334
06/30/94 0.60% 10,396
09/30/94 0.90% 10,490
12/31/94 0.60% 10,553
03/31/95 0.80% 10,638
06/30/95 0.90% 10,734
09/30/95 0.40% 10,777
12/31/95 0.50% 10,831
03/31/96 0.80% 10,917
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
06/30/97 0.19% 11,276
09/30/97 0.44% 11,325
12/31/97 0.62% 11,396
03/31/98 0.12% 11,409
The Jamestown Equity Fund Average Total Returns
1 Year 5 Years Since Inception*
43.74% 19.12% 18.31%
*Initial public offering of shares was December 1, 1992.
Past performance is not predictive of future performance.
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1998
<CAPTION>
<S> <C>
ASSETS
Investments in securities:
At acquisition cost $ 32,982,706
=============
At value (Note 1) $ 48,803,931
Investments in repurchase agreements (Note 1) 3,527,000
Cash 115
Receivable for securities sold 977,601
Receivable for capital shares sold 24,000
Dividends receivable 27,940
Interest receivable 514
Other assets 2,761
-------------
TOTAL ASSETS 53,363,862
-------------
LIABILITIES
Dividends payable 5,194
Distributions payable 118,987
Payable for securities purchased 957,776
Payable for capital shares redeemed 30,600
Accrued advisory fees (Note 3) 28,147
Accrued administration fees (Note 3) 7,950
Other accrued expenses 1,103
-------------
TOTAL LIABILITIES 1,149,757
-------------
NET ASSETS $ 52,214,105
=============
Net assets consist of:
Paid-in capital $ 36,403,344
Distributions in excess of net realized gains (14,486)
Undistributed net investment income 4,022
Net unrealized appreciation on investments 15,821,225
-------------
Net assets $ 52,214,105
=============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 2,589,737
=============
Net asset value, offering price and redemption
price per share (Note 1) $ 20.16
=============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1998
<CAPTION>
INVESTMENT INCOME
<S> <C>
Dividends $ 451,263
Interest 146,628
------------
TOTAL INVESTMENT INCOME 597,891
------------
EXPENSES
Investment advisory fees (Note 3) 259,757
Administration fees (Note 3) 76,276
Professional fees 9,021
Registration fees 8,115
Custodian fees 6,418
Trustees' fees and expenses 5,405
Postage and supplies 3,864
Insurance expense 2,136
Other expenses 670
------------
TOTAL EXPENSES 371,662
Expenses reimbursed through a directed brokerage arrangement (Note 4) (12,000)
------------
NET EXPENSES 359,662
------------
NET INVESTMENT INCOME 238,229
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 3,855,317
Net change in unrealized appreciation/depreciation on investments 10,606,115
------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 14,461,432
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 14,699,661
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1998 and 1997
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1998 1997
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 238,229 $ 211,890
Net realized gains from security transactions 3,855,317 777,388
Net change in unrealized appreciation/depreciation
on investments 10,606,115 2,328,613
----------------- ----------------
Net increase in net assets from operations 14,699,661 3,317,891
----------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (242,370) (206,587)
From net realized gains from security transactions (4,379,490) (521,388)
----------------- ----------------
Decrease in net assets from distributions to shareholders (4,621,860) (727,975)
----------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 10,499,561 11,827,742
Net asset value of shares issued in reinvestment
of distributions to shareholders 4,351,536 671,223
Payments for shares redeemed (3,895,041) (1,765,155)
----------------- ----------------
Net increase in net assets from capital share transactions 10,956,056 10,733,810
----------------- ----------------
TOTAL INCREASE IN NET ASSETS 21,033,857 13,323,726
NET ASSETS:
Beginning of year 31,180,248 17,856,522
----------------- ----------------
End of year - (including undistributed net investment
income of $4,022 and $8,163, respectively) $ 52,214,105 $ 31,180,248
================= ================
Capital share activity:
Sold 571,636 788,755
Reinvested 236,191 43,245
Redeemed (209,264) (120,237)
----------------- ----------------
Net increase in shares outstanding 598,563 711,763
Shares outstanding, beginning of year 1,991,174 1,279,411
----------------- ----------------
Shares outstanding, end of year 2,589,737 1,991,174
================= ================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
<CAPTION>
Years ended March 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $15.66 $13.96 $11.29 $10.19 $10.18
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.11 0.13 0.15 0.10 0.08
Net realized and unrealized gains (losses)
on investments 6.47 2.00 2.98 1.15 (0.01)
------- ------- ------- ------- -------
Total from investment operations 6.58 2.13 3.13 1.25 0.07
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.11) (0.13) (0.15) (0.12) (0.06)
Distributions from net realized gains (1.97) (0.30) (0.31) (0.03) --
------- ------- ------- ------- -------
Total distributions (2.08) (0.43) (0.46) (0.15) (0.06)
------- ------- ------- ------- -------
Net asset value at end of year $20.16 $15.66 $13.96 $11.29 $10.19
======= ======= ======= ======= =======
Total return 43.74% 15.27% 28.00% 12.33% 0.67%
======= ======= ======= ======= =======
Net assets at end of year (000's) $52,214 $31,180 $17,857 $8,111 $2,811
======= ======= ======= ======= =======
Ratio of gross expenses to average net assets 0.93% 0.98% 1.14% 1.99% 3.16%
Ratio of net expenses to average net assets 0.90%(a) 0.92%(a) 1.01%(a) 1.44%(b) 1.50%(b)
Ratio of net investment income to average net assets 0.60% 0.85% 1.27% 1.18% 0.82%
Portfolio turnover rate 59% 44% 54% 48% 92%
Average commission rate per share $0.0686 $0.0688 -- -- --
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
(b) Ratios were determined based on net expenses after the Adviser waived all
or a portion of its advisory fee and/or reimbursed the Fund for operating
expenses.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1998
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 93.5%
Advertising - 1.3%
11,000 Interpublic Group of Companies, Inc. $ 683,375
-------------------
Chemicals - 2.9%
18,400 Air Products & Chemicals, Inc. 1,524,900
-------------------
Commercial Banking - 6.9%
17,000 Fannie Mae 1,075,250
24,000 First Union Corporation 1,362,000
16,000 NationsBank Corporation 1,167,000
-------------------
3,604,250
-------------------
Communications - 8.7%
46,000 Equifax, Inc. 1,679,000
10,000 Lucent Technologies, Inc. 1,278,750
32,000 MCI Communications 1,584,000
-------------------
4,541,750
-------------------
Computers/Computer Technology Services - 12.1%
16,500 Cisco Systems, Inc. (a) 1,128,188
20,000 Computer Sciences Corporation (a) 1,100,000
31,000 Diebold, Inc. 1,364,000
14,800 Intel Corporation 1,155,325
26,000 Sunstrand Corporation 1,573,000
-------------------
6,320,513
-------------------
Consumer Products - 18.2%
22,500 Avon Products, Inc. 1,755,000
12,000 Cendant Corporation (a) 475,500
27,000 Crane Company 1,431,000
17,500 General Electric Company 1,508,281
8,500 Gillette Company 1,008,844
20,000 Kimberly-Clark Corporation 1,002,500
6,000 Procter & Gamble Company 506,250
24,000 Sherwin Williams Company 852,000
36,800 Sysco Corporation 943,000
-------------------
9,482,375
-------------------
Drugs/Medical Equipment - 8.1%
11,500 Abbott Laboratories 866,094
18,000 Lilly (Eli) & Company 1,073,250
7,500 Merck and Company, Inc. 962,812
16,000 Schering-Plough Corporation 1,307,000
-------------------
4,209,156
-------------------
<PAGE>
<CAPTION>
Shares Value
COMMON STOCKS - Continued
<S> <C> <C>
Electronics - 2.2%
18,000 Hewlett-Packard Company $ 1,140,750
-------------------
Entertainment - 1.1%
5,100 Walt Disney Company 544,425
-------------------
Fire Systems - 3.2%
31,000 Tyco International Ltd. 1,693,375
-------------------
Food Productions - 2.3%
37,000 Conagra, Inc. 1,188,625
-------------------
Funeral Services - 2.4%
30,000 Service Corporation International 1,273,125
-------------------
Health Care Centers - 1.5%
28,000 HealthSouth Corporation (a) 785,750
-------------------
Hotels - 2.7%
78,000 Choice Hotel International, Inc. (a) 1,433,250
-------------------
Insurance - 7.2%
7,700 American International Group 969,719
25,100 Conseco, Inc. 1,421,288
15,500 Jefferson-Pilot Corporation 1,378,531
-------------------
3,769,538
-------------------
Oil and Gas Drilling - 7.8%
23,000 Coastal Corporation 1,497,875
19,700 Schlumberger Ltd. 1,492,275
18,000 Texaco, Inc. 1,084,500
-------------------
4,074,650
-------------------
Oil Field Machinery and Equipment - 2.5%
27,000 Dresser Industries, Inc. 1,297,687
-------------------
<PAGE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - Continued
Retail Stores - 2.4%
36,500 AutoZone, Inc. (a) $ 1,236,437
-------------------
Total Common Stocks (Cost $32,982,706) $ 48,803,931
-------------------
<CAPTION>
Face
Amount
REPURCHASE AGREEMENTS (b) - 6.7%
$3,527,000 Star Bank, N.A., 5.25%, dated 03/31/1998, due 04/01/1998,
repurchase proceeds $3,527,514 (Cost $3,527,000) $ 3,527,000
-------------------
Total Investments and Repurchase Agreements
at Value - 100.2% $ 52,330,931
Liabilities in Excess of Other Assets - (0.2)% (116,826)
-------------------
Net Assets - 100.0% $ 52,214,105
===================
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $12,715,000 GNMA
II, Pool #8421, 7.375%, due 05/20/24; $14,335,000 GNMA II, Pool #8932, 7.00%,
due 03/20/22; and $1,120,000 GNMA II, Pool #8359, 7.00% due 01/20/24. The
aggregate market value of the collateral at March 31, 1998 was $28,948,985. The
Fund's pro-rata interest in the collateral at March 31, 1998 was $3,618,623.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
THE JAMESTOWN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
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. Cost of securities sold is determined 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 income and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $32,997,876 as of March 31, 1998:
Gross unrealized appreciation......................................$15,903,238
Gross unrealized depreciation..................................... (97,183)
-----------
Net unrealized appreciation........................................$15,806,055
===========
The difference between the Federal income tax cost of portfolio investments and
financial statement cost is due to certain timing differences in the recognition
of capital losses under generally accepted accounting principles and income tax
regulations.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1998, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $27,951,286 and $21,883,675, 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) 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>
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 $12,000 for the year ended March 31, 1998.
<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, 1998, 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, 1998 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, 1998, 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 24, 1998
