The
Flippin, Bruce & Porter
Funds
Semi-Annual Report
September 30, 1998
(Unaudited)
- --------------------------
FBP Contrarian Equity Fund
- --------------------------
- ----------------------------
FBP Contrarian Balanced Fund
- ----------------------------
<PAGE>
Letter to Shareholders October 21, 1998
================================================================================
We would like to report on your Fund and its investments for the semi-annual
period ending September 30, 1998. The following table displays the total return
(capital change plus income) of the Funds for this and longer time periods.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Five Years Since Inception
Six Months One Year Annualized Annualized
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FBP Contrarian Equity Fund -15.7% -6.1% 15.2% 15.3%
FBP Contrarian Balanced Fund -9.2% -1.4% 12.5% 10.9%
- ------------------------------------------------------------------------------------
</TABLE>
Review and Outlook
The Fund's semi-annual period ended during a very difficult time for the equity
markets. As the most recent quarter progressed, investors grew more fearful that
the economic problems confronting Southeast Asia, Japan and Russia were quickly
spreading to Latin America and would soon engulf the United States. Prior
expectations of continued strong economic growth in our country gave way to fear
of weakening corporate profits and the potential for a domestic recession. Also
adding to the uncertainty were the political problems confronting our nation.
The result of all this uncertainty was an adjustment in stock prices. While not
unexpected after many years of above average returns, the slide in stock prices
has been none the less both swift and painful. From the peak on July 17 to the
bottom on August 31, most broad indices dropped 20% or more, with many
individual companies dropping twice that rate. Large quality growth stocks,
utilities, telecommunications and international oil companies held their values
better than most. There was good news if one looks at the returns of U.S.
Treasury bonds. With investors nervous worldwide, there has been a tremendous
flight to quality. Thus, intermediate and longterm Treasuries provided excellent
results during this period. However, investors have shunned most other types of
fixed income investments resulting in a widening of the yield spread between
Treasury and corporate bonds. This lead to weaker performance in the corporate
sector, albeit better than equities.
Fortunately, our government and key financial leaders realize the need to do
whatever is necessary to stabilize the situation and put the foundation in place
to restore the potential for longer term growth. Inflation is low, interest
rates are low and our economy is still strong, although showing some signs of
weakness. In order to put the current global economic problems into a rational
context, one needs to reflect on history and have confidence in the global
economic system. Since 1948, there has not been a world recession and global GDP
growth has never gone negative for more than two quarters. It is clear the rate
of growth worldwide may slow dramatically and painfully for many countries, but
the risk of a true global recession should be viewed as a low probability. The
Asian region continues its slow and painful struggle to stabilize its currencies
and return to moderate growth. As one of the key countries in the process, Japan
continues to search for the right formula to get its economy back on track.
Europe still looks like a recovery is in progress with some disruptions due to
the impact of Russia. Latin America seems to be on the edge, but again Brazil
appears to be taking corrective steps.
1
<PAGE>
Where do we go from here? The widening yield spread between treasury and
corporate fixed income issues is now providing the opportunity to begin
increasing the corporate bond exposure relative to treasuries in the Balanced
Fund. For equities, we cannot predict the exact bottom of this market correction
and we expect volatility to continue for some time. However, we do believe
strongly that the market is giving us an opportunity to own companies with
excellent long-term prospects at very reasonable prices and in some cases overly
depressed prices. It is times like these when extreme pessimism presents rare
investment opportunities. While our value approach is currently out of favor, we
firmly believe that the investments made during this period of uncertainty will
provide excellent long-term results.
Comparative Charts
Performance for each Fund is compared on the next page to the most appropriate
broad-based index, the S&P 500, an unmanaged index of 500 large common stocks.
Over time, this index has outpaced the FBP Contrarian Balanced Fund which
maintains at least 25% bonds. Balanced funds have the growth potential to
outpace inflation, but they will typically be outperformed by a 100% stock index
over the long term because of the bond portion of their portfolios. However, the
advantage of the bond portion is that it can make the return and principal of a
balanced fund more stable than a portfolio completely invested in stocks.
Results are also compared to the Consumer Price Index, a measure of inflation.
Thank you for your continued confidence and investment in The Flippin, Bruce &
Porter Funds.
/s/ John T. Bruce
John T. Bruce, CFA
Vice President-Portfolio Manager
2
<PAGE>
FBP Contrarian Equity Fund
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
Sept 98
-------
FBP Contrarian Equity Fund $20,893
Standard & Poor's 500 Index $25,532
Consumer Price Index $11,330
Past performance is not predictive of future performance.
------------------------------------
FBP Contrarian Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
-6.06% 15.18% 15.32%
------------------------------------
* Initial public offering of shares was July 30, 1993
FBP Contrarian Balanced Fund
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Balanced Fund, the Stancerd & Poor's 500 Index and the Consumer Price Index
Sept 98
-------
FBP Contrarian Balanced Fund $25,985
Standard & Poor's 500 Index $40,986
Consumer Price Index $13,204
Past performance is not predictive of future performance.
------------------------------------
FBP Contrarian Balanced Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
-1.41% 12.46% 10.89%
------------------------------------
* Initial public offering of shares was July 3, 1989
3
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Shares COMMON STOCKS -- 99.7% Value
- --------------------------------------------------------------------------------
ADVERTISING -- 0.1%
1,800 R.H. Donnelley Corporation ................... $ 22,275
-----------
BUSINESS INFORMATION SERVICES -- 0.7%
9,000 Dun & Bradstreet Corporation ................. 243,000
-----------
CHEMICALS -- 4.0%
7,000 Dow Chemical Company ......................... 598,062
11,500 Ethyl Corporation ............................ 46,000
16,400 Great Lakes Chemical Corporation ............. 637,550
4,100 Octel Corporation(a) ......................... 56,375
-----------
1,337,987
-----------
COMMERCIAL BANKING -- 9.7%
11,000 Banc One Corporation ......................... 468,875
16,000 Chase Manhattan Corporation .................. 692,000
8,500 Citicorp ..................................... 789,969
8,000 First Chicago NBD Corporation ................ 548,000
14,000 NationsBank Corporation ...................... 749,000
-----------
3,247,844
-----------
COMMUNICATIONS -- 4.3%
11,500 GTE Corporation .............................. 632,500
18,000 Harris Corporation ........................... 576,000
40,000 Paging Network, Inc.(a) ...................... 241,250
-----------
1,449,750
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 13.0%
25,620 Compaq Computer Corporation .................. 810,233
20,000 Electronic Data Systems Corporation .......... 663,750
9,000 Hewlett-Packard Company ...................... 476,438
14,000 International Business Machines Corporation .. 1,792,000
50,000 Novell, Inc.(a) .............................. 612,500
-----------
4,354,921
-----------
CONSUMER GOODS & SERVICES -- 8.7%
88,000 Cendant Corporation(a) ....................... 1,023,000
19,000 Philip Morris Companies, Inc. ................ 875,187
40,000 Shaw Industries, Inc. ........................ 650,000
13,000 UST, Inc. .................................... 384,313
-----------
2,932,500
-----------
DRUGS/MEDICAL EQUIPMENT -- 16.3%
14,800 Allergan, Inc. ............................... 863,950
12,500 Amgen, Inc.(a) ............................... 944,531
8,000 Bristol-Myers Squibb Company ................. 831,000
6,000 Johnson & Johnson ............................ 469,500
60,000 Mallinckrodt, Inc. ........................... 1,218,750
3,800 Merck & Company, Inc. ........................ 492,337
13,000 Pharmacia & Upjohn, Inc. ..................... 652,438
-----------
5,472,506
-----------
4
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 99.7% (Continued) Value
- --------------------------------------------------------------------------------
DURABLE GOODS -- 2.7%
4,000 General Electric Company ..................... $ 318,250
12,325 Waste Management, Inc.(a) .................... 592,370
-----------
910,620
-----------
FINANCE -- 4.1%
25,000 SLM Holding Corporation ...................... 810,937
50,000 United Dominion Realty ....................... 568,750
-----------
1,379,687
-----------
HOTELS -- 0.7%
26,200 Circus Circus Enterprises, Inc.(a) ........... 247,263
-----------
HUMAN RESOURCES -- 0.9%
52,800 Olsten Corporation ........................... 300,300
-----------
INSURANCE -- 3.0%
10,000 Aetna Life & Casualty Company ................ 695,000
6,600 Marsh & McLennan Companies, Inc. ............. 328,350
-----------
1,023,350
-----------
OIL & OIL DRILLING -- 6.4%
16,000 Equitable Resources, Inc. .................... 407,000
44,200 Oryx Energy Company(a) ....................... 571,838
14,000 Pennzoil Company ............................. 490,875
13,700 Schlumberger Limited ......................... 689,281
-----------
2,158,994
-----------
PACKAGING -- 1.7%
21,000 Crown Cork & Seal Company, Inc. .............. 561,750
-----------
PAPER & FOREST PRODUCTS -- 1.3%
10,000 Weyerhaeuser Company ......................... 421,875
-----------
PHOTOGRAPHICAL PRODUCTS -- 3.2%
14,000 Eastman Kodak Company ........................ 1,082,375
-----------
PRINTING -- 1.8%
17,000 R. R. Donnelley & Sons Company ............... 598,187
-----------
RETAIL STORES -- 12.4%
12,000 Applebee's International, Inc. ............... 250,500
19,000 Apple South, Inc. ............................ 211,375
15,000 Circuit City Stores, Inc.(b) ................. 499,687
25,000 Cracker Barrel Old Country Store, Inc. ....... 568,750
48,000 IKON Office Solutions, Inc. .................. 345,000
36,500 K-Mart Corporation(a) ........................ 435,719
34,000 The Pep Boys - Manny, Moe & Jack ............. 454,750
35,000 Toys R Us, Inc.(a) ........................... 566,562
15,500 Wal-Mart Stores, Inc.(b) ..................... 846,688
-----------
4,179,031
-----------
5
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 99.7% (Continued) Value
- --------------------------------------------------------------------------------
TRANSPORTATION -- 4.0%
14,000 FDX Corporation(a) ........................... $ 631,750
17,000 Union Pacific Corporation .................... 724,625
-----------
1,356,375
-----------
TRAVEL & INVESTMENT SERVICES -- 0.7%
3,000 American Express Company ..................... 232,875
-----------
TOTAL COMMON STOCKS (COST $30,518,776) $33,513,465
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(c) -- 1.4% Value
- --------------------------------------------------------------------------------
$ 479,000 Star Bank, N.A., 5.15%, dated 09/30/98,
due 10/01/98, repurchase proceeds
$479,068 (Cost $479,000) ..................... $ 479,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 101.1% .............. $33,992,465
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.1%) (362,227)
-----------
NET ASSETS -- 100.0% ......................... $33,630,238
===========
(a) Non-income producing security.
(b) Security covers a call option.
(c) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/24; $12,360,000 GNMA II, Pool #8932, 6.875%,
due 03/20/22; and $5,510,000 GNMA II, Pool #8395, 6.875%, due 03/20/24. The
aggregate market value of the collateral at September 30, 1998 was
$30,730,289. The Fund's pro-rata interest in the collateral at September
30, 1998 was $538,359.
================================================================================
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
September 30, 1998 (Unaudited)
================================================================================
Market
Option Value of Premiums
Contracts COVERED CALL OPTIONS Options Received
- --------------------------------------------------------------------------------
Circuit City Stores, Inc.,
21 10/17/98 at $45 .................. $ -- $ 13,303
Wal-Mart Stores, Inc.,
30 01/16/99 at $70 .................. 4,313 15,255
------- -----------
$ 4,313 $ 28,558
======= ===========
See accompanying notes to financial statements.
6
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Shares COMMON STOCKS -- 66.4% Value
- --------------------------------------------------------------------------------
ADVERTISING -- 0.1%
1,800 R.H. Donnelley Corporation ................... $ 22,275
-----------
BUSINESS INFORMATION SERVICES -- 0.5%
9,000 Dun & Bradstreet Corporation ................. 243,000
-----------
CHEMICALS -- 2.4%
8,000 Dow Chemical Company ......................... 683,500
20,000 Ethyl Corporation ............................ 80,000
11,700 Great Lakes Chemical Corporation ............. 454,838
2,925 Octel Corporation(a) ......................... 40,219
-----------
1,258,557
-----------
COMMERCIAL BANKING -- 5.9%
14,949 Banc One Corporation ......................... 637,201
15,350 Chase Manhattan Corporation .................. 663,888
6,125 Citicorp ..................................... 569,242
5,430 First Chicago NBD Corporation ................ 371,955
16,250 NationsBank Corporation ...................... 869,375
-----------
3,111,661
-----------
COMMUNICATIONS -- 3.2%
15,000 GTE Corporation .............................. 825,000
17,000 Harris Corporation ........................... 544,000
50,000 Paging Network, Inc.(a) ...................... 301,562
-----------
1,670,562
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 9.5%
25,914 Compaq Computer Corporation .................. 819,530
20,000 Electronic Data Systems Corporation .......... 663,750
6,100 Hewlett-Packard Company ...................... 322,919
20,400 International Business Machines Corporation(b) 2,611,200
45,000 Novell, Inc.(a) .............................. 551,250
-----------
4,968,649
-----------
CONSUMER GOODS & SERVICES -- 5.0%
88,000 Cendant Corporation(a) ....................... 1,023,000
19,300 Philip Morris Companies, Inc. ................ 889,006
29,000 Shaw Industries, Inc. ........................ 471,250
8,500 UST, Inc. .................................... 251,281
-----------
2,634,537
-----------
DRUGS/MEDICAL EQUIPMENT -- 11.1%
14,000 Allergan, Inc. ............................... 817,250
14,000 Amgen, Inc.(a) ............................... 1,057,875
6,000 Bristol-Myers Squibb Company ................. 623,250
14,600 Johnson & Johnson ............................ 1,142,450
46,000 Mallinckrodt, Inc. ........................... 934,375
3,200 Merck & Company, Inc. ........................ 414,600
16,400 Pharmacia & Upjohn, Inc. ..................... 823,075
-----------
5,812,875
-----------
7
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 66.4% (Continued) Value
- --------------------------------------------------------------------------------
DURABLE GOODS -- 2.7%
11,200 General Electric Company ..................... $ 891,100
11,600 Waste Management, Inc.(a) .................... 557,525
-----------
1,448,625
-----------
FINANCE -- 2.6%
24,000 SLM Holding Corporation ...................... 778,500
50,000 United Dominion Realty ....................... 568,750
-----------
1,347,250
-----------
HOTELS -- 0.6%
31,000 Circus Circus Enterprises, Inc.(a) ........... 292,563
-----------
HUMAN RESOURCES -- 0.6%
54,000 Olsten Corporation ........................... 307,125
-----------
INSURANCE -- 3.6%
8,300 Aetna Life & Casualty Company ................ 576,850
7,368 American International Group ................. 567,336
15,000 Marsh & McLennan Companies, Inc. ............. 746,250
-----------
1,890,436
-----------
OIL & OIL DRILLING -- 3.1%
6,800 Equitable Resources, Inc. .................... 172,975
33,400 Oryx Energy Company(a) ....................... 432,113
12,000 Pennzoil Company ............................. 420,750
12,150 Schlumberger Limited ......................... 611,297
-----------
1,637,135
-----------
PACKAGING -- 1.1%
21,000 Crown Cork & Seal Company, Inc. .............. 561,750
-----------
PAPER & FOREST PRODUCTS -- 0.8%
10,000 Weyerhaeuser Company ......................... 421,875
-----------
PHOTOGRAPHICAL PRODUCTS -- 1.6%
11,000 Eastman Kodak Company ........................ 850,437
-----------
PRINTING -- 1.1%
17,000 R. R. Donnelley & Sons Company ............... 598,188
-----------
RETAIL STORES -- 7.2%
8,200 Applebee's International, Inc. ............... 171,175
23,300 Apple South, Inc. ............................ 259,212
10,400 Circuit City Stores, Inc.(b) ................. 346,450
18,650 Cracker Barrel Old Country Store, Inc. ....... 424,288
50,000 IKON Office Solutions, Inc. .................. 359,375
39,500 K-Mart Corporation(a) ........................ 471,531
34,100 The Pep Boys - Manny, Moe & Jack ............. 456,087
19,000 Toys R Us, Inc.(a) ........................... 307,562
18,500 Wal-Mart Stores, Inc.(b) ..................... 1,010,563
-----------
3,806,243
-----------
8
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 66.4% (Continued) Value
- --------------------------------------------------------------------------------
TRANSPORTATION -- 2.5%
13,000 FDX Corporation(a) ........................... $ 586,625
17,200 Union Pacific Corporation .................... 733,150
-----------
1,319,775
-----------
TRAVEL & INVESTMENT SERVICES -- 1.2%
8,300 American Express Company ..................... 644,287
-----------
TOTAL COMMON STOCKS (COST $23,889,994) ....... $34,847,805
-----------
================================================================================
Par Value U.S. GOVERNMENT OBLIGATIONS -- 17.5% Value
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 17.5%
$1,000,000 5.50%, due 02/28/99 ........................ $ 1,003,750
500,000 6.75%, due 06/30/99 ........................ 507,656
1,000,000 5.75%, due 09/30/99 ........................ 1,010,938
500,000 7.75%, due 01/31/00 ........................ 520,469
1,000,000 5.875%, due 06/30/00 ....................... 1,024,063
500,000 5.625%, due 02/28/01 ....................... 514,063
750,000 5.625%, due 05/15/01 ....................... 775,079
750,000 6.125%, due 12/31/01 ....................... 788,906
500,000 6.625%, due 04/30/02 ....................... 536,719
500,000 6.375%, due 08/15/02 ....................... 535,156
500,000 6.25%, due 02/15/03 ........................ 537,500
500,000 7.25%, due 05/15/04 ........................ 570,938
750,000 7.00%, due 07/15/06 ........................ 873,985
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $8,725,154) $ 9,199,222
-----------
================================================================================
Par Value CORPORATE BONDS -- 10.7% Value
- --------------------------------------------------------------------------------
FINANCE -- 4.5%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/08 ....................... $ 799,162
Green Tree Financial Corporation,
750,000 7.55%, due 10/15/99 ........................ 760,388
Macsaver Financial Services,
500,000 7.60%, due 08/01/07 ........................ 344,728
Signet Banking Corporation,
150,000 9.625%, due 06/01/99 ....................... 154,018
United Dominion Realty,
300,000 7.25%, due 04/01/99 ........................ 300,088
-----------
2,358,384
-----------
9
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par Value CORPORATE BONDS -- 10.7% (Continued) Value
- --------------------------------------------------------------------------------
INDUSTRIAL -- 1.5%
Baxter International, Inc.,
$ 75,000 9.25%, due 12/15/99 ........................ $ 78,450
Dayton Hudson Corporation,
52,000 9.875%, due 06/01/17 ....................... 53,380
Hilton Hotels Corporaton,
300,000 7.70%, due 07/15/02 ........................ 307,151
USG Corporation,
375,000 8.75%, due 03/01/17 ........................ 371,250
-----------
810,231
-----------
UTILITIES -- 4.7%
Dayton Power & Light, Inc.,
500,000 8.40%, due 12/01/22 ........................ 527,711
Niagara Mohawk Power,
525,000 9.50%, due 03/01/21 ........................ 557,900
Potomac Edison Company,
515,000 8.875%, due 08/01/21 ....................... 542,475
West Penn Power Company,
775,000 8.875%, due 02/01/21 ....................... 814,350
-----------
2,442,436
-----------
TOTAL CORPORATE BONDS (COST $5,591,757) ...... $ 5,611,051
-----------
TOTAL INVESTMENTS AT VALUE
(COST $38,206,905) -- 94.6% ................ $49,658,078
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(c) -- 5.4% Value
- --------------------------------------------------------------------------------
$2,853,000 Star Bank, N.A., 5.15%, dated 09/30/98,
due 10/01/98, repurchase proceeds
$2,853,408 (Cost $2,853,000) ................. $ 2,853,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 100.0% .............. $52,511,078
LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0% (2,324)
-----------
NET ASSETS -- 100.0% ......................... $52,508,754
===========
(a) Non-income producing security.
(b) Security covers a call option.
(c) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/24; $12,360,000 GNMA II, Pool #8932, 6.875%,
due 03/20/22; and $5,510,000 GNMA II, Pool #8395, 6.875%, due 03/20/24. The
aggregate market value of the collateral at September 30, 1998 was
$30,730,289. The Fund's pro-rata interest in the collateral at September
30, 1998 was $3,206,551.
See accompanying notes to financial statements.
10
<PAGE>
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
September 30, 1998 (Unaudited)
================================================================================
Market
Option Value of Premiums
Contracts COVERED CALL OPTIONS Options Received
- --------------------------------------------------------------------------------
Circuit City Stores, Inc.,
14 10/17/98 at $45 .................. $ -- $ 8,869
International Business Machines
Corporation,
62 01/16/99 at $140 ................. 37,975 49,350
Wal-Mart Stores, Inc.,
36 01/16/99 at $70 .................. 5,175 18,305
------- -----------
$43,150 $ 76,524
======= ===========
See accompanying notes to financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1998 (Unaudited)
=========================================================================================
FBP FBP
Contrarian Contrarian
Equity Balanced
Fund Fund
- -----------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C>
At acquisition cost ................................. $30,518,776 $38,206,905
=========== ===========
At value (Note 1) ................................... $33,513,465 $49,658,078
Investments in repurchase agreements (Note 1) .......... 479,000 2,853,000
Cash ................................................... 702 175
Interest receivable .................................... 69 210,267
Dividends receivable ................................... 42,868 43,966
Receivable for capital shares sold ..................... 4,235 12,066
Other assets ........................................... 6,822 11,525
----------- -----------
TOTAL ASSETS ........................................ 34,047,161 52,789,077
----------- -----------
LIABILITIES
Dividends payable ...................................... 8,803 17,309
Payable for securities purchased ....................... 354,870 159,975
Payable for capital shares redeemed .................... 16,626 16,714
Accrued investment advisory fees (Note 3) .............. 20,891 32,499
Accrued administration fees (Note 3) ................... 5,500 8,160
Other accrued expenses ................................. 5,920 2,516
Covered call options, at value (Notes 1 and 4)
(premiums received $28,558 and $76,524, respectively) 4,313 43,150
----------- -----------
TOTAL LIABILITIES ................................... 416,923 280,323
----------- -----------
NET ASSETS ................................................ $33,630,238 $52,508,754
=========== ===========
Net assets consist of:
Paid-in capital ........................................ $29,637,595 $39,424,174
Undistributed net investment income .................... 207 2,981
Accumulated net realized gains
from security transactions .......................... 973,502 1,597,052
Net unrealized appreciation on investments ............. 3,018,934 11,484,547
----------- -----------
Net assets ................................................ $33,630,238 $52,508,754
=========== ===========
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ............. 1,865,049 3,066,176
=========== ===========
Net asset value, offering price and redemption
price per share (Note 1) ............................... $ 18.03 $ 17.13
=========== ===========
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended September 30, 1998 (Unaudited)
=========================================================================================
FBP FBP
Contrarian Contrarian
Equity Balanced
Fund Fund
- -----------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C>
Interest ............................................... $ 56,435 $ 595,282
Dividends .............................................. 261,679 294,634
----------- -----------
TOTAL INVESTMENT INCOME ............................. 318,114 889,916
----------- -----------
EXPENSES
Investment advisory fees (Note 3) ...................... 134,802 209,608
Administration fees (Note 3) ........................... 34,497 51,164
Postage and supplies ................................... 5,831 6,002
Professional fees ...................................... 4,063 5,933
Printing of shareholder reports ........................ 4,584 4,449
Trustees' fees and expenses ............................ 3,210 3,210
Custodian fees ......................................... 2,676 3,477
Pricing costs .......................................... 723 2,334
Insurance expense ...................................... 1,089 1,245
Other expenses ......................................... 6,234 3,234
----------- -----------
TOTAL EXPENSES ...................................... 197,709 290,656
----------- -----------
NET INVESTMENT INCOME ..................................... 120,405 599,260
----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on security transactions ............ 946,547 1,560,846
Net realized gains on option contracts written ......... 26,719 36,186
Net change in unrealized appreciation/depreciation
on investments ....................................... (7,071,285) (7,475,373)
----------- -----------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS ......... (6,098,019) (5,878,341)
----------- -----------
NET DECREASE IN NET ASSETS FROM OPERATIONS ................ $(5,977,614) $(5,279,081)
----------- -----------
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
Periods Ended September 30, 1998 and March 31, 1998
==========================================================================================================================
FBP Contrarian FBP Contrarian
Equity Fund Balanced Fund
----------------------------- -----------------------------
Six Months Six Months
Ended Year Ended Year
September 30, Ended September 30, Ended
1998 March 31, 1998 March 31,
(Unaudited) 1998 (Unaudited) 1998
- --------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income .............................. $ 120,405 $ 256,331 $ 599,260 $ 1,134,978
Net realized gains on:
Security transactions ........................... 946,547 691,750 1,560,846 2,146,818
Option contracts written ........................ 26,719 11,978 36,186 31,530
Net change in unrealized appreciation/
depreciation on investments ..................... (7,071,285) 6,925,224 (7,475,373) 9,325,106
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations . (5,977,614) 7,885,283 (5,279,081) 12,638,432
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ......................... (121,266) (256,571) (600,382) (1,138,576)
From net realized gains ............................ -- (865,431) -- (2,862,386)
------------ ------------ ------------ ------------
Decrease in net assets from
distributions to shareholders ...................... (121,266) (1,122,002) (600,382) (4,000,962)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold .......................... 5,835,814 12,609,930 4,343,002 5,859,836
Net asset value of shares issued in reinvestment
of distributions to shareholders ................ 103,484 963,147 566,070 3,827,435
Payments for shares redeemed ....................... (1,532,496) (1,354,310) (2,461,184) (3,238,764)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ......................... 4,406,802 12,218,767 2,447,888 6,448,507
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ...................................... (1,692,078) 18,982,048 (3,431,575) 15,085,977
NET ASSETS
Beginning of period ................................ 35,322,316 16,340,268 55,940,329 40,854,352
------------ ------------ ------------ ------------
End of period (including undistributed net
investment income of $207, $1,068,
$2,981 and $4,103, respectively) ................ $ 33,630,238 $ 35,322,316 $ 52,508,754 $ 55,940,329
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ............................................... 287,000 651,600 237,219 323,989
Reinvested ......................................... 5,294 48,841 31,284 211,834
Redeemed ........................................... (74,207) (69,562) (134,268) (177,851)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................. 218,087 630,879 134,235 357,972
Shares outstanding at beginning of period .......... 1,646,962 1,016,083 2,931,941 2,573,969
------------ ------------ ------------ ------------
Shares outstanding at end of period ................ 1,865,049 1,646,962 3,066,176 2,931,941
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
============================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
============================================================================================================================
Six Months
Ended July 30,
Sept. 30, Years Ended March 31, 1993(a) to
1998 -------------------------------------------- March 31,
(Unaudited) 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ............. $ 21.45 $ 16.08 $ 14.21 $ 11.21 $ 10.15 $ 10.00
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ........................... 0.07 0.19 0.22 0.24 0.21 0.12
Net realized and unrealized gains (losses)
on investments ............................... (3.42) 5.98 2.24 3.05 1.14 0.19
-------- -------- -------- -------- -------- --------
Total from investment operations ................... (3.35) 6.17 2.46 3.29 1.35 0.31
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.07) (0.19) (0.22) (0.24) (0.23) (0.10)
Distributions from net realized gains ........... -- (0.61) (0.37) (0.05) (0.06) (0.06)
-------- -------- -------- -------- -------- --------
Total distributions ................................ (0.07) (0.80) (0.59) (0.29) (0.29) (0.16)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ................... $ 18.03 $ 21.45 $ 16.08 $ 14.21 $ 11.21 $ 10.15
======== ======== ======== ======== ======== ========
Total return ....................................... (15.65%) 38.90% 17.65% 29.54% 13.52% 4.59%(c)
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ................ $ 33,630 $ 35,322 $ 16,340 $ 9,090 $ 5,323 $ 3,135
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets(b) ..... 1.10%(c) 1.12% 1.21% 1.25% 1.25% 1.25%(c)
Ratio of net investment income to average net assets 0.67%(c) 1.04% 1.50% 1.89% 2.15% 1.98%(c)
Portfolio turnover rate ............................ 8% 10% 9% 12% 9% 7%
</TABLE>
(a) Commencement of operations.
(b) Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.25%, 1.67%, 2.27% and
3.10%(c) for the periods ended March 31, 1997, 1996, 1995 and 1994,
respectively.
(c) Annualized.
See accompanying notes to financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
============================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
============================================================================================================================
Six Months
Ended
Sept. 30, Years Ended March 31,
1998 --------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ............. $ 19.08 $ 15.87 $ 14.86 $ 12.80 $ 12.19 $ 12.10
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ........................... 0.20 0.41 0.42 0.43 0.38 0.33
Net realized and unrealized gains (losses)
on investments ............................... (1.95) 4.26 1.49 2.44 0.87 0.15
-------- -------- -------- -------- -------- --------
Total from investment operations ................... (1.75) 4.67 1.91 2.87 1.25 0.48
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.20) (0.41) (0.42) (0.43) (0.39) (0.32)
Distributions from net realized gains ........... -- (1.05) (0.48) (0.38) (0.25) (0.07)
-------- -------- -------- -------- -------- --------
Total distributions ................................ (0.20) (1.46) (0.90) (0.81) (0.64) (0.39)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ................... $ 17.13 $ 19.08 $ 15.87 $ 14.86 $ 12.80 $ 12.19
======== ======== ======== ======== ======== ========
Total return ....................................... (9.23%) 30.22% 13.15% 22.86% 10.54% 3.88%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ................ $ 52,509 $ 55,940 $ 40,854 $ 35,641 $ 25,976 $ 21,969
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets ........ 1.04%(c) 1.04% 1.08% 1.17% 1.17%(a) 1.25%(b)
Ratio of net investment income to average net assets 2.14%(c) 2.33% 2.65% 3.04% 3.10% 2.64%
Portfolio turnover rate ............................ 10% 21% 24% 17% 14% 28%
</TABLE>
(a) In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's custodian fees for the year ended March 31, 1995 was paid
through an arrangement with a third-party broker-dealer who was compensated
through commission trades. Payment of the fees was based on a percentage of
commissions earned. Absent expenses reimbursed through the directed
brokerage arrangement, the ratio of expenses to average net assets would
have been 1.20% for the year ended March 31, 1995.
(b) Absent fee waivers and/or expense reimbursements by the Adviser, the ratio
of expenses to average net assets would have been 1.36% for the year ended
March 31, 1994.
(c) Annualized.
See accompanying notes to financial statements.
16
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 1998 (Unaudited)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund (the Funds)
are no-load, diversified series of the Williamsburg Investment Trust (the
Trust), an open-end management investment company registered under the
Investment Company Act of 1940. The Trust was organized as a Massachusetts
business trust on July 18, 1988.
The FBP Contrarian Equity Fund seeks long-term growth of capital through
investment in a diversified portfolio comprised primarily of equity securities,
with current income as a secondary objective.
The FBP Contrarian Balanced Fund seeks long-term capital appreciation and
current income through investment in a balanced portfolio of equity and fixed
income securities assuming a moderate level of investment risk.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national stock exchange are
valued based upon the closing price on the principal exchange where the security
is traded. It is expected that fixed income securities will ordinarily be traded
in the over-the-counter market, and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market value. At the time the Funds
enter into the joint repurchase agreement, the Funds take possession of the
underlying securities and the seller agrees that the value of the underlying
securities, including accrued interest, will at all times be equal to or exceed
the face amount of the repurchase agreement. In addition, each Fund actively
monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of each Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
17
<PAGE>
Options transactions -- The Funds may write covered call options for which
premiums are received and are recorded as liabilities, and are subsequently
valued daily at the closing prices on their primary exchanges. Premiums received
from writing options which expire are treated as realized gains. Premiums
received from writing options which are exercised increase the proceeds used to
calculate the realized gain or loss on the sale of the security. If a closing
purchase transaction is used to terminate the Funds' obligation on a call, a
gain or loss will be realized, depending upon whether the price of the closing
purchase transaction is more or less than the premium previously received on the
call written.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments and covered call options as of September 30, 1998:
- --------------------------------------------------------------------------------
FBP Contrarian FBP Contrarian
Equity Fund Balanced Fund
- --------------------------------------------------------------------------------
Gross unrealized appreciation .......... $ 7,324,107 $ 14,715,057
Gross unrealized depreciation .......... (4,305,173) (3,230,510)
------------ ------------
Net unrealized appreciation ............ $ 3,018,934 $ 11,484,547
============ ============
Federal income tax cost ................ $ 30,518,776 $ 38,206,905
============ ============
- --------------------------------------------------------------------------------
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 1998, cost of purchases and proceeds
from sales and maturities of investment securities, other than short-term
investments, amounted to $9,534,573 and $2,653,153, respectively, for the FBP
Contrarian Equity Fund and $7,675,302 and $5,307,988, respectively, for the FBP
Contrarian Balanced Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by Flippin, Bruce & Porter, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, each Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly, at an annual rate of .75% on its
average daily net assets up to $250 million; .65% on the next $250 million of
such net assets; and .50% on such net assets in excess of $500 million. Certain
trustees and officers of the Trust are also officers of the Adviser.
18
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Fund Services, Inc. (CFS), CFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, CFS receives a monthly fee from each
Fund at an annual rate of .20% on its average daily net assets up to $25
million; .175% on the next $25 million of such net assets; and .15% on such net
assets in excess of $50 million, subject to a $2,000 minimum monthly fee for
each Fund. In addition, each Fund pays out-of-pocket expenses including, but not
limited to, postage, supplies and costs of pricing the Funds' portfolio
securities. Certain officers of the Trust are also officers of CFS.
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the six months ended September
30, 1998 is as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
FBP Contrarian FBP Contrarian
Equity Fund Balanced Fund
------------------- -------------------
Option Option Option Option
Contracts Premiums Contracts Premiums
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding at beginning of period .. 125 $ 62,686 144 $ 66,996
Options written ............................. 30 15,255 98 67,655
Options expired ............................. (65) (26,719) (90) (36,186)
Options exercised ........................... (39) (22,664) (40) (21,941)
--- -------- --- --------
Options outstanding at end of period ........ 51 $ 28,558 112 $ 76,524
=== ======== === ========
- ------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
- ---------------------------------
The Flippin, Bruce & Porter Funds
- ---------------------------------
INVESTMENT ADVISER
Flippin, Bruce & Porter, Inc.
800 Main Street, Suite 202
P.O. Box 6138
Lynchburg, Virginia 24505
800-FBP-9375
TRANSFER AGENT AND
SHAREHOLDER SERVICING AGENT
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
800-443-4249
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
OFFICERS
John M. Flippin, President
John T. Bruce, Vice President
and Portfolio Manager
R. Gregory Porter, III, Vice President
TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt, III
<PAGE>
The Government Street Funds
The Alabama Tax Free Bond Fund
------------------------------
No Load Mutual Funds
Semi-Annual Report
September 30, 1998
(Unaudited)
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1998 (Unaudited)
========================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C> <C>
At acquisition cost ................................ $ 43,928,925 $ 36,780,606 $ 18,535,440
============ ============ ============
At value (Note 1) .................................. $ 67,903,711 $ 38,192,212 $ 19,569,312
Investments in repurchase agreements (Note 1) ......... 3,680,000 1,711,000 --
Cash .................................................. 665 577 --
Receivable for capital shares sold .................... 22,959 49,530 350
Interest receivable ................................... 526 644,121 251,213
Dividends receivable .................................. 76,252 -- --
Other assets .......................................... 8,175 7,622 4,389
------------ ------------ ------------
TOTAL ASSETS ....................................... 71,692,288 40,605,062 19,825,264
------------ ------------ ------------
LIABILITIES
Dividends payable ..................................... 3,321 19,913 17,743
Payable for securities purchased ...................... -- 649,453 --
Payable for capital shares redeemed ................... 1,200 27,887 2,500
Accrued investment advisory fees (Note 3) ............. 35,100 16,114 3,141
Accrued administrative fees (Note 3) .................. 10,500 2,450 2,450
Other accrued expenses and liabilities ................ 3,485 7,337 3,300
------------ ------------ ------------
TOTAL LIABILITIES .................................. 53,606 723,154 29,134
------------ ------------ ------------
NET ASSETS ............................................ $ 71,638,682 $ 39,881,908 $ 19,796,130
============ ============ ============
Net assets consist of:
Paid-in capital ....................................... $ 44,423,316 $ 38,964,950 $ 18,961,544
Undistributed net investment income ................... 883 5,974 --
Accumulated net realized gains (losses)
from security transactions ......................... 3,239,697 (500,622) (199,286)
Net unrealized appreciation on investments ............ 23,974,786 1,411,606 1,033,872
------------ ------------ ------------
Net assets ............................................ $ 71,638,682 $ 39,881,908 $ 19,796,130
============ ============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ......... 1,776,407 1,847,413 1,857,710
============ ============ ============
Net asset value, offering price and
redemption price per share (Note 1) ................ $ 40.33 $ 21.59 $ 10.66
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Six Months Ended September 30, 1998 (Unaudited)
========================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- --------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest ........................................... $ 81,191 $ 1,309,587 $ 470,136
Dividends .......................................... 516,810 -- --
------------ ------------ ------------
TOTAL INVESTMENT INCOME ......................... 598,001 1,309,587 470,136
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) .................. 228,811 95,131 34,047
Administrative fees (Note 3) ....................... 66,412 14,235 14,541
Professional fees .................................. 5,506 5,506 3,992
Pricing costs ...................................... 1,164 6,187 6,737
Printing of shareholder reports .................... 5,903 5,242 6,487
Custodian fees ..................................... 4,718 2,222 1,800
Trustees' fees and expenses ........................ 3,210 3,210 3,210
Postage and supplies ............................... 5,043 4,357 3,659
Insurance expense .................................. 1,401 1,153 778
Other expenses ..................................... 1,980 1,649 563
------------ ------------ ------------
TOTAL EXPENSES ..................................... 324,148 138,892 75,814
Fees waived by the Adviser (Note 3) ................... -- -- (12,584)
------------ ------------ ------------
NET EXPENSES ....................................... 324,148 138,892 63,230
------------ ------------ ------------
NET INVESTMENT INCOME ................................. 273,853 1,170,695 406,906
------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses)
from security transactions ...................... 1,310,062 (66,512) (350)
Net change in unrealized appreciation/depreciation
on investments .................................. (7,421,186) 1,024,706 302,697
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS ............................ (6,111,124) 958,194 302,347
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS .................................... $ (5,837,271) $ 2,128,889 $ 709,253
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Periods Ended September 30, 1998 and March 31, 1998
====================================================================================================================================
Government Street Government Street Alabama Tax Free
Equity Fund Bond Fund Bond Fund
------------------------ ------------------------ ------------------------
Six Months Six Months Six Months
Ended Year Ended Year Ended Year
Sept. 30, Ended Sept. 30, Ended Sept. 30, Ended
1998 March 31, 1998 March 31, 1998 March 31,
(Unaudited) 1998 (Unaudited) 1998 (Unaudited) 1998
- ------------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ............................ $ 273,853 $ 516,281 $ 1,170,695 $ 2,087,331 $ 406,906 $ 782,390
Net realized gains (losses)
from security transactions .................... 1,310,062 2,517,491 (66,512) (36,286) (350) 1,079
Net change in unrealized appreciation/
depreciation on investments ................... (7,421,186) 17,143,907 1,024,706 906,779 302,697 546,731
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets from operations .......... (5,837,271) 20,177,679 2,128,889 2,957,824 709,253 1,330,200
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ....................... (273,854) (527,419) (1,168,577) (2,095,202) (406,906) (782,390)
From net realized gains .......................... -- (1,732,108) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Decrease in net assets from distributions
to shareholders ............................... (273,854) (2,259,527) (1,168,577) (2,095,202) (406,906) (782,390)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ........................ 3,852,373 10,616,273 2,823,805 7,696,201 823,137 2,804,374
Net asset value of shares issued in
reinvestment of distributions
to shareholders ............................... 267,514 2,175,993 1,048,973 1,871,979 296,460 555,482
Payments for shares redeemed ..................... (2,013,117) (4,696,332) (1,859,135) (2,965,314) (1,564,110) (770,028)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets from
capital share transactions ....................... 2,106,770 8,095,934 2,013,643 6,602,866 (444,513) 2,589,828
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................... (4,004,355) 26,014,086 2,973,955 7,465,488 (142,166) 3,137,638
NET ASSETS:
Beginning of period .............................. 75,643,037 49,628,951 36,907,953 29,442,465 19,938,296 16,800,658
----------- ----------- ----------- ----------- ----------- -----------
End of period .................................... $71,638,682 $75,643,037 $39,881,908 $36,907,953 $19,796,130 $19,938,296
=========== =========== =========== =========== =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME ................................ $ 883 $ 884 $ 5,974 $ 3,856 $ -- $ --
=========== =========== =========== =========== =========== ===========
Capital share activity:
Sold .......................................... 88,755 268,759 133,331 365,904 78,356 270,970
Reinvested .................................... 6,338 56,533 49,499 89,389 28,162 53,306
Redeemed ...................................... (45,963) (121,016) (87,874) (141,456) (148,767) (73,918)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding . 49,130 204,276 94,956 313,837 (42,249) 250,358
Shares outstanding, beginning of period ....... 1,727,277 1,523,001 1,752,457 1,438,620 1,899,959 1,649,601
----------- ----------- ----------- ----------- ----------- -----------
Shares outstanding, end of period ............. 1,776,407 1,727,277 1,847,413 1,752,457 1,857,710 1,899,959
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
===============================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===============================================================================================================================
Six Months
Ended
Sept. 30, Years Ended March 31,
1998 -------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ......... $ 43.79 $ 32.59 $ 29.41 $ 23.87 $ 22.69 $ 23.06
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ....................... 0.16 0.32 0.37 0.40 0.38 0.30
Net realized and unrealized
gains (losses) on investments ............ (3.46) 12.28 4.50 5.75 1.19 (0.37)
--------- --------- --------- --------- --------- ---------
Total from investment operations ............... (3.30) 12.60 4.87 6.15 1.57 (0.07)
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ........ (0.16) (0.32) (0.36) (0.40) (0.39) (0.30)
Distributions from net realized gains ....... -- (1.08) (1.33) (0.21) -- --
--------- --------- --------- --------- --------- ---------
Total distributions ............................ (0.16) (1.40) (1.69) (0.61) (0.39) (0.30)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period ............... $ 40.33 $ 43.79 $ 32.59 $ 29.41 $ 23.87 $ 22.69
========= ========= ========= ========= ========= =========
Total return ................................... (7.56%) 39.31% 16.94% 25.96% 7.02% (0.31%)
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) ............ $ 71,639 $ 75,643 $ 49,629 $ 41,421 $ 31,473 $ 27,101
========= ========= ========= ========= ========= =========
Ratio of net expenses to average net assets(a) . 0.85%(b) 0.86% 0.89% 0.94% 0.91% 1.00%
Ratio of net investment income
to average net assets ....................... 0.72%(b) 0.82% 1.17% 1.50% 1.71% 1.33%
Portfolio turnover rate ........................ 10% 18% 20% 31% 55% 63%
</TABLE>
(a) In an effort to reduce the total operating expenses of the Fund, a portion
of the Fund's administrative and custodian fees for years ended prior to
March 31, 1996 were paid through an arrangement with a third-party
broker-dealer who was compensated through commission trades. Payment of the
fees was based on a percentage of commissions earned. Absent expenses
reimbursed through the directed brokerage arrangement, the ratios of
expenses to average net assets would have been 1.00% and 1.16% for the
years ended March 31, 1995 and 1994, respectively.
(b) Annualized.
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
=============================================================================================================================
Six Months
Ended
Sept. 30, Years Ended March 31,
1998 -------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ....... $ 21.06 $ 20.47 $ 20.87 $ 20.33 $ 20.87 $ 21.77
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income ..................... 0.65 1.32 1.34 1.35 1.35 1.32
Net realized and unrealized
gains (losses) on investments .......... 0.53 0.60 (0.40) 0.54 (0.53) (0.90)
--------- --------- --------- --------- --------- ---------
Total from investment operations ............. 1.18 1.92 0.94 1.89 0.82 0.42
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ...... (0.65) (1.33) (1.34) (1.35) (1.36) (1.32)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period ............. $ 21.59 $ 21.06 $ 20.47 $ 20.87 $ 20.33 $ 20.87
========= ========= ========= ========= ========= =========
Total return ................................. 5.71% 9.61% 4.60% 9.43% 4.12% 1.85%
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) .......... $ 39,882 $ 36,908 $ 29,442 $ 28,718 $ 27,780 $ 22,633
========= ========= ========= ========= ========= =========
Ratio of net expenses to average net assets .. 0.73%(b) 0.74% 0.75% 0.76% 0.85% 0.86%(a)
Ratio of net investment income
to average net assets ..................... 6.15%(b) 6.35% 6.44% 6.38% 6.68% 6.15%
Portfolio turnover rate ...................... 13% 10% 20% 10% 11% 10%
</TABLE>
(a) Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 1.03% for the year ended
March 31, 1994.
(b) Annualized.
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
=================================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
=================================================================================================================================
Six
Months Seven
Ended Months Jan. 15,
Sept. 30. Years Ended March 31, Ended 1993(b) to
1998 ----------------------------------------- Mar. 31, Aug. 31,
(Unaudited) 1998 1997 1996 1995 1994(a) 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period .......... $ 10.49 $ 10.18 $ 10.23 $ 9.96 $ 9.96 $ 10.30 $ 10.00
-------- -------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ........................ 0.22 0.44 0.43 0.42 0.45 0.26 0.23
Net realized and unrealized
gains (losses) on investments ............. 0.17 0.31 (0.05) 0.27 -- (0.34) 0.30
-------- -------- -------- -------- -------- -------- --------
Total from investment operations ................ 0.39 0.75 0.38 0.69 0.45 (0.08) 0.53
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ......... (0.22) (0.44) (0.43) (0.42) (0.45) (0.26) (0.23)
-------- -------- -------- -------- -------- -------- --------
Net asset value at end of period ................ $ 10.66 $ 10.49 $ 10.18 $ 10.23 $ 9.96 $ 9.96 $ 10.30
======== ======== ======== ======== ======== ======== ========
Total return .................................... 3.77% 7.44% 3.82% 7.02% 4.66% (1.50%)(d) 8.79%(d)
======== ======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ............. $ 19,796 $ 19,938 $ 16,801 $ 15,480 $ 12,816 $ 9,716 $ 3,429
======== ======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets(c) .. 0.65%(d) 0.65% 0.66% 0.75% 0.75% 0.75%(d) 0.75%(d)
Ratio of net investment income
to average net assets ........................ 4.19%(d) 4.19% 4.24% 4.11% 4.56% 4.46%(d) 4.01%(d)
Portfolio turnover rate ......................... 2% 2% 6% 4% 36% 3% 2%
</TABLE>
(a) Effective April 1, 1994, the Fund was reorganized and changed its fiscal
year end from August 31 to March 31.
(b) Commencement of operations.
(c) Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
0.78%(d), 0.75%, 0.78%, 0.86%, 1.05%, 1.76%(d) and 2.75%(d) for the periods
ended September 30, 1998, March 31, 1998, 1997, 1996, 1995, 1994 and August
31, 1993, respectively (Note 3).
(d) Annualized.
See accompanying notes to financial statements.
6
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Shares COMMON STOCKS -- 94.8% Value
- --------------------------------------------------------------------------------
AEROSPACE -- 0.9%
18,200 Boeing Company ............................... $ 624,488
-----------
CHEMICALS AND DRUGS -- 18.2%
40,000 Becton Dickinson & Company ................... 1,645,000
15,000 Biomet, Inc.(a) .............................. 520,312
20,000 Cardinal Health, Inc. ........................ 2,065,000
18,000 duPont (E.I.) de Nemours & Company ........... 1,010,250
14,000 Eli Lilly & Company .......................... 1,096,375
10,000 Engelhard Corporation ........................ 176,875
14,000 Goodrich (B.F.) Company ...................... 457,625
15,000 Johnson & Johnson ............................ 1,173,750
25,800 Mallinckrodt, Inc. ........................... 524,063
9,700 Merck & Company, Inc. ........................ 1,256,756
5,000 Pfizer, Inc. ................................. 529,687
20,000 Schering-Plough Corporation .................. 2,071,250
18,000 Sigma-Aldrich Corporation .................... 519,750
-----------
13,046,693
-----------
CASINO HOTELS -- 0.1%
7,000 Circus Circus Enterprises, Inc.(a) ........... 66,063
-----------
CONSTRUCTION -- 4.7%
3,000 Armstrong World Industries, Inc. ............. 160,500
25,500 Blount, Inc. - Class A ....................... 605,625
20,000 Caterpiller, Inc. ............................ 891,250
20,312 Clayton Homes, Inc. .......................... 344,034
3,000 Florida Rock Industries, Inc. ................ 74,250
16,000 Lowe's Companies, Inc. ....................... 509,000
25,600 Valspar Corporation .......................... 766,400
-----------
3,351,059
-----------
CONSUMER PRODUCTS -- 7.7%
22,746 Archer-Daniels-Midland Company ............... 380,996
27,000 Belo (A.H.) Corporation - Class A ............ 540,000
7,000 Cendant Corporation(a) ....................... 81,375
4,000 Clorox Company ............................... 330,000
12,000 General Motors Corporation ................... 656,250
25,000 Gillette Company ............................. 956,250
3,500 Hewlett-Packard Company ...................... 185,281
2,500 Microsoft Corporation(a) ..................... 275,156
8,000 Newell Company ............................... 368,500
12,000 Polygram NV .................................. 681,000
15,000 Procter & Gamble Company ..................... 1,064,063
-----------
5,518,871
-----------
DURABLE GOODS -- 13.6%
12,000 Advanced Micro Devices, Inc.(a) .............. 222,750
20,000 Andrew Corporation(a) ........................ 265,000
49,500 Cisco Systems, Inc.(a) ....................... 3,059,719
10,000 Computer Associates International, Inc. ...... 370,000
9,000 Deere & Company .............................. 272,250
2,000 Diebold, Inc. ................................ 44,000
23,000 General Electric Company ..................... 1,829,938
15,000 General Signal Corporation ................... 509,062
9,500 Intel Corporation ............................ 814,625
3,000 International Business Machines Corporation .. 384,000
16,000 Philips Electronics NV ....................... 854,000
11,500 Raytheon Company ............................. 620,281
6,000 Shared Medical Systems, Inc. ................. 319,125
5,000 Springs Industries, Inc. ..................... 173,750
-----------
9,738,500
-----------
7
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 94.8% Value
- --------------------------------------------------------------------------------
ELECTRONICS -- 1.2%
17,400 AMP, Inc. .................................... $ 622,050
25,000 National Semiconductor Corporation(a) ........ 242,187
-----------
864,237
-----------
FINANCIAL -- 13.7%
9,695 Aetna, Inc. .................................. 673,803
30,000 AFLAC, Inc. .................................. 856,875
10,000 American Express Company ..................... 776,250
10,000 Fleet Financial Group, Inc. .................. 734,375
22,000 Freddie Mac .................................. 1,087,625
7,500 Marsh & McLennan Companies, Inc. ............. 373,125
6,000 MBNA Corporation ............................. 171,750
28,000 Mellon Bank Corporation ...................... 1,541,750
33,000 Star Banc Corporation ........................ 2,182,125
21,000 Synovus Financial Corporation ................ 414,750
15,000 Torchmark Corporation ........................ 539,063
12,000 Travelers, Inc. .............................. 450,000
-----------
9,801,491
-----------
FOOD/BEVERAGES -- 2.6%
6,000 Anheuser-Busch Companies, Inc. ............... 324,000
10,000 Campbell Soup Company ........................ 501,875
40,000 Coca-Cola Enterprises ........................ 1,010,000
1,000 Vlasic Foods International Inc.(a) ........... 18,688
-----------
1,854,563
-----------
MANUFACTURING -- 0.9%
15,000 Pall Corporation ............................. 332,812
6,000 Tyco International Ltd. ...................... 331,500
-----------
664,312
-----------
METAL AND MINING -- 1.7%
9,000 Aluminum Company of America .................. 639,000
10,000 Newmont Mining Corporation ................... 242,500
7,000 Phelps Dodge Corporation ..................... 365,312
-----------
1,246,812
-----------
OIL/ENERGY -- 7.8%
25,000 Amoco Corporation ............................ 1,346,875
13,000 Chevron Corporation .......................... 1,092,813
14,650 Exxon Corporation ............................ 1,028,247
11,000 Halliburton Company .......................... 314,187
5,000 Helmerich & Payne, Inc. ...................... 105,000
12,000 Nabors Industries, Inc.(a) ................... 182,250
5,000 Pennzoil Company ............................. 175,312
6,000 Schlumberger Limited ......................... 301,875
28,500 Shell Transport & Trading PLC ................ 1,038,469
-----------
5,585,028
-----------
PAPER AND FOREST PRODUCTS -- 2.1%
11,000 Georgia Pacific Corporation .................. 501,875
5,000 Georgia Pacific Corporation, Timber Group .... 97,187
7,000 International Paper Company .................. 326,375
10,000 Mead Corporation ............................. 294,375
3,000 Union Camp Corporation ....................... 118,125
5,000 Willamette Industries, Inc. .................. 143,438
-----------
1,481,375
-----------
8
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 94.8% Value
- --------------------------------------------------------------------------------
RETAIL -- 7.0%
14,000 American Stores Company ...................... $ 450,625
7,000 Cracker Barrel Old Country Store, Inc. ....... 159,250
15,000 Dillard's, Inc. .............................. 424,688
33,000 Home Depot, Inc. ............................. 1,303,500
8,000 Nike, Inc. - Class B ......................... 294,500
8,000 Reebok International Ltd. .................... 108,500
24,000 Toys "R" Us, Inc.(a) ......................... 388,500
14,500 Wal-Mart Stores, Inc. ........................ 792,062
25,000 Walgreen Company ............................. 1,101,562
-----------
5,023,187
-----------
SERVICES - COMPUTER -- 3.4%
11,100 Automatic Data Processing, Inc. .............. 829,725
24,000 Computer Sciences Corporation(a) ............. 1,308,000
5,000 Electronic Data Systems Corporation .......... 165,938
6,000 Wallace Computer Services, Inc. .............. 107,625
-----------
2,411,288
-----------
TELECOMMUNICATION EQUIPMENT -- 0.7%
18,000 Scientific - Atlanta, Inc. ................... 380,250
5,000 Northern Telecom Limited ..................... 160,000
-----------
540,250
-----------
TRANSPORTATION -- 1.1%
17,500 FDX Corporation(a) ........................... 789,687
-----------
UTILITIES -- 7.4%
27,000 Ameritech Corporation ........................ 1,279,125
2,000 AT&T Corporation ............................. 116,875
11,000 BellSouth Corporation ........................ 827,750
15,490 Duke Power Company ........................... 1,025,244
26,000 SBC Communications, Inc. ..................... 1,155,375
17,000 US WEST, Inc. ................................ 891,438
-----------
5,295,807
-----------
TOTAL COMMON STOCKS (COST $43,928,925) $67,903,711
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 5.1% Value
- --------------------------------------------------------------------------------
Star Bank, N.A.,
$3,680,000 5.15%, dated 09/30/1998, due 10/01/1998,
repurchase proceeds $3,680,526 (Cost $3,680,000) $ 3,680,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 99.9% ................ $71,583,711
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% .. 54,971
-----------
NET ASSETS -- 100.0% ........................... $71,638,682
===========
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/2024; $12,360,000 GNMA II, Pool #8932,
6.875%, due 03/20/2022; and $5,510,000 GNMA II, Pool #8395, 6.875%, due
03/20/2024. The aggregate market value of the collateral at September 30,
1998 was $30,730,289. The Fund's pro-rata interest in the collateral at
September 30, 1998 was $4,136,035.
See accompanying notes to financial statements.
9
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Par Value U.S. TREASURY AND AGENCY OBLIGATIONS -- 40.3% Value
U.S. TREASURY NOTES -- 8.9%
$ 855,000 7.125%, due 10/15/1998 ....................... $ 856,069
225,000 7.00%, due 04/15/1999 ........................ 227,813
150,000 6.375%, due 07/15/1999 ....................... 152,016
100,000 8.00%, due 08/15/1999 ........................ 102,875
250,000 7.50%, due 10/31/1999 ........................ 257,500
50,000 7.875%, due 11/15/1999 ....................... 51,781
100,000 8.50%, due 02/15/2000 ........................ 105,219
20,000 8.75%, due 08/15/2000 ........................ 21,550
50,000 8.50%, due 11/15/2000 ........................ 54,141
140,000 8.00%, due 05/15/2001 ........................ 152,294
125,000 7.875%, due 08/15/2001 ....................... 136,562
850,000 5.75%, due 04/30/2003 ........................ 899,672
250,000 5.875%, due 11/15/2005 ....................... 272,812
250,000 5.50%, due 02/15/2008 ........................ 270,469
-----------
3,560,773
-----------
FEDERAL FARM CREDIT BANK BONDS-- 1.3%
500,000 6.00%, due 01/07/2008 ........................ 536,166
-----------
FEDERAL HOME LOAN BANK BONDS-- 5.4%
500,000 7.57%, due 08/19/2004 ........................ 570,745
500,000 6.045%, due 12/10/2004 ....................... 532,352
500,000 5.42%, due 09/23/2008 ........................ 515,396
500,000 5.52%, due 09/23/2008 ........................ 519,322
-----------
2,137,815
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS -- 8.5%
500,000 6.345%, due 11/01/2005 ....................... 540,327
200,000 6.73%, due 01/05/2006 ........................ 200,897
300,000 7.52%, due 04/21/2006 ........................ 304,307
500,000 7.55%, due 04/26/2006 ........................ 505,984
895,000 7.44%, due 09/20/2006 ........................ 961,685
800,000 7.04%, due 01/09/2007 ........................ 858,771
-----------
3,371,971
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS -- 15.0%
100,000 8.45%, due 07/12/1999 ........................ 102,713
500,000 6.83%, due 04/02/2003 ........................ 503,498
500,000 6.63%, due 06/20/2005 ........................ 548,424
500,000 7.90%, due 06/28/2006 ........................ 507,081
650,000 7.65%, due 10/06/2006 ........................ 668,398
500,000 7.36%, due 02/07/2007 ........................ 512,505
400,000 7.70%, due 04/10/2007 ........................ 415,296
500,000 6.62%, due 06/25/2007 ........................ 557,069
500,000 7.16%, due 06/26/2007 ........................ 517,002
500,000 7.00%, due 07/17/2007 ........................ 519,286
400,000 6.80%, due 08/27/2012 ........................ 449,337
600,000 6.875%, due 09/24/2012 ....................... 671,986
-----------
5,972,595
-----------
PRIVATE EXPORT FUNDING BONDS-- 1.2%
470,000 7.90%, due 03/31/2000 ........................ 491,223
-----------
TOTAL U.S. TREASURY AND AGENCY
OBLIGATIONS (COST $15,510,979) .............. $16,070,543
-----------
10
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par Value MORTGAGE-BACKED SECURITIES -- 9.0% Value
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.8%
$ 20,455 Pool #15032, 7.50%, due 02/15/2007 ........... $ 21,184
482,943 Pool #438434, 6.50%, due 01/01/2013 .......... 495,016
18,326 Pool #176413, 7.50%, due 09/15/2016 .......... 18,979
24,027 Pool #170784, 8.00%, due 12/15/2016 .......... 25,026
25,319 Pool #181540, 8.00%, due 02/15/2017 .......... 26,371
476,158 Pool #366710, 6.50%, due 02/01/2024 .......... 486,276
640,548 Pool #453826, 7.25%, due 09/01/2027 .......... 661,866
968,030 Pool #412360, 7.00%, due 11/15/2027 .......... 997,978
741,247 Pool #454162, 7.00%, due 05/15/2028 .......... 764,180
-----------
3,496,876
-----------
OTHER MORTGAGE-BACKED SECURITIES -- 0.2%
Collateralized Mortgage Securities Corporation,
84,662 Series #1991-8PF, 7.30%, due 08/20/2020 .... 84,781
-----------
TOTAL MORTGAGE-BACKED SECURITIES (COST $3,522,477) $ 3,581,657
-----------
================================================================================
Par Value CORPORATE BONDS -- 46.5% Value
- --------------------------------------------------------------------------------
FINANCE -- 22.9%
American Express Company,
$ 350,000 8.50%, due 08/15/2001 ........................ $ 380,998
-----------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999 ....................... 433,826
550,000 7.75%, due 05/15/2004 ........................ 609,544
-----------
1,043,370
-----------
Banc One Corporation,
600,000 7.00%, due 07/15/2005 ........................ 643,742
-----------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002 ....................... 542,079
-----------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001 ....................... 185,422
-----------
General Electric Capital Corporation,
100,000 7.24%, due 01/15/2002 ........................ 106,303
150,000 7.50%, due 03/15/2002 ........................ 161,082
-----------
267,385
-----------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002 ....................... 799,746
-----------
J.P. Morgan & Company,
500,000 7.25%, due 01/15/2002 ........................ 525,651
-----------
NationsBank,
550,000 7.625%, due 04/15/2005 ....................... 602,461
-----------
Regions Financial Corporation,
350,000 7.80%, due 12/01/2002 ........................ 380,824
-----------
11
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par Value CORPORATE BONDS -- 46.5% Value
- --------------------------------------------------------------------------------
Salomon, Inc.,
$ 400,000 7.25%, due 01/15/2000 ........................ $ 407,681
480,000 7.50%, due 02/01/2003 ........................ 513,258
-----------
920,939
-----------
Sears Roebuck Acceptance Corporation,
700,000 6.00%, due 03/20/2003 ........................ 717,860
-----------
SouthTrust Bank of Alabama, N.A.,
665,000 7.00%, due 11/15/2008 ........................ 724,600
-----------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004 ........................ 857,712
-----------
Wachovia Corporation,
535,000 7.00%, due 12/15/1999 ........................ 544,967
-----------
TOTAL FINANCE CORPORATE BONDS .................. 9,137,756
-----------
INDUSTRIAL -- 18.8%
BP America, Inc.,
265,000 8.50%, due 04/15/2001 ........................ 287,693
-----------
Coca-Cola Company,
500,000 6.625%, due 08/01/2004 ....................... 532,132
-----------
duPont (E.I.) de Nemours & Company,
150,000 9.15%, due 04/15/2000 ........................ 159,141
300,000 6.75%, due 10/15/2002 ........................ 320,562
-----------
479,703
-----------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003 ....................... 1,183,606
-----------
International Business Machines Corporation,
1,000,000 7.25%, due 11/01/2002 ........................ 1,088,536
-----------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001 ....................... 261,781
-----------
Limited, Inc.,
150,000 8.875%, due 08/15/1999 ....................... 154,113
-----------
Mobil Corporation,
100,000 8.375%, due 02/12/2001 ....................... 107,651
-----------
Philip Morris Companies, Inc.,
305,000 7.375%, due 02/15/1999 ....................... 307,000
175,000 7.75%, due 05/01/1999 ........................ 177,246
700,000 7.125%, due 10/01/2004 ....................... 759,045
-----------
1,243,291
-----------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001 ........................ 165,011
-----------
12
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par Value CORPORATE BONDS -- 46.5% Value
- --------------------------------------------------------------------------------
Raytheon Company,
$ 800,000 6.50%, due 07/15/2005 ........................ $ 852,871
-----------
Wal-Mart Stores, Inc.,
170,000 9.10%, due 07/15/2000 ........................ 182,172
100,000 8.625%, due 04/01/2001 ....................... 108,902
745,000 7.50%, due 05/15/2004 ........................ 840,031
-----------
1,131,105
-----------
TOTAL INDUSTRIAL CORPORATE BONDS ............... 7,487,493
-----------
UTILITY -- 4.8%
Consolidated Edison,
785,000 7.60%, due 01/15/2000 ........................ 807,734
-----------
Emerson Electric Company,
552,000 6.30%, due 11/01/2005 ........................ 590,865
-----------
Scana Corporation,
500,000 6.05%, due 01/13/2003 ........................ 516,164
-----------
TOTAL UTILITY CORPORATE BONDS .................. 1,914,763
-----------
TOTAL CORPORATE BONDS (COST $17,747,150) ....... $18,540,012
-----------
TOTAL INVESTMENTS AT VALUE
(COST $36,780,606) -- 95.8% .................. $38,192,212
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) -- 4.3% Value
- --------------------------------------------------------------------------------
Star Bank, N.A.,
$1,711,000 5.15%, dated 09/30/1998, due 10/01/1998,
repurchase proceeds $1,711,245 (Cost $1,711,000) $ 1,711,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 100.1% ................ $39,903,212
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) (21,304)
-----------
NET ASSETS -- 100.0% ........................... $39,881,908
===========
(a) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/2024; $12,360,000 GNMA II, Pool #8932,
6.875%, due 03/20/2022; and $5,510,000 GNMA II, Pool #8395, 6.875%, due
03/20/2024. The aggregate market value of the collateral at September 30,
1998 was $30,730,289. The Fund's pro-rata interest in the collateral at
September 30, 1998 was $1,923,031.
See accompanying notes to financial statements.
13
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS -- 96.7% Value
- --------------------------------------------------------------------------------
Alabama Housing Finance Auth. Rev.,
$ 245,000 4.90%, due 10/01/1998 ........................ $ 245,007
-----------
Alabama Mental Health Finance Auth. Special Tax,
300,000 5.00%, due 05/01/2006 ........................ 319,452
-----------
Alabama State, GO,
200,000 5.90%, due 03/01/1999 ........................ 202,172
100,000 5.70%, due 12/01/2002 ........................ 106,752
-----------
308,924
-----------
Alabama State Industrial Access Road & Bridge Corp., GO,
100,000 5.25%, due 06/01/2003 ........................ 105,576
-----------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000 ....................... 155,157
340,000 5.75%, due 09/01/2001 ........................ 357,636
400,000 6.50%, due 09/01/2005, prerefunded 09/01/2001 at 101 434,800
-----------
947,593
-----------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000 ........................ 101,657
205,000 5.00%, due 06/01/2003 ........................ 218,579
250,000 5.25%, due 11/01/2005 ........................ 270,070
-----------
590,306
-----------
Alabama Water Pollution Control Rev.,
25,000 7.00%, due 08/15/2001, prerefunded 08/15/1999 at 100 25,781
190,000 6.25%, due 08/15/2004 ........................ 213,231
-----------
239,012
-----------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004 ........................ 269,555
-----------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
25,000 7.375%, due 07/01/2006, ETM .................. 27,823
-----------
Auburn University, Alabama, Rev.,
25,000 6.10%, due 06/01/1999 ........................ 25,453
150,000 5.20%, due 06/01/2004 ........................ 159,903
325,000 5.25%, due 04/01/2005 ........................ 347,864
-----------
533,220
-----------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003 ........................ 218,222
400,000 5.00%, due 02/01/2007 ........................ 426,344
-----------
644,566
-----------
Baldwin Co., AL, Board of Education Rev.,
50,000 5.40%, due 12/01/1998 ........................ 50,171
300,000 5.90%, due 12/01/2001 ........................ 307,194
-----------
357,365
-----------
Birmingham, AL, GO,
100,000 5.80%, due 04/01/2002 ........................ 106,502
200,000 5.90%, due 04/01/2003 ........................ 216,802
-----------
323,304
-----------
14
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS -- 96.7% Value
- --------------------------------------------------------------------------------
Birmingham, AL, Industrial Water Board Rev.,
$ 100,000 5.00%, due 03/01/2001 ........................ $ 103,080
100,000 6.00%, due 07/01/2007 ........................ 114,402
-----------
217,482
-----------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM ................... 67,615
-----------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999 ........................ 100,756
-----------
Birmingham, AL, Waterworks & Sewer Board Rev.,
50,000 5.90%, due 01/01/2003 ........................ 54,034
400,000 6.15%, due 01/01/2006 ........................ 433,632
-----------
487,666
-----------
Birmingham-Southern College, AL,
Private Education Bldg. Auth. Rev.,
500,000 5.10%, due 12/01/2012 ........................ 515,825
-----------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004 ........................ 57,762
-----------
Decatur, AL, GO,
300,000 5.00%, due 06/01/2009 ........................ 318,894
-----------
Fairhope, AL, Utility, Rev.,
200,000 5.10%, due 12/01/2008 ........................ 209,770
-----------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009 ........................ 321,321
-----------
Hoover, AL, Board of Education, GO,
400,000 6.00%, due 02/15/2006 ........................ 443,356
-----------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded 02/01/2001 at 102 216,904
-----------
Houston Co., AL, GO,
100,000 4.20%, due 10/01/1998 ........................ 100,002
250,000 5.00%, due 07/01/2002 ........................ 260,565
-----------
360,567
-----------
Huntsville, AL, GO,
115,000 5.15%, due 08/01/2000 ........................ 118,211
100,000 5.20%, due 11/01/2000 ........................ 103,240
500,000 5.50%, due 11/01/2002 ........................ 533,625
100,000 5.90%, due 11/01/2005 ........................ 109,191
300,000 5.40%, due 02/01/2010 ........................ 321,891
-----------
1,186,158
-----------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000 ........................ 157,503
150,000 5.00%, due 12/01/2003 ........................ 158,008
250,000 4.80%, due 12/01/2012 ........................ 253,745
-----------
569,256
-----------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004 ........................ 158,877
150,000 5.25%, due 05/01/2005 ........................ 159,115
-----------
317,992
-----------
15
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS -- 96.7% Value
- --------------------------------------------------------------------------------
Jefferson Co., AL, GO,
$ 150,000 5.55%, due 04/01/2002 ........................ $ 158,333
100,000 5.00%, due 04/01/2004 ........................ 105,148
-----------
263,481
-----------
Jefferson Co., AL, Board of Education Capital Outlay Warrants,
300,000 5.70%, due 02/15/2011 ........................ 327,759
-----------
Jefferson Co., AL, Sewer Rev.,
140,000 5.15%, due 09/01/2002 ........................ 147,115
50,000 5.50%, due 09/01/2003, ETM ................... 53,726
300,000 5.75%, due 09/01/2005 ........................ 327,336
-----------
528,177
-----------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007 ........................ 328,554
-----------
Madison, AL, Board of Education School Warrants,
100,000 5.00%, due 02/01/1999 ........................ 100,570
-----------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007 ........................ 358,225
-----------
Madison Co., AL, Board of Education
Capital Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004 ........................ 186,916
250,000 5.10%, due 09/01/2011 ........................ 264,260
-----------
451,176
-----------
Mobile, AL, GO,
150,000 5.20%, due 02/15/1999 ........................ 151,080
200,000 5.40%, due 08/15/2000 ........................ 206,454
25,000 6.25%, due 08/01/2001 ........................ 26,733
25,000 6.30%, due 08/01/2001 ........................ 25,219
275,000 6.20%, due 02/15/2007, ETM ................... 314,735
-----------
724,221
-----------
Mobile, AL, Water & Sewer Commissioners Rev.,
55,000 6.30%, due 01/01/2003 ........................ 60,029
-----------
Mobile Co., AL, GO,
50,000 6.10%, due 02/01/2002, prerefunded 02/01/2000 at 102 52,583
160,000 6.70%, due 02/01/2011, prerefunded 02/01/2000 at 102 169,526
-----------
222,109
-----------
Mobile Co., AL., Board of Education Capital Outlay Warrants,
400,000 5.00%, due 03/01/2008 ........................ 421,768
-----------
Mobile Co., AL, Gas Tax Antic. Warrants Rev.,
100,000 4.50%, due 02/01/2003 ........................ 101,824
-----------
Montgomery, AL, GO,
200,000 4.25%, due 05/01/1999, ETM ................... 201,092
200,000 4.70%, due 05/01/2002 ........................ 206,110
500,000 5.10%, due 10/01/2008 ........................ 537,205
-----------
944,407
-----------
Montgomery, AL, Waterworks & Sanitation Rev.,
200,000 5.85%, due 03/01/2003 ........................ 215,770
400,000 5.60%, due 09/01/2009 ........................ 439,976
-----------
655,746
-----------
16
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
===============================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
Par Value OBLIGATION (GO) BONDS -- 96.7% Value
- -------------------------------------------------------------------------------
Montgomery Co., AL, GO,
$ 100,000 5.20%, due 11/01/2006 ........................ $ 106,219
-----------
Mountain Brook, AL, Board of Education Capital Outlay Warrants,
405,000 4.80%, due 02/15/2011 ........................ 417,660
-----------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010 ........................ 439,580
-----------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003 ........................ 103,347
100,000 5.30%, due 07/01/2003 ........................ 106,595
-----------
209,942
-----------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000 ........................ 210,867
50,000 5.35%, due 08/01/2001 ........................ 52,279
-----------
263,146
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM ................... 37,263
25,000 6.60%, due 02/01/2002, ETM ................... 27,189
40,000 6.60%, due 02/01/2003, ETM ................... 44,301
-----------
108,753
-----------
Tuscaloosa, AL, Board of Education, GO,
300,000 4.625%, due 08/01/2001 ....................... 308,928
100,000 5.10%, due 02/01/2004 ........................ 105,775
-----------
414,703
-----------
Tuscaloosa, AL, Board of Education Special Tax Warrants,
75,000 5.70%, due 02/15/2005 ........................ 80,444
125,000 6.00%, due 02/15/2009 ........................ 135,414
-----------
215,858
-----------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999 ........................ 251,967
50,000 5.00%, due 11/01/2000 ........................ 51,350
240,000 5.10%, due 10/01/2002 ........................ 251,666
400,000 5.25%, due 06/01/2010 ........................ 430,108
-----------
985,091
-----------
Vestavia Hills, AL, Board of Education Capital Outlay Rev.,
55,000 5.25%, due 02/01/2004 ........................ 57,682
-----------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005 ........................ 131,605
-----------
TOTAL ALABAMA (COST $18,107,440) ............... $19,141,312
-----------
================================================================================
Shares MONEY MARKETS -- 2.2% Value
- --------------------------------------------------------------------------------
428,000 Star Tax-Free Money Market Fund (Cost $428,000) $ 428,000
-----------
TOTAL INVESTMENTS AT VALUE
(COST $18,535,440)-- 98.9% ................... $19,569,312
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.1% .. 226,818
-----------
NET ASSETS -- 100.0% ........................... $19,796,130
===========
ETM - Escrowed to maturity.
See accompanying notes to financial statements.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1998 (Unaudited)
===============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Government Street Equity Fund, The Government Street Bond Fund, and The
Alabama Tax Free Bond Fund (the Funds) are each a no-load series of The
Williamsburg Investment Trust (the Trust). The Trust, an open-end management
investment company registered under the Investment Company Act of 1940, was
organized as a Massachusetts business trust on July 18, 1988.
The Government Street Equity Fund's investment objective is capital appreciation
through the compounding of dividends and capital gains, both realized and
unrealized, on its investments in common stocks. Current income is of secondary
importance.
The Government Street Bond Fund's investment objectives are to preserve capital,
to provide current income and to protect the value of the portfolio against the
effects of inflation by limiting investments to fixed income securities in the
four highest quality ratings. Capital appreciation is of secondary importance.
The Alabama Tax Free Bond Fund's investment objectives are to provide current
income exempt from both federal income taxes and the personal income taxes of
Alabama and to preserve capital. Capital appreciation is of secondary
importance.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national stock exchange are
valued based upon the closing price on the principal exchange where the security
is traded. It is expected that fixed income securities will ordinarily be traded
in the over-the-counter market, and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service.
Repurchase agreements -- The Funds generally enter into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market value. At the time the Funds
enter into the joint repurchase agreement, the Funds take possession of the
underlying securities and the seller agrees that the value of the underlying
securities, including accrued interest, will at all times be equal to or exceed
the face amount of the repurchase agreement. In addition, each Fund actively
monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of The Government Street Equity
Fund; declared and paid monthly to shareholders of The Government Street Bond
Fund; and declared daily and paid monthly to shareholders of The Alabama Tax
Free Bond Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income dividends and capital gain
distributions are determined in accordance with income tax regulations.
18
<PAGE>
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.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies,
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of September 30, 1998:
- -------------------------------------------------------------------------------
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- -------------------------------------------------------------------------------
Gross unrealized appreciation .. $ 27,387,306 $ 1,623,374 $ 1,035,773
Gross unrealized depreciation .. (3,412,520) (211,768) (1,901)
------------ ------------ ------------
Net unrealized appreciation .... $ 23,974,786 $ 1,411,606 $ 1,033,872
============ ============ ============
Federal income tax cost ........ $ 43,928,925 $ 36,780,606 $ 18,535,440
============ ============ ============
- -------------------------------------------------------------------------------
As of March 31, 1998, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$434,110 and $198,936, respectively, which expire through the year 2006.
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 1998, cost of purchases and proceeds
from sales and maturities of investment securities, other than short-term
investments, amounted to $11,065,284 and $7,041,377, respectively, for The
Government Street Equity Fund, $6,475,795 and $4,728,990, respectively, for The
Government Street Bond Fund, and $324,492 and $405,000, respectively, for The
Alabama Tax Free Bond Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly, at an
annual rate of .60% of its average daily net assets up to $100 million and .50%
of such assets in excess of $100 million. The Government Street Bond Fund pays
the Adviser a fee at an annual rate of .50% of its average daily net assets up
to $100 million and .40% of such net assets in excess of $100 million. The
Alabama Tax Free Bond Fund pays the Adviser a fee at an annual rate of .35% of
its average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
19
<PAGE>
The Adviser currently intends to limit the total operating expenses of The
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $12,584 of its investment advisory fees for the
Fund during the six months ended September 30, 1998.
Certain trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Fund Services, Inc. (CFS), CFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, CFS receives a monthly fee from The
Government Street Equity Fund at an annual rate of .20% of its average daily net
assets up to $25 million; .175% of the next $25 million of such assets; and .15%
of such net assets in excess of $50 million. From The Government Street Bond
Fund, CFS receives a monthly fee of .075% of its average daily net assets up to
$200 million and .05% of such assets in excess of $200 million. From The Alabama
Tax Free Bond Fund, CFS receives a monthly fee of .15% of its average daily net
assets up to $200 million and .10% of such assets in excess of $200 million. The
fee for each Fund is subject to a $2,000 monthly minimum. In addition, each Fund
pays out-of-pocket expenses including, but not limited to, postage, supplies and
costs of pricing the Funds' portfolio securities.
Certain officers of the Trust are also officers of CFS.
20
<PAGE>
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21
<PAGE>
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22
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
23
<PAGE>
The Government Street Funds
The Alabama Tax Free Bond Fund
------------------------------
No Load Mutual Funds
INVESTMENT ADVISER
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, AL 36633
ADMINISTRATOR
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, OH 45201-5354
1-800-443-4249
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
BOARD OF TRUSTEES
Richard Mitchell, President
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt, III
PORTFOLIO MANAGERS
Thomas W. Leavell,
The Government Street Equity Fund
Mary Shannon Hope,
The Government Street Bond Fund
Timothy S. Healey,
The Alabama Tax Free Bond Fund
<PAGE>
THE
JAMESTOWN
FUNDS
No-Load Funds
SEMI-ANNUAL REPORT
September 30, 1998
(Unaudited)
Investment Adviser
Lowe, Brockenbrough & Company, Inc.
Richmond, Virginia
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1998 (Unaudited)
====================================================================================================================
Jamestown Jamestown
Jamestown Jamestown Tax Exempt International
Balanced Equity Virginia Equity
Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C> <C> <C>
At acquisition cost ........................... $74,675,695 $ 37,834,120 $20,077,048 $ 35,941,626
=========== ============ =========== ============
At value (Note 1) ............................. $91,136,544 $ 45,615,725 $21,075,385 $ 39,131,736
Investments in repurchase agreements (Note 1) .... 3,531,000 1,630,000 -- --
Cash ............................................. 11,623 624 -- 1,727,260
Cash denominated in foreign currency (Cost $6,102) -- -- -- 6,142
Receivable for securities sold ................... 1,037,193 945,210 -- 114,911
Dividends receivable ............................. 57,008 46,740 -- 158,153
Interest receivable .............................. 426,139 233 293,282 --
Other assets ..................................... 4,905 5,487 3,973 3,767
----------- ------------ ----------- ------------
TOTAL ASSETS .................................. 96,204,412 48,244,019 21,372,640 41,141,969
----------- ------------ ----------- ------------
LIABILITIES
Dividends payable ................................ 30,318 9,144 34,533 --
Payable for securities purchased ................. 1,390,207 -- -- --
Payable for capital shares redeemed .............. 74,266 21,600 419 --
Net unrealized depreciation on forward foreign
currency exchange contracts (Note 6) .......... -- -- -- 147,352
Accrued investment advisory fees (Note 3) ........ 50,842 26,140 6,910 34,902
Accrued administration fees (Note 3) ............. 13,450 7,700 2,630 8,480
Other accrued expenses ........................... 11,248 4,372 6,577 37,006
----------- ------------ ----------- ------------
TOTAL LIABILITIES ............................. 1,570,331 68,956 51,069 227,740
----------- ------------ ----------- ------------
NET ASSETS .......................................... $94,634,081 $ 48,175,063 $21,321,571 $ 40,914,229
=========== ============ =========== ============
Net assets consist of:
Paid-in capital .................................. $78,000,176 $ 40,756,738 $20,313,741 $ 37,153,705
Undistributed net investment income .............. 12,719 7,521 -- 7,855
Accumulated net realized gains (losses) from
security and foreign currency transactions .... 160,337 (370,801) 9,493 703,181
Net unrealized appreciation on investments ....... 16,460,849 7,781,605 998,337 3,190,110
Net unrealized depreciation on translation of
assets and liabilities in foreign currencies .. -- -- -- (140,622)
----------- ------------ ----------- ------------
Net assets .......................................... $94,634,081 $ 48,175,063 $21,321,571 $ 40,914,229
=========== ============ =========== ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ....... 6,001,031 2,807,662 2,057,149 3,615,660
=========== ============ =========== ============
Net asset value, offering price and redemption
price per share (Note 1) ......................... $ 15.77 $ 17.16 $ 10.36 $ 11.32
=========== ============ =========== ============
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended September 30, 1998 (Unaudited)
====================================================================================================================
Jamestown Jamestown
Jamestown Jamestown Tax Exempt International
Balanced Equity Virginia Equity
Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Dividends ............................................ $ 378,866 $ 283,266 $ -- $ 599,125
Foreign withholding taxes on dividends ............... -- -- -- (53,638)
Interest ............................................. 1,098,723 72,307 497,269 49,297
----------- ----------- -------- -----------
TOTAL INVESTMENT INCOME ........................... 1,477,589 355,573 497,269 594,784
----------- ----------- -------- -----------
EXPENSES
Investment advisory fees (Note 3) .................... 332,220 170,326 39,674 223,575
Administration fees (Note 3) ......................... 85,770 48,717 14,842 53,271
Custodian fees ....................................... 7,000 3,547 1,800 38,611
Pricing costs ........................................ 4,687 494 3,176 3,894
Professional fees .................................... 6,783 3,992 3,963 5,903
Trustees' fees and expenses .......................... 3,210 3,210 3,210 3,210
Printing of shareholder reports ...................... 2,283 2,385 1,046 2,123
Postage and supplies ................................. 2,266 2,425 1,153 2,164
Insurance expense .................................... 1,634 1,245 701 934
Other expenses ....................................... 5,700 7,995 4,808 15,018
----------- ----------- -------- -----------
TOTAL EXPENSES .................................... 451,553 244,336 74,373 348,703
Expenses reimbursed through a directed
brokerage arrangement (Note 4) .................... (12,000) (8,500) -- --
----------- ----------- -------- -----------
NET EXPENSES ...................................... 439,553 235,836 74,373 348,703
----------- ----------- -------- -----------
NET INVESTMENT INCOME ................................... 1,038,036 119,737 422,896 246,081
----------- ----------- -------- -----------
REALIZEDAND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS AND FOREIGN CURRENCIES (Note 5)
Net realized gains (losses) from:
Security transactions ............................. 172,535 (356,315) 8,711 1,652,610
Foreign currency transactions ..................... -- -- -- 453,255
Net change in unrealized appreciation/depreciation on:
Investments ....................................... (9,909,173) (8,039,620) 416,135 (6,780,876)
Foreign currency translation ...................... -- -- -- (266,482)
----------- ----------- -------- -----------
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS AND FOREIGN CURRENCIES ................ (9,736,638) (8,395,935) 424,846 (4,941,493)
----------- ----------- -------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS ........................... $(8,698,602) $(8,276,198) $847,742 $(4,695,412)
=========== =========== ======== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended September 30, 1998 and March 31, 1998
==============================================================================================================================
Jamestown Jamestown
Balanced Fund Equity Fund
------------------------------- -------------------------------
Six Months Six Months
Ended Year Ended Year
September 30, Ended September 30, Ended
1998 March 31, 1998 March 31,
(Unaudited) 1998 (Unaudited) 1998
- ------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income .............................. $ 1,038,036 $ 1,911,506 $ 119,737 $ 238,229
Net realized gains (losses) from
security transactions ........................... 172,535 9,533,601 (356,315) 3,855,317
Net change in unrealized appreciation/
depreciation on investments ..................... (9,909,173) 12,603,990 (8,039,620) 10,606,115
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from operations . (8,698,602) 24,049,097 (8,276,198) 14,699,661
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ......................... (1,028,295) (1,934,092) (116,238) (242,370)
From net realized gains from security transactions . -- (10,800,423) -- (4,379,490)
------------- ------------- ------------- -------------
Decrease in net assets from distributions
to shareholders .................................... (1,028,295) (12,734,515) (116,238) (4,621,860)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold .......................... 6,674,255 17,601,307 6,739,638 10,499,561
Net asset value of shares issued in reinvestment
of distributions to shareholders ................ 968,629 12,174,707 101,463 4,351,536
Payments for shares redeemed ....................... (4,690,193) (10,335,880) (2,487,707) (3,895,041)
------------- ------------- ------------- -------------
Net increase in net assets from
capital share transactions ......................... 2,952,691 19,440,134 4,353,394 10,956,056
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............... (6,774,206) 30,754,716 (4,039,042) 21,033,857
NET ASSETS:
Beginning of period ................................ 101,408,287 70,653,571 52,214,105 31,180,248
------------- ------------- ------------- -------------
End of period ...................................... $ 94,634,081 $ 101,408,287 $ 48,175,063 $ 52,214,105
============= ============= ============= =============
CAPITAL SHARE ACTIVITY:
Sold ............................................... 387,459 1,041,126 342,649 571,636
Reinvested ......................................... 58,697 735,126 5,507 236,191
Redeemed ........................................... (280,899) (599,080) (130,231) (209,264)
------------- ------------- ------------- -------------
Net increase in shares outstanding ................. 165,257 1,177,172 217,925 598,563
Shares outstanding, beginning of period ............ 5,835,774 4,658,602 2,589,737 1,991,174
------------- ------------- ------------- -------------
Shares outstanding, end of period .................. 6,001,031 5,835,774 2,807,662 2,589,737
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended September 30, 1998 and March 31, 1998
============================================================================================================================
Jamestown Tax Exempt Jamestown
Virginia Fund International Equity Fund
----------------------------- -----------------------------
Six Months Six Months
Ended Year Ended Year
September 30, Ended September 30, Ended
1998 March 31, 1998 March 31,
(Unaudited) 1998 (Unaudited) 1998
- ----------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss) ......................... $ 422,896 $ 673,872 $ 246,081 $ (19,285)
Net realized gains (losses) from:
Security transactions ............................. 8,711 57,902 1,652,610 (60,926)
Foreign currency transactions ..................... -- -- 453,255 190,757
Net change in unrealized appreciation/depreciation on:
Investments ....................................... 416,135 399,917 (6,780,876) 8,970,013
Foreign currency translation ...................... -- -- (266,482) 126,420
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations ... 847,742 1,131,691 (4,695,412) 9,206,979
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ........................... (422,896) (673,872) (238,226) (325,257)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ............................ 3,400,000 8,481,218 3,980,960 4,706,633
Net asset value of shares issued in reinvestment
of distributions to shareholders .................. 234,873 360,594 231,344 321,283
Payments for shares redeemed ......................... (950,876) (2,284,029) (907,081) (657,411)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ........................... 2,683,997 6,557,783 3,305,223 4,370,505
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ................. 3,108,843 7,015,602 (1,628,415) 13,252,227
NET ASSETS:
Beginning of period .................................. 18,212,728 11,197,126 42,542,644 29,290,417
------------ ------------ ------------ ------------
End of period ........................................ $ 21,321,571 $ 18,212,728 $ 40,914,229 $ 42,542,644
============ ============ ============ ============
CAPITAL SHARE ACTIVITY:
Sold ................................................. 334,511 843,460 299,525 418,420
Reinvested ........................................... 23,014 35,724 17,619 28,068
Redeemed ............................................. (93,636) (225,366) (74,026) (60,156)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... 263,889 653,818 243,118 386,332
Shares outstanding, beginning of period .............. 1,793,260 1,139,442 3,372,542 2,986,210
------------ ------------ ------------ ------------
Shares outstanding, end of period .................... 2,057,149 1,793,260 3,615,660 3,372,542
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
=================================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
=================================================================================================================================
Six Months
Ended
Sept. 30, Years Ended March 31,
1998 ------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ........... $ 17.38 $ 15.17 $ 14.77 $ 12.76 $ 12.15 $ 12.49
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ......................... 0.17 0.37 0.35 0.36 0.33 0.30
Net realized and unrealized gains (losses)
on investments ............................. (1.61) 4.31 1.45 2.50 0.90 (0.18)
-------- -------- -------- -------- -------- --------
Total from investment operations ................. (1.44) 4.68 1.80 2.86 1.23 0.12
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .......... (0.17) (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 .............................. (0.17) (2.47) (1.40) (0.85) (0.62) (0.46)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ................. $ 15.77 $ 17.38 $ 15.17 $ 14.77 $ 12.76 $ 12.15
======== ======== ======== ======== ======== ========
Total return ..................................... (8.31)% 32.42% 12.29% 22.79% 10.54% 0.94%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) .............. $ 94,634 $101,408 $ 70,654 $ 61,576 $ 52,062 $ 46,928
======== ======== ======== ======== ======== ========
Ratio of gross expenses to average net assets .... 0.88%(b) 0.90% 0.91% 0.93% 0.99% 1.01%
Ratio of net expenses to average net assets (a) .. 0.86%(b) 0.87% 0.87% 0.88% 0.96% 0.98%
Ratio of net investment income
to average net assets ......................... 2.03%(b) 2.21% 2.31% 2.52% 2.72% 2.47%
Portfolio turnover rate .......................... 82%(b) 90% 58% 72% 95% 123%
</TABLE>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
(b) Annualized.
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
=================================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
=================================================================================================================================
Six Months
Ended
Sept. 30, Years Ended March 31,
1998 ----------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ........ $ 20.16 $ 15.66 $ 13.96 $ 11.29 $ 10.19 $ 10.18
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ...................... 0.04 0.11 0.13 0.15 0.10 0.08
Net realized and unrealized gains (losses)
on investments .......................... (3.00) 6.47 2.00 2.98 1.15 (0.01)
-------- -------- -------- -------- -------- --------
Total from investment operations .............. (2.96) 6.58 2.13 3.13 1.25 0.07
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ....... (0.04) (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 ........................... (0.04) (2.08) (0.43) (0.46) (0.15) (0.06)
-------- -------- -------- -------- -------- --------
Net asset value at end of period .............. $ 17.16 $ 20.16 $ 15.66 $ 13.96 $ 11.29 $ 10.19
======== ======== ======== ======== ======== ========
Total return .................................. (14.68)% 43.74% 15.27% 28.00% 12.33% 0.67%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ........... $ 48,175 $ 52,214 $ 31,180 $ 17,857 $ 8,111 $ 2,811
======== ======== ======== ======== ======== ========
Ratio of gross expenses to average net assets . 0.93%(c) 0.93% 0.98% 1.14% 1.99% 3.16%
Ratio of net expenses to average net assets ... 0.90%(a)(c) 0.90%(a) 0.92%(a) 1.01%(a) 1.44%(b) 1.50%(b)
Ratio of net investment income
to average net assets ...................... 0.46%(c) 0.60% 0.85% 1.27% 1.18% 0.82%
Portfolio turnover rate ....................... 65%(c) 59% 44% 54% 48% 92%
</TABLE>
(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 other
operating expenses.
(c) Annualized.
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
========================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
========================================================================================================================
Six Months
Ended Period
Sept. 30, Years Ended March 31, Ended
1998 -------------------------------------------- March 31,
(Unaudited) 1998 1997 1996 1995 1994 (a)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ........ $ 10.16 $ 9.83 $ 9.85 $ 9.68 $ 9.61 $ 10.00
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ....................... 0.22 0.44 0.45 0.45 0.44 0.23
Net realized and unrealized gains (losses)
on investments .......................... 0.20 0.33 (0.02) 0.17 0.07 (0.39)
-------- -------- -------- -------- -------- --------
Total from investment operations .............. 0.42 0.77 0.43 0.62 0.51 (0.16)
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ....... (0.22) (0.44) (0.45) (0.45) (0.44) (0.23)
-------- -------- -------- -------- -------- --------
Net asset value at end of period .............. $ 10.36 $ 10.16 $ 9.83 $ 9.85 $ 9.68 $ 9.61
======== ======== ======== ======== ======== ========
Total return .................................. 4.16% 8.00% 4.39% 6.51% 5.47% (2.96)%(c)
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ........... $ 21,322 $ 18,213 $ 11,197 $ 8,779 $ 7,712 $ 2,056
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets (b) 0.75%(c) 0.75% 0.75% 0.75% 0.75% 0.75%(c)
Ratio of net investment income
to average net assets ...................... 4.26%(c) 4.40% 4.51% 4.57% 4.64% 4.07%(c)
Portfolio turnover rate ....................... 25%(c) 33% 24% 14% 97% 33%
</TABLE>
(a) Represents the period from the commencement of operations (September 1,
1993) through March 31, 1994.
(b) Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
0.78%, 0.88%, 1.04%, 1.62% and 4.83%(c) for the periods ended March 31,
1998, 1997, 1996, 1995 and 1994, respectively.
(c) Annualized.
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
===================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
===================================================================================================
Six Months
Ended Year Period
September 30, Ended Ended
1998 March 31, March 31,
(Unaudited) 1998 1997 (a)
-------- -------- --------
<S> <C> <C> <C>
Net asset value at beginning of period ....................... $ 12.61 $ 9.81 $ 10.00
-------- -------- --------
Income (loss) from investment operations:
Net investment income (loss) .............................. 0.07 (0.01) (0.01)
Net realized and unrealized gains (losses)
on investments and foreign currencies .................. (1.29) 2.91 (0.14)
-------- -------- --------
Total from investment operations ............................. (1.22) 2.90 (0.15)
-------- -------- --------
Less distributions:
Dividends from net investment income ...................... (0.07) (0.10) (0.04)
-------- -------- --------
Net asset value at end of period ............................. $ 11.32 $ 12.61 $ 9.81
======== ======== ========
Total return ................................................. (9.75)% 29.67% (1.56)%(c)
======== ======== ========
Net assets at end of period (000's) .......................... $ 40,914 $ 42,543 $ 29,290
======== ======== ========
Ratio of net expenses to average net assets (b) .............. 1.56%(c) 1.56% 1.60%(c)
Ratio of net investment income (loss) to average net assets .. 1.10%(c) (0.05)% (0.15)%(c)
Portfolio turnover rate ...................................... 40%(c) 47% 70%(c)
</TABLE>
(a) Represents the period from the commencement of operations (April 16, 1996)
through March 31, 1997.
(b) Absent investment advisory fees waived by the Adviser, the ratio of
expenses to average net assets would have been 1.71%(c) for the period
ended March 31, 1997.
(c) Annualized.
See accompanying notes to financial statements.
8
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 1998 (Unaudited)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (individually, a Fund,
and, collectively, the Funds) are each a no-load series of the Williamsburg
Investment Trust (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940. The Trust was organized as
a Massachusetts business trust on July 18, 1988.
The Jamestown Balanced Fund's investment objectives are long-term growth of
capital and income through investment in a balanced portfolio of equity and
fixed income securities. Capital protection and low volatility are important
investment goals.
The Jamestown Equity Fund's investment objective is long-term growth of capital
through investment in a diversified portfolio composed primarily of common
stocks. Current income is incidental to this objective and may not be
significant.
The Jamestown Tax Exempt Virginia Fund's investment objectives are to provide
current income exempt from federal income taxes and from the personal income
taxes of Virginia, to preserve capital, to limit credit risk and to take
advantage of opportunities to increase and enhance the value of an investment in
the Fund. The Fund invests primarily in debt obligations issued by the State of
Virginia and its political subdivisions, agencies, authorities and
instrumentalities and by other issuers the interest from which is exempt from
the personal income taxes of Virginia. The marketability and market value of
these obligations could be affected by certain Virginia political and economic
developments.
The Jamestown International Equity Fund's investment objective is to achieve
superior total returns through investment in equity securities of issuers
located outside the United States.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national or foreign stock
exchange are valued based upon the closing price on the principal exchange where
the security is traded. It is expected that fixed income securities will
ordinarily be traded in the over-the-counter market, and common stocks will
ordinarily be traded on a national securities exchange, but may also be traded
in the over-the-counter market. When market quotations are not readily
available, fixed income securities may be valued on the basis of prices provided
by an independent pricing service. If a pricing service cannot provide a
valuation, securities will be valued in good faith at value using methods
consistent with those determined by the Board of Trustees. Foreign securities
are translated from the local currency into U.S. dollars using currency exchange
rates supplied by a quotation service.
Repurchase agreements -- The Jamestown Balanced Fund and The Jamestown Equity
Fund generally enter into joint repurchase agreements with other funds within
the Trust. The joint repurchase agreement, which is collateralized by U.S.
Government obligations, is valued at cost which, together with accrued interest,
approximates market. At the time the Funds enter 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, each Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
9
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations which approximate
generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income,
if any, are declared and paid quarterly to shareholders of The Jamestown
Balanced Fund, The Jamestown Equity Fund and The Jamestown International Equity
Fund and are declared daily and paid monthly to shareholders of The Jamestown
Tax Exempt Virginia 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 dividends 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.
Securities traded on a "to-be-announced" basis -- The Jamestown Balanced Fund
occasionally trades securities on a "to-be-announced" (TBA) basis. In a TBA
transaction, the Fund has committed to purchase securities for which all
specific information is not yet known at the time of the trade, particularly the
face amount in mortgage-backed securities transactions. Securities purchased on
a TBA basis are not settled until they are delivered to the Fund, normally 15 to
45 days later. These transactions are subject to market fluctuations and their
current value is determined in the same manner as for other portfolio
securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments as of September 30, 1998:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Jamestown Jamestown Jamestown Jamestown
Balanced Equity Tax Exempt International
Fund Fund Virginia Fund Equity Fund
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized appreciation .. $ 20,292,749 $ 11,427,446 $ 998,337 $ 7,831,133
Gross unrealized depreciation .. (4,568,655) (4,165,628) -- (4,641,152)
------------ ------------ ----------- ------------
Net unrealized appreciation .... $ 15,724,094 $ 7,261,818 $ 998,337 $ 3,189,981
============ ============ =========== ============
Federal income tax cost ........ $ 75,412,450 $ 38,353,907 $20,077,048 $ 35,941,755
============ ============ =========== ============
- -------------------------------------------------------------------------------------------------
</TABLE>
The difference between the federal income tax cost of portfolio investments and
the financial statement cost is due to certain timing differences in the
recognition of capital losses under income tax regulations and generally
accepted accounting principles.
10
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
As of March 31, 1998, The Jamestown International Equity Fund had capital loss
carryforwards for federal income tax purposes of $496,302 which expire on March
31, 2005. In addition, the Fund had net realized capital losses of $791,824
during the period from November 1, 1997 through March 31, 1998, which are
treated for federal income tax purposes as arising during the Fund's tax year
ending March 31, 1999. These capital loss carryforwards and "post-October"
losses may be utilized in the current and future years to offset net realized
capital gains, if any, prior to distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 1998, cost of purchases and proceeds
from sales and maturities of investment securities, other than short-term
investments, amounted to $43,691,193 and $39,107,413, respectively, for The
Jamestown Balanced Fund, $21,065,090 and $15,857,362, respectively, for The
Jamestown Equity Fund, $4,971,856 and $2,419,070, respectively, for The
Jamestown Tax Exempt Virginia Fund, and $11,368,349 and $8,468,605,
respectively, for The Jamestown International Equity Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
The Funds' investments are managed by Lowe, Brockenbrough & Company, Inc. (the
Adviser), under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Jamestown Balanced Fund pays the Adviser a
fee, which is computed and accrued daily and paid monthly, at an annual rate of
.65% on its average daily net assets up to $250 million, .60% on the next $250
million of such net assets and .55% on such net assets in excess on $500
million. The Jamestown Equity Fund pays the Adviser a fee at an annual rate of
.65% on its average daily net assets up to $500 million and .50% on such net
assets in excess on $500 million. The Jamestown Tax Exempt Virginia Fund pays
the Adviser a fee at an annual rate of .40% on its average daily net assets up
to $250 million, .35% on the next $250 million of such net assets and .30% on
such net assets in excess of $500 million. The Jamestown International Equity
Fund pays the Adviser a fee at an annual rate of 1.00% on its average daily net
assets. Certain trustees and officers of the Trust are also officers of the
Adviser.
The Adviser retains Oechsle International Advisors, LLC (Oechsle) to provide The
Jamestown International Equity Fund with a continuous program of supervision of
the Fund's assets, including the composition of its portfolio, and to furnish
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities, pursuant to the terms of a Sub-Advisory
Agreement. Under the Sub-Advisory Agreement, the Adviser, not the Fund, pays
Oechsle a fee in the amount of one-half of the monthly advisory fee received by
the Adviser, net of any investment advisory fee waivers.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Fund Services, Inc. (CFS), CFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, CFS receives a monthly fee from each
of The Jamestown Balanced Fund and The Jamestown Equity Fund at an annual rate
of .20% on its respective average daily net assets up to $25 million; .175% on
the next $25 million of such net assets; and .15% on such net assets in excess
of $50 million, subject to a $2,000 minimum monthly fee with respect to each
Fund. From The Jamestown Tax Exempt Virginia Fund, CFS receives a monthly fee at
an annual rate of .15% on its average daily net assets up to $200 million and
.10% on such net assets in excess of $200 million, subject to a $2,000 minimum
monthly fee. From The Jamestown International Equity Fund, CFS receives a
monthly fee at an annual rate of .25% on its average daily net assets up to $25
million; .225% on the next $25 million of such net assets; and .20% on such net
assets in excess of $50 million, subject to a $4,000 minimum monthly fee. In
addition, each Fund pays out-of-pocket expenses including, but not limited to,
postage, supplies and costs of pricing the Funds' portfolio securities. Certain
officers of the Trust are also officers of CFS.
11
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of The Jamestown Balanced Fund
and The Jamestown Equity Fund, each Fund's custodian fees and a portion of other
operating expenses have been paid through an arrangement with a thirdparty
brokerdealer who is compensated through commission trades. Payment of expenses
by the brokerdealer is based on a percentage of commissions earned. Expenses
reimbursed through the directed brokerage arrangement totaled $12,000 and $8,500
for The Jamestown Balanced Fund and The Jamestown Equity Fund, respectively,
during the six months ended September 30, 1998.
5. FOREIGN CURRENCY TRANSLATION
With respect to The Jamestown International Equity Fund, amounts denominated in
or expected to settle in foreign currencies are translated into U.S. dollars
based on exchange rates on the following basis:
A. The market values of investment securities and other assets and liabilities
are translated at the closing rate of exchange each day.
B. Purchases and sales of investment securities and income and expenses are
translated at the rate of exchange prevailing on the respective dates of
such transactions.
C. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from those
resulting from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gains or
losses on investments.
Reported net realized foreign exchange gains or losses arise from 1) sales of
foreign currencies, 2) currency gains or losses realized between the trade and
settlement dates on securities transactions and 3) the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received or
paid. Reported net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities, other than investment
securities, resulting from changes in exchange rates.
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Jamestown International Equity Fund enters into forward foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The Fund may
enter into these contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific transactions or portfolio positions. The objective of the Fund's
foreign currency hedging transactions is to reduce risk that the U.S. dollar
value of the Fund's securities denominated in foreign currency will decline in
value due to changes in foreign currency exchange rates. All foreign currency
exchange contracts are "marked-to-market" daily at the applicable translation
rates resulting in unrealized gains or losses. Realized and unrealized gains or
losses are included in the Fund's Statement of Assets and Liabilities and
Statement of Operations. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar.
12
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
As of September 30, 1998, the Jamestown International Equity Fund had forward
foreign currency exchange contracts outstanding as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Net Unrealized
Settlement Initial Market Appreciation
Date To Deliver Value Value (Depreciation)
- ---------------------------------------------------------------------------------------------
Contracts To Sell
<S> <C> <C> <C> <C>
10/01/98 ........... 761,113 JPY $ (5,623) $ (5,591) $ 32
10/06/98 ........... 1,859,116 PHP (42,157) (42,473) (316)
10/30/98 ........... 374,543 FRF (66,729) (66,941) (212)
11/25/98 ........... 379,000,000 JPY (2,658,437) (2,806,887) (148,450)
12/03/98 ........... 872,000 NZD (437,744) (436,150) 1,594
----------- ----------- ---------
Total sell contracts .. $(3,210,690) $(3,358,042) $(147,352)
=========== =========== =========
- ---------------------------------------------------------------------------------------------
</TABLE>
FRF - French Franc
JPY - Japanese Yen
NZD - New Zealand Dollar
PHP - Philippine Peso
7. SPECIAL MEETING OF THE JAMESTOWN INTERNATIONAL EQUITY FUND SHAREHOLDERS
On September 30, 1998, a Special Meeting of Shareholders of The Jamestown
International Equity Fund was held (1) to approve or disapprove a new
Sub-Advisory Agreement among the Trust, the Adviser and Oechsle to become
effective upon the closing of the proposed reorganization and recapitalization
of Oechsle International Advisors, L.P. and (2) to ratify or reject the
selection of Tait, Weller & Baker as the Fund's independent public accountants
for the current fiscal year. The total number of shares of the Fund present by
proxy represented 66.4% of the shares entitled to vote at the meeting. Each of
the matters submitted to shareholders was approved.
With respect to the approval or disapproval of the new Sub-Advisory Agreement,
2,397,574.261 shares voted for approval of the new Sub-Advisory Agreement and
6,864.918 shares abstained from voting. With respect to the ratification or
rejection of the selection of Tait, Weller & Baker, 2,399,264.878 shares voted
for ratification of Tait, Weller & Baker and 5,174.301 shares abstained from
voting.
13
<PAGE>
THE JAMESTOWN BALANCED FUND PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Shares COMMON STOCKS -- 61.8% Value
- --------------------------------------------------------------------------------
ADVERTISING -- 1.5%
26,000 Interpublic Group of Companies, Inc. ......... $ 1,402,375
-----------
CHEMICALS -- 1.1%
34,000 Air Products & Chemicals, Inc. ............... 1,011,500
-----------
COMMERCIAL BANKING -- 4.8%
26,000 Fannie Mae ................................... 1,670,500
29,400 First Union Corporation ...................... 1,504,912
25,000 NationsBank Corporation ...................... 1,337,500
-----------
4,512,912
-----------
COMMUNICATIONS -- 5.5%
51,000 Equifax, Inc. ................................ 1,820,062
19,000 Lucent Technologies, Inc. .................... 1,312,188
41,048 MCI WorldCom, Inc.(a) ........................ 2,006,255
-----------
5,138,505
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 8.2%
25,500 Cisco Systems, Inc.(a) ....................... 1,576,219
30,400 Computer Sciences Corporation(a) ............. 1,656,800
64,300 Diebold, Inc. ................................ 1,414,600
13,900 Intel Corporation ............................ 1,191,925
5,000 Microsoft Corporation(a) ..................... 550,312
29,000 Sundstrand Corporation ....................... 1,344,875
-----------
7,734,731
-----------
CONSUMER PRODUCTS -- 10.7%
52,000 Avon Products, Inc. .......................... 1,459,250
140,000 Cendant Corporation(a) ....................... 1,627,500
60,000 Crane Company ................................ 1,410,000
22,000 General Electric Company ..................... 1,750,375
20,000 Gillette Company ............................. 765,000
33,000 Kimberly-Clark Corporation ................... 1,336,500
15,000 Sara Lee Corporation ......................... 810,000
42,000 Sysco Corporation ............................ 989,625
-----------
10,148,250
-----------
DRUGS/MEDICAL EQUIPMENT -- 9.4%
35,000 Abbott Laboratories .......................... 1,520,312
16,000 Bristol-Myers Squibb Company ................. 1,662,000
21,000 Lilly (Eli) & Company ........................ 1,644,563
14,000 Merck and Company, Inc. ...................... 1,813,875
22,000 Schering-Plough Corporation .................. 2,278,375
-----------
8,919,125
-----------
ELECTRONICS -- 1.4%
25,000 Hewlett-Packard Company ...................... 1,323,437
-----------
ENTERTAINMENT -- 0.5%
19,200 Walt Disney Company .......................... 486,000
-----------
FINANCIAL SERVICES -- 0.6%
6,000 Citicorp, Inc. ............................... 557,625
-----------
14
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 61.8% (Continued) Value
- --------------------------------------------------------------------------------
FIRE SYSTEMS -- 2.4%
42,000 Tyco International Ltd. ...................... $ 2,320,500
-----------
FUNERAL SERVICES -- 1.5%
44,500 Service Corporation International ............ 1,418,438
-----------
HEALTH CARE CENTERS -- 0.7%
65,000 HealthSouth Corporation(a) ................... 686,563
-----------
HOTELS -- 1.6%
118,100 Choice Hotel International, Inc.(a) .......... 1,498,394
-----------
INSURANCE -- 4.4%
21,500 American International Group ................. 1,655,500
30,700 Conseco, Inc. ................................ 938,269
25,500 Jefferson-Pilot Corporation .................. 1,542,750
-----------
4,136,519
-----------
OIL AND GAS DRILLING -- 5.1%
50,000 Coastal Corporation .......................... 1,687,500
28,000 Halliburton Company .......................... 799,750
29,000 Schlumberger Ltd. ............................ 1,459,063
14,600 Texaco, Inc. ................................. 915,237
-----------
4,861,550
-----------
RETAIL STORES -- 2.4%
65,000 AutoZone, Inc.(a) ............................ 1,600,625
20,000 Circuit City Stores, Inc. .................... 666,250
-----------
2,266,875
-----------
TOTAL COMMON STOCKS (COST $42,960,662) ....... $58,423,299
-----------
================================================================================
Par
Value U.S. TREASURY OBLIGATIONS -- 7.5% Value
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 6.9%
$ 875,000 7.75%, due 11/30/1999 ........................ $ 905,896
2,575,000 6.50%, due 05/31/2001 ........................ 2,710,600
2,485,000 7.00%, due 07/15/2006 ........................ 2,895,025
-----------
6,511,521
-----------
U.S. TREASURY INFLATION-PROTECTION NOTES -- 0.6%
397,413 3.625%, due 07/15/2002 ....................... 399,027
211,164 3.375%, due 01/15/2007 ....................... 207,997
-----------
607,024
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $6,875,089) $ 7,118,545
-----------
15
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par
Value MORTGAGE-BACKED SECURITIES -- 10.3% Value
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 1.3%
$ 182,953 Pool #G50153, 4.50%, due 05/01/1999 .......... $ 181,046
366,517 Pool #1490-PE, 5.75%, due 07/15/2006 ......... 367,433
475,000 Pool #1471-G, 7.00%, due 03/15/2008 .......... 508,692
175,000 Pool #1655-HB, 6.50%, due 10/01/2008 ......... 185,390
-----------
1,242,561
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 7.0%
385,644 Pool #73718, 7.23%, due 11/01/2003 ........... 416,375
347,028 Pool #375448, 6.66%, due 10/01/2004 .......... 368,935
315,124 Series #93-63-PE, 6.25%, due 06/25/2005 ...... 316,501
619,234 Pool #375296, 6.92%, due 08/01/2007 .......... 677,191
425,000 Series #93-18-PJ, 6.50%, due 12/25/2007 ...... 448,375
712,055 Pool #380190, 6.325%, due 04/01/2008 ......... 754,000
734,377 Pool #380512, 6.15%, due 08/01/2008 .......... 768,112
699,396 Pool #380555, 6.17%, due 08/01/2008 .......... 732,836
174,349 Pool #70, 8.50%, due 01/01/2012 .............. 183,235
146,555 Series #88-29-B, 9.50%, due 12/25/2018 ....... 165,286
237,962 Series #90-35-E, 9.50%, due 04/25/2020 ....... 265,475
500,000 Series #98-M4-B, 6.424%, due 12/01/2023 ...... 517,656
550,000 TBA, 6.00%, due 10/01/2028 ................... 548,625
470,000 TBA, 6.50%, due 10/01/2028 ................... 477,784
-----------
6,640,386
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 0.5%
455,482 Pool #343536, 7.50%, due 02/15/2023 .......... 472,646
-----------
STUDENT LOAN MARKETING ASSOCIATION -- 1.4%
535,339 Series #97-3-A1, 5.817%, adjustable
rate, due 04/25/2006 ....................... 531,325
832,761 Series #98-1-A1, 5.253%, adjustable
rate, due 01/25/2007 ....................... 832,761
-----------
1,364,086
-----------
OTHER MORTGAGE-BACKED SECURITIES -- 0.1%
37,112 Lehman Brothers Mortgage Trust #91-2-A1,
8.00%, due 03/20/1999 ...................... 37,112
-----------
TOTAL MORTGAGE-BACKED SECURITIES (COST $9,447,812) $ 9,756,791
-----------
================================================================================
Par
Value ASSET-BACKED SECURITIES -- 2.0% Value
- --------------------------------------------------------------------------------
Advanta Mortgage Loan Trust #92-2-A2,
$ 166,975 7.03%, due 03/25/2011 ........................ $ 167,142
AFG Receivables Trust #95-A-A,
64,965 6.15%, due 09/15/2000 ........................ 65,128
Fleetwood Credit Corporation Grantor Trust #95-A-A,
324,564 8.45%, due 11/15/2010 ........................ 343,834
Green Tree Financial Corporation #98-A-A1C,
431,570 6.18%, due 06/15/2019 ........................ 436,749
Nomura Asset Securties Corporation #96-MD5-A1A,
623,199 7.07%, due 04/13/2036 ........................ 675,972
NationsCredit Grantor Trust #96-1-A,
228,618 5.85%, due 09/15/2011 ........................ 229,853
-----------
TOTAL ASSET-BACKED SECURITIES (COST $1,874,338) $ 1,918,678
-----------
16
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par
Value CORPORATE BONDS -- 14.7% Value
- --------------------------------------------------------------------------------
Beneficial Corporation Medium Term Notes,
$ 230,000 6.35%, due 12/03/2001 ........................ $ 237,544
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 ........................ 1,018,100
Duke Realty L.P. Medium Term Notes,
390,000 6.75%, due 05/30/08 .......................... 388,058
Enron Corporation,
750,000 6.45%, due 11/15/2001 ........................ 767,340
Equity Residential Properties,
875,000 6.65%, due 11/15/2003 ........................ 886,594
Finova Capital Corporation,
1,000,000 6.25%, due 08/15/2000 ........................ 1,014,090
Ford Motor Credit Medium Term Notes,
225,000 7.55%, due 07/19/1999 ........................ 228,996
475,000 7.20%, due 06/15/2007 ........................ 530,143
GMAC Medium Term Notes,
525,000 6.65%, due 05/24/2000 ........................ 538,387
International Paper Company,
735,000 8.68%, due 09/14/2001 ........................ 803,884
International Lease Finance Corporation,
425,000 6.42%, due 09/11/2000 ........................ 435,973
International Lease Finance Corporation
Medium Term Notes,
425,000 6.55%, due 09/15/2000 ........................ 437,036
265,000 6.375%, due 08/01/2002 ....................... 274,320
KeyCorp Medium Term Notes,
675,000 6.75%, due 05/29/2001 ........................ 701,615
Manitoba (Province of) Medium Term Notes,
205,000 5.50%, due 10/01/2008 ........................ 209,018
Merrill Lynch & Company Medium Term Notes,
265,000 7.26%, due 03/25/2002 ........................ 266,031
National City Corporation,
575,000 7.20%, due 05/15/2005 ........................ 623,162
Norwest Financial, Inc.,
140,000 6.05%, due 11/19/1999 ........................ 141,579
Norwest Corporation,
400,000 5.375%, due 09/30/2003 ....................... 403,560
Pacific Bell,
185,000 6.625%, due 11/01/2009 ....................... 205,681
Pacific Bell Medium Term Notes,
400,000 6.875%, due 08/15/2006 ....................... 438,320
Sears Roebuck Acceptance Corporation,
400,000 6.99%, due 09/30/2002 ........................ 425,804
Southern California Edison Company,
700,000 6.17%, due 03/25/2003 ........................ 707,700
Suntrust Banks,
310,000 6.125%, due 02/15/2004 ....................... 321,151
TRW, Inc.,
400,000 6.25%, due 01/15/2010 ........................ 424,640
-----------
17
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par
Value CORPORATE BONDS -- 14.7% (Continued) Value
- --------------------------------------------------------------------------------
Union Camp Corporation,
$ 425,000 6.50%, due 11/15/2007 ........................ $ 444,015
U.S. WEST Capital Funding, Inc. Medium Term Notes,
550,000 6.375%, due 07/15/2008 ....................... 591,558
-----------
TOTAL CORPORATE BONDS (COST $13,517,794) ..... $13,919,231
-----------
TOTAL INVESTMENTS AT VALUE
(COST $74,675,695) -- 96.3% ................ $91,136,544
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 3.7% Value
- --------------------------------------------------------------------------------
$3,531,000 Star Bank, N.A., 5.15%, dated 09/30/1998,
due 10/01/1998 repurchase proceeds
$3,531,505 (Cost $3,531,000) ............... $ 3,531,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 100.0% .............. $94,667,544
LIABILITIES IN EXCESS OF OTHER ASSETS -- 0.0% (33,463)
-----------
NET ASSETS -- 100.0% ......................... $94,634,081
===========
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/24; $12,360,000 GNMA II, Pool #8932, 6.875%,
due 03/20/22; and $5,510,000 GNMA II, Pool #8395, 6.875%, due 03/20/24. The
aggregate market value of the collateral at September 30, 1998 was
$30,730,289. The Fund's pro-rata interest in the collateral at September
30, 1998 was $3,968,570.
See accompanying notes to financial statements.
18
<PAGE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Shares COMMON STOCKS -- 94.7% Value
- --------------------------------------------------------------------------------
ADVERTISING -- 2.4%
21,000 Interpublic Group of Companies, Inc. ......... $ 1,132,688
-----------
CHEMICALS -- 1.4%
22,800 Air Products & Chemicals, Inc. ............... 678,300
-----------
COMMERCIAL BANKING -- 7.6%
21,000 Fannie Mae ................................... 1,349,250
24,000 First Union Corporation ...................... 1,228,500
20,000 NationsBank Corporation ...................... 1,070,000
-----------
3,647,750
-----------
COMMUNICATIONS -- 8.3%
40,000 Equifax, Inc. ................................ 1,427,500
15,000 Lucent Technologies, Inc. .................... 1,035,937
31,097 MCI WorldCom, Inc.(a) ........................ 1,519,890
-----------
3,983,327
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 14.0%
20,250 Cisco Systems, Inc.(a) ....................... 1,251,703
22,000 Computer Sciences Corporation(a) ............. 1,199,000
62,000 Diebold, Inc. ................................ 1,364,000
14,000 Intel Corporation ............................ 1,200,500
5,000 Microsoft Corporation(a) ..................... 550,313
25,000 Sunstrand Corporation ........................ 1,159,375
-----------
6,724,891
-----------
CONSUMER PRODUCTS -- 18.3%
41,000 Avon Products, Inc. .......................... 1,150,563
120,000 Cendant Corporation(a) ....................... 1,395,000
42,750 Crane Company ................................ 1,004,625
17,000 General Electric Company ..................... 1,352,562
26,000 Gillette Company ............................. 994,500
32,000 Kimberly-Clark Corporation ................... 1,296,000
15,000 Sara Lee Corporation ......................... 810,000
35,000 Sysco Corporation ............................ 824,688
-----------
8,827,938
-----------
DRUGS/MEDICAL EQUIPMENT -- 13.0%
15,000 Abbott Laboratories .......................... 651,563
13,000 Bristol-Myers Squibb Company ................. 1,350,375
17,000 Lilly (Eli) & Company ........................ 1,331,312
11,500 Merck and Company, Inc. ...................... 1,489,969
14,000 Schering-Plough Corporation .................. 1,449,875
-----------
6,273,094
-----------
ELECTRONICS -- 2.3%
21,000 Hewlett-Packard Company ...................... 1,111,687
-----------
ENTERTAINMENT -- 0.8%
15,300 Walt Disney Company .......................... 387,281
-----------
FINANCIAL SERVICES -- 1.0%
5,000 Citicorp, Inc. ............................... 464,688
-----------
19
<PAGE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 94.7% (Continued) Value
- --------------------------------------------------------------------------------
FIRE SYSTEMS -- 3.9%
34,000 Tyco International Ltd. ...................... $ 1,878,500
-----------
FUNERAL SERVICES -- 2.4%
37,000 Service Corporation International ............ 1,179,375
-----------
HEALTH CARE CENTERS -- 1.0%
47,000 HealthSouth Corporation(a) ................... 496,437
-----------
HOTELS -- 2.4%
92,900 Choice Hotel International, Inc.(a) .......... 1,178,669
-----------
INSURANCE -- 6.6%
16,550 American International Group ................. 1,274,350
22,000 Conseco, Inc. ................................ 672,375
20,000 Jefferson-Pilot Corporation .................. 1,210,000
-----------
3,156,725
-----------
OIL AND GAS DRILLING -- 6.4%
40,000 Coastal Corporation .......................... 1,350,000
20,000 Halliburton Company .......................... 571,250
23,000 Schlumberger Ltd. ............................ 1,157,188
-----------
3,078,438
-----------
RETAIL STORES -- 2.9%
57,500 AutoZone, Inc.(a) ............................ 1,415,937
-----------
TOTAL COMMON STOCKS (COST $37,834,120) ....... $45,615,725
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 3.4% Value
- --------------------------------------------------------------------------------
$1,630,000 Star Bank, N.A., 5.15%, dated 09/30/1998,
due 10/01/1998, repurchase proceeds
$1,630,233 (Cost $1,630,000) .............. $ 1,630,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 98.1% ............... $47,245,725
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.9% 929,338
-----------
NET ASSETS -- 100.0% ......................... $48,175,063
===========
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/24; $12,360,000 GNMA II, Pool #8932, 6.875%,
due 03/20/22; and $5,510,000 GNMA II, Pool #8395, 6.875%, due 03/20/24. The
aggregate market value of the collateral at September 30, 1998 was
$30,730,289. The Fund's pro-rata interest in the collateral at September
30, 1998 was $1,831,994.
See accompanying notes to financial statements.
20
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Par VIRGINIA FIXED RATE REVENUE AND GENERAL
Value OBLIGATION (GO) BONDS -- 97.6% Value
- --------------------------------------------------------------------------------
Arlington Co., Virginia, GO,
$ 700,000 5.60%, due 08/01/2006 ...................... $ 774,263
Augusta Co., Virginia, Industrial Dev.
Authority, Hospital, Revenue,
500,000 7.00%, due 09/01/2021, prerefunded 09/01/2001 553,830
Brunswick Co., Virginia, Industrial
Dev. Authority, Revenue,
300,000 5.45%, due 07/01/2006 ...................... 329,151
Chesterfield Co., Virginia, GO,
350,000 6.25%, due 07/15/2005 ...................... 379,274
Fairfax Co., Virginia, GO,
350,000 5.60%, due 05/01/2003 ...................... 360,252
600,000 5.00%, due 06/01/2014 ...................... 621,372
Fairfax Co., Virginia, Park Authority, Revenue,
300,000 6.25%, due 07/15/2005 ...................... 330,783
Fairfax Co., Virginia, Sewer, Revenue,
350,000 5.625%, due 07/15/2008 ..................... 390,621
Hanover Co., Virginia, Industrial
Dev. Authority, Revenue,
225,000 6.25%, due 10/01/2011 ...................... 242,786
Henrico Co., Virginia, GO,
500,000 4.70%, due 01/15/2002 ...................... 515,650
James City Co., Virginia, GO,
500,000 5.25%, due 12/15/2015 ...................... 524,520
Loudoun Co., Virginia, GO,
300,000 5.50%, due 06/01/2009 ...................... 330,939
Lynchburg, Virginia, GO,
500,000 5.30%, due 05/01/2014 ...................... 530,685
Medical College of Virginia
Hospitals Authority, Revenue,
700,000 5.00%, due 07/01/2013 ...................... 716,205
Newport News, Virginia, GO,
400,000 5.40%, due 07/01/2002 ...................... 407,808
400,000 5.15%, due 01/01/2010 ...................... 421,908
Norfolk, Virginia, GO,
300,000 5.75%, due 06/01/2011 ...................... 328,326
500,000 5.00%, due 07/01/2014 ...................... 515,495
Norfolk, Virginia, Industrial Dev.
Authority, Hospital, Revenue,
350,000 6.80%, due 06/01/2005 ...................... 404,499
Petersburg, Virginia, GO,
500,000 5.125%, due 01/15/2013 ..................... 525,145
Peumansend Creek, Virginia,
Regional Jail Authority, Revenue,
300,000 5.75%, due 06/01/2017 ...................... 328,692
Pittsylvania Co., Virginia, GO,
300,000 5.65%, due 07/01/2006 ...................... 329,808
Portsmouth, Virginia, GO,
800,000 5.00%, due 08/01/2017 ...................... 815,376
Prince William Co., Virginia, GO,
400,000 4.90%, due 08/01/2005 ...................... 424,028
Prince William Co., Virginia,
Park Authority, Revenue,
250,000 6.10%, due 10/15/2004 ...................... 276,935
21
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par VIRGINIA FIXED RATE REVENUE AND GENERAL
Value OBLIGATION (GO) BONDS -- 97.6% (Continued) Value
- --------------------------------------------------------------------------------
Prince William Co., Virginia,
Service Auth. Water & Sewer, Revenue,
$ 150,000 6.40%, due 07/01/2004, prerefunded 07/01/2001 $ 163,456
500,000 5.00%, due 07/01/2003 ...................... 525,615
Richmond, Virginia, GO,
400,000 6.25%, due 01/15/2018 ...................... 427,620
Richmond, Virginia, Metropolitan
Authority, Expressway, Revenue,
500,000 6.05%, due 07/15/2005 ...................... 545,580
Richmond, Virginia, Redev. &
Housing Authority, Revenue,
500,000 5.00%, due 03/01/2018 ...................... 499,980
Riverside, Virginia, Regional
Jail Authority, Revenue,
300,000 5.30%, due 07/01/2002 ...................... 316,011
Roanoke, Virginia, GO,
300,000 6.40%, due 08/01/2012 ...................... 329,439
Roanoke Co., Virginia, Water System, Revenue,
400,000 6.00%, due 07/01/2031, prerefunded 07/01/2001 424,488
Spotsylvania Co., Virginia, GO,
400,000 5.75%, due 07/15/2011 ...................... 434,644
Suffolk, Virginia, GO,
350,000 5.80%, due 06/01/2011 ...................... 389,750
Upper Occoquan, Virginia,
Sewer Authority, Revenue,
700,000 5.00% due 07/01/2015 ....................... 717,332
Virginia Beach, Virginia, GO,
325,000 6.20%, due 09/01/2013 ...................... 369,518
Virginia College Building Authority,
Educational Facilities, Revenue,
250,000 3.60%, floating rate, due 11/01/2026 ....... 250,000
Virginia State, GO,
500,000 5.25%, due 07/01/2011 ...................... 528,750
500,000 5.375%, due 06/01/2015 ..................... 529,075
Virginia State Housing Dev. Authority,
Commonwealth Mortgages, Revenue,
150,000 5.60%, due 01/01/2002 ...................... 155,537
Virginia State Housing Dev.
Authority, Multi-Family, Revenue,
150,000 6.60%, due 11/01/2012 ...................... 164,854
150,000 6.30%, due 11/01/2015 ...................... 162,371
Virginia State Public Building Authority, Revenue,
500,000 6.00%, due 08/01/2003 ...................... 533,775
Virginia State Resource Authority,
Solid Waste Disposal System, Revenue,
500,000 5.50%, due 04/01/2015 ...................... 530,650
Virginia State Transportation Board, Revenue,
350,000 6.25%, due 05/15/2012, prerefunded 05/15/2004 394,170
Virginia Commonwealth University, Revenue,
250,000 5.75%, due 05/01/2006 ...................... 278,547
Winchester, Virginia, Industrial Dev.
Authority, Educational Facilities, Revenue,
500,000 5.00% due 10/01/2018 ....................... 505,400
York Co., Virginia, Certificates of
Participation, Revenue,
250,000 6.625%, due 03/01/2012 ..................... 263,995
-----------
TOTAL VIRGINIA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (COST $19,820,571) ... $20,818,908
-----------
22
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares MONEY MARKETS -- 1.2% Value
- --------------------------------------------------------------------------------
256,477 Star Tax-Free Fund (Cost $256,477) ........... $ 256,477
-----------
TOTAL INVESTMENTS AT VALUE
(COST $20,077,048) -- 98.8% ................ $21,075,385
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2% 246,186
-----------
NET ASSETS -- 100.0% ......................... $21,321,571
===========
See accompanying notes to financial statements.
23
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Shares COMMON STOCKS -- 95.6% Value
- --------------------------------------------------------------------------------
AUSTRALIA -- 1.6%
85,700 Australia and New Zealand Banking Group Ltd. . $ 457,704
70,326 Coca-Cola Amatil Ltd. ........................ 185,319
-----------
643,023
-----------
BELGIUM -- 1.3%
7,970 Kredietbank NV ............................... 515,312
-----------
CANADA -- 1.2%
18,100 BCE, Inc. .................................... 506,402
-----------
FRANCE -- 13.6%
4,980 Banque Nationale de Paris .................... 266,557
3,424 Danone ....................................... 899,863
18,357 Renault SA(a) ................................ 733,651
7,915 Schneider SA ................................. 412,357
8,970 Suez Lyonnaise des Eaux ...................... 1,526,795
8,601 Thomson CSF .................................. 262,413
20,670 Usinor SA .................................... 229,757
8,229 Valeo SA ..................................... 587,282
3,335 Vivendi ...................................... 664,049
-----------
5,582,724
-----------
GERMANY -- 5.2%
7,683 Daimler-Benz AG .............................. 642,625
10,500 Mannesmann AG ................................ 961,170
7,270 Volkswagen AG ................................ 528,482
-----------
2,132,277
-----------
HONG KONG -- 0.7%
57,000 Hutchison Whampoa Ltd. ....................... 300,136
-----------
INDIA -- 0.3%
4,220 Richter Gedeon Rt. - GDR ..................... 130,306
-----------
ITALY -- 9.1%
390,565 Banca di Roma ................................ 697,248
9,100 Banca Popolare di Bergamo Credito Varesino SpA 184,208
187,722 Credito Italiano SpA ......................... 781,583
116,200 Mediaset SpA ................................. 778,792
186,202 Telecom Italia SpA ........................... 1,281,762
-----------
3,723,593
-----------
JAPAN -- 13.2%
24,000 Canon, Inc. .................................. 488,393
25,000 Denso Corporation ............................ 364,568
500 Isetan Company ............................... 4,132
11,000 Ito-Yokado Company Ltd. ...................... 525,272
33,000 Matsushita Electric Industrial Company Ltd. .. 449,714
23,000 Mitsui Fudosan Company Ltd. .................. 118,109
15,000 Murata Manufacturing Company Ltd. ............ 508,008
134 Nippon Telegraph and Telephone Corporation ... 979,503
24
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 95.6% (Continued) Value
- --------------------------------------------------------------------------------
JAPAN -- 13.2% (CONTINUED)
44,000 Nomura Securities Company Ltd. ............... $ 316,779
7,000 Rohm Company ................................. 668,528
6,500 Sony Corporation ............................. 453,166
24,000 Sumitomo Realty & Development ................ 44,079
18,000 Takeda Chemical Industries ................... 482,662
-----------
5,402,913
-----------
MEXICO -- 1.7%
12,300 Grupo Televisa SA ............................ 237,544
9,961 Telefonos de Mexico SA - ADR ................. 440,774
-----------
678,318
-----------
NETHERLANDS -- 10.6%
13,500 Gucci Group NV - ADR ......................... 487,688
26,514 KPN NV ....................................... 818,585
13,310 Royal Dutch Petroleum Company ................ 660,169
7,618 Royal Philips Electronics NV ................. 410,178
7,129 Vedior NV .................................... 175,852
7,225 Vendex International NV ...................... 268,288
36,406 VNU NV ....................................... 1,502,513
-----------
4,323,273
-----------
NEW ZEALAND -- 1.1%
69,065 Telecom Corporation of New Zealand Ltd. ...... 264,438
98,164 Telecom Corporation of New Zealand Ltd. - IR . 174,415
-----------
438,853
-----------
PHILIPPINES -- 0.3%
540,000 Filinvest Land, Inc.(a) ...................... 13,330
24,192 Metropolitan Bank & Trust Company(a) ......... 82,944
2,278 Philippine Long Distance Telephone Company ... 47,903
-----------
144,177
-----------
PORTUGAL -- 1.0%
11,354 Portugal Telecom SA .......................... 412,807
-----------
SINGAPORE -- 0.1%
12,000 Development Bank of Singapore Ltd. ........... 48,436
-----------
SPAIN -- 5.2%
55,549 Argentaria SA ................................ 1,104,606
28,326 Telefonica de Espana ......................... 1,032,828
-----------
2,137,434
-----------
SWEDEN -- 3.0%
15,760 Hennes and Mauritz AB - Class B .............. 1,146,621
7,710 Skandinaviska Enskilda Banken - Class A ...... 67,411
-----------
1,214,032
-----------
SWITZERLAND -- 6.6%
414 Nestle SA .................................... 823,634
581 Novartis AG .................................. 931,329
89 Roche Holding AG ............................. 957,957
-----------
2,712,920
-----------
25
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Shares COMMON STOCKS -- 95.6% (Continued) Value
- --------------------------------------------------------------------------------
UNITED KINGDOM -- 19.8%
36,942 Allied Zurich PLC ............................ $ 377,936
36,942 British American Tobacco PLC ................. 275,134
186,880 British Aerospace PLC ........................ 1,126,629
11,556 British Sky Broadcasting Group PLC ........... 97,995
94,155 Diageo PLC ................................... 867,238
47,580 Glaxo Wellcome PLC ........................... 1,401,260
78,079 Imperial Chemical Industries PLC ............. 615,006
248,170 LucasVarity PLC .............................. 772,839
11,792 Railtrack Group PLC .......................... 336,460
138,037 Somerfield PLC ............................... 979,372
105,931 Vodafone Group PLC ........................... 1,234,931
-----------
8,084,800
-----------
TOTAL COMMON STOCKS (COST $35,941,626) ....... $39,131,736
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES -- 4.4% 1,782,493
-----------
NET ASSETS -- 100.0% ......................... $40,914,229
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
26
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
27
<PAGE>
THE JAMESTOWN FUNDS
INVESTMENT ADVISER
Lowe, Brockenbrough & Company, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
INDEPENDENT AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt, III
<PAGE>
Davenport
Equity Fund
-----------
SEMI-ANNUAL REPORT
September 30, 1998
(Unaudited)
<PAGE>
LETTER TO SHAREHOLDERS November 12, 1998
================================================================================
As everyone knows by now, the stock market, after being ahead almost twenty
percent in just the six months through June, lost about three-quarters of that
gain during the September quarter. In fact, by the end of August the entire gain
had been wiped out. Then there was some strengthening during September. The
problem has been fears of a growing global economic slowdown and the effect this
will have on corporate earnings growth. The Federal Reserve has recently swung
into action with a .25% decrease in the Federal Funds rate in October and many
observers feel another decrease is possible. These moves are aimed at
stimulating business here in recognition of falling interest rates worldwide.
As has been the case all year, the Dow Jones Industrial Average and the S&P 500
tell only a small part of the story. The average stock is down much more than
the indices so far this year. There are many examples of smaller technology
issues and financial stocks that are off over 50%. Investors have become
jittery, with August marking the first month in several years that there has
been a net outflow of money from mutual funds.
Those are the grim statistics. However, behind these statistics lie great
opportunities to invest in some of the world's best companies at prices
significantly lower than they were just six months ago. We remain fully invested
as always and on market weakness look to increase our equity portfolios with the
addition of more of these superb companies at very attractive prices.
Our expectation is that the market will remain volatile with a flight to
quality, both on the stock side as well as the bond side. For example, U.S.
Treasury Bond prices have soared as investors seek both their quality and their
protection. The thirty-year bond rate dropped as low as 4.75%, which is a level
not seen in many years. The economically strong nations of the world can and, we
believe, will pull together in order to protect themselves from this creeping
global weakness. This will take a while and will probably continue to test our
peace of mind. It will also have a salutary effect on the economies of the
emerging markets. We remain convinced of the fine future prospects of the
companies we hold.
In thinking about the recent huge, mostly negative, daily price swings and, in
response to the many calls I have gotten from understandably nervous investors,
I've thought back to a short novel I studied during college and looked at once
again fairly recently. About a hundred years ago, Joseph Conrad's Heart of
Darkness, was published. It has become a classic of English literature. It is
both an exciting tale of adventure as well as a psychological journey into the
human condition. The tale revolves around a journey up a rugged river into an
impenetrable jungle. The first of the two main characters, Mr. Kurtz, travels up
river in search of ivory for his employer. Along the way, the uncertainty of
where the trip will eventually lead him and lack of order in the difficult
environment begin to cloud his judgment. He becomes emotional and delusional. He
loses any contact with the outside world as he sinks further into his spiraling
fears. As he moves into his personal heart of darkness, the horror of being out
of control completely incapacitates him.
The second character's name is Marlow, who goes into the jungle to find Kurtz
and bring him out. In spite of dire warnings about the difficulties and
ambiguities he is about to confront, Marlow succeeds. He is confronted with
every imaginable challenge that an uncertain and unordered world can throw at
him, and yet he maintains his intellect, judgment and humanity.
A bear market is like a journey up that river into the heart of darkness.
Emotions rule and logic and intellect seem of little help. Some investors become
disoriented and disheartened as they focus on the next bend in the river,
instead of the journey back downstream. There definitely is a psychological
aspect to successful investing. The greats on Wall Street have always taken a
long-term view, avoiding the Kurtz-like behavior of succumbing to what seems
chaotic at the time.
Another sign of the times is an advertisement I've heard several times recently
on the radio. It goes something like this: "Sometimes the market goes up,
recently it has gone down, but if you know the Wall Street formulas you can make
money in any market." Thinking you can reduce successful investing to a formula
is like believing you can create a beautiful priceless piece of art by painting
by the numbers!
I apologize for the rather rambling thoughts above; however, we at Davenport
strongly believe that there is not only a craft to investing, but an art. Part
of this art lies in knowing yourself, your goals, and always keeping your eye on
the long term. What success we've achieved over the last fifteen years has been
a direct result of this long-term view.
Please don't hesitate to contact any of us with any questions or comments you
may have.
Sincerely,
Joseph L. Antrim, CFA
For additional Fund inquiries please contact your investment executive or call
Davenport Asset Management at (888) 285-1863 or (804) 697-2999 to discover how
we can add value to your portfolio.
1
<PAGE>
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1998 (Unaudited)
================================================================================
ASSETS
Investments in securities:
At acquisition cost .................................... $ 43,643,809
============
At market value (Note 1) ............................... $ 40,603,510
Investments in repurchase agreements (Note 1) ............. 1,198,000
Cash ...................................................... 847
Receivable for capital shares sold ........................ 108,134
Dividends and interest receivable ......................... 65,094
Other assets .............................................. 7,919
------------
TOTAL ASSETS ........................................... 41,983,504
------------
LIABILITIES
Dividends payable ......................................... 2,683
Payable for capital shares redeemed ....................... 15,500
Accrued investment advisory fees (Note 3) ................. 26,374
Accrued administration fees (Note 3) ...................... 6,525
Other accrued expenses .................................... 8,009
------------
TOTAL LIABILITIES ...................................... 59,091
------------
NET ASSETS ................................................... $ 41,924,413
============
Net assets consist of:
Paid-in capital .............................................. $ 45,293,617
Undistributed net investment income .......................... 6,014
Accumulated net realized losses from security transactions ... (334,919)
Net unrealized depreciation on investments ................... (3,040,299)
------------
Net assets ................................................... $ 41,924,413
============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ...... 4,230,313
============
Net asset value, offering price and redemption
price per share (Note 1) ................................... $ 9.91
============
See accompanying notes to financial statements.
2
<PAGE>
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
Six Months Ended September 30, 1998 (Unaudited)
================================================================================
INVESTMENT INCOME
Dividends ................................................. $ 327,375
Interest .................................................. 34,097
-----------
TOTAL INVESTMENT INCOME ................................ 361,472
-----------
EXPENSES
Investment advisory fees (Note 3) ......................... 140,597
Administration fees (Note 3) .............................. 35,855
Registration fees ......................................... 10,270
Printing of shareholder reports ........................... 7,290
Custodian fees ............................................ 6,917
Postage and supplies ...................................... 5,029
Professional fees ......................................... 3,963
Trustees' fees and expenses ............................... 3,210
Insurance expense ......................................... 778
Pricing costs ............................................. 755
Other expenses ............................................ 919
-----------
TOTAL EXPENSES ......................................... 215,583
-----------
NET INVESTMENT INCOME ........................................ 145,889
-----------
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
Net realized losses from security transactions ............ (357,491)
Net change in unrealized appreciation/depreciation
on investments .......................................... (4,559,210)
-----------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS ............ (4,916,701)
-----------
NET DECREASE IN NET ASSETS FROM OPERATIONS ................... $(4,770,812)
===========
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
THE DAVENPORT EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended September 30, 1998 and March 31, 1998
=====================================================================================================
Six Months
Ended Period
September 30, Ended
1998 March 31,
(Unaudited) 1998 (a)
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C>
Net investment income ........................................... $ 145,889 $ 24,604
Net realized gains (losses) from security transactions .......... (357,491) 22,572
Net change in unrealized appreciation/depreciation on investments (4,559,210) 1,518,911
------------ ------------
Net increase (decrease) in net assets from operations .............. (4,770,812) 1,566,087
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ...................................... (164,479) --
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ....................................... 24,064,460 23,577,618
Net asset value of shares issued in reinvestment
of distributions to shareholders .............................. 155,419 --
Payments for shares redeemed .................................... (2,054,350) (449,530)
------------ ------------
Net increase in net assets from capital share transactions ......... 22,165,529 23,128,088
------------ ------------
TOTAL INCREASE IN NET ASSETS ....................................... 17,230,238 24,694,175
NET ASSETS:
Beginning of period ............................................. 24,694,175 --
------------ ------------
End of period (including undistributed net investment
income of $6,014 and $24,604, respectively) .................. $ 41,924,413 $ 24,694,175
============ ============
CAPITAL SHARE ACTIVITY:
Sold ............................................................ 2,186,945 2,259,111
Reinvested ...................................................... 14,658 --
Redeemed ........................................................ (188,644) (41,757)
------------ ------------
Net increase in shares outstanding .............................. 2,012,959 2,217,354
Shares outstanding at beginning of period ....................... 2,217,354 --
------------ ------------
Shares outstanding at end of period ............................. 4,230,313 2,217,354
============ ============
</TABLE>
(a) Represents the period from the commencement of operations (January 15,
1998) through March 31, 1998.
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
THE DAVENPORT EQUITY FUND
FINANCIAL HIGHLIGHTS
==========================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
==========================================================================================
Six Months
Ended Period
September 30, Ended
1998 March 31,
(Unaudited) 1998 (a)
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value at beginning of period ....................... $ 11.14 $ 10.00
--------- ---------
Income (loss) from investment operations:
Net investment income ..................................... 0.03 0.01
Net realized and unrealized gains (losses) on investments . (1.22) 1.13
--------- ---------
Total from investment operations ............................. (1.19) 1.14
--------- ---------
Less distributions:
Dividends from net investment income ...................... (0.04) --
--------- ---------
Net asset value at end of period ............................. $ 9.91 $ 11.14
========= =========
Total return ................................................. (10.69%) 11.40%
========= =========
Net assets at end of period (000's) .......................... $ 41,924 $ 24,694
========= =========
Ratio of net expenses to average net assets(c) ............... 1.15% 1.15%(b)
Ratio of net investment income to average net assets(c) ...... 0.78% 0.76%
Portfolio turnover rate(c) ................................... 7% 17%
</TABLE>
(a) Represents the period from the commencement of operations (January 15,
1998) through March 31, 1998.
(b) Absent investment advisory fees waived and expenses reimbursed by the
Adviser, the ratio of expenses to average net assets would have been
2.13%(c) for the period ended March 31, 1998.
(c) Annualized.
See accompanying notes to financial statements.
5
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998 (Unaudited)
================================================================================
Market
Shares COMMON STOCKS -- 96.8% Value
- --------------------------------------------------------------------------------
BASIC MATERIALS -- 4.0%
8,163 Aluminum Company of America .................. $ 579,573
18,140 Chesapeake Corporation ....................... 629,231
12,698 Cleveland - Cliffs, Inc. ..................... 495,222
-----------
1,704,026
-----------
CHEMICALS AND DRUGS -- 10.3%
18,140 Air Products & Chemicals, Inc. ............... 539,665
23,582 ChemFirst Inc. ............................... 415,633
12,698 duPont (E.I.) de Nemours & Company ........... 712,675
8,971 Merck & Company, Inc. ........................ 1,162,305
14,512 Schering-Plough Corporation .................. 1,502,899
-----------
4,333,177
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 9.2%
18,140 Allied Signal, Inc. .......................... 641,703
14,512 Hewlett-Packard Company ...................... 768,229
9,070 Intel Corporation ............................ 777,753
6,349 Lockheed Martin Corporation .................. 640,059
18,140 Media General, Inc. .......................... 702,925
7,256 Motorola, Inc. ............................... 309,740
-----------
3,840,409
-----------
CONSUMER PRODUCTS -- 16.4%
18,140 American Home Products ....................... 950,083
7,256 Amgen, Inc.(a) ............................... 548,281
10,884 Bristol-Myers Squibb Company ................. 1,130,576
14,512 Ford Motor Company ........................... 681,157
14,600 Gillette Company ............................. 558,450
10,884 International Flavors & Fragrances ........... 359,172
13,061 Johnson & Johnson ............................ 1,022,023
14,512 Mattel, Inc. ................................. 406,336
30,838 Owens & Minor, Inc. Holding Company .......... 358,492
36,280 Sysco Corporation ............................ 854,848
-----------
6,869,418
-----------
DURABLE GOODS -- 10.8%
14,512 CSX Corporation .............................. 610,411
10,884 Deere & Company .............................. 329,241
9,070 General Electric Company ..................... 721,632
18,140 Martin Marietta Materials .................... 783,421
19,047 Norfolk Southern Corporation ................. 553,553
12,670 Philips Electronics NV-NY .................... 676,261
47,617 Tredegar Industries, Inc. .................... 871,986
-----------
4,546,505
-----------
ENTERTAINMENT -- 1.7%
27,812 The Walt Disney Company ...................... 703,991
-----------
6
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Market
Shares COMMON STOCKS -- 96.8% (Continued) Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 22.7%
12,244 American International Group ................. $ 942,788
3,809 Associates First Capital Corporation ......... 248,537
18,140 BB&T Corporation ............................. 543,066
6,757 Capital One Financial ........................ 699,350
6,258 CCB Financial Corporation .................... 630,494
10,884 Crestar Financial Corporation ................ 617,667
21,768 Federal Realty Investments Trust ............. 492,501
10,884 First Union Corporation ...................... 557,125
3,628 General RE Corporation ....................... 736,484
7,256 Markel Corporation(a) ........................ 1,106,540
39,908 MGI Properties, Inc. ......................... 1,107,447
17,637 The Pioneer Group, Inc. ...................... 291,010
18,800 St. Paul Companies, Inc. ..................... 611,000
36,100 United Dominion Realty ....................... 410,638
6,349 Wachovia Corporation ......................... 541,252
-----------
9,535,899
-----------
FOOD/BEVERAGES -- 3.4%
14,512 Anheuser-Busch Company, Inc. ................. 783,648
10,884 Coca-Cola Company ............................ 627,190
-----------
1,410,838
-----------
OIL/ENERGY -- 11.0%
12,698 Amoco Corporation ............................ 684,105
6,530 Atlantic Richfield Company ................... 463,222
9,070 Chevron Corporation .......................... 762,447
13,605 Enron Corporation ............................ 718,514
9,070 Mobil Corporation ............................ 688,753
10,884 Schlumberger Limited ......................... 547,601
18,140 Tidewater, Inc. .............................. 376,405
18,140 Valero Energy Corporation .................... 360,532
-----------
4,601,579
-----------
RETAIL STORES -- 5.0%
18,140 Circuit City Stores, Inc. .................... 604,289
18,140 Saks, Inc.(a) ................................ 407,016
24,489 Walgreen Company ............................. 1,079,047
-----------
2,090,352
-----------
UTILITIES -- 2.3%
21,768 SBC Communications, Inc. ..................... 967,316
-----------
TOTAL COMMON STOCKS (COST $43,643,809) ....... $40,603,510
-----------
7
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Face Market
Amount REPURCHASE AGREEMENTS(b) -- 2.9% Value
- --------------------------------------------------------------------------------
$1,198,000 Star Bank, N.A., 5.15%, dated 09/30/98,
due 10/01/98, repurchase proceeds
$1,198,171 (Cost $1,198,000) ............... $ 1,198,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 99.7% ............... $41,801,510
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3% 122,903
-----------
NET ASSETS -- 100.0% ......................... $41,924,413
===========
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/24; $12,360,000 GNMA II, Pool #8932, 6.875%,
due 03/20/22; and $5,510,000 GNMA II, Pool #8395, 6.875%, due 03/20/24. The
aggregate market value of the collateral at September 30, 1998 was
$30,730,289. The Fund's pro-rata interest in the collateral at September
30, 1998 was $1,346,459.
See accompanying notes to financial statements.
8
<PAGE>
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998 (Unaudited)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Davenport Equity Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940. The Trust was
organized as a Massachusetts business trust on July 18, 1988. The Fund began
operations on January 15, 1998.
The Fund's investment objective is long-term growth of capital through
investment in a diversified portfolio of common stocks. Current income is
incidental to this objective and may not be significant.
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.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of 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.
9
<PAGE>
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
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 $43,643,809 as of September 30, 1998:
- --------------------------------------------------------------------------------
Gross unrealized appreciation .......................... $ 2,288,213
Gross unrealized depreciation .......................... (5,328,512)
-----------
Net unrealized depreciation ............................ $(3,040,299)
===========
- --------------------------------------------------------------------------------
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 1998, cost of purchases and proceeds
from sales and maturities of investment securities, other than short-term
investments, amounted to $24,102,744 and $1,296,682, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Davenport & Company LLC (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 .75% of its average daily
net assets. Certain officers of the Fund are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Countrywide Fund Services, Inc. (CFS), CFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Fund. For these services, CFS receives a monthly fee from the
Fund at an annual rate of .20% on its average daily net assets up to $25
million; .175% on the next $25 million of such net assets; and .15% on such net
assets in excess of $50 million, subject to a $2,000 minimum monthly fee. In
addition, 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.
10
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
11
<PAGE>
THE DAVENPORT EQUITY FUND
INVESTMENT ADVISER
Davenport & Company LLC
One James Center
901 East Cary Street
Richmond, Virginia 23219-4037
1-800-281-3217
ADMINISTRATOR
Countrywide Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Fred T. Tattersall
Erwin H. Will, Jr.
Samuel B. Witt III
OFFICERS
Joseph L. Antrim III, President
Coleman Wortham III, Vice President
J. Lee Keiger III, Vice President
John P. Ackerly IV, Vice President
<PAGE>
- --------------------------------------------------------------------------------
THE JAMESTOWN BOND FUND
-----------------------
No Load Mutual Fund
SEMI-ANNUAL REPORT
September 30, 1998
(Unaudited)
INVESTMENT ADVISER ADMINISTRATOR
------------------ -------------
TATTERSALL ADVISORY GROUP, INC. COUNTRYWIDE FUND SERVICES, INC.
6802 Paragon Place, Suite 200 P.O. Box 5354
Richmond, Virginia 23230-1655 Cincinnati, Ohio 45201-5354
1.804.289.2663 1.800.443.4249
- --------------------------------------------------------------------------------
<PAGE>
THE JAMESTOWN BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1998
(Unaudited)
ASSETS
Investments in securities:
At acquisition cost $106,172,374
============
At value (Note 1) $110,205,868
Investments in repurchase agreements (Note 1) 11,785,000
Cash 39,332
Interest and dividends receivable 1,063,048
Receivable for securities sold 5,657,871
Receivable for capital shares sold 1,125,000
Other assets 13,565
------------
TOTAL ASSETS 129,889,684
------------
LIABILITIES
Dividends payable 49,998
Payable for securities purchased 12,398,526
Payable for capital shares redeemed 102,375
Accrued investment advisory fees (Note 3) 24,465
Accrued administration fees (Note 3) 8,165
Accrued distribution expenses (Note 3) 1,051
Other accrued expenses 800
------------
TOTAL LIABILITIES 12,585,380
------------
NET ASSETS $117,304,304
============
Net assets consist of:
Paid-in capital $111,185,140
Undistributed net investment income 8,115
Accumulated net realized gains from security transactions 2,077,555
Net unrealized appreciation on investments 4,033,494
------------
Net assets $117,304,304
============
PRICING OF INSTITUTIONAL SHARES
Net assets attributable to Institutional Shares $114,444,529
============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 10,211,169
============
Net asset value, offering price and redemption
price per share (Note 1) $ 11.21
============
PRICING OF SERVICE GROUP SHARES
Net assets applicable to Service Group Shares $ 2,859,775
============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 255,186
============
Net asset value, offering price and
redemption price per share (Note 1) $ 11.21
============
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN BOND FUND
STATEMENT OF OPERATIONS
Six Months Ended September 30, 1998
(Unaudited)
INVESTMENT INCOME
Interest $ 3,180,766
Dividends 224,355
-----------
TOTAL INVESTMENT INCOME 3,405,121
-----------
EXPENSES
Investment advisory fees (Note 3) 202,997
Administration fees (Note 3) 50,515
Custodian fees 9,129
Professional fees 7,463
Pricing costs 6,582
Printing of shareholder reports 4,375
Trustees' fees and expenses 3,210
Distribution expenses, Service Group Shares (Note 3) 2,151
Insurance expense 1,634
Postage and supplies 1,339
Registration fees 1,293
Other expenses 1,986
-----------
TOTAL EXPENSES 292,674
Fees waived by the Adviser (Note 3) (10,866)
Expenses reimbursed through a directed
brokerage arrangement (Note 4) (8,994)
-----------
NET EXPENSES 272,814
-----------
NET INVESTMENT INCOME 3,132,307
-----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 1,780,328
Net change in unrealized
appreciation/depreciation on investments 1,969,321
-----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 3,749,649
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 6,881,956
===========
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Periods Ended September 30, 1998 and March 31, 1998
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
SEPTEMBER 30, ENDED
1998 MARCH 31,
(UNAUDITED) 1998
------------- -------------
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 3,132,307 $ 5,273,886
Net realized gains from security transactions 1,780,328 1,826,210
Net change in unrealized appreciation/depreciation
on investments 1,969,321 2,574,722
------------- -------------
Net increase in net assets from operations 6,881,956 9,674,818
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income, Institutional Shares (3,055,068) (5,189,396)
From net investment income, Service Group Shares (77,248) (99,842)
------------- -------------
Decrease in net assets from distributions from shareholders (3,132,316) (5,289,238)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS:
INSTITUTIONAL SHARES
Proceeds from shares sold 13,187,869 15,597,164
Net asset value of shares issued in reinvestment
of distributions to shareholders 2,952,334 5,049,237
Payments for shares redeemed (1,597,130) (5,227,155)
------------- -------------
Net increase in net assets from Institutional Shares transactions 14,543,073 15,419,246
------------- -------------
SERVICE GROUP SHARES
Proceeds from shares sold 153,370 4,316,277
Net asset value of shares issued in reinvestment
of distributions to shareholders 77,248 99,842
Payments for shares redeemed (537,727) (1,401,739)
------------- -------------
Net increase (decrease) in net assets from
Service Group Shares transactions (307,109) 3,014,380
------------- -------------
TOTAL INCREASE IN NET ASSETS 17,985,604 22,819,206
NET ASSETS:
Beginning of period 99,318,700 76,499,494
------------- -------------
End of period - (including undistributed net investment
income of $8,115 and $8,124, respectively) $ 117,304,304 $ 99,318,700
============= =============
CAPITAL SHARE ACTIVITY:
INSTITUTIONAL SHARES
Sold 1,202,850 1,446,450
Reinvested 266,695 472,113
Redeemed (145,074) (486,114)
------------- -------------
Net increase in shares outstanding 1,324,471 1,432,449
Shares outstanding, beginning of period 8,886,698 7,454,249
------------- -------------
Shares outstanding, end of period 10,211,169 8,886,698
============= =============
SERVICE GROUP SHARES
Sold 14,036 402,367
Reinvested 6,981 9,229
Redeemed (49,141) (128,286)
------------- -------------
Net increase (decrease) in shares outstanding (28,124) 283,310
Shares outstanding, beginning of period 283,310 --
------------- -------------
Shares outstanding, end of period 255,186 283,310
============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN BOND FUND - INSTITUTIONAL SHARES
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a
Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
1998 --------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................... $ 10.83 $ 10.26 $ 10.39 $ 9.97 $ 10.15 $ 10.82
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income ................................. 0.30 0.58 0.68 0.70 0.62 0.55
Net realized and unrealized gains
(losses) on investments ............................ 0.39 0.63 (0.12) 0.41 (0.18) (0.30)
-------- -------- -------- -------- -------- --------
Total from investment operations ......................... 0.69 1.21 0.56 1.11 0.44 0.25
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .................. (0.31) (0.64) (0.69) (0.69) (0.62) (0.55)
Distributions from net realized gains ................. -- -- -- -- -- (0.19)
Distributions in excess of net realized gains ......... -- -- -- -- -- (0.18)
-------- -------- -------- -------- -------- --------
Total distributions ...................................... (0.31) (0.64) (0.69) (0.69) (0.62) (0.92)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ......................... $ 11.21 $ 10.83 $ 10.26 $ 10.39 $ 9.97 $ 10.15
======== ======== ======== ======== ======== ========
Total return ............................................. 6.45% 12.06% 5.52% 11.23% 4.56% 2.12%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ...................... $114,445 $ 96,250 $ 76,499 $ 74,774 $ 72,029 $ 64,029
======== ======== ======== ======== ======== ========
Ratio of gross expenses to average net assets ............ 0.54%(b) 0.53% 0.53% 0.56% 0.57% 0.60%
Ratio of net expenses to average net assets (a) .......... 0.50%(b) 0.50% 0.50% 0.53% 0.53% 0.60%
Ratio of net investment income to average net assets ..... 5.78%(b) 6.06% 6.48% 6.54% 6.28% 5.03%
Portfolio turnover rate .................................. 114% 235% 207% 268% 381% 381%
</TABLE>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement for periods after March 31, 1994
(Note 4) and investment advisory fee waivers for the periods ended
September 30, 1998 and March 31, 1998 (Note 3).
(b) Annualized.
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN BOND FUND - SERVICE GROUP SHARES
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a
Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
SEPTEMBER 30, ENDED
1998 MARCH 31,
(UNAUDITED) 1998 (A)
-------- --------
<S> <C> <C>
Net asset value at beginning of period .................. $ 10.83 $ 10.69
-------- --------
Income from investment operations:
Net investment income ................................ 0.32 0.37
Net realized and unrealized gains on investments ..... 0.37 0.08
-------- --------
Total from investment operations ........................ 0.69 0.45
-------- --------
Less distributions:
Dividends from net investment income ................. (0.31) (0.31)
-------- --------
Net asset value at end of period ........................ $ 11.21 $ 10.83
======== ========
Total return ............................................ 6.38% 8.55%(c)
======== ========
Net assets at end of period (000's) ..................... $ 2,860 $ 3,069
======== ========
Ratio of gross expenses to average net assets ........... 0.69%(c) 0.68%(c)
Ratio of net expenses to average net assets (b) ......... 0.65%(c) 0.65%(c)
Ratio of net investment income to average net assets .... 5.64%(c) 5.96%(c)
Portfolio turnover rate ................................. 114% 235%
</TABLE>
(a) Represents the period from the initial public offering of Service Group
Shares (October 2, 1997) through March 31, 1998.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4) and investment advisory
fee waivers (Note 3).
(c) Annualized.
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
U.S. TREASURY OBLIGATIONS - 14.6%
U.S. TREASURY BONDS - 8.1%
$6,855,000 8.125%, due 08/15/2021 ..................... $ 9,505,966
-----------
U.S. TREASURY NOTES - 5.1%
3,155,000 6.50%, due 05/31/2001 ...................... 3,321,142
2,260,000 7.00%, due 07/15/2006 ...................... 2,632,900
-----------
5,954,042
-----------
U.S. TREASURY INFLATION-PROTECTION NOTES - 1.4%
1,700,000 3.375%, due 01/15/2007 ..................... 1,679,194
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $16,266,026) $17,139,202
-----------
MORTGAGE-BACKED SECURITIES - 37.7%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.3%
$ 825,000 Pool #1197-H, 6.75%, due 02/15/2007 $ 883,781
900,194 Pool #1221-I, 7.00%, due 03/15/2007 933,384
700,000 Pool #1457-PK, 7.00%, due 01/15/2008 759,717
925,000 Pool #1460-I, 7.00%, due 01/15/2008 1,001,313
825,000 Pool #1655-HB, 6.50%, due 10/15/2008 873,980
600,000 Pool #1857-D, 6.50%, due 11/15/2022 636,372
-----------
5,088,547
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 19.9%
813,175 Pool #313443, 6.775%, due 04/01/2004 864,508
1,186,519 Pool #375139, 7.13%, due 05/01/2004 1,283,851
1,460,650 Pool #375299, 6.81%, due 08/01/2004 1,561,755
597,119 Pool #73061, 8.66%, due 01/01/2005 682,022
621,824 Pool #73126, 7.00%, due 07/01/2005 646,175
557,395 Pool #73443, 6.87%, due 04/01/2006 603,032
626,199 Series #92-61-ZB, 7.50%, due 05/25/2007 675,312
765,000 Series #92-179-H, 7.00%, due 09/01/2007 809,462
545,801 Pool #375538, 6.70%, due 11/01/2007 589,397
1,425,000 Series #93-10-PH, 6.50%, due 12/01/2007 1,503,375
1,275,000 Pool #380701, 6.19%, due 09/01/2008 1,338,152
750,000 Series #98-M3, 6.45%, due 01/01/2011 778,125
1,410,000 Series #96-53-PG, 6.50%, due 12/18/2011 1,502,087
1,011,096 Pool #398341, 6.00%, due 04/01/2013 1,021,794
1,889,531 Pool #424298, 6.00%, due 06/01/2013 1,909,523
605,877 Series #G92-23-Z, 7.50%, due 05/01/2021 659,649
776,666 Series #G92-44-Z, 8.00%, due 07/25/2022 857,727
2,885,000 TBA, 6.00%, due 10/01/2028 2,877,787
1,375,000 TBA, 6.50%, due 10/01/2028 1,397,773
1,800,000 TBA, 6.00%, due 11/01/2028 1,794,375
-----------
23,355,881
-----------
<PAGE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
MORTGAGE-BACKED SECURITIES - CONTINUED
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 10.8%
$ 64,741 Pool #223997, 8.85%, due 05/15/2018 $ 69,491
515,853 Pool #224002, 8.85%, due 07/15/2018 553,702
127,328 Pool #316205, 7.50%, due 02/15/2022 132,126
1,829,230 Pool #373331, 7.50%, due 05/15/2022 1,898,156
346,789 Pool #333658, 7.50%, due 01/15/2023 359,855
741,440 Pool #342526, 7.50%, due 02/15/2023 769,377
304,450 Pool #349314, 7.50%, due 02/15/2023 315,922
649,155 Pool #352143, 7.50%, due 07/15/2023 673,615
532,223 Pool #008505, 7.00%, adjustable rate,
due 09/20/2024 541,787
1,559,804 Pool #8541, 7.00%, adjustable rate,
due 11/20/2024 1,586,368
575,011 Pool #8552, 7.00%, adjustable rate,
due 11/20/2024 584,982
484,999 Pool #455413, 7.50%, due 08/15/2027 502,974
674,375 Pool #780798, 7.50%, due 12/15/2027 699,368
1,350,000 Pool #433882, 7.00%, due 07/15/2028 1,394,118
485,000 Pool #473853, 7.00%, due 09/15/2028 500,850
2,000,000 TBA, 7.00%, due 10/15/2028 2,062,500
-----------
12,645,191
-----------
OTHER MORTGAGE-BACKED SECURITIES - 2.7%
Contimortgage Home Equity Loan Trust #98-2-A4,
925,000 6.19%, due 01/15/2014 936,849
CS First Boston Mortgage Securities
Corporation #98-C1-A1A,
811,923 6.26%, due 12/17/2007 837,296
GS Mortgage Securities Corporation II #98-GLII-A1,
1,195,370 6.312%, due 04/13/2031 1,231,606
Lehman Brothers Mortgage Trust #91-2-A1,
184,074 8.00%, due 03/20/1999 184,074
-----------
3,189,825
-----------
TOTAL MORTGAGE-BACKED SECURITIES (COST $43,203,593) $44,279,444
-----------
ASSET-BACKED SECURITIES - 8.8%
STUDENT LOAN MARKETING ASSOCIATION - 4.4%
$2,138,651 Series #97-2-A1, 5.083%, adjustable rate,
due 10/25/2005 $ 2,122,612
2,611,940 Series #97-3-A1, 5.817%, adjustable rate,
due 04/25/2006 2,592,351
428,277 Series #98-1-A1, 5.253%, adjustable rate,
due 01/25/2007 428,277
-----------
5,143,240
-----------
<PAGE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
ASSET-BACKED SECURITIES - CONTINUED
OTHER ASSET-BACKED SECURITIES - 4.4%
Bank America Manufactured Housing Contract #96-1-A6,
$ 650,000 8.00%, due 10/10/2026 $ 705,510
CIT RV Trust #95-B-A1,
197,137 6.50%, due 04/15/2011 200,771
CIT RV Trust #96-A-A1,
499,320 5.40%, due 12/15/2011 502,127
Fleetwood Credit Corporation Grantor Trust #94-A-A,
397,429 4.70%, due 07/15/2009 395,812
Fleetwood Credit Corporation Grantor Trust #96-A-A,
378,938 6.75%, due 10/15/2011 391,845
Green Tree Financial Corporation, #97-2-A6,
775,000 7.24%, due 06/15/2028 812,293
Green Tree Financial Corporation, #97-2-A7,
700,000 7.62%, due 04/15/2028 753,151
Green Tree Financial Corporation, #98-A,
1,337,868 6.18%, due 04/01/2018 1,353,922
-----------
5,115,431
-----------
TOTAL ASSET-BACKED SECURITIES (COST $10,115,395) $10,258,671
-----------
CORPORATE BONDS - 25.2%
Aluminum Company of American,
$ 775,000 6.50%, due 06/15/2018 $ 794,693
Allmerica Financial Corporation,
390,000 7.625%, due 10/15/2025 415,892
Associates Corporation,
700,000 5.75%, due 10/15/2003 709,303
Avalon Properties, Inc.,
485,000 6.625%, due 01/15/2005 483,623
Bank of New York Company, Inc.,
610,000 6.50%, due 12/01/2003 638,566
BellSouth Telecommunications,
1,075,000 6.375%, due 06/01/2028 1,128,965
Beneficial Corporation Medium Term Notes,
800,000 6.33%, due 10/09/2001 824,472
BRE Properties, Inc.,
425,000 7.125%, due 02/15/2013 427,486
Coca-Cola Enterprises,
325,000 6.75%, due 09/15/2028 335,692
440,000 6.75%, due 01/15/2038 448,052
Dana Corporation,
425,000 7.00%, due 03/15/2028 429,246
<PAGE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
CORPORATE BONDS - CONTINUED
Dayton Hudson Corporation,
$ 370,000 6.75%, due 01/01/2028 $ 376,242
Duke Realty LP,
470,000 7.05%, due 03/01/2006 478,394
510,000 6.75%, due 05/30/2008 507,460
Equity Residential Properties Trust,
875,000 6.55%, due 11/15/2001 887,399
450,000 6.63%, due 04/13/2005 449,240
Finova Capital Corporation,
385,000 6.25%, due 08/15/2000 390,425
Firstar Bank Milwaukee,
2,450,000 6.25%, due 12/01/2002 2,556,820
Ford Motor Company,
300,000 6.625%, due 02/15/2028 303,759
900,000 6.625%, due 10/01/2028 912,519
335,000 8.90%, due 01/15/2032 428,706
General Motors Corporation,
235,000 8.80%, due 03/01/2021 295,797
General Motors Acceptance Corporation
Medium Term Notes,
1,400,000 6.80%, due 04/17/2001 1,456,210
IBM Corporation,
950,000 6.50%, due 01/15/2028 992,417
International Lease Finance Medium Term Notes,
1,315,000 6.42%, due 09/11/2000 1,348,953
JDN Realty Corporation,
375,000 6.95%, due 08/01/2007 395,456
May Department Stores,
275,000 7.45%, due 09/15/2011 314,168
650,000 6.70%, due 09/15/2028 670,969
Mellon Financial Company,
915,000 7.625%, due 11/15/1999 938,616
Morgan Stanley Dean Witter & Company,
500,000 6.09%, due 11/19/1999 510,885
National City Corporation,
900,000 7.20%, due 05/15/2005 975,384
Norwest Financial, Inc.,
450,000 6.05%, due 11/19/1999 455,076
Philips Petroleum Company,
375,000 6.65%, due 07/15/2018 384,581
Price Development Company,
485,000 7.29%, due 03/11/2008 484,370
SBC Communications, Inc.,
600,000 6.625%, due 11/01/2009 667,074
<PAGE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
CORPORATE BONDS - CONTINUED
Sears Roebuck & Company,
$1,500,000 5.63%, due 02/07/2001 $ 1,518,075
750,000 6.86%, due 07/03/2001 782,288
750,000 6.99%, due 09/30/2002 798,382
Suntrust Banks,
340,000 6.125%, due 02/15/2004 352,230
Textron, Inc.,
510,000 6.625%, due 11/15/2007 548,444
TRW, Inc.,
425,000 6.25%, due 01/15/2010 451,180
350,000 9.35%, due 06/04/2020 453,968
Union Camp Corporation,
325,000 6.50%, due 11/15/2007 339,540
United Parcel Service of America, Inc.,
420,000 8.375%, due 04/01/2030 534,790
-----------
TOTAL CORPORATE BONDS (COST $28,512,167) $29,595,807
-----------
Shares Value
------ -----
CLOSED-END MUTUAL FUNDS - 7.6%
37,400 Blackrock 1999 Term Trust, Inc. $ 364,650
226,400 Blackrock 2001 Term Trust, Inc. 2,037,600
53,900 Blackrock Investment Quality Term Trust, Inc. 485,100
63,200 Blackrock North American Government Income Trust 639,900
125,300 Blackrock Strategic Term Trust, Inc. 1,151,194
12,000 Dean Witter Government Income Trust 108,000
7,400 Excelsior Income Shares, Inc. 125,800
15,500 First Commonwealth Fund 165,656
232,200 Hyperion 1999 Term Trust, Inc. 1,683,450
201,000 Hyperion 2002 Term Trust, Inc. 1,695,938
4,100 Hyperion 2005 Investment Grade
Opportunity Term Trust, Inc. 36,131
16,400 Income Opportunities Fund, Inc. - 1999 157,850
41,700 MFS Government Markets Income Trust 281,475
------------
TOTAL CLOSED-END FUNDS (COST $8,075,193) $ 8,932,744
------------
TOTAL INVESTMENTS AT VALUE
(COST $106,172,374) - 93.9% $110,205,868
------------
<PAGE>
THE JAMESTOWN BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Face Amount Value
- ----------- -----
REPURCHASE AGREEMENTS (A) - 10.1%
$11,785,000 Star Bank, N.A., 5.15%, dated 09/30/1998,
due 10/01/1998 repurchase proceeds
$11,786,686 (Cost $11,785,000) $ 11,785,000
------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS
AT VALUE - 104.0% $121,990,868
LIABILITIES IN EXCESS OF OTHER ASSETS - (4.0)% (4,686,564)
------------
NET ASSETS - 100.0% $117,304,304
============
(a) Joint repurchase agreement is fully collateralized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/24; $12,360,000 GNMA II, Pool #8932, 6.875%,
due 03/20/22; and $5,510,000 GNMA II, Pool #8395, 6.875%, due 03/20/24. The
aggregate market value of the collateral at September 30, 1998 was
$30,730,289. The Fund's pro-rata interest in the collateral at September
30, 1998 was $13,245,427.
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Bond Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940 (the 1940 Act). The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on December 13, 1990.
The Fund offers two classes of shares: Service Group Shares, sold subject to a
12b-1 fee up to 0.15% of average daily net assets, and Institutional Shares,
sold without a 12b-1 fee. Each Service Group and Institutional Share of the Fund
represents identical interests in the Fund's investment portfolio and has the
same rights, except that (i) Service Group Shares bear the expenses of the
distribution fees, which will cause Service Group Shares to have a higher
expense ratio and to pay lower dividends than Institutional Shares; (ii) certain
class specific expenses will be borne solely by the class to which such expenses
are attributable; and (iii) each class has exclusive voting rights with respect
to matters affecting only that class.
The Fund's investment objective is to maximize total return, consisting of
current income and capital appreciation (both realized and unrealized),
consistent with the preservation of capital through active management of
investment grade fixed income securities.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of the regular session of trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national exchange are valued
based upon the closing price on the principal exchange where the security is
traded. It is expected that fixed income securities of the Fund will ordinarily
be traded in the over-the-counter market. When market quotations are not readily
available, securities may be valued on the basis of prices provided by an
independent pricing service. If a pricing service cannot provide a valuation,
securities will be valued in good faith at fair 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 each class of shares of the
Fund is calculated daily by dividing the total value of the Fund's assets
attributable to that class, less liabilities attributable to that class, by the
number of shares of that class outstanding. The offering price and redemption
price per share of each class of shares of the Fund is equal to the net asset
value per share.
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
Investment income and distributions to shareholders -- Dividend income is
recorded on the ex-dividend date. Interest income is accrued as earned.
Discounts and premiums on securities purchased are amortized in accordance with
income tax regulations. Dividends arising from net investment income are
declared and paid quarterly to shareholders of the Fund. Net realized short-term
capital gains, if any, may be distributed throughout the year and net realized
long-term capital gains, if any, are distributed at least once each year. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles.
Allocations between classes -- Investment income earned, realized capital gains
and losses, and unrealized appreciation and depreciation for the Fund are
allocated daily to each class of shares based upon its proportionate share of
total net assets of the Fund. Class specific expenses are charged directly to
the class incurring the expense. Common expenses which are not attributable to a
specific class are allocated daily to each class of shares based upon its
proportionate share of total net assets of the Fund.
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 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.
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.
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
The following information is based upon the federal income tax cost of portfolio
investments of $106,181,654 as of September 30, 1998:
Gross unrealized appreciation............................... $ 4,105,603
Gross unrealized depreciation............................... (81,389)
Net unrealized appreciation................................. $ 4,024,214
The difference between the federal income tax cost of portfolio investments and
the financial statement cost is due to certain timing differences in the
recognition of capital losses under income tax regulations and generally
accepted accounting principles.
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 1998, cost of purchases and proceeds
from sales and maturities of investment securities, other than short-term
investments, amounted to $122,341,098 and $108,594,862, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Tattersall Advisory Group, 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 0.375% of its
average daily net assets. The Adviser currently intends to limit the total
operating expenses of the Institutional Shares of the Fund to 0.50% of its
average daily net assets, and to limit the total operating expenses of the
Service Group Shares of the Fund to 0.65% of its average daily net assets.
Accordingly, the Adviser voluntarily waived $10,866 of its investment advisory
fees for the six months ended September 30, 1998. 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 0.075% on its average daily net assets up to $200
million and 0.05% on such net assets in excess of $200 million, subject to a
$2,000 minimum monthly fee, plus a surcharge of $1,000 per month. In addition,
the Fund pays out-of-pocket expenses including, but not limited to, postage,
supplies and cost of pricing the Fund's portfolio securities. Certain officers
of the Trust are also officers of CFS.
<PAGE>
THE JAMESTOWN BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the Plan) with respect to Service
Group Shares pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that
the Fund may incur certain costs related to the distribution of Service Group
Shares, not to exceed 0.15% of average daily net assets applicable to Service
Group Shares. For the six months ended September 30, 1998, Service Group Shares
incurred $2,151 of distribution expenses under the Plan.
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of the Fund, a portion of the
Fund's custodian fees have been paid through an arrangement with a third-party
broker-dealer who is compensated through security trades. Expenses reimbursed
through the directed brokerage arrangement totaled $8,994 for the six months
ended September 30, 1998.
<PAGE>
- --------------------------------------------------------------------------------
THE JAMESTOWN SHORT TERM BOND FUND
----------------------------------
No Load Mutual Fund
SEMI-ANNUAL REPORT
September 30, 1998
(Unaudited)
INVESTMENT ADVISER ADMINISTRATOR
------------------ -------------
TATTERSALL ADVISORY GROUP, INC. COUNTRYWIDE FUND SERVICES, INC.
6802 Paragon Place, Suite 200 P.O. Box 5354
Richmond, Virginia 23230-1655 Cincinnati, Ohio 45201-5354
1.804.289.2663 1.800.443.4249
- --------------------------------------------------------------------------------
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1998
(Unaudited)
ASSETS
Investments in securities:
At acquisition cost $ 7,108,002
===========
At value (Note 1) $ 7,158,599
Investments in repurchase agreements (Note 1) 475,000
Cash 608
Interest receivable 69,481
Due from Adviser (Note 3) 7,404
Other assets 6,748
-----------
TOTAL ASSETS 7,717,840
-----------
LIABILITIES
Payable for capital shares redeemed 4,330
Accrued administration fees (Note 3) 2,000
Other accrued expenses 1,900
-----------
TOTAL LIABILITIES 8,230
-----------
NET ASSETS $ 7,709,610
===========
Net assets consist of:
Paid-in capital $ 8,254,434
Undistributed net investment income 607
Accumulated net realized losses from security transactions (596,028)
Net unrealized appreciation on investments 50,597
-----------
Net assets $ 7,709,610
===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 799,702
===========
Net asset value, offering price and redemption
price per share (Note 1) $ 9.64
===========
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENT OF OPERATIONS
Six Months Ended September 30, 1998
(Unaudited)
INVESTMENT INCOME
Interest $ 274,026
---------
EXPENSES
Investment advisory fees (Note 3) 17,756
Administration fees (Note 3) 12,000
Professional fees 5,713
Trustees' fees and expenses 3,210
Printing of shareholder reports 2,448
Pricing costs 2,357
Custodian fees 1,800
Postage and supplies 718
Other expenses 878
---------
TOTAL EXPENSES 46,880
Fees waived and expenses reimbursed by the Adviser (Note 3) (23,205)
---------
NET EXPENSES 23,675
---------
NET INVESTMENT INCOME 250,351
---------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions (4,012)
Net change in unrealized appreciation/depreciation
on investments 53,429
---------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 49,417
---------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 299,768
=========
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Periods Ended September 30, 1998 and March 31, 1998
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
SEPTEMBER 30, ENDED
1998 MARCH 31,
(UNAUDITED) 1998
------------ ------------
FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 250,351 $ 566,720
Net realized losses from security transactions (4,012) (45,768)
Net change in unrealized appreciation/depreciation
on investments 53,429 48,104
------------ ------------
Net increase in net assets from operations 299,768 569,056
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (251,042) (568,054)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 1,913,653 2,162,478
Net asset value of shares issued in reinvestment
of distributions to shareholders 251,043 568,054
Payments for shares redeemed (4,715,676) (2,444,148)
------------ ------------
Net increase (decrease) in net assets
from capital share transactions (2,550,980) 286,384
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,502,254) 287,386
NET ASSETS:
Beginning of period 10,211,864 9,924,478
------------ ------------
End of period - (including undistributed net investment
income of $607 and $1,298, respectively) $ 7,709,610 $ 10,211,864
============ ============
CAPITAL SHARE ACTIVITY:
Sold 197,597 223,127
Reinvested 26,100 59,049
Redeemed (486,306) (252,774)
------------ ------------
Net increase (decrease) in shares outstanding (262,609) 29,402
Shares outstanding, beginning of period 1,062,311 1,032,909
------------ ------------
Shares outstanding, end of period 799,702 1,062,311
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a
Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
1998 ------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 9.61 $ 9.61 $ 9.72 $ 9.64 $ 9.82 $ 10.07
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.29 0.54 0.58 0.62 0.60 0.51
Net realized and unrealized gains
(losses) on investments 0.03 0.00 (0.11) 0.08 (0.17) (0.23)
-------- -------- -------- -------- -------- --------
Total from investment operations 0.32 0.54 0.47 0.70 0.43 0.28
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.29) (0.54) (0.58) (0.62) (0.61) (0.51)
Distributions from net realized gains -- -- -- -- -- (0.02)
-------- -------- -------- -------- -------- --------
Total distributions (0.29) (0.54) (0.58) (0.62) (0.61) (0.53)
-------- -------- -------- -------- -------- --------
Net asset value at end of period $ 9.64 $ 9.61 $ 9.61 $ 9.72 $ 9.64 $ 9.82
======== ======== ======== ======== ======== ========
Total return 3.33% 5.76% 5.01% 7.38% 4.53% 2.76%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) $ 7,710 $ 10,212 $ 9,924 $ 9,426 $ 14,122 $ 18,715
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets (a) 0.50%(b) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets 5.30%(b) 5.64% 5.96% 6.27% 6.04% 5.22%
Portfolio turnover rate 31% 109% 62% 157% 144% 324%
</TABLE>
(a) Absent investment advisory fees waived and expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
0.99%(b), 0.95%, 0.94%, 0.85%, 0.85% and 0.81% for the periods ended
September 30, 1998 and March 31, 1998, 1997, 1996, 1995 and 1994,
respectively (Note 3).
(b) Annualized.
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
U.S. TREASURY AND AGENCY OBLIGATIONS - 14.6%
U.S. TREASURY NOTES - 6.9%
$ 280,000 6.50%, due 05/31/2001 $ 294,745
225,000 5.75%, due 10/31/2002 236,495
-----------
531,240
-----------
U.S. TREASURY INFLATION-PROTECTION NOTES - 2.6%
200,000 3.625%, due 07/15/2002 204,629
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.1%
390,000 due 10/09/1998 389,548
-----------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(COST $1,107,197) $ 1,125,417
-----------
MORTGAGE-BACKED SECURITIES - 16.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.7%
$ 242,536 Pool #1697-PE, 5.65%, due 07/15/2003 $ 242,309
42,396 Pool #1272-D, 7.50%, due 11/15/2005 42,541
-----------
284,850
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.2%
109,903 Pool #124029, 8.00%, due 12/01/2002 111,436
210,000 Series #94-13-PE, 5.8%, due 12/25/2006 210,853
152,043 Pool #313383, 6.50%, due 11/01/2009 155,244
-----------
477,533
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.9%
147,198 Pool #8542, 7.00%, adjustable rate, due 11/20/2024 149,683
-----------
OTHER MORTGAGE-BACKED SECURITIES - 4.7%
Lehman Brothers Mortgage Trust #91-2-A1,
116,902 8.00%, due 03/20/1999 116,902
GE Capital Mortgage Services, Inc. #93-4A-A1,
25,684 6.388%, adjustable rate, due 03/25/2023 25,740
GE Capital Mortgage Services, Inc. #94-2-A4,
221,548 6.00%, due 01/25/2009 222,239
-----------
364,881
-----------
TOTAL MORTGAGE-BACKED SECURITIES (COST $1,271,004) $ 1,276,947
-----------
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Par Value Value
--------- -----
ASSET-BACKED SECURITIES - 11.0%
CIT RV Trust #96-A-A1,
$ 186,702 5.40%, due 12/15/2011 $ 187,752
Fleetwood Credit Corporation Grantor Trust #97-B-A,
197,101 6.40%, due 05/15/2013 203,937
Premier Auto Trust #95-1-A6,
79,534 8.05%, due 04/04/2000 79,881
Student Loan Marketing Association #97-2-A1,
379,867 5.083%, adjustable rate, due 10/25/2005 377,018
-----------
TOTAL ASSET-BACKED SECURITIES (COST $841,381) $ 848,588
-----------
CORPORATE BONDS - 23.4%
Caterpillar Financial, Inc.,
$ 400,000 5.81%, due 07/05/2000 $ 405,636
Enron Corporation,
290,000 6.45%, due 11/15/2001 296,705
International Bank Reconstruction and Development,
265,000 5.10%, due 09/15/1999 265,669
International Lease Finance Medium Term Notes,
245,000 6.55%, due 09/15/2000 251,938
Norwest Financial Corporation,
400,000 6.05%, due 11/19/1999 404,512
Xerox Corporation Medium Term Notes,
175,000 7.13%, due 04/30/1999 176,766
-----------
TOTAL CORPORATE BONDS (COST $1,781,999) $ 1,801,226
-----------
COMMERCIAL PAPER - 27.3%
$ 375,000 Allmerica Financial Corporation, due 10/27/1998 $ 373,497
375,000 Aluminum Company of America, due 11/05/1998 372,999
375,000 American General, due 11/13/1998 372,541
300,000 John Deere Capital Corporation, due 01/05/1999 295,768
300,000 Prudential Funding Corporation, due 02/17/1999 294,150
400,000 Walt Disney Company, due 11/12/1998 397,466
-----------
TOTAL COMMERCIAL PAPER (COST $2,106,421) $ 2,106,421
-----------
TOTAL INVESTMENTS AT VALUE (COST $7,108,002) - 92.8% $ 7,158,599
-----------
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
September 30, 1998
(Unaudited)
Face
Amount Value
------ -----
REPURCHASE AGREEMENTS (A) - 6.2%
$ 475,000 Star Bank, N.A., 5.15%, dated 09/30/1998,
due 10/01/1998 repurchase proceeds
$475,068 (Cost $475,000) $ 475,000
-----------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS
AT VALUE - 99.0% $ 7,633,599
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.0% 76,011
-----------
NET ASSETS - 100.0% $ 7,709,610
===========
(a) Joint repurchase agreement is fully collaterized by $12,560,000 GNMA II,
Pool #8375, 6.875%, due 02/20/2024; $12,360,000 GNMA II, Pool #8932 ,
6.875%, due 03/20/2022; and $5,510,000 GNMA II, Pool #8395, 6.875%, due
03/20/2024. The aggregate market value of the collateral at September 30,
1998 was $30,730,289. The Fund's pro-rata interest in the collateral at
September 30, 1998 was $533,863.
See accompanying notes to financial statements.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Short Term Bond Fund (the Fund) is a no-load, diversified series
of the Williamsburg Investment Trust (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940. The
Trust was organized as a Massachusetts business trust on July 18, 1988. The Fund
began operations on January 21, 1992.
The Fund's investment objective is to maximize total return, consisting of
current income and capital appreciation (both realized and unrealized),
consistent with the preservation of capital through active management of high
quality short-term fixed income securities.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of the regular session of trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available, otherwise, at
the last quoted bid price. Securities traded on a national exchange are valued
based upon the closing price on the principal exchange where the security is
traded. It is expected that securities of the Fund will ordinarily be traded in
the over-the-counter market. When market quotations are not readily available,
securities may be valued on the basis of prices provided by an independent
pricing service. If a pricing service cannot provide a valuation, securities
will be valued in good faith at fair value using methods consistent with those
determined by the Board of Trustees.
Repurchase agreements -- The Fund generally enters into joint repurchase
agreements with other funds within the Trust. The joint repurchase agreement,
which is collateralized by U.S. Government obligations, is valued at cost which,
together with accrued interest, approximates market. At the time the Fund enters
into the joint repurchase agreement, the seller agrees that the value of the
underlying securities, including accrued interest, will at all times be equal to
or exceed the face amount of the repurchase agreement. In addition, the Fund
actively monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Discounts and premiums on securities purchased are amortized
in accordance with income tax regulations. Dividends arising from net investment
income are declared and paid quarterly to shareholders of the Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles.
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
Securities traded on a "to-be-announced" basis -- The Fund occasionally trades
securities on a "to-be-announced" (TBA) basis. In a TBA transaction, the Fund
has committed to purchase securities for which all specific information is not
yet known at the time of the trade, particularly the face amount in
mortgage-backed securities transactions. Securities purchased on a TBA basis are
not settled until they are delivered to the Fund, normally 15 to 45 days later.
These transactions are subject to market fluctuations and their current value is
determined in the same manner as for other portfolio securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of 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 $7,108,002 as of September 30, 1998:
Gross unrealized appreciation.............................. $ 61,958
Gross unrealized depreciation.............................. (11,361)
---------
Net unrealized depreciation................................ $ 50,597
+========
As of March 31, 1998, the Fund had capital loss carryforwards for federal income
tax purposes of $586,098 which expire on March 31, 2005. In addition, the Fund
had net realized capital losses of $5,918 during the period from November 1,
1997 through March 31, 1998, which are treated for federal income tax purposes
as arising during the Fund's tax year ending March 31, 1999. These capital loss
carryforwards and "post-October" losses may be utilized in the current and
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 1998, cost of purchases and proceeds
from sales and maturities of investment securities, other than short-term
investments, amounted to $1,592,012 and $1,243,062, respectively.
<PAGE>
THE JAMESTOWN SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Tattersall Advisory Group, 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 0.375% of its
average daily net assets. The Adviser currently intends to limit the total
operating expenses of the Fund to 0.50% of its average daily net assets.
Accordingly, the Adviser voluntarily waived its entire investment advisory fee
of $17,756 and reimbursed the Fund for $5,449 of other operating expenses for
the six months ended September 30, 1998. 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 0.075% on its average daily net assets up to $200
million and 0.05% on such net assets in excess of $200 million, subject to a
$2,000 minimum monthly fee. In addition, the Fund pays out-of-pocket expenses
including, but not limited to, postage, supplies and cost of pricing the Fund's
portfolio securities. Certain officers of the Trust are also officers of CFS.
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