The
Flippin, Bruce & porter
Funds
[LOGO]
Annual Report
March 31, 1999
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FBP Contrarian Equity Fund
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FBP Contrarian Balanced Fund
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<PAGE>
LETTER TO SHAREHOLDERS MAY 17, 1999
================================================================================
We are pleased to report on the progress of your Fund and its investments for
the fiscal year ended March 31,1999. The following table displays the annualized
total return (capital change plus income) of the Funds for the most recent year
and longer time periods.
- --------------------------------------------------------------------------------
Twelve Months Three Years Five Years
- --------------------------------------------------------------------------------
FBP Contrarian Equity Fund 7.74% 20.75% 20.96%
FBP Contrarian Balanced Fund 8.74% 17.01% 16.82%
- --------------------------------------------------------------------------------
REVIEW AND OUTLOOK
Over the course of the past year, we have witnessed events that usually would
result in poorly performing financial markets. Economic weakness in most of the
emerging markets, political uncertainty in the United States and other
countries, and increased volatility in the markets were pushed aside by low
inflation, low interest rates and a powerful U.S. economy. Large growth
companies performed particularly well, gaining 18.5% as measured by the S&P
500's total return. However, results were far from even as the Value Line
Composite, a broader measure of companies, fell 18.1%, lagging far behind.
The outlook for the U.S. economy is quite positive. As the fear of a recession
subsided late in 1998, most economists increased their GDP forecasts to around
3% for 1999. The pace for the first quarter was well above this, so the economy
should moderate as the year progresses. The strength in the economy is being
fueled by the consumer as spending is being boosted by employment growth and
rising confidence. Also, the manufacturing sector is beginning to show signs of
improvement as Asian economies stabilize and domestic demand strengthens.
The Federal Reserve remains neutral, letting the markets set the level of
interest rates. It was the Fed's swift reaction to last fall's liquidity crisis
that allowed our markets to recover as sharply as they have. By reducing
interest rates, as well as coaxing other nations to do the same, they stemmed
the fear of a global recession and possible deflation. The Federal Reserve is
now in a monitoring mode. While concerned over the possibility of renewed
inflation accompanying a pickup in global growth, they seem content with the
continued low domestic inflation rate. Interest rates appear to have reached
their lows last October, and have risen recently due to international events and
a stronger economy. With the current level of interest rates, we continue to
remain defensive with our bond purchases in the Balanced Fund, looking for high
coupon callable corporate bonds or short-term government issues.
As we have looked at the valuation of the stock market over the past year, we
have seen two entirely different worlds. The narrow segment of the market that
has provided the bulk of the leadership (large quality growth issues) appears
overvalued to us. While these companies deserve a premium valuation to the
market, the premium has become excessive by almost any standard. The
pharmaceutical, technology and communication services groups are trading at very
high earnings multiples and are discounting long-term earnings growth rates that
will be very difficult to achieve. Conversely, the broader market has been more
reasonably priced, with many companies trading under 15 times earnings and at
low measures of their price to book, cash flow and sales. Over the years, stocks
purchased at these valuation ranges have proven to be good long-term
investments.
Since March 31, investors have been shifting their interest to a broader group
of value stocks as they gain confidence in sustainable worldwide economic
growth. Many of the former market leaders have begun to underperform. This
broadening out of the market based on improving economic growth has been a
multi-year process in the past. Only time will tell if the duration of this
change is a lengthy one. However, Asian economies are stabilizing, Japan's and
other emerging markets' equities are recovering and U.S. manufacturing appears
to be increasing.
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
1
<PAGE>
COMPARATIVE CHARTS
Performance for each Fund is compared 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%
in bonds. Balanced funds have the growth potential to outpace inflation, but
they will typically lag 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.
FBP Contrarian Equity Fund
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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
3/99
------
FBP Contrarian Equity Fund $26,668
Standard & Poor's 500 Index $32,513
Consumer Price Index $11,405
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-------------------------------------
FBP Contrarian Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
7.74% 20.96% 18.89%
-------------------------------------
*Initial public offering of shares was July 30, 1993.
Past performance is not predictive of future performance.
FBP Contrarian Balanced Fund
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Balanced Fund, the Standard & Poor's 500 Index and the Consumer Price Index
3/99
------
FBP Contrarian Equity Fund $31,127
Standard & Poor's 500 Index $52,192
Consumer Price Index $13,291
- --------------------------------------------------------------------------------
-------------------------------------
FBP Contrarian Balanced Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
8.74% 16.82% 12.36%
-------------------------------------
*Initial public offering of shares was July 3, 1989.
Past performance is not predictive of future performance.
2
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
SHARES COMMON STOCKS -- 95.3% VALUE
- --------------------------------------------------------------------------------
CHEMICALS -- 3.0%
7,000 Dow Chemical Company ........................ $ 652,312
11,500 Ethyl Corporation ........................... 48,875
16,400 Great Lakes Chemical Corporation ............ 602,700
3,900 Octel Corporation(a) ........................ 47,775
-----------
1,351,662
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COMMERCIAL BANKING -- 12.3%
23,960 Banc One Corporation ........................ 1,319,298
22,000 BankAmerica Corporation ..................... 1,553,750
16,000 Chase Manhattan Corporation ................. 1,301,000
21,250 Citigroup, Inc. ............................. 1,357,344
-----------
5,531,392
-----------
COMMUNICATIONS-- 3.1%
11,500 GTE Corporation ............................. 695,750
18,000 Harris Corporation .......................... 515,250
40,000 Paging Network, Inc.(a) ..................... 187,500
-----------
1,398,500
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES-- 13.3%
25,620 Compaq Computer Corporation ................. 811,834
20,000 Electronic Data Systems Corporation ......... 973,750
9,000 Hewlett-Packard Company ..................... 610,313
13,000 International Business Machines Corporation(b) 2,304,250
50,000 Novell, Inc.(a) ............................. 1,259,375
-----------
5,959,522
-----------
CONSUMER GOODS & SERVICES-- 6.5%
74,000 Cendant Corporation(a) ...................... 1,165,500
19,000 Philip Morris Companies, Inc. ............... 668,563
40,000 Shaw Industries, Inc. ....................... 740,000
13,000 UST, Inc. ................................... 339,625
-----------
2,913,688
-----------
DRUGS/MEDICAL EQUIPMENT-- 13.3%
7,000 Allergan, Inc. .............................. 615,125
19,000 Amgen, Inc.(a) .............................. 1,422,625
16,000 Bristol-Myers Squibb Company ................ 1,029,000
6,000 Johnson & Johnson ........................... 562,125
35,000 Mallinckrodt, Inc. .......................... 931,875
7,600 Merck & Company, Inc. ....................... 609,425
13,000 Pharmacia & Upjohn, Inc. .................... 810,875
-----------
5,981,050
-----------
DURABLE GOODS -- 2.2%
4,000 General Electric Company .................... 442,500
12,325 Waste Management, Inc.(a) ................... 546,922
-----------
989,422
-----------
3
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FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.3% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCE -- 3.5%
25,000 SLM Holding Corporation ..................... $ 1,043,750
50,000 United Dominion Realty ...................... 512,500
-----------
1,556,250
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FUNERAL SERVICES -- 1.4%
44,000 Service Corporation International ........... 627,000
-----------
HUMAN RESOURCES -- 0.7%
50,000 Olsten Corporation .......................... 309,375
-----------
INSURANCE -- 2.9%
10,000 Aetna Life & Casualty Company ............... 830,000
6,600 Marsh & McLennan Companies, Inc. ............ 489,638
-----------
1,319,638
-----------
OIL & OIL DRILLING -- 6.3%
16,000 Equitable Resources, Inc. ................... 417,000
22,000 Kerr-McGee Corporation ...................... 721,865
18,000 Schlumberger Limited ........................ 1,083,375
20,000 Sonat, Inc. ................................. 600,000
-----------
2,822,240
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PACKAGING -- 1.3%
21,000 Crown Cork & Seal Company, Inc. ............. 599,812
-----------
PAPER & FOREST PRODUCTS -- 1.2%
10,000 Weyerhaeuser Company(b) ..................... 555,000
-----------
PHOTOGRAPHICAL PRODUCTS-- 2.0%
14,000 Eastman Kodak Company ....................... 894,250
-----------
PRINTING -- 1.9%
27,000 R. R. Donnelley & Sons Company .............. 869,062
-----------
RETAIL STORES -- 14.7%
12,000 Applebee's International, Inc. .............. 297,750
19,000 Avado Brands, Inc. .......................... 112,812
25,000 CBRL Group, Inc. ............................ 450,000
15,000 Circuit City Stores, Inc. ................... 1,149,375
38,000 Dilliard's, Inc. ............................ 964,250
32,000 IKON Office Solutions, Inc. ................. 410,000
36,500 K-Mart Corporation(a) ....................... 613,656
34,000 The Pep Boys - Manny, Moe & Jack ............ 518,500
51,000 Toys R Us, Inc.(a) .......................... 959,437
12,500 Wal-Mart Stores, Inc. ....................... 1,152,344
-----------
6,628,124
-----------
TRANSPORTATION -- 4.9%
14,000 FDX Corporation(a)(b) ....................... 1,299,375
17,000 Union Pacific Corporation ................... 908,437
-----------
2,207,812
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4
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FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.3% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
TRAVEL & INVESTMENT SERVICES-- 0.8%
3,000 American Express Company .................... $ 352,500
-----------
TOTAL COMMON STOCKS (COST $30,381,118) $42,866,299
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================================================================================
Face
Amount REPURCHASE AGREEMENTS(c) -- 5.4% Value
- --------------------------------------------------------------------------------
$2,438,000 Firstar Bank, 3.75%, dated 03/31/99,
due 04/01/99, repurchase proceeds
$2,438,254 (Cost $2,438,000) .............. $ 2,438,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 100.7% ............. $45,304,299
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%) (326,417)
-----------
NET ASSETS -- 100.0% $44,977,882
===========
(a) Non-income producing security.
(b) Security covers a call option.
(c) Joint repurchase agreement is fully collateralized by $28,093,000 U.S.
Treasury Note, 5.625%, due 02/28/01. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $2,525,573.
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1999
================================================================================
MARKET
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- --------------------------------------------------------------------------------
FDX Corporation,
30 04/17/99 at $90 ............. $ 14,625 $ 15,265
International Business Machines Corporation,
10 04/17/99 at $170 ............ 9,500 11,451
Weyerhaeuser Company,
15 04/17/99 at $55 ............. 2,625 4,346
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$ 26,750 $ 31,062
=========== ===========
See accompanying notes to financial statements.
5
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
SHARES COMMON STOCKS -- 66.7% VALUE
- --------------------------------------------------------------------------------
CHEMICALS -- 1.9%
8,000 Dow Chemical Company ........................ $ 745,500
20,000 Ethyl Corporation ........................... 85,000
11,700 Great Lakes Chemical Corporation ............ 429,975
-----------
1,260,475
-----------
COMMERCIAL BANKING -- 7.6%
23,745 Banc One Corporation ........................ 1,307,459
20,000 BankAmerica Corporation ..................... 1,412,500
15,350 Chase Manhattan Corporation ................. 1,248,147
15,312 Citigroup, Inc. ............................. 978,054
-----------
4,946,160
-----------
COMMUNICATIONS -- 2.5%
15,000 GTE Corporation ............................. 907,500
17,000 Harris Corporation .......................... 486,625
50,000 Paging Network, Inc.(a) ..................... 234,375
-----------
1,628,500
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 8.6%
25,914 Compaq Computer Corporation ................. 821,150
20,000 Electronic Data Systems Corporation ......... 973,750
6,100 Hewlett-Packard Company ..................... 413,656
12,800 International Business Machines Corporation(b) 2,268,800
43,000 Novell, Inc.(a) ............................. 1,083,063
-----------
5,560,419
-----------
CONSUMER GOODS & SERVICES -- 3.9%
70,000 Cendant Corporation(a) ...................... 1,102,500
19,300 Philip Morris Companies, Inc. ............... 679,119
29,000 Shaw Industries, Inc. ....................... 536,500
8,500 UST, Inc. ................................... 222,063
-----------
2,540,182
-----------
DRUGS/MEDICAL EQUIPMENT -- 9.3%
5,400 Allergan, Inc. .............................. 474,525
15,000 Amgen, Inc.(a) .............................. 1,123,125
12,000 Bristol-Myers Squibb Company ................ 771,750
14,600 Johnson & Johnson ........................... 1,367,837
28,000 Mallinckrodt, Inc. .......................... 745,500
6,400 Merck & Company, Inc. ....................... 513,200
16,400 Pharmacia & Upjohn, Inc. .................... 1,022,950
-----------
6,018,887
-----------
DURABLE GOODS -- 2.7%
11,200 General Electric Company .................... 1,239,000
11,600 Waste Management, Inc.(a) ................... 514,750
-----------
1,753,750
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6
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FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS -- 66.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCE -- 2.3%
24,000 SLM Holding Corporation ..................... $ 1,002,000
50,000 United Dominion Realty ...................... 512,500
-----------
1,514,500
-----------
FUNERAL SERVICES -- 0.9%
42,000 Service Corporation International ........... 598,500
-----------
HUMAN RESOURCES -- 0.5%
50,000 Olsten Corporation .......................... 309,375
-----------
INSURANCE -- 4.1%
8,300 Aetna Life & Casualty Company ............... 688,900
7,368 American International Group ................ 888,765
15,000 Marsh & McLennan Companies, Inc. ............ 1,112,813
-----------
2,690,478
-----------
OIL & OIL DRILLING -- 3.8%
6,800 Equitable Resources, Inc. ................... 177,225
20,000 Kerr-McGee Corporation ...................... 656,250
17,500 Schlumberger Limited ........................ 1,053,281
20,000 Sonat, Inc. ................................. 600,000
-----------
2,486,756
-----------
PACKAGING -- 0.9%
21,000 Crown Cork & Seal Company, Inc. ............. 599,812
-----------
PAPER & FOREST PRODUCTS -- 0.9%
10,000 Weyerhaeuser Company(b) ..................... 555,000
-----------
PHOTOGRAPHICAL PRODUCTS-- 1.1%
11,000 Eastman Kodak Company ....................... 702,625
-----------
PRINTING -- 1.2%
25,000 R. R. Donnelley & Sons Company .............. 804,687
-----------
RETAIL STORES -- 9.7%
8,200 Applebee's International, Inc. .............. 203,462
23,300 Avado Brands, Inc. .......................... 138,344
18,650 CBRL Group, Inc. ............................ 335,700
10,400 Circuit City Stores, Inc. ................... 796,900
36,000 Dilliard's, Inc. ............................ 913,500
34,000 IKON Office Solutions, Inc. ................. 435,625
39,500 K-Mart Corporation(a) ....................... 664,094
34,100 The Pep Boys - Manny, Moe & Jack ............ 520,025
48,000 Toys R Us, Inc.(a) .......................... 903,000
14,900 Wal-Mart Stores, Inc. ....................... 1,373,594
-----------
6,284,244
-----------
TRANSPORTATION -- 3.3%
13,000 FDX Corporation(a)(b) ....................... 1,206,562
17,200 Union Pacific Corporation ................... 919,125
-----------
2,125,687
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7
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FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 66.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
TRAVEL & INVESTMENT SERVICES -- 1.5%
8,300 American Express Company .................... $ 975,250
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TOTAL COMMON STOCKS (COST $23,615,947) ...... $43,355,287
-----------
================================================================================
PAR VALUE U.S. GOVERNMENT OBLIGATIONS -- 14.1% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 14.1%
$ 500,000 6.75%, due 06/30/99 ....................... $ 502,657
1,000,000 5.75%, due 09/30/99 ....................... 1,005,000
500,000 7.75%, due 01/31/00 ....................... 511,406
1,000,000 5.875%, due 06/30/00 ...................... 1,010,938
1,000,000 4.625%, due 12/31/00 ...................... 993,125
500,000 5.625%, due 02/28/01 ...................... 505,469
1,000,000 4.875%, due 03/31/01 ...................... 997,656
750,000 5.625%, due 05/15/01 ...................... 758,906
750,000 6.125%, due 12/31/01 ...................... 768,985
500,000 6.625%, due 04/30/02 ...................... 520,625
500,000 6.375%, due 08/15/02 ...................... 518,125
500,000 6.25%, due 02/15/03 ....................... 518,125
500,000 7.25%, due 05/15/04 ....................... 544,688
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TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $8,971,582) ......................... $ 9,155,705
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================================================================================
PAR VALUE CORPORATE BONDS -- 11.5% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 5.1%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/08 ...................... $ 783,229
General Motors Acceptance Corporation,
1,000,000 5.50%, due 01/14/02 ....................... 994,796
Green Tree Financial Corporation,
750,000 7.55%, due 10/15/99 ....................... 752,976
Macsaver Financial Services,
500,000 7.60%, due 08/01/07 ....................... 325,000
Signet Banking Corporation,
150,000 9.625%, due 06/01/99 ...................... 150,915
United Dominion Realty,
300,000 7.25%, due 04/01/99 ....................... 300,000
-----------
3,306,916
-----------
INDUSTRIAL -- 2.2%
Baxter International, Inc.,
75,000 9.25%, due 12/15/99 ....................... 76,934
Dayton Hudson Corporation,
52,000 9.875%, due 06/01/17 ...................... 52,316
Hertz Corporation,
1,000,000 6.00%, due 01/15/03 ....................... 993,692
Hilton Hotels Corporation,
300,000 7.70%, due 07/15/02 ....................... 306,766
-----------
1,429,708
-----------
8
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 11.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
UTILITIES -- 4.2%
Dayton Power & Light, Inc.,
$ 500,000 8.40%, due 12/01/22 ....................... $ 528,082
Mississippi Power & Light,
750,000 8.50%, due 01/15/23 ....................... 795,571
Niagara Mohawk Power,
525,000 9.50%, due 03/01/21 ....................... 556,972
West Penn Power Company,
775,000 8.875%, due 02/01/21 ...................... 811,726
-----------
2,692,351
-----------
TOTAL CORPORATE BONDS (COST $7,448,613) ..... $ 7,428,975
-----------
TOTAL INVESTMENTS AT VALUE
(COST $40,036,142) -- 92.3% ............... $59,939,967
-----------
================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(C) -- 9.4% VALUE
- --------------------------------------------------------------------------------
$6,128,000 Firstar Bank, 3.75%, dated 03/31/99,
due 04/01/99, repurchase proceeds
$6,128,638 (Cost $6,128,000) .............. $ 6,128,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 101.7% ............. $66,067,967
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.7)% (1,105,254)
-----------
NET ASSETS -- 100.0% $64,962,713
===========
(a) Non-income producing security.
(b) Security covers a call option.
(c) Joint repurchase agreement is fully collateralized by $28,093,000 U.S.
Treasury Note, 5.625%, due 02/28/01. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $6,348,119.
See accompanying notes to financial statements.
9
<PAGE>
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 1999
================================================================================
MARKET
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- --------------------------------------------------------------------------------
FDX Corporation,
30 04/17/99 at $90 ............. $ 14,625 $ 15,265
International Business Machines Corporation,
40 04/17/99 at $170 ............ 38,000 45,826
Weyerhaeuser Company,
15 04/17/99 at $55 ............. 2,625 4,346
----------- -----------
$ 55,250 $ 65,437
=========== ===========
See accompanying notes to financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1999
=========================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- -----------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C>
At acquisition cost ................................. $30,381,118 $40,036,142
=========== ===========
At value (Note 1) ................................... $42,866,299 $59,939,967
Investments in repurchase agreements (Note 1) .......... 2,438,000 6,128,000
Cash ................................................... 699 --
Interest receivable .................................... 254 233,527
Dividends receivable ................................... 68,319 69,228
Receivable for capital shares sold ..................... 67,303 34,508
Other assets ........................................... 9,500 14,157
----------- -----------
TOTAL ASSETS ........................................ 45,450,374 66,419,387
----------- -----------
LIABILITIES
Bank overdraft ......................................... -- 996,865
Dividends payable ...................................... 9,066 16,740
Distributions payable .................................. 57,911 40,643
Payable for securities purchased ....................... 331,125 264,900
Payable for capital shares redeemed .................... 94 19,465
Accrued investment advisory fees (Note 3) .............. 28,592 41,170
Accrued administration fees (Note 3) ................... 7,050 9,625
Other accrued expenses and liabilities ................. 11,904 12,016
Covered call options, at value (Notes 1 and 4)
(premiums received $31,062 and $65,437, respectively) 26,750 55,250
----------- -----------
TOTAL LIABILITIES ................................... 472,492 1,456,674
----------- -----------
NET ASSETS ................................................ $44,977,882 $64,962,713
=========== ===========
Net assets consist of:
Paid-in capital ........................................ $32,488,389 $45,048,568
Undistributed net investment income .................... -- 133
Net unrealized appreciation on investments ............. 12,489,493 19,914,012
----------- -----------
Net assets ................................................ $44,977,882 $64,962,713
=========== ===========
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ............. 1,992,808 3,356,112
=========== ===========
Net asset value, offering price and
redemption price per share (Note 1) .................... $ 22.57 $ 19.36
=========== ===========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1999
================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ........................................ $ 81,153 $1,179,964
Dividends ....................................... 577,102 614,944
---------- ----------
TOTAL INVESTMENT INCOME ...................... 658,255 1,794,908
---------- ----------
EXPENSES
Investment advisory fees (Note 3) ............... 288,068 435,257
Administration fees (Note 3) .................... 73,470 105,848
Postage and supplies ............................ 9,495 10,057
Professional fees ............................... 7,945 11,585
Trustees' fees and expenses ..................... 8,220 8,220
Custodian fees .................................. 6,725 8,119
Printing of shareholder reports ................. 6,821 6,492
Registration fees ............................... 5,687 4,582
Pricing costs ................................... 1,451 4,645
Insurance expense ............................... 2,179 2,490
Other expenses .................................. 5,804 5,908
---------- ----------
TOTAL EXPENSES ............................... 415,865 603,203
---------- ----------
NET INVESTMENT INCOME .............................. 242,390 1,191,705
---------- ----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains on security transactions ..... 685,564 2,907,950
Net realized gains on option contracts written .. 40,022 45,055
Net change in unrealized appreciation/
depreciation on investments .................. 2,399,274 954,092
---------- ----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ... 3,124,860 3,907,097
---------- ----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ......... $3,367,250 $5,098,802
========== ==========
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31, 1999 AND 1998
======================================================================================================================
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
----------------------------- -----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income .......................... $ 242,390 $ 256,331 $ 1,191,705 $ 1,134,978
Net realized gains on:
Security transactions ....................... 685,564 691,750 2,907,950 2,146,818
Option contracts written .................... 40,022 11,978 45,055 31,530
Net change in unrealized appreciation/
depreciation on investments ................. 2,399,274 6,925,224 954,092 9,325,106
------------ ------------ ------------ ------------
Net increase in net assets from operations ........ 3,367,250 7,885,283 5,098,802 12,638,432
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ..................... (243,458) (256,571) (1,195,675) (1,138,576)
From net realized gains ........................ (725,822) (865,431) (2,953,025) (2,862,386)
------------ ------------ ------------ ------------
Decrease in net assets from
distributions to shareholders .................. (969,280) (1,122,002) (4,148,700) (4,000,962)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 9,849,442 12,609,930 9,396,418 5,859,836
Net asset value of shares issued in reinvestment
of distributions to shareholders ............ 836,052 963,147 4,014,589 3,827,435
Payments for shares redeemed ................... (3,427,898) (1,354,310) (5,338,725) (3,238,764)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ..................... 7,257,596 12,218,767 8,072,282 6,448,507
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS ...................... 9,655,566 18,982,048 9,022,384 15,085,977
NET ASSETS
Beginning of year .............................. 35,322,316 16,340,268 55,940,329 40,854,352
------------ ------------ ------------ ------------
End of year (including undistributed net
investment income of $0, $1,068,
$133 and $4,103, respectively) .............. $ 44,977,882 $ 35,322,316 $ 64,962,713 $ 55,940,329
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ........................................... 471,229 651,600 494,996 323,989
Reinvested ..................................... 39,117 48,841 213,289 211,834
Redeemed ....................................... (164,500) (69,562) (284,114) (177,851)
------------ ------------ ------------ ------------
Net increase in shares outstanding ............. 345,846 630,879 424,171 357,972
Shares outstanding at beginning of year ........ 1,646,962 1,016,083 2,931,941 2,573,969
------------ ------------ ------------ ------------
Shares outstanding at end of year .............. 1,992,808 1,646,962 3,356,112 2,931,941
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 21.45 $ 16.08 $ 14.21 $ 11.21 $ 10.15
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ........................... 0.13 0.19 0.22 0.24 0.21
Net realized and unrealized gains
on investments ............................... 1.50 5.98 2.24 3.05 1.14
-------- -------- -------- -------- --------
Total from investment operations ................... 1.63 6.17 2.46 3.29 1.35
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.13) (0.19) (0.22) (0.24) (0.23)
Distributions from net realized gains ........... (0.38) (0.61) (0.37) (0.05) (0.06)
-------- -------- -------- -------- --------
Total distributions ................................ (0.51) (0.80) (0.59) (0.29) (0.29)
-------- -------- -------- -------- --------
Net asset value at end of year ..................... $ 22.57 $ 21.45 $ 16.08 $ 14.21 $ 11.21
======== ======== ======== ======== ========
Total return ....................................... 7.74% 38.90% 17.65% 29.54% 13.52%
======== ======== ======== ======== ========
Net assets at end of year (000's) .................. $ 44,978 $ 35,322 $ 16,340 $ 9,090 $ 5,323
======== ======== ======== ======== ========
Ratio of net expenses to average net assets(a) ..... 1.08% 1.12% 1.21% 1.25% 1.25%
Ratio of net investment income to average net assets 0.63% 1.04% 1.50% 1.89% 2.15%
Portfolio turnover rate ............................ 18% 10% 9% 12% 9%
</TABLE>
(a) Absent fee waivers and/or expense reimbursements by the Advisor, the ratios
of expenses to average net assets would have been 1.25%, 1.67% and 2.27%
for the years ended March 31, 1997, 1996 and 1995, respectively.
See accompanying notes to financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 19.08 $ 15.87 $ 14.86 $ 12.80 $ 12.19
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ........................... 0.39 0.41 0.42 0.43 0.38
Net realized and unrealized gains
on investments ............................... 1.21 4.26 1.49 2.44 0.87
-------- -------- -------- -------- --------
Total from investment operations ................... 1.60 4.67 1.91 2.87 1.25
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.39) (0.41) (0.42) (0.43) (0.39)
Distributions from net realized gains ........... (0.93) (1.05) (0.48) (0.38) (0.25)
-------- -------- -------- -------- --------
Total distributions ................................ (1.32) (1.46) (0.90) (0.81) (0.64)
-------- -------- -------- -------- --------
Net asset value at end of year ..................... $ 19.36 $ 19.08 $ 15.87 $ 14.86 $ 12.80
======== ======== ======== ======== ========
Total return ....................................... 8.74% 30.22% 13.15% 22.86% 10.54%
======== ======== ======== ======== ========
Net assets at end of year (000's) .................. $ 64,963 $ 55,940 $ 40,854 $ 35,641 $ 25,976
======== ======== ======== ======== ========
Ratio of net expenses to average net assets ........ 1.04% 1.04% 1.08% 1.17% 1.17%(a)
Ratio of net investment income to average net assets 2.05% 2.33% 2.65% 3.04% 3.10%
Portfolio turnover rate ............................ 25% 21% 24% 17% 14%
</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.
See accompanying notes to financial statements.
15
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
================================================================================
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
(normally 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.
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.
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.
16
<PAGE>
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
investment securities and covered call options as of March 31, 1999:
- --------------------------------------------------------------------------------
FBP Contrarian FBP Contrarian
Equity Fund Balanced Fund
- --------------------------------------------------------------------------------
Gross unrealized appreciation .......... $ 14,792,127 $ 21,685,201
Gross unrealized depreciation .......... (2,302,634) (1,771,189)
------------ ------------
Net unrealized appreciation ............ $ 12,489,493 $ 19,914,012
============ ============
Federal income tax cost ................ $ 30,350,056 $ 39,970,705
============ ============
- --------------------------------------------------------------------------------
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1999, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $13,526,771 and $6,500,301, respectively, for the FBP Contrarian
Equity Fund and $16,348,446 and $13,423,764, 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
Advisor) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, each Fund pays the Advisor 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 Advisor.
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 CFS 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, or of CW
Fund Distributors, Inc., the exclusive underwriter of each Funds' shares.
17
<PAGE>
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31, 1999
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 year .. 125 $ 62,686 144 $ 66,996
Options written ........................... 95 52,787 197 142,157
Options expired ........................... (86) (40,023) (104) (45,055)
Options exercised ......................... (79) (44,388) (152) (98,661)
--------- --------- --------- ---------
Options outstanding at end of year ........ 55 $ 31,062 85 $ 65,437
========= ========= ========= =========
- --------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
the FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund, (each a
series of The Williamsburg Investment Trust), including the portfolios of
investments, as of March 31, 1999, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund as of March 31,
1999, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and their
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 30, 1999
19
<PAGE>
- ---------------------------------
The Flippin, Bruce & Porter Funds
- ---------------------------------
INVESTMENT ADVISOR
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
Annual Report
March 31, 1999
Investment Adviser
T. Leavell & Associates, Inc.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT
================================================================================
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report of The
Government Street Funds and of The Alabama Tax Free Bond Fund for the year ended
March 31, 1999.
The Government Street Equity Fund
- ---------------------------------
We are proud to report that The Government Street Equity Fund has received
a four star rating from Morningstar, Inc. for the 1, 3 and 5 year periods
coinciding with the end of its fiscal year on March 31, 1999. The Morningstar
ratings reflect risk-adjusted performance and are subject to change every month.
Ratings are calculated for the Fund's total annual return in excess of the
90-day T-bill return with fee adjustments and a risk factor that reflects Fund
performance below the 90-day T-bill return. A four star rating places the Fund
in the top 32.5% of all domestic stock funds measured. For the five year period
ended March 31, 1999, that universe consisted of 1,810 common stock mutual
funds.
For the year ended March 31, 1999, The Government Street Equity Fund
achieved a solid investment return of 14.8%. This compares favorably with the
Lipper Growth and Income Fund Index whose return was 6.8% for the same twelve
month period.
During 1998 and the first quarter of 1999, common stocks continued their
recent trend of larger capitalization stocks performing well with the broader
market lagging. Most indicative of this phenomenon, perhaps, was the investment
return of the S&P 500 Index. This index-- which is capitalization weighted-- had
a total return of 18.5% for the twelve months ended March 31, 1999; however, on
an equal weighted basis, the S&P 500 would have achieved a return of only 1.9%
for the same period.
In addition, growth stocks have recently outperformed value stocks to an
extent that has not been experienced in at least 20 years. For example, the
average "large growth" fund achieved a return of 26.1% for the 12 months through
March; for the same period, however, the average "small value" fund fell 22.7%.
This extreme disparity is evident within The Government Street Equity Fund's
portfolio. For the year ended March 31, 1999, the return of the growth stocks in
the Fund was 30.4%, while the return of the Fund's value stocks was a mere 1.5%.
It is unlikely that the U.S. stock market will continue indefinitely to be
driven by the narrow leadership of a handful of large capitalization stocks; nor
is it reasonable to expect that growth stocks will continue to outperform value
stocks as they have over the past 18 months.
Looking ahead, it probably would be foolish to predict a continuation of
the recent record setting pace experienced in the stock market. However, the
fundamental economic environment in our country is so healthy that it is equally
difficult to maintain strong negative sentiments about the market. Regardless of
what may occur in the short run, we continue to be positive with respect to
potential long-term growth in equity markets.
The Government Street Equity Fund is currently invested in approximately
120 companies. These investments are spread over most areas of the economy
thereby insuring broad diversification of risk. All of these companies are
quality representatives of their respective industries, and each has passed a
number of fundamental financial and technical screens used in its selection.
During the recent fiscal year, the Fund experienced a turnover rate of only
22%. At year end, the net assets of the Fund were $90,707,450; net asset value
per share was $48.10.
The Government Street Bond Fund
- -------------------------------
Following the rally in U.S. Treasury securities that occurred during the
latter part of 1998, bond investors began 1999 with optimism. After all,
inflation continued to be low, the possibility of lower interest rates seemed
likely, and there was a growing feeling among analysts that the U.S. economy
would be slowing throughout the year.
1
<PAGE>
However, these economic conditions actually resulted in a shift in investor
sentiment. As the strength in the U.S. economy became more apparent and as
global economies seemed to improve, fewer investors sought the safety of U.S.
Treasuries. During February, 1999, the Lehman Brothers Treasury Index
experienced a loss of 2.6%-- the worst month for U.S. Treasuries in 18 years.
The sell-off in Treasuries affected most other bonds which also fell in price
during the quarter.
Despite these reverses in the bond market during 1999's first calendar
quarter, The Government Street Bond Fund completed its fiscal year at March 31
with a total return of 5.38%. For this same period, the return of the Lehman
Government/Corporate Intermediate Bond Index was 6.56%. The Fund's ratio of net
investment income to average net assets was 6.01%.
For its fiscal year ended March 31, 1999, 97.7% of The Government Street
Bond Fund's assets were invested in securities rated A or better with over 55%
rated AAA. The average maturity and duration of the Fund were 5.8 years and 4.4
years, respectively. The net assets of the Fund were $43,040,526; net asset
value per share was $20.90. The ratio of expenses to average net assets was
0.73%.
The Alabama Tax Free Bond Fund
- ------------------------------
The Alabama Tax Free Bond Fund was ranked by Lipper Analytical Services,
Inc. as the number one Alabama municipal debt fund based on total return for the
year ended December 31, 1998. Lipper provides mutual fund data and rankings to
The Wall Street Journal and other national financial publications.
This Fund remains the only no-load Alabama municipal bond fund. It invests
in high grade Alabama tax-exempt bonds which carry a Moody's or Standard and
Poor's rating of A or better. As of March 31, 1999, more than half of the Fund's
assets were rated AAA.
The net assets of the Fund as of March 31, 1999 were $21,559,972; the net
asset value per share was $10.54. The weighted average maturity of the Fund's
portfolio was 7.2 years-- an average maturity in keeping with its intermediate
term objective.
The total return of the Fund for its fiscal year ended March 31, 1999 was
4.73%. For the same twelve months period, the Lehman Three Year and Five Year
Indices achieved returns of 5.28% and 5.98%, respectively. The ratio of net
investment income to average net assets was 4.16%. For an Alabama investor in
the maximum combined federal and state income tax bracket of 42.6%, that yield's
taxable equivalent was 7.25%.
Tax-exempt municipal securities continue to provide an attractive option
for investors who are seeking stability of principal as well as income which is
sheltered from federal and state income taxes. Demographic trend suggests that
the interest in such securities will continue to grow in the years ahead as the
aging population focuses increasingly on principal preservation and generation
of income.
Thank you for your continued confidence in The Government Street Funds and
The Alabama Tax Free Bond Fund. Please call us if we can be of further service
to you.
Very truly yours,
/s/ Thomas W. Leavell
Thomas W. Leavell
President
T. Leavell & Associates, Inc.
/s/ Richard Mitchell
Richard Mitchell
President
The Government Street Funds
The Alabama Tax Free Bond Fund
2
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
3/99
------
The Government Street Equity Fund $29,816
Standard & Poor's 500 Index $40,940
Consumer Price Index $12,144
- --------------------------------------------------------------------------------
-------------------------------------
The Government Street Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
14.81% 20.32% 15.06%
-------------------------------------
*Initial public offering of shares was June 3, 1991.
Past performance is not predictive of future performance.
THE GOVERNMENT STREET BOND FUND
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Bond Fund, the Lehman Government/Corporate Intermediate Bond Index, and
the 90-Day Treasury Bill Index
3/99
------
The Government Street Bond Fund $17,002
Lehman Government/Corporate Intermediate Bond Index $17,611
90-Day Treasury Bill Index $14,453
- --------------------------------------------------------------------------------
-------------------------------------
The Government Street Bond Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
5.38% 6.60% 7.03%
-------------------------------------
*Initial public offering of shares was June 3, 1991.
Past performance is not predictive of future performance.
3
<PAGE>
THE ALABAMA TAX FREE BOND FUND
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Alabama
Tax Free Bond Fund, the Lehman 7-Year G.O. Municipal Bond Index and the
Lehman 3-Year Municipal Bond Index
3/99
------
The Alabama Tax Free Bond Fund $13,661
Lehman 7-Year G.O. Municipal Bond Index $14,725
Lehman 3-Year Municipal Bond Index $13,599
- --------------------------------------------------------------------------------
-------------------------------------
The Alabama Tax Free Bond Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
4.73% 5.52% 5.15%
-------------------------------------
*Initial public offering of shares was January 15, 1993.
Past performance is not predictive of future performance.
4
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1999
=====================================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C> <C>
At acquisition cost ............................. $45,491,392 $ 41,634,311 $ 20,698,028
=========== ============ ============
At value (Note 1) ............................... $86,838,733 $ 41,770,060 $ 21,515,625
Investments in repurchase agreements (Note 1) ...... 3,833,000 888,000 --
Cash ............................................... 987 898 --
Interest receivable ................................ 399 704,668 273,457
Dividends receivable ............................... 88,884 -- --
Receivable for capital shares sold ................. 50,302 55,344 350
Other assets ....................................... 5,328 3,813 1,338
----------- ------------ ------------
TOTAL ASSETS .................................... 90,817,633 43,422,783 21,790,770
----------- ------------ ------------
LIABILITIES
Dividends payable .................................. 3,238 13,377 16,933
Distributions payable .............................. 35,888 -- --
Payable for securities purchased ................... -- 256,008 199,361
Payable for capital shares redeemed ................ 1,329 77,002 1,500
Accrued investment advisory fees (Note 3) .......... 45,990 18,043 5,087
Accrued administrative fees (Note 3) ............... 12,850 2,700 2,650
Other accrued expenses and liabilities ............. 10,888 15,127 5,267
----------- ------------ ------------
TOTAL LIABILITIES ............................... 110,183 382,257 230,798
----------- ------------ ------------
NET ASSETS ......................................... $90,707,450 $ 43,040,526 $ 21,559,972
=========== ============ ============
Net assets consist of:
Paid-in capital .................................... $49,360,109 $ 43,458,038 $ 20,941,658
Accumulated net realized losses
from security transactions ...................... -- (553,261) (199,283)
Net unrealized appreciation on investments ......... 41,347,341 135,749 817,597
----------- ------------ ------------
Net assets ......................................... $90,707,450 $ 43,040,526 $ 21,559,972
=========== ============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ...... 1,885,753 2,059,224 2,044,597
=========== ============ ============
Net asset value, offering price and
redemption price per share (Note 1) ............. $ 48.10 $ 20.90 $ 10.54
=========== ============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
Year Ended March 31, 1999
=======================================================================================
Government Government Alabama
Street Street Tax Free
Equity Bond Bond
Fund Fund Fund
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest ............................. $ 169,115 $ 2,665,381 $ 960,084
Dividends ............................ 995,184 -- --
----------- ----------- -----------
TOTAL INVESTMENT INCOME ........... 1,164,299 2,665,381 960,084
----------- ----------- -----------
EXPENSES
Investment advisory fees (Note 3) .... 478,172 197,590 69,902
Administrative fees (Note 3) ......... 138,379 29,702 29,975
Professional fees .................... 11,145 11,145 8,045
Pricing costs ........................ 2,671 11,810 14,038
Trustees' fees and expenses .......... 8,220 8,220 8,220
Printing of shareholder reports ...... 8,199 6,741 7,843
Custodian fees ....................... 11,302 5,188 3,886
Postage and supplies ................. 6,911 6,229 5,475
Registration fees .................... 2,957 3,222 1,067
Insurance expense .................... 2,802 2,179 1,557
Other expenses ....................... 6,651 6,456 899
----------- ----------- -----------
TOTAL EXPENSES .................... 677,409 288,482 150,907
Fees waived by the Adviser (Note 3) .. -- -- (21,089)
----------- ----------- -----------
NET EXPENSES ...................... 677,409 288,482 129,818
----------- ----------- -----------
NET INVESTMENT INCOME ................... 486,890 2,376,899 830,266
----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses)
from security transactions ........ 1,154,015 (119,151) (347)
Net change in unrealized appreciation/
depreciation on investments ....... 9,951,369 (251,151) 86,422
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS .............. 11,105,384 (370,302) 86,075
----------- ----------- -----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................... $11,592,274 $ 2,006,597 $ 916,341
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1999 and 1998
===================================================================================================================================
Government Street Government Street Alabama Tax Free
Equity Fund Bond Fund Bond Fund
--------------------------- --------------------------- ---------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31, March 31, March 31, March 31, March 31, March 31,
1999 1998 1999 1998 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net investment income ................. $ 486,890 $ 516,281 $ 2,376,899 $ 2,087,331 $ 830,266 $ 782,390
Net realized gains (losses)
from security transactions ......... 1,154,015 2,517,491 (119,151) (36,286) (347) 1,079
Net change in unrealized appreciation/
depreciation on investments ........ 9,951,369 17,143,907 (251,151) 906,779 86,422 546,731
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets from operations 11,592,274 20,177,679 2,006,597 2,957,824 916,341 1,330,200
------------ ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............ (487,774) (527,419) (2,380,755) (2,095,202) (830,266) (782,390)
From net realized gains ............... (3,083,650) (1,732,108) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Decrease in net assets from
distributions to shareholders ......... (3,571,424) (2,259,527) (2,380,755) (2,095,202) (830,266) (782,390)
------------ ------------ ------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............. 10,535,714 10,616,273 7,618,281 7,696,201 3,032,760 2,804,374
Net asset value of shares issued in
reinvestment of distributions
to shareholders .................... 3,411,170 2,175,993 2,146,286 1,871,979 609,745 555,482
Payments for shares redeemed .......... (6,903,321) (4,696,332) (3,257,836) (2,965,314) (2,106,904) (770,028)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ............ 7,043,563 8,095,934 6,506,731 6,602,866 1,535,601 2,589,828
------------ ------------ ------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS ............. 15,064,413 26,014,086 6,132,573 7,465,488 1,621,676 3,137,638
NET ASSETS
Beginning of year ..................... 75,643,037 49,628,951 36,907,953 29,442,465 19,938,296 16,800,658
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 90,707,450 $ 75,643,037 $ 43,040,526 $ 36,907,953 $ 21,559,972 $ 19,938,296
============ ============ ============ ============ ============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME ..................... $ -- $ 884 $ -- $ 3,856 $ -- $ --
============ ============ ============ ============ ============ ============
Capital share activity
Sold .................................. 233,010 268,759 359,195 365,904 286,831 270,970
Reinvested ............................ 77,139 56,533 101,333 89,389 57,694 53,306
Redeemed .............................. (151,673) (121,016) (153,761) (141,456) (199,887) (73,918)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in shares outstanding .... 158,476 204,276 306,767 313,837 144,638 250,358
Shares outstanding, beginning of year . 1,727,277 1,523,001 1,752,457 1,438,620 1,899,959 1,649,601
------------ ------------ ------------ ------------ ------------ ------------
Shares outstanding, end of year ....... 1,885,753 1,727,277 2,059,224 1,752,457 2,044,597 1,899,959
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
- ------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ......... $ 43.79 $ 32.59 $ 29.41 $ 23.87 $ 22.69
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ..................... 0.27 0.32 0.37 0.40 0.38
Net realized and unrealized
gains on investments ................... 6.01 12.28 4.50 5.75 1.19
-------- -------- -------- -------- --------
Total from investment operations ............. 6.28 12.60 4.87 6.15 1.57
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ...... (0.27) (0.32) (0.36) (0.40) (0.39)
Distributions from net realized gains ..... (1.70) (1.08) (1.33) (0.21) --
-------- -------- -------- -------- --------
Total distributions .......................... (1.97) (1.40) (1.69) (0.61) (0.39)
-------- -------- -------- -------- --------
Net asset value at end of year ............... $ 48.10 $ 43.79 $ 32.59 $ 29.41 $ 23.87
======== ======== ======== ======== ========
Total return ................................. 14.81% 39.31% 16.94% 25.96% 7.02%
======== ======== ======== ======== ========
Net assets at end of year (000's) ............ $ 90,707 $ 75,643 $ 49,629 $ 41,421 $ 31,473
======== ======== ======== ======== ========
Ratio of net expenses to average net assets(a) 0.85% 0.86% 0.89% 0.94% 0.91%
Ratio of net investment income
to average net assets ..................... 0.61% 0.82% 1.17% 1.50% 1.71%
Portfolio turnover rate ...................... 22% 18% 20% 31% 55%
</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 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 1.00% for the year ended March 31, 1995.
See accompanying notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
- ------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ......... $ 21.06 $ 20.47 $ 20.87 $ 20.33 $ 20.87
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ..................... 1.27 1.32 1.34 1.35 1.35
Net realized and unrealized
gains (losses) on investments .......... (0.16) 0.60 (0.40) 0.54 (0.53)
-------- -------- -------- -------- --------
Total from investment operations ............. 1.11 1.92 0.94 1.89 0.82
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ...... (1.27) (1.33) (1.34) (1.35) (1.36)
-------- -------- -------- -------- --------
Net asset value at end of year ............... $ 20.90 $ 21.06 $ 20.47 $ 20.87 $ 20.33
======== ======== ======== ======== ========
Total return ................................. 5.38% 9.61% 4.60% 9.43% 4.12%
======== ======== ======== ======== ========
Net assets at end of year (000's) ............ $ 43,041 $ 36,908 $ 29,442 $ 28,718 $ 27,780
======== ======== ======== ======== ========
Ratio of net expenses to average net assets .. 0.73% 0.74% 0.75% 0.76% 0.85%
Ratio of net investment income
to average net assets ..................... 6.01% 6.35% 6.44% 6.38% 6.68%
Portfolio turnover rate ...................... 17% 10% 20% 10% 11%
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
- ------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ......... $ 10.49 $ 10.18 $ 10.23 $ 9.96 $ 9.96
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income ..................... 0.44 0.44 0.43 0.42 0.45
Net realized and unrealized
gains (losses) on investments .......... 0.05 0.31 (0.05) 0.27 --
-------- -------- -------- -------- --------
Total from investment operations ............. 0.49 0.75 0.38 0.69 0.45
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ...... (0.44) (0.44) (0.43) (0.42) (0.45)
-------- -------- -------- -------- --------
Net asset value at end of year ............... $ 10.54 $ 10.49 $ 10.18 $ 10.23 $ 9.96
======== ======== ======== ======== ========
Total return ................................. 4.73% 7.44% 3.82% 7.02% 4.66%
======== ======== ======== ======== ========
Net assets at end of year (000's) ............ $ 21,560 $ 19,938 $ 16,801 $ 15,480 $ 12,816
======== ======== ======== ======== ========
Ratio of net expenses to average net assets(a) 0.65% 0.65% 0.66% 0.75% 0.75%
Ratio of net investment income
to average net assets ..................... 4.16% 4.19% 4.24% 4.11% 4.56%
Portfolio turnover rate ...................... 7% 2% 6% 4% 36%
</TABLE>
(a) Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
0.76%, 0.75%, 0.78%, 0.86% and 1.05% for the years ended March 31, 1999,
1998, 1997, 1996 and 1995, respectively (Note 3).
See accompanying notes to financial statements.
10
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
SHARES COMMON STOCKS -- 95.7% VALUE
- --------------------------------------------------------------------------------
ADVERTISING -- 0.5%
6,000 Omnicom Group, Inc. ......................... $ 479,625
-----------
AEROSPACE -- 0.7%
17,000 Boeing Company .............................. 580,125
-----------
CHEMICALS AND DRUGS -- 15.4%
40,000 Becton Dickinson & Company .................. 1,532,500
15,000 Biomet, Inc.(a) ............................. 629,063
30,000 Cardinal Health, Inc. ....................... 1,980,000
18,000 duPont (E.I.) de Nemours & Company .......... 1,045,125
16,000 Eli Lilly & Company ......................... 1,358,000
8,000 Goodrich (B.F.) Company ..................... 274,500
15,000 Johnson & Johnson ........................... 1,405,312
19,400 Merck & Company, Inc. ....................... 1,555,638
10,500 Monsanto Company ............................ 482,344
5,500 Pfizer, Inc. ................................ 763,125
40,000 Schering-Plough Corporation ................. 2,212,500
15,000 Sigma-Aldrich Corporation ................... 438,750
2,700 Waters Corporation .......................... 283,669
-----------
13,960,526
-----------
CONSTRUCTION -- 4.2%
25,500 Blount, Inc. - Class A ...................... 736,312
20,000 Caterpiller, Inc. ........................... 918,750
25,390 Clayton Homes, Inc. ......................... 280,877
3,000 Florida Rock Industries, Inc. ............... 102,375
8,500 Kaufman & Broad Home Corporation ............ 191,781
10,000 Lowe's Companies, Inc. ...................... 605,000
7,000 Masco Corporation ........................... 197,750
25,600 Valspar Corporation ......................... 808,000
-----------
3,840,845
-----------
CONSUMER PRODUCTS -- 7.6%
20,000 Archer-Daniels-Midland Company .............. 293,750
25,000 Belo (A.H.) Corporation - Class A ........... 456,250
4,000 Clorox Company .............................. 468,750
12,000 General Motors Corporation .................. 1,042,500
15,000 Gillette Company ............................ 891,563
5,000 Hewlett-Packard Company ..................... 339,062
3,000 Macromedia, Inc.(a) ......................... 135,938
3,000 Maytag Corporation .......................... 181,125
12,000 Microsoft Corporation(a) .................... 1,075,500
9,000 Newell Company .............................. 427,500
5,000 OshKosh B'Gosh, Inc. - Class A .............. 88,438
15,000 Procter & Gamble Company .................... 1,469,062
-----------
6,869,438
-----------
DURABLE GOODS -- 12.9%
12,000 Advanced Micro Devices, Inc.(a) ............. 186,000
47,000 Cisco Systems, Inc.(a) ...................... 5,149,437
6,000 Costco Companies(a) ......................... 549,375
23,000 General Electric Company .................... 2,544,375
6,000 Ingersoll-Rand Company ...................... 297,750
9,500 Intel Corporation ........................... 1,131,687
3,000 International Business Machines Corporation . 531,750
11,500 Raytheon Company - Class B .................. 674,188
7,500 Shared Medical Systems, Inc. ................ 417,656
5,118 SPX Corporation ............................. 258,139
-----------
11,740,357
-----------
11
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
ELECTRONICS -- 2.9%
15,177 AMP, Inc. ................................... $ 814,815
16,000 Koninklijke (Royal) Philips Electronics N.V . 1,319,000
7,000 Motorola, Inc. .............................. 512,750
-----------
2,646,565
-----------
FINANCIAL -- 15.2%
9,000 Aetna, Inc. ................................. 747,000
30,000 AFLAC, Inc. ................................. 1,633,125
10,000 American Express Company .................... 1,175,000
4,000 Charles Schwab Corporation (The) ............ 384,500
12,000 Citigroup, Inc. ............................. 766,500
28,000 Firstar Corporation ......................... 2,506,000
20,000 Fleet Financial Group, Inc. ................. 752,500
23,000 Freddie Mac ................................. 1,313,875
7,500 Marsh & McLennan Companies, Inc. ............ 556,406
16,000 MBNA Corporation ............................ 382,000
25,000 Mellon Bank Corporation ..................... 1,759,375
21,000 Synovus Financial Corporation ............... 429,187
15,000 Torchmark Corporation ....................... 474,375
11,000 Transamerica Corporation .................... 781,000
853 Waddell & Reed Financial, Inc. - Class A .... 17,486
3,673 Waddell & Reed Financial, Inc. - Class B .... 73,001
-----------
13,751,330
-----------
FOOD/BEVERAGES -- 2.7%
7,500 Anheuser-Busch Companies, Inc. .............. 571,406
12,000 Campbell Soup Company ....................... 488,250
40,000 Coca-Cola Enterprises ....................... 1,210,000
7,000 Pilgrim's Pride Corporation - Class B ....... 115,063
3,000 SYSCO Corporation ........................... 78,937
-----------
2,463,656
-----------
HOTELS -- 0.2%
6,000 Marriott International, Inc. - Class A ...... 201,750
-----------
MANUFACTURING -- 1.6%
6,000 Johnson Controls, Inc. ...................... 374,250
10,000 Leggett & Platt, Inc. ....................... 200,000
19,000 Pall Corporation ............................ 314,688
8,000 Tyco International Ltd. ..................... 574,000
-----------
1,462,938
-----------
METAL AND MINING -- 1.1%
14,000 Alcoa, Inc. ................................. 576,625
10,000 Newmont Mining Corporation .................. 175,000
5,000 Phelps Dodge Corporation .................... 246,250
-----------
997,875
-----------
MULTIMEDIA -- 0.5%
7,000 Meredith Corporation ........................ 220,063
3,000 Viacom, Inc. - Class A(a) ................... 249,938
-----------
470,001
-----------
OIL/ENERGY -- 5.2%
16,541 BP Amoco Plc ................................ 1,669,607
5,000 Burlington Resources, Inc. .................. 199,687
13,000 Chevron Corporation ......................... 1,149,687
14,650 Exxon Corporation ........................... 1,033,741
11,500 Halliburton Company ......................... 442,750
10,000 Helmerich & Payne, Inc. ..................... 226,875
-----------
4,722,347
-----------
12
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
PAPER AND FOREST PRODUCTS -- 1.2%
5,000 Georgia Pacific Corporation, Timber Group ... $ 112,188
7,000 International Paper Company ................. 295,313
5,000 Mead Corporation ............................ 153,750
3,000 Union Camp Corporation ...................... 201,375
8,000 Willamette Industries, Inc. ................. 302,000
-----------
1,064,626
-----------
RACETRACKS -- 0.4%
9,000 Speedway Motorsports, Inc.(a) ............... 371,250
-----------
RETAIL -- 8.3%
17,000 American Stores Company ..................... 561,000
7,000 AutoZone, Inc.(a) ........................... 212,625
20,000 CBRL Group, Inc. ............................ 360,000
9,000 Circuit City Stores - Circuit City Group .... 689,625
33,000 Home Depot, Inc. ............................ 429,187
10,000 Nike, Inc. - Class B ........................ 576,875
8,000 Sears, Roebuck & Company .................... 361,500
15,000 Wal-Mart Stores, Inc. ....................... 1,382,813
40,000 Walgreen Company ............................ 1,130,000
6,000 Williams-Sonoma, Inc.(a) .................... 169,500
-----------
7,498,188
-----------
SERVICES - COMPUTER -- 3.7%
22,200 Automatic Data Processing, Inc. ............. 918,525
16,000 Ceridian Corporation ........................ 585,000
24,000 Computer Sciences Corporation(a) ............ 1,324,500
8,500 Electronic Data Systems Corporation ......... 413,844
6,000 Wallace Computer Services, Inc. ............. 118,875
-----------
3,360,744
-----------
SERVICES - CONSUMER -- 0.4%
6,000 HEALTHSOUTH Corporation(a) .................. 62,250
7,000 Waste Management, Inc. ...................... 310,625
-----------
372,875
-----------
TELECOMMUNICATION EQUIPMENT -- 2.8%
2,000 Lucent Technologies, Inc. ................... 215,500
12,000 Northern Telecom Limited .................... 745,500
18,000 Scientific-Atlanta, Inc. .................... 490,500
11,500 Tellabs, Inc. ............................... 1,124,125
-----------
2,575,625
-----------
TRANSPORTATION -- 1.6%
15,500 FDX Corporation(a) .......................... 1,438,594
-----------
UTILITIES -- 6.6%
25,000 Ameritech Corporation ....................... 1,446,875
3,000 AT&T Corporation ............................ 239,438
23,000 BellSouth Corporation ....................... 921,437
15,490 Duke Energy Corporation ..................... 846,141
4,000 MCI WorldCom, Inc.(a) ....................... 354,250
26,000 SBC Communications, Inc. .................... 1,225,250
17,000 US WEST, Inc. ............................... 936,062
-----------
5,969,453
-----------
TOTAL COMMON STOCKS (COST $45,491,392) ........ $86,838,733
-----------
13
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Face
Amount REPURCHASE AGREEMENTS(b) -- 4.2% Value
- --------------------------------------------------------------------------------
Firstar Bank,
$3,833,000 3.75%, dated 03/31/1999, due 04/01/1999,
repurchase proceeds $3,833,399
(Cost $3,833,000) ......................... $ 3,833,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 99.9% ................ $90,671,733
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% . 35,717
-----------
NET ASSETS -- 100.0% .......................... $90,707,450
===========
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $28,093,000 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $3,970,682.
See accompanying notes to financial statements.
14
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
PAR VALUE U.S. TREASURY AND AGENCY OBLIGATIONS -- 41.3% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 8.5%
$ 225,000 7.00%, due 04/15/1999 ....................... $ 225,211
150,000 6.375%, due 07/15/1999 ...................... 150,750
100,000 8.00%, due 08/15/1999 ....................... 101,187
250,000 7.50%, due 10/31/1999 ....................... 253,828
50,000 7.875%, due 11/15/1999 ...................... 50,937
100,000 8.50%, due 02/15/2000 ....................... 103,063
20,000 8.75%, due 08/15/2000 ....................... 20,981
50,000 8.50%, due 11/15/2000 ....................... 52,672
140,000 8.00%, due 05/15/2001 ....................... 148,225
125,000 7.875%, due 08/15/2001 ...................... 132,695
850,000 5.75%, due 04/30/2003 ....................... 866,204
750,000 5.875%, due 11/15/2005 ...................... 770,860
750,000 5.50%, due 02/15/2008 ....................... 757,735
-----------
3,634,348
-----------
FEDERAL FARM CREDIT BANK BONDS -- 1.9%
500,000 6.00%, due 01/07/2008 ....................... 503,585
325,000 6.06%, due 05/28/2013 ....................... 324,441
-----------
828,026
-----------
FEDERAL HOME LOAN BANK BONDS -- 7.5%
500,000 7.57%, due 08/19/2004 ....................... 544,676
500,000 6.045%, due 12/10/2004 ...................... 510,163
750,000 5.925%, due 04/09/2008 ...................... 752,374
500,000 5.42%, due 09/23/2008 ....................... 483,462
500,000 5.52%, due 09/23/2008 ....................... 487,082
500,000 5.038%, due 10/14/2008 ...................... 469,487
-----------
3,247,244
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS -- 7.1%
500,000 6.345%, due 11/01/2005 ...................... 517,749
300,000 7.52%, due 04/21/2006 ....................... 300,420
500,000 7.55%, due 04/26/2006 ....................... 500,885
895,000 7.44%, due 09/20/2006 ....................... 930,106
800,000 7.04%, due 01/09/2007 ....................... 822,390
-----------
3,071,550
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS -- 15.2%
100,000 8.45%, due 07/12/1999 ....................... 100,980
500,000 6.83%, due 04/02/2003 ....................... 500,000
500,000 6.63%, due 06/20/2005 ....................... 520,881
500,000 7.90%, due 06/28/2006 ....................... 499,744
650,000 7.65%, due 10/06/2006 ....................... 659,322
500,000 7.36%, due 02/07/2007 ....................... 504,553
400,000 7.70%, due 04/10/2007 ....................... 407,815
500,000 6.62%, due 06/25/2007 ....................... 524,779
500,000 7.16%, due 06/26/2007 ....................... 505,774
500,000 7.00%, due 07/17/2007 ....................... 506,043
750,000 6.08%, due 12/15/2010 ....................... 758,662
400,000 6.80%, due 08/27/2012 ....................... 416,869
600,000 6.875%, due 09/24/2012 ...................... 623,644
-----------
6,529,066
-----------
PRIVATE EXPORT FUNDING BONDS-- 1.1%
470,000 7.90%, due 03/31/2000 ....................... 482,162
-----------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(COST $17,875,130) .......................... $17,792,396
-----------
15
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 11.7% VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 11.7%
$ 17,332 Pool #15032, 7.50%, due 02/15/2007 .......... $ 17,839
432,045 Pool #438434, 6.50%, due 01/01/2013 ......... 437,919
14,205 Pool #176413, 7.50%, due 09/15/2016 ......... 14,620
18,723 Pool #170784, 8.00%, due 12/15/2016 ......... 19,497
13,842 Pool #181540, 8.00%, due 02/15/2017 ......... 14,414
496,979 Pool #493659, 6.50%, due 12/15/2018 ......... 494,669
482,719 Pool #476695, 6.50%, due 10/15/2023 ......... 480,476
442,073 Pool #366710, 6.50%, due 02/01/2024 ......... 440,019
545,800 Pool #453826, 7.25%, due 09/01/2027 ......... 557,551
868,998 Pool #412360, 7.00%, due 11/15/2027 ......... 882,271
687,931 Pool #454162, 7.00%, due 05/15/2028 ......... 698,439
499,974 Pool #158794, 7.00%, due 09/15/2028 ......... 507,610
496,851 Pool #48760, 6.50%, due 12/15/2028 .......... 494,542
-----------
TOTAL MORTGAGE-BACKED SECURITIES (COST $5,080,623) $ 5,059,866
-----------
================================================================================
PAR VALUE CORPORATE BONDS -- 44.0% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 23.0%
American Express Company,
$ 350,000 8.50%, due 08/15/2001 ..................... $ 370,985
-----------
AmSouth Bancorp,
425,000 9.375%, due 05/01/1999 .................... 426,163
550,000 7.75%, due 05/15/2004 ..................... 583,520
-----------
1,009,683
-----------
Associate Corporation,
500,000 6.25%, due 11/01/2008 ..................... 498,307
-----------
Banc One Corporation,
600,000 7.00%, due 07/15/2005 ..................... 625,998
-----------
BankAmerica Corporation,
496,000 8.375%, due 03/15/2002 .................... 528,900
-----------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001 .................... 181,542
-----------
General Electric Capital Corporation,
100,000 7.24%, due 01/15/2002 ..................... 104,331
150,000 7.50%, due 03/15/2002 ..................... 157,796
-----------
262,127
-----------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002 .................... 777,864
-----------
J.P. Morgan & Company,
500,000 7.25%, due 01/15/2002 ..................... 515,948
500,000 6.00%, due 01/15/2009 ..................... 482,297
-----------
998,245
-----------
NationsBank,
550,000 7.625%, due 04/15/2005 .................... 591,488
-----------
Regions Financial Corporation,
350,000 7.80%, due 12/01/2002 ..................... 368,578
-----------
16
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 44.0% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Salomon, Inc.,
$ 400,000 7.25%, due 01/15/2000 ..................... $ 405,222
480,000 7.50%, due 02/01/2003 ..................... 502,899
-----------
908,121
-----------
Sears Roebuck Acceptance Corporation,
700,000 6.00%, due 03/20/2003 ..................... 700,406
-----------
SouthTrust Bank of Alabama, N.A.,
665,000 7.00%, due 11/15/2008 ..................... 683,779
-----------
Transamerica Financial Corporation,
785,000 7.50%, due 03/15/2004 ..................... 827,521
-----------
Wachovia Corporation,
535,000 7.00%, due 12/15/1999 ..................... 540,881
-----------
TOTAL FINANCE CORPORATE BONDS ................. 9,874,425
-----------
INDUSTRIAL -- 16.1%
BP America, Inc.,
265,000 8.50%, due 04/15/2001 ..................... 280,286
-----------
Coca-Cola Company,
500,000 6.625%, due 08/01/2004 .................... 512,830
-----------
duPont (E.I.) de Nemours & Company,
150,000 9.15%, due 04/15/2000 ..................... 155,641
300,000 6.75%, due 10/15/2002 ..................... 310,434
-----------
466,075
-----------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003 .................... 1,150,009
-----------
International Business Machines Corporation,
1,000,000 7.25%, due 11/01/2002 ..................... 1,046,058
-----------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001 .................... 255,879
-----------
Limited, Inc.,
150,000 8.875%, due 08/15/1999 .................... 151,751
-----------
Mobil Corporation,
100,000 8.375%, due 02/12/2001 .................... 104,779
-----------
Philip Morris Companies, Inc.,
175,000 7.75%, due 05/01/1999 ..................... 175,284
700,000 7.125%, due 10/01/2004 .................... 727,870
-----------
903,154
-----------
Procter & Gamble Company,
150,000 8.70%, due 08/01/2001 ..................... 161,011
-----------
17
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
Par Value CORPORATE BONDS -- 44.0% (Continued) Value
- --------------------------------------------------------------------------------
Raytheon Company,
$ 800,000 6.50%, due 07/15/2005 ..................... $ 815,058
-----------
Wal-Mart Stores, Inc.,
170,000 9.10%, due 07/15/2000 ..................... 177,733
100,000 8.625%, due 04/01/2001 .................... 105,890
745,000 7.50%, due 05/15/2004 ..................... 806,212
-----------
1,089,835
-----------
TOTAL INDUSTRIAL CORPORATE BONDS .............. 6,936,725
-----------
UTILITY -- 4.9%
AT&T Corporation,
250,000 6.00%, due 03/15/2009 ..................... 248,439
-----------
Consolidated Edison,
785,000 7.60%, due 01/15/2000 ..................... 798,281
-----------
Emerson Electric Company,
552,000 6.30%, due 11/01/2005 ..................... 560,893
-----------
Scana Corporation,
500,000 6.05%, due 01/13/2003 ..................... 499,035
-----------
TOTAL UTILITY CORPORATE BONDS ................. 2,106,648
-----------
TOTAL CORPORATE BONDS (COST $18,678,558) ...... $18,917,798
-----------
TOTAL INVESTMENTS AT VALUE
(COST $41,634,311) -- 97.0% ................. $41,770,060
-----------
================================================================================
Face
Amount REPURCHASE AGREEMENTS(a) -- 2.1% Value
- --------------------------------------------------------------------------------
Firstar Bank,
$ 888,000 3.75%, dated 03/31/1999, due 04/01/1999,
repurchase proceeds $888,093 (Cost $888,000) $ 888,000
-----------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 99.1% ................ $42,658,060
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.9% . 382,466
-----------
NET ASSETS -- 100.0% .......................... $43,040,526
===========
(a) Joint repurchase agreement is fully collateralized by $28,093,000 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $919,897.
See accompanying notes to financial statements.
18
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 95.4% VALUE
- --------------------------------------------------------------------------------
Alabama Mental Health Finance Auth. Special Tax,
$ 300,000 5.00%, due 05/01/2006 ..................... $ 315,501
-----------
Alabama Special Care Facilities Financing Auth. Rev.,
250,000 5.375%, due 11/01/2012 .................... 257,522
-----------
Alabama State, GO,
100,000 5.70%, due 12/01/2002 ..................... 105,936
-----------
Alabama State Industrial Access Road & Bridge Corp., GO,
100,000 5.25%, due 06/01/2003 ..................... 104,866
-----------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000 .................... 154,490
340,000 5.75%, due 09/01/2001 ..................... 355,616
400,000 6.50%, due 09/01/2005, prerefunded
09/01/2001 at 101 ....................... 430,592
-----------
940,698
-----------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000 ..................... 101,748
250,000 5.25%, due 11/01/2005 ..................... 267,325
205,000 5.00%, due 12/01/2005 ..................... 216,267
200,000 5.125%, due 11/01/2010 .................... 210,442
300,000 5.00%, due 11/01/2012 ..................... 308,178
-----------
1,103,960
-----------
Alabama Water Pollution Control Rev.,
25,000 7.00%, due 08/15/2001, prerefunded
08/15/1999 at 100 ....................... 25,360
190,000 6.25%, due 08/15/2004 ..................... 211,054
-----------
236,414
-----------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004 ..................... 267,287
-----------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
25,000 7.375%, due 07/01/2006, ETM ............... 27,775
-----------
Auburn University, Alabama, Rev.,
25,000 6.10%, due 06/01/1999 ..................... 25,123
150,000 5.20%, due 06/01/2004 ..................... 158,821
325,000 5.25%, due 04/01/2005 ..................... 344,806
-----------
528,750
-----------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003 ..................... 216,228
400,000 5.00%, due 02/01/2007 ..................... 419,788
200,000 4.55%, due 02/01/2009 ..................... 197,338
-----------
833,354
-----------
Baldwin Co., AL, Board of Education Rev.,
300,000 5.90%, due 12/01/2001 ..................... 304,095
-----------
Birmingham, AL, GO,
100,000 5.80%, due 04/01/2002 ..................... 105,737
200,000 5.90%, due 04/01/2003 ..................... 214,974
-----------
320,711
-----------
19
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 95.4% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Birmingham, AL, Industrial Water Board Rev.,
$ 100,000 5.00%, due 03/01/2001 ..................... $ 102,592
100,000 6.00%, due 07/01/2007 ..................... 112,508
-----------
215,100
-----------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM ................ 66,823
-----------
Birmingham, AL, Special Facilities Rev.,
100,000 4.45%, due 06/01/1999 ..................... 100,222
-----------
Birmingham, AL, Waterworks & Sewer Board Rev.,
50,000 5.90%, due 01/01/2003 ..................... 53,698
400,000 6.15%, due 01/01/2006 ..................... 432,168
-----------
485,866
-----------
Birmingham-Southern College, AL,
Private Education Bldg. Auth. Rev.,
500,000 5.10%, due 12/01/2012 ..................... 508,210
-----------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004 ..................... 57,358
-----------
Decatur, AL, GO,
300,000 5.00%, due 06/01/2009 ..................... 313,440
-----------
Fairhope, AL, Utility Rev.,
200,000 5.10%, due 12/01/2008 ..................... 207,044
-----------
Florence, AL, School Warrants,
200,000 4.65%, due 12/01/2012 ..................... 197,678
-----------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009 ..................... 315,360
-----------
Hoover, AL, Board of Education, GO,
400,000 6.00%, due 02/15/2006 ..................... 439,240
-----------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded
02/01/2001 at 102 ....................... 214,550
-----------
Houston Co., AL, GO,
250,000 5.00%, due 07/01/2002 ..................... 259,542
-----------
Huntsville, AL, GO,
115,000 5.15%, due 08/01/2000 ..................... 117,661
100,000 5.20%, due 11/01/2000 ..................... 102,785
500,000 5.50%, due 11/01/2002 ..................... 528,895
100,000 5.90%, due 11/01/2005 ..................... 108,893
300,000 5.40%, due 02/01/2010 ..................... 314,670
200,000 5.25%, due 11/01/2011 ..................... 210,792
-----------
1,383,696
-----------
Huntsville, AL, Electric Systems Rev.,
150,000 6.10%, due 12/01/2000 ..................... 156,517
150,000 5.00%, due 12/01/2003 ..................... 157,232
250,000 4.80%, due 12/01/2012 ..................... 250,522
-----------
564,271
-----------
20
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 95.4% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Huntsville, AL, Water Systems Rev.,
$ 150,000 5.15%, due 05/01/2004 ..................... $ 157,922
150,000 5.25%, due 05/01/2005 ..................... 157,813
200,000 4.70%, due 11/01/2013 ..................... 197,912
-----------
513,647
-----------
Jefferson Co., AL, GO,
150,000 5.55%, due 04/01/2002 ..................... 157,290
100,000 5.00%, due 04/01/2004 ..................... 104,399
-----------
261,689
-----------
Jefferson Co., AL, Board of Education
Capital Outlay Warrants,
300,000 5.70%, due 02/15/2011 ..................... 331,029
-----------
Jefferson Co., AL, Sewer Rev.,
140,000 5.15%, due 09/01/2002 ..................... 146,409
50,000 5.50%, due 09/01/2003, ETM ................ 53,418
300,000 5.75%, due 09/01/2005 ..................... 324,798
-----------
524,625
-----------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007 ..................... 323,871
-----------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007 ..................... 352,401
200,000 4.40%, due 02/01/2011 ..................... 194,838
400,000 4.85%, due 02/01/2013 ..................... 396,872
-----------
944,111
-----------
Madison Co., AL, Board of Education
Capital Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004 ..................... 185,568
250,000 5.10%, due 09/01/2011 ..................... 259,818
-----------
445,386
-----------
Mobile, AL, GO,
200,000 5.40%, due 08/15/2000 ..................... 205,622
25,000 6.25%, due 08/01/2001 ..................... 26,490
25,000 6.30%, due 08/01/2001 ..................... 26,517
275,000 6.20%, due 02/15/2007, ETM ................ 308,784
-----------
567,413
-----------
Mobile, AL, Water & Sewer Commissioners Rev.,
55,000 6.30%, due 01/01/2003 ..................... 59,438
-----------
Mobile Co., AL, GO,
50,000 6.10%, due 02/01/2002, prerefunded
02/01/2000 at 102 ....................... 52,175
160,000 6.70%, due 02/01/2011, prerefunded
02/01/2000 at 102 ....................... 167,786
-----------
219,961
-----------
Mobile Co., AL, Board of Education
Capital Outlay Warrants,
400,000 5.00%, due 03/01/2008 ..................... 416,100
-----------
Mobile Co., AL, Gas Tax Antic. Warrants,
100,000 4.50%, due 02/01/2003 ..................... 101,517
-----------
Montgomery, AL, GO,
200,000 4.25%, due 05/01/1999, ETM ................ 200,190
200,000 4.70%, due 05/01/2002 ..................... 205,536
500,000 5.10%, due 10/01/2008 ..................... 527,735
-----------
933,461
-----------
21
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 95.4% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Montgomery, AL, Waterworks & Sanitation Rev.,
$ 200,000 5.85%, due 03/01/2003 ..................... $ 213,882
400,000 5.60%, due 09/01/2009 ..................... 431,920
-----------
645,802
-----------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006 ..................... 105,131
-----------
Mountain Brook, AL, Board of Education
Capital Outlay Warrants,
405,000 4.80%, due 02/15/2011 ..................... 411,079
-----------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010 ..................... 434,376
-----------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003 ..................... 102,883
100,000 5.30%, due 07/01/2003 ..................... 105,830
-----------
208,713
-----------
Scottsboro, AL, Waterworks Sewer & Gas Rev.,
200,000 4.35%, due 08/01/2011 ..................... 193,966
-----------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000 ..................... 210,072
50,000 5.35%, due 08/01/2001 ..................... 52,030
-----------
262,102
-----------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM ................ 36,817
25,000 6.60%, due 02/01/2002, ETM ................ 26,860
40,000 6.60%, due 02/01/2003, ETM ................ 43,808
-----------
107,485
-----------
Tuscaloosa, AL, Board of Education, GO,
100,000 5.10%, due 02/01/2004 ..................... 105,099
300,000 4.625%, due 08/01/2008 .................... 305,115
-----------
410,214
-----------
Tuscaloosa, AL, Board of Education
Special Tax Warrants,
75,000 5.70%, due 02/15/2005 ..................... 79,657
125,000 6.00%, due 02/15/2009 ..................... 134,440
-----------
214,097
-----------
University of Alabama General Fee Series A Rev.,
250,000 4.15%, due 10/01/1999 ..................... 251,323
50,000 5.00%, due 11/01/2000 ..................... 51,263
240,000 5.10%, due 10/01/2002 ..................... 250,694
400,000 5.25%, due 06/01/2010 ..................... 421,076
100,000 5.375%, due 06/01/2013 .................... 104,822
-----------
1,079,178
-----------
Vestavia Hills, AL, Board of Education
Capital Outlay Rev.,
55,000 5.25%, due 02/01/2004 ..................... 57,294
-----------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005 ..................... 130,339
-----------
TOTAL ALABAMA (COST $19,759,696) .............. $20,577,293
-----------
22
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKETS -- 4.4% VALUE
- --------------------------------------------------------------------------------
938,332 Firstar Tax-Free Money Market Fund (Cost $938,332) $ 938,332
-----------
TOTAL INVESTMENTS AT VALUE
(COST $20,698,028)-- 99.8% .................. $21,515,625
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2% . 44,347
-----------
NET ASSETS -- 100.0% .......................... $21,559,972
===========
ETM - Escrowed to maturity.
See accompanying notes to financial statements.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
================================================================================
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
(normally 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.
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.
24
<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 March 31, 1999:
- --------------------------------------------------------------------------------
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
- --------------------------------------------------------------------------------
Gross unrealized appreciation . $ 42,337,895 $ 653,317 $ 861,851
Gross unrealized depreciation . (990,554) (517,568) (44,254)
------------ ------------ ------------
Net unrealized appreciation ... $ 41,347,341 $ 135,749 $ 817,597
============ ============ ============
Federal income tax cost ....... $ 45,491,392 $ 41,634,311 $ 20,698,028
============ ============ ============
- --------------------------------------------------------------------------------
As of March 31, 1999, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$540,121 and $199,283, respectively, which expire through the year 2007. In
addition, The Government Street Bond Fund had net realized capital losses of
$13,140 during the period from November 1, 1998 through March 31, 1999, which
are treated for federal income tax purposes as arising during the Fund's tax
year ending March 31, 2000. These capital loss carryforwards and "post-October"
losses may be utilized in future years to offset net realized capital gains
prior to distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1999, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $22,246,919 and $16,504,497, respectively, for The Government Street
Equity Fund, $13,200,689 and $6,549,408, respectively, for The Government Street
Bond Fund, and $2,840,186 and $1,250,000, respectively, for The Alabama Tax Free
Bond Fund.
25
<PAGE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly, at an
annual rate of .60% of its average daily net assets up to $100 million and .50%
of such assets in excess of $100 million. The Government Street Bond Fund pays
the Adviser a fee at an annual rate of .50% of its average daily net assets up
to $100 million and .40% of such net assets in excess of $100 million. The
Alabama Tax Free Bond Fund pays the Adviser a fee at an annual rate of .35% of
its average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
The Adviser currently intends to limit the total operating expenses of The
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $21,089 of its investment advisory fees for the
Fund during the year ended March 31, 1999.
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 CFS 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.
26
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Government Street Equity Fund, The Government Street Bond Fund and The
Alabama Tax Free Bond Fund, (each a series of The Williamsburg Investment
Trust), including the portfolios of investments, as of March 31, 1999, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Government Street Equity Fund, The Government Street Bond Fund and The Alabama
Tax Free Bond Fund, as of March 31, 1999, the results of their operations for
the year then ended, the changes in their net assets for each of the two years
in the period then ended and their financial highlights for each of the five
years in the period then ended, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 30, 1999
27
<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>
DAVENPORT
Equity Fund
-----------
ANNUAL REPORT
March 31, 1999
<PAGE>
LETTER TO SHAREHOLDERS MAY 7, 1999
================================================================================
Dear Fellow Shareholder:
We welcome you as a shareholder of the Davenport Equity Fund and thank you for
your support as we close our first full fiscal year. We are pleased to report
that during the first calendar quarter of 1999 your Fund was up 5.0%. For the
year ended March 31, 1999, the Fund increased 8.5% and, since inception, the
Fund has returned 17.0% on an average annual basis. For comparison, the Standard
& Poor's 500 Index and the Lipper Universe of General Equity Funds were up 5.0%
and 0.9%, respectively, for the quarter and 18.5% and 3.6%, respectively, for
the year ended March 31, 1999.
While large company indices such as the Standard & Poor's 500 have sailed
through many milestones over the past couple of years, the average stock has had
difficulty keeping pace. Smaller to mid-size corporations, especially those that
are industrial or commodity based, have hardly budged. The negative 3.5% first
quarter performance of the Value Line Index of 1700 companies is typical of the
broader markets' performance of late.
The companies whose stocks have performed well generally share a common
characteristic: the ability to raise prices. Investors are willing to pay
substantial premiums to own dominant companies with proprietary products. Price
or value is not a concern. Investors want growth. Unfortunately, growth and
pricing power are scarce. Most companies are flush with inventory due to years
of increasing capacity, technological advancements and slack overseas demand. To
reduce inventory, companies have resorted to price-cutting.
The winner in this benign inflationary environment is the consumer. Consumers
now enjoy price stability and an increase in discretionary income despite tepid
wage growth. Consumers feel confident. Jobs are plentiful. Interest rates are
low. The economy is chugging along comfortably. It is no wonder that consumers
are spending. Compounding this spending trend is the baby boomer generation.
Boomers' incomes are close to peak levels, while the bulk of their fixed
expenses, such as mortgage and childcare payments, are behind them. Industries
that offer products that appeal to this bulging segment of society are enjoying
strong growth. For example:
Car manufacturers that produce sports utility vehicles have experienced a
long string of record sales. Ford continues to increase production of the
very popular Explorer, Expedition and Navigator. These vehicles have had a
major impact on Ford's bottom line as the company makes approximately
$10,000 on each vehicle sold.
Pharmaceutical companies and their stock prices have also performed well.
As people age they require more medicines, not only for traditional
ailments like arthritis, heart disease and cholesterol, but also for
lifestyle improvement like baldness, weight problems and allergies. We
believe Schering-Plough and Bristol-Myers Squibb are well positioned to
take advantage of this increase in health care spending.
The Internet and related technologies are also having a dramatic impact on
our economy and lifestyle. Companies are investing heavily in technology to
boost productivity and to gain a competitive advantage. Furthermore, good
workers are scarce and companies are substituting technology for wages.
Companies that sell proprietary technology that dominate its field enjoy
monopoly size margins. Cisco Systems and EMC, we believe, are well
entrenched in their areas of expertise.
Circuit City and other electronics stores are also experiencing a pickup in
sales as consumers are buying DVD players, satellite dishes and large
screen televisions. Further excitement can be anticipated with the
introduction of high definition television. The home entertainment center
is becoming a necessity for some and status for others.
1
<PAGE>
We continue to search for stocks that represent good value and offer the growth
characteristics that make them attractive on a long-term basis. However, in this
market, finding growth and value in the same stock is fairly elusive. We have
tackled this challenge by investing in companies such as those mentioned above
that we believe will lead their field for years to come. While we own a number
of traditional growth companies, a majority of your portfolio is invested in
more value-oriented companies.
We believe that many value companies offer tremendous long-term potential
despite currently being out of favor. Enron and Schlumberger in the energy
sector are typical of the value stocks we own. Both companies are leaders in
their field and have the expertise and financial wherewithal to take advantage
of depressed prices and to position themselves for future growth. We also find
companies, like Tredegar Industries and Capital One Financial, that are focused
on cutting costs, growing revenues and increasing shareholder value, attractive.
We look forward to facing the challenges in the market. After all, Davenport's
own profit sharing plan is invested in the same fashion as the Davenport Equity
Fund. In this way, we have aligned your interest with that of our 300 plus
employees. You can be sure we will work hard to do our best for the Davenport
Equity Fund for years to come.
Sincerely,
Davenport & Company LLC
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.
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in the
Davenport Equity Fund and the Standard & Poor's 500 Index
3/99
------
Davenport Equity Fund $12,090
Standard & Poor's 500 Index $13,771
- --------------------------------------------------------------------------------
------------------------------
Davenport Equity Fund
Average Annual Total Return
1 Year Since Inception*
8.53% 17.01%
------------------------------
*Initial public offering of shares was January 15, 1998
Past performance is not predictive of future performance.
2
<PAGE>
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
================================================================================
ASSETS
Investments in securities:
At acquisition cost $ 48,091,959
============
At market value (Note 1) $ 55,258,175
Investments in repurchase agreements (Note 1) 1,186,000
Cash 642
Dividends and interest receivable 73,790
Receivable for capital shares sold 86,885
Other assets 18,101
------------
TOTAL ASSETS 56,623,593
------------
LIABILITIES
Dividends payable 3,784
Payable for capital shares redeemed 189,404
Accrued investment advisory fees (Note 3) 37,295
Accrued administration fees (Note 3) 8,550
Other accrued expenses and liabilities 26,660
------------
TOTAL LIABILITIES 265,693
------------
NET ASSETS $ 56,357,900
============
Net assets consist of:
Paid-in capital $ 50,456,935
Undistributed net investment income 22,572
Accumulated net realized losses from security transactions (1,287,823)
Net unrealized appreciation on investments 7,166,216
------------
Net assets $ 56,357,900
============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) 4,692,814
============
Net asset value, offering price and
redemption price per share (Note 1) $ 12.01
============
See accompanying notes to financial statements.
3
<PAGE>
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1999
================================================================================
INVESTMENT INCOME
Dividends $ 712,045
Interest 71,568
-----------
TOTAL INVESTMENT INCOME 783,613
-----------
EXPENSES
Investment advisory fees (Note 3) 329,707
Administration fees (Note 3) 83,035
Registration fees 16,220
Custodian fees 10,943
Printing of shareholder reports 10,880
Postage and supplies 9,827
Professional fees 8,845
Trustees' fees and expenses 8,220
Insurance expense 1,556
Pricing costs 1,494
Other expenses 19,945
-----------
TOTAL EXPENSES 500,672
-----------
NET INVESTMENT INCOME 282,941
-----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions (1,287,823)
Net change in unrealized appreciation/
depreciation on investments 5,647,305
-----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 4,359,482
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 4,642,423
===========
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
THE DAVENPORT EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended March 31, 1999 and 1998
=====================================================================================================
Year Period
Ended Ended
March 31, March 31,
1999 1998 (a)
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C>
Net investment income $ 282,941 $ 24,604
Net realized gains (losses) from security transactions (1,287,823) 22,572
Net change in unrealized appreciation/depreciation on investments 5,647,305 1,518,911
------------ ------------
Net increase in net assets from operations 4,642,423 1,566,087
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (284,973) --
From net realized gains (22,572) --
------------ ------------
Decrease in net assets from distributions to shareholders (307,545) --
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 33,435,301 23,577,618
Net asset value of shares issued in reinvestment
of distributions to shareholders 292,444 --
Payments for shares redeemed (6,398,898) (449,530)
------------ ------------
Net increase in net assets from capital share transactions 27,328,847 23,128,088
------------ ------------
TOTAL INCREASE IN NET ASSETS 31,663,725 24,694,175
NET ASSETS
Beginning of period 24,694,175 --
------------ ------------
End of period (including undistributed net investment
income of $22,572 and $24,604, respectively) $ 56,357,900 $ 24,694,175
============ ============
CAPITAL SHARE ACTIVITY
Sold 3,018,408 2,259,111
Reinvested 26,301 --
Redeemed (569,249) (41,757)
------------ ------------
Net increase in shares outstanding 2,475,460 2,217,354
Shares outstanding at beginning of period 2,217,354 --
------------ ------------
Shares outstanding at end of period 4,692,814 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.
5
<PAGE>
THE DAVENPORT EQUITY FUND
FINANCIAL HIGHLIGHTS
================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR
A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
YEAR PERIOD
ENDED ENDED
MARCH 31, MARCH 31,
1999 1998 (a)
- --------------------------------------------------------------------------------
Net asset value at beginning of period $ 11.14 $ 10.00
-------- --------
Income from investment operations:
Net investment income 0.06 0.01
Net realized and unrealized gains on investments 0.88 1.13
-------- --------
Total from investment operations 0.94 1.14
-------- --------
Less distributions:
Dividends from net investment income (0.06) --
Distributions from net realized gains (0.01) --
-------- --------
Total distributions (0.07) --
-------- --------
Net asset value at end of period $ 12.01 $ 11.14
======== ========
Total return 8.53% 11.40%
======== ========
Net assets at end of period (000's) $ 56,358 $ 24,694
======== ========
Ratio of net expenses to average net assets(b) 1.14% 1.15%(c)
Ratio of net investment income to average net assets 0.64% 0.76%(c)
Portfolio turnover rate 15% 17%(c)
(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.
6
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
================================================================================
MARKET
SHARES COMMON STOCKS -- 98.1% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS -- 3.2%
18,568 Alcoa, Inc. $ 764,769
19,766 Chesapeake Corporation 536,153
13,837 Cleveland-Cliffs, Inc. 471,323
-----------
1,772,245
-----------
CHEMICALS AND DRUGS -- 8.8%
19,766 Air Products & Chemicals, Inc. 676,985
14,629 duPont (E.I.) de Nemours & Company 849,396
19,766 Merck & Company, Inc. 1,584,986
33,193 Schering-Plough Corporation 1,835,988
-----------
4,947,355
-----------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES-- 14.7%
19,872 Allied Signal, Inc. 977,454
8,300 Cisco Systems, Inc.(a) 909,369
9,000 EMC Corporation 1,149,750
15,812 Hewlett-Packard Company 1,072,251
10,690 Intel Corporation 1,273,446
13,837 Lockheed Martin Corporation 521,482
21,379 Media General, Inc. 999,468
9,000 Microsoft Corporation(a) 806,625
7,903 Motorola, Inc. 578,895
-----------
8,288,740
-----------
CONGLOMERATES -- 1.7%
416 Berkshire Hathaway, Inc. - Class B(a) 978,016
-----------
CONSUMER PRODUCTS -- 14.8%
19,766 American Home Products Corporation 1,289,732
15,806 Amgen, Inc.(a) 1,183,474
24,190 Bristol-Myers Squibb Company 1,555,719
15,812 Ford Motor Company 897,331
16,035 Gillette Company 953,080
14,629 Johnson & Johnson 1,370,554
41,353 SYSCO Corporation 1,088,101
-----------
8,337,991
-----------
DURABLE GOODS -- 10.9%
12,095 Deere & Company 467,169
9,883 General Electric Company 1,093,307
14,629 Koninklijke Philips Electronics N.V. 1,205,978
19,766 Martin Marietta Materials, Inc. 1,127,897
20,751 Norfolk Southern Corporation 547,308
54,854 Tredegar Industries, Inc. 1,697,046
-----------
6,138,705
-----------
ENTERTAINMENT -- 1.8%
32,069 The Walt Disney Company 998,148
-----------
7
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
MARKET
SHARES COMMON STOCKS-- 98.1% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 17.6%
13,342 American International Group, Inc. $ 1,609,379
7,996 Associates First Capital Corporation 359,820
19,766 BB&T Corporation 715,282
7,879 Capital One Financial Corporation 1,189,729
14,629 CCB Financial Corporation 790,880
25,319 Federal Realty Investments Trust 536,446
8,156 Markel Corporation(a) 1,470,119
45,006 MGI Properties, Inc. 1,232,039
6,337 The Pioneer Group, Inc. 93,867
19,766 St. Paul Companies, Inc. 613,981
12,095 SunTrust Banks, Inc. 752,914
6,919 Wachovia Corporation 561,736
-----------
9,926,192
-----------
FOOD/BEVERAGES -- 4.5%
15,812 Anheuser-Busch Company, Inc. 1,204,677
11,857 Coca-Cola Company 727,723
23,310 Sara Lee Corporation 576,923
-----------
2,509,323
-----------
OIL/ENERGY -- 9.3%
7,879 Atlantic Richfield Company 575,167
9,883 Chevron Corporation 874,028
14,822 Enron Corporation 952,314
19,766 Halliburton Company 760,991
9,883 Mobil Corporation 869,704
11,857 Schlumberger Limited 713,643
19,075 Tidewater, Inc. 493,566
-----------
5,239,413
-----------
RETAIL STORES -- 5.8%
19,766 Circuit City Stores, Inc. 1,514,570
19,766 Saks, Inc.(a) 513,916
44,270 Walgreen Company 1,250,628
-----------
3,279,114
-----------
UTILITIES -- 5.0%
10,690 Cox Communications, Inc.(a) 808,431
9,500 MCI WorldCom, Inc.(a) 841,344
25,319 SBC Communications, Inc. 1,193,158
-----------
2,842,933
-----------
TOTAL COMMON STOCKS (COST $48,091,959) $55,258,175
-----------
8
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS(B)-- 2.1% VALUE
- --------------------------------------------------------------------------------
$1,186,000 Firstar Bank, 3.75%, dated 03/31/99, due 04/01/99,
repurchase proceeds $1,186,124 (Cost $1,186,000) $ 1,186,000
-----------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS
AT VALUE -- 100.2% $56,444,175
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%) (86,275)
-----------
NET ASSETS -- 100.0% $56,357,900
===========
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $28,093,000 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $1,228,601.
See accompanying notes to financial statements.
9
<PAGE>
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
================================================================================
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
(normally 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.
10
<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
investment securities of $48,091,959 as of March 31, 1999:
- --------------------------------------------------------------------------------
Gross unrealized appreciation ............................ $ 9,655,864
Gross unrealized depreciation ............................ (2,489,648)
------------
Net unrealized appreciation .............................. $ 7,166,216
============
- --------------------------------------------------------------------------------
As of March 31,1999, the Fund had capital loss carryforwards for federal income
tax purposes of $334,879, which expire through the year 2007. In addition, the
Fund had net realized capital losses of $952,944 during the period from November
1, 1998 through March 31,1999, which are treated for federal income tax purposes
as arising during the Fund's tax year ending March 31, 2000. These capital loss
carryforwards and "post-October" losses may be utilized in future years to
offset net realized capital gains prior to distributing such gains to
shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1999, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $34,403,126 and $6,218,581, 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 CFS 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.
11
<PAGE>
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati Ohio
We have audited the accompanying statement of assets and liabilities of The
Davenport Equity Fund (a series of The Williamsburg Investment Trust), including
the portfolio of investments, as of March 31, 1999, and the related statement of
operations for the year then ended and the statement of changes in net assets
and financial highlights for the year then ended and for the period January 15,
1998 (commencement of operations) to March 31, 1998. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Davenport Equity Fund as of March 31, 1999, the results of its operations for
the year then ended and the changes in its net assets and financial highlights
for the year then ended and for the period January 15, 1998 to March 31, 1998,
in conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 30, 1999
12
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
13
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
14
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
15
<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
Firstar Bank
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
FUNDS
No-Load Funds
ANNUAL REPORT
March 31, 1999
INVESTMENT ADVISER
Lowe, Brockenbrough & Company, Inc.
Richmond, Virginia
<PAGE>
LETTER TO SHAREHOLDERS MAY 18, 1999
================================================================================
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited annual report of The
Jamestown Funds for the year ended March 31, 1999.
THE JAMESTOWN BALANCED FUND
For the fiscal year ended March 31, 1999, The Jamestown Balanced Fund produced a
total return of 7.6% compared to the Lipper Balanced Index of 8.4%. The equity
market had very narrow leadership during this period, with the technology sector
leading the way by a wide margin. That sector alone was up 62.7%, followed by
the communication services sector up 34.6%, and the health care sector up 28.5%.
The other nine equity sectors failed to keep pace with the 18.5% return of the
Standard & Poor's 500 Index, and four of these sectors actually produced
negative returns. The basic industry sector, which includes metal and chemical
companies, as well as paper and forest product companies, had the poorest
showing with a return of -14.1%.
The Jamestown Balanced Fund returned 16.9% on an annualized basis for the three
years ended March 31, 1999, comparing favorably to the 15.9% return for the
Lipper Balanced Index. For the five-year period, the Fund generated a return of
16.8% versus 15.0% for the comparable Lipper Balanced Index.
Your Fund grew in size to over $112 million in total net assets with 294
shareholders as of March 31, 1999.
THE JAMESTOWN EQUITY FUND
For the year ended March 31, 1999, The Jamestown Equity Fund had a total return
of 8.3%, failing to keep up with the 17.5% return for the Lipper Growth Index
and the 18.5% return for the Standard & Poor's 500 Index. Fueled by the
technology sector in general, and by many of the Internet stocks in particular,
the Lipper Growth Index was difficult for us to match, as we believe a large
number of the Internet stocks are selling at hyper-inflated valuations. Our
risk-averse style has kept us from owning those equities.
The Jamestown Equity Fund returned 21.5% on an annualized basis for the three
years ended March 31, 1999, versus 23.9% for the Lipper Growth Index. For the
five-year period, your Fund has returned 20.9% as compared to 21.8% for the
Index.
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ended March 31, 1999, the Jamestown Tax Exempt Virginia Fund
had a total return of 4.9% compared to 5.2% for the Lipper Intermediate
Municipal Fund Index and 6.2% for the Lehman Municipal Bond Index. Yields and
prices on municipal bonds have been extraordinarily stable by historical
standards. Over the past twelve months, Treasury yield volatility has been
roughly three times as great as municipal yield volatility, with a range of 110
basis points on the 30-year Treasury versus a difference of 31 basis points on
the Municipal Revenue Bond Index.
Some key characteristics of The Jamestown Tax Exempt Virginia Fund are as
follows:
Average Effective Maturity ......... 7.6 years
Average Effective Duration ......... 5.9 years
Average Weighted Coupon ............ 5.1%
SEC Yield .......................... 3.9%
Average Credit Quality ............. AA+
1
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
For the year ended March 31, 1999, The Jamestown International Equity Fund had a
total return of 8.7%. This return compares favorably with the 6.0% return
generated by the Morgan Stanley EAFE Index and the -0.6% return generated by the
Lipper International Index. The period was characterized by continued strength
throughout Europe and weakness in Japan and the rest of Asia.
Throughout the year, the Fund benefited from its heavy weighting in European
markets and its low weighting in Asian Pacific markets. European markets
benefited from the convergence of interest rates in preparation for the launch
of the Euro and the massive corporate restructuring programs that supported
stronger earnings growth. Beginning with the devaluation of the Thailand
currency last summer, most Asian Pacific equity markets fell 50% or more in the
second half of 1998.
The global crisis that was born out of the economic and financial turmoil in
Southeast Asia appears to have eased significantly. The Federal Reserve played a
leading role by cutting interest rates in the United States three times last
fall. Oechsle International Advisors used the turmoil to reduce their holdings
in Continental Europe and to reallocate money into the United Kingdom and Japan.
The regional allocations of the portfolio as of March 31, 1999 are shown in the
chart below:
The Jamestown
International Morgan Stanley
Equity Fund EAFE Index
----------- ----------
Continental Europe .................... 45.3% 48.7%
United Kingdom ........................ 21.5% 22.3%
Japan ................................. 18.3% 23.1%
Pacific Basin, ex Japan ............... 5.9% 5.9%
Emerging Markets ...................... 2.7% 0.0%
Cash/North America .................... 6.3% 0.0%
------ ------
100.0% 100.0%
Thank you for your continued confidence in The Jamestown Funds.
Sincerely,
/s/ Austin Brockenbrough, III
Austin Brockenbrough, III
President
Jamestown Tax Exempt Virginia Fund
Jamestown International Equity Fund
/s/ Henry C. Spalding, Jr.
Henry C. Spalding, Jr.
President
Jamestown Balanced Fund
Jamestown Equity Fund
2
<PAGE>
The Jamestown Balanced Fund
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Balanced Fund, the Standard & Poor's 500 Index and the Consumer Price Index
3/99
------
The Jamestown Balanced Fund $30,623
Standard & Poor's 500 Index $52,192
Consumer Price Index $13,290
- --------------------------------------------------------------------------------
-------------------------------------
The Jamestown Balanced Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
7.56% 16.77% 12.17%
-------------------------------------
*Initial public offering of shares was July 3, 1989.
Past performance is not predictive of future performance.
The Jamestown Equity Fund
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
3/99
------
The Jamestown Equity Fund $26,560
Standard & Poor's 500 Index $34,375
Consumer Price Index $11,598
- --------------------------------------------------------------------------------
-------------------------------------
The Jamestown Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
8.33% 20.88% 16.68%
-------------------------------------
*Initial public offering of shares was December 1, 1992.
Past performance is not predictive of future performance.
3
<PAGE>
The Jamestown Tax Exempt Virginia Fund
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Tax Exempt Virginia Fund, the Lipper Intermediate Municipal Fund Index and
the Lehman Municipal Bond Index
3/99
------
The Jamestown Tax Exempt Virginia Fund $13,060
Lipper Intermediate Municipal Fund Index $12,653
Lehman Municipal Bond Index $13,993
- --------------------------------------------------------------------------------
-------------------------------------
The Jamestown Tax Exempt Virginia Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
4.92% 5.85% 4.90%
-------------------------------------
*Initial public offering of shares was September 1, 1993.
Past performance is not predictive of future performance.
The Jamestown International Equity Fund
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
International Equity Fund and the Morgan Stanley EAFE Index
3/99
------
The Jamestown International Equity Fund $13,878
Morgan Stanley EAFE Index $12,402
- --------------------------------------------------------------------------------
-------------------------------------
The Jamestown International Equity Fund
Average Annual Total Returns
1 Year Since Inception*
8.67% 11.72%
-------------------------------------
*Initial public offering of shares was April 16, 1996.
Past performance is not predictive of future performance.
4
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1999
======================================================================================================================
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 .......................... $ 80,224,277 $ 42,050,206 $ 24,600,110 $ 40,485,195
============ ============ ============ ============
At value (Note 1) ............................ $111,101,623 $ 62,915,109 $ 25,263,919 $ 51,967,556
Investments in repurchase agreements (Note 1) ... 1,868,000 679,000 -- --
Cash ............................................ 218 438 -- 1,837,687
Cash denominated in foreign currency ............ -- -- -- 4,985
Dividends receivable ............................ 72,234 60,380 -- 199,689
Interest receivable ............................. 450,221 71 320,333 4,341
Receivable for securities sold .................. -- 347,139 -- 104,814
Receivable for capital shares sold .............. -- 5,837 100,264 11,979
Net unrealized appreciation on forward foreign
currency exchange contracts (Note 6) ......... -- -- -- 5,824
Other assets .................................... 15,286 24,067 891 13,704
------------ ------------ ------------ ------------
TOTAL ASSETS ................................. 113,507,582 64,032,041 25,685,407 54,150,579
------------ ------------ ------------ ------------
LIABILITIES
Dividends payable ............................... 42,499 5,737 39,003 --
Distributions payable ........................... 79,100 -- -- --
Payable for securities purchased ................ 317,954 526,001 -- 41,737
Payable for capital shares redeemed ............. 165,732 30,916 1,219 --
Accrued investment advisory fees (Note 3) ....... 62,999 35,501 8,423 44,922
Accrued administration fees (Note 3) ............ 15,850 9,600 3,100 10,350
Other accrued expenses and liabilities .......... 19,643 8,318 7,867 34,313
------------ ------------ ------------ ------------
TOTAL LIABILITIES ............................ 703,777 616,073 59,612 131,322
------------ ------------ ------------ ------------
NET ASSETS ......................................... $112,803,805 $ 63,415,968 $ 25,625,795 $ 54,019,257
============ ============ ============ ============
Net assets consist of:
Paid-in capital ................................. $ 82,006,322 $ 42,935,120 $ 24,935,618 $ 41,845,573
Accumulated net realized gains (losses) from
security and foreign currency transactions ... (79,863) (384,055) 26,368 686,231
Net unrealized appreciation on investments ...... 30,877,346 20,864,903 663,809 11,482,361
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies . -- -- -- 5,092
------------ ------------ ------------ ------------
Net assets ......................................... $112,803,805 $ 63,415,968 $ 25,625,795 $ 54,019,257
============ ============ ============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ...... 6,226,192 2,914,908 2,506,203 3,961,839
============ ============ ============ ============
Net asset value, offering price and
redemption price per share (Note 1) ............. $ 18.12 $ 21.76 $ 10.22 $ 13.63
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
=============================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Dividends .............................. $ 739,421 $ 562,424 $ -- $ 882,162
Foreign withholding taxes on dividends . -- -- -- (91,794)
Interest ............................... 2,204,935 127,509 1,042,494 89,187
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ............. 2,944,356 689,933 1,042,494 879,555
------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) ...... 680,064 361,874 85,055 464,912
Administration fees (Note 3) ........... 175,782 102,461 31,931 110,789
Custodian fees ......................... 14,825 8,047 3,795 72,618
Professional fees ...................... 13,185 8,045 8,045 11,775
Trustees' fees and expenses ............ 8,220 8,220 8,220 8,220
Pricing costs .......................... 9,712 1,015 6,782 8,559
Registration fees ...................... 7,626 6,122 2,202 7,518
Postage and supplies ................... 3,939 3,903 2,441 5,880
Printing of shareholder reports ........ 4,072 4,264 2,043 3,577
Insurance expense ...................... 3,268 2,490 1,401 1,868
Other expenses ......................... 3,083 6,687 3,615 5,339
------------ ------------ ------------ ------------
TOTAL EXPENSES ...................... 923,776 513,128 155,530 701,055
Expenses reimbursed through a directed
brokerage arrangement (Note 4) ...... (24,000) (17,500) -- --
------------ ------------ ------------ ------------
NET EXPENSES ........................ 899,776 495,628 155,530 701,055
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ..................... 2,044,580 194,305 886,964 178,500
------------ ------------ ------------ ------------
REALIZEDAND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (Note 5)
Net realized gains (losses) from:
Security transactions ............... 1,234,403 (369,569) 36,651 2,205,161
Foreign currency transactions ....... -- -- -- (56,520)
Net change in unrealized appreciation/
depreciation on:
Investments ......................... 4,507,324 5,043,678 81,607 1,511,375
Foreign currency translation ........ -- -- -- (120,768)
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS
AND FOREIGN CURRENCIES ................. 5,741,727 4,674,109 118,258 3,539,248
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ........................ $ 7,786,307 $ 4,868,414 $ 1,005,222 $ 3,717,748
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1999 AND 1998
==========================================================================================================================
JAMESTOWN JAMESTOWN
BALANCED FUND EQUITY FUND
----------------------------- -----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income .............................. $ 2,044,580 $ 1,911,506 $ 194,305 $ 238,229
Net realized gains (losses) from
security transactions ........................... 1,234,403 9,533,601 (369,569) 3,855,317
Net change in unrealized appreciation/
depreciation on investments ..................... 4,507,324 12,603,990 5,043,678 10,606,115
------------ ------------ ------------ ------------
Net increase in net assets from operations ............ 7,786,307 24,049,097 4,868,414 14,699,661
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ......................... (2,047,558) (1,934,092) (198,327) (242,370)
From net realized gains from security transactions . (1,302,068) (10,800,423) -- (4,379,490)
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders .................................... (3,349,626) (12,734,515) (198,327) (4,621,860)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold .......................... 13,392,101 17,601,307 11,342,221 10,499,561
Net asset value of shares issued in reinvestment
of distributions to shareholders ................ 3,140,088 12,174,707 171,755 4,351,536
Payments for shares redeemed ....................... (9,573,352) (10,335,880) (4,982,200) (3,895,041)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ......................... 6,958,837 19,440,134 6,531,776 10,956,056
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS .......................... 11,395,518 30,754,716 11,201,863 21,033,857
NET ASSETS
Beginning of year .................................. 101,408,287 70,653,571 52,214,105 31,180,248
------------ ------------ ------------ ------------
End of year ........................................ $112,803,805 $101,408,287 $ 63,415,968 $ 52,214,105
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ............................................... 766,478 1,041,126 565,307 571,636
Reinvested ......................................... 178,274 735,126 8,737 236,191
Redeemed ........................................... (554,334) (599,080) (248,873) (209,264)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................. 390,418 1,177,172 325,171 598,563
Shares outstanding, beginning of year .............. 5,835,774 4,658,602 2,589,737 1,991,174
------------ ------------ ------------ ------------
Shares outstanding, end of year .................... 6,226,192 5,835,774 2,914,908 2,589,737
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1999 AND 1998
==============================================================================================================================
JAMESTOWN TAX EXEMPT JAMESTOWN
VIRGINIA FUND INTERNATIONAL EQUITY FUND
----------------------------- -----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income (loss) ........................... $ 886,964 $ 673,872 $ 178,500 $ (19,285)
Net realized gains (losses) from:
Security transactions ............................... 36,651 57,902 2,205,161 (60,926)
Foreign currency transactions ....................... -- -- (56,520) 190,757
Net change in unrealized appreciation/depreciation on:
Investments ......................................... 81,607 399,917 1,511,375 8,970,013
Foreign currency translation ........................ -- -- (120,768) 126,420
------------ ------------ ------------ ------------
Net increase in net assets from operations ................ 1,005,222 1,131,691 3,717,748 9,206,979
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............................. (886,964) (673,872) (238,226) (325,257)
From net realized gains from security transactions ..... (11,065) -- -- --
------------ ------------ ------------ ------------
Decrease in net assets from
distributions to shareholders .......................... (898,029) (673,872) (238,226) (325,257)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold .............................. 8,922,497 8,481,218 9,046,185 4,706,633
Net asset value of shares issued in reinvestment
of distributions to shareholders .................... 487,854 360,594 231,344 321,283
Payments for shares redeemed ........................... (2,104,477) (2,284,029) (1,280,438) (657,411)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ............................. 7,305,874 6,557,783 7,997,091 4,370,505
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS .............................. 7,413,067 7,015,602 11,476,613 13,252,227
NET ASSETS
Beginning of year ...................................... 18,212,728 11,197,126 42,542,644 29,290,417
------------ ------------ ------------ ------------
End of year ............................................ $ 25,625,795 $ 18,212,728 $ 54,019,257 $ 42,542,644
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ................................................... 871,702 843,460 673,952 418,420
Reinvested ............................................. 47,603 35,724 17,619 28,068
Redeemed ............................................... (206,362) (225,366) (102,274) (60,156)
------------ ------------ ------------ ------------
Net increase in shares outstanding ..................... 712,943 653,818 589,297 386,332
Shares outstanding, beginning of year .................. 1,793,260 1,139,442 3,372,542 2,986,210
------------ ------------ ------------ ------------
Shares outstanding, end of year ........................ 2,506,203 1,793,260 3,961,839 3,372,542
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 17.38 $ 15.17 $ 14.77 $ 12.76 $ 12.15
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income ........................... 0.34 0.37 0.35 0.36 0.33
Net realized and unrealized gains
on investments ............................... 0.95 4.31 1.45 2.50 0.90
--------- --------- --------- --------- ---------
Total from investment operations ................... 1.29 4.68 1.80 2.86 1.23
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ............ (0.34) (0.37) (0.35) (0.36) (0.33)
Distributions from net realized gains ........... (0.21) (2.10) (1.05) (0.49) (0.29)
--------- --------- --------- --------- ---------
Total distributions ................................ (0.55) (2.47) (1.40) (0.85) (0.62)
--------- --------- --------- --------- ---------
Net asset value at end of year ..................... $ 18.12 $ 17.38 $ 15.17 $ 14.77 $ 12.76
========= ========= ========= ========= =========
Total return ....................................... 7.56% 32.42% 12.29% 22.79% 10.54%
========= ========= ========= ========= =========
Net assets at end of year (000's) .................. $ 112,804 $ 101,408 $ 70,654 $ 61,576 $ 52,062
========= ========= ========= ========= =========
Ratio of gross expenses to average net assets ...... 0.88% 0.90% 0.91% 0.93% 0.99%
Ratio of net expenses to average net assets (a) .... 0.86% 0.87% 0.87% 0.88% 0.96%
Ratio of net investment income to average net assets 1.95% 2.21% 2.31% 2.52% 2.72%
Portfolio turnover rate ............................ 69% 90% 58% 72% 95%
</TABLE>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 20.16 $ 15.66 $ 13.96 $ 11.29 $ 10.19
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income ........................... 0.07 0.11 0.13 0.15 0.10
Net realized and unrealized gains
on investments ............................... 1.60 6.47 2.00 2.98 1.15
--------- --------- --------- --------- ---------
Total from investment operations ................... 1.67 6.58 2.13 3.13 1.25
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ............ (0.07) (0.11) (0.13) (0.15) (0.12)
Distributions from net realized gains ........... -- (1.97) (0.30) (0.31) (0.03)
--------- --------- --------- --------- ---------
Total distributions ................................ (0.07) (2.08) (0.43) (0.46) (0.15)
--------- --------- --------- --------- ---------
Net asset value at end of year ..................... $ 21.76 $ 20.16 $ 15.66 $ 13.96 $ 11.29
========= ========= ========= ========= =========
Total return ....................................... 8.33% 43.74% 15.27% 28.00% 12.33%
========= ========= ========= ========= =========
Net assets at end of year (000's) .................. $ 63,416 $ 52,214 $ 31,180 $ 17,857 $ 8,111
========= ========= ========= ========= =========
Ratio of gross expenses to average net assets ...... 0.92% 0.93% 0.98% 1.14% 1.99%
Ratio of net expenses to average net assets ........ 0.89%(a) 0.90%(a) 0.92%(a) 1.01%(a) 1.44%(b)
Ratio of net investment income to average net assets 0.35% 0.60% 0.85% 1.27% 1.18%
Portfolio turnover rate ............................ 66% 59% 44% 54% 48%
</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 investment advisory fee
waivers and/or other operating expense reimbursements by the Adviser.
See accompanying notes to financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
---------------------------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 10.16 $ 9.83 $ 9.85 $ 9.68 $ 9.61
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income ........................... 0.43 0.44 0.45 0.45 0.44
Net realized and unrealized gains (losses)
on investments ............................... 0.07 0.33 (0.02) 0.17 0.07
--------- --------- --------- --------- ---------
Total from investment operations ................... 0.50 0.77 0.43 0.62 0.51
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ............ (0.43) (0.44) (0.45) (0.45) (0.44)
Distributions from net realized gains ........... (0.01) -- -- -- --
--------- --------- --------- --------- ---------
Total distributions ................................ (0.44) (0.44) (0.45) (0.45) (0.44)
--------- --------- --------- --------- ---------
Net asset value at end of year ..................... $ 10.22 $ 10.16 $ 9.83 $ 9.85 $ 9.68
========= ========= ========= ========= =========
Total return ....................................... 4.92% 8.00% 4.39% 6.51% 5.47%
========= ========= ========= ========= =========
Net assets at end of year (000's) .................. $ 25,626 $ 18,213 $ 11,197 $ 8,779 $ 7,712
========= ========= ========= ========= =========
Ratio of net expenses to average net assets (a) .... 0.73% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets 4.17% 4.40% 4.51% 4.57% 4.64%
Portfolio turnover rate ............................ 31% 33% 24% 14% 97%
</TABLE>
(a) 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% and 1.62% for the years ended March 31, 1998, 1997,
1996 and 1995, respectively.
See accompanying notes to financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
======================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31,
1999 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) ........................... 0.05 (0.01) (0.01)
Net realized and unrealized gains (losses)
on investments and foreign currencies ............... 1.04 2.91 (0.14)
--------- --------- ---------
Total from investment operations .......................... 1.09 2.90 (0.15)
--------- --------- ---------
Less distributions:
Dividends from net investment income ................... (0.07) (0.10) (0.04)
--------- --------- ---------
Net asset value at end of period .......................... $ 13.63 $ 12.61 $ 9.81
========= ========= =========
Total return .............................................. 8.67% 29.67% (1.56)%(c)
========= ========= =========
Net assets at end of period (000's) ....................... $ 54,019 $ 42,543 $ 29,290
========= ========= =========
Ratio of net expenses to average net assets (b) ........... 1.51% 1.56% 1.60%(c)
Ratio of net investment income (loss) to average net assets 0.38% (0.05)% (0.15)%(c)
Portfolio turnover rate ................................... 39% 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.
12
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
================================================================================
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
(normally 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.
13
<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.
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.
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
investment securities as of March 31, 1999:
<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 .. $ 32,112,011 $ 21,868,458 $ 704,888 $ 13,312,879
Gross unrealized depreciation .. (1,314,528) (1,018,725) (41,079) (1,830,518)
------------ ------------ ------------ ------------
Net unrealized appreciation .... $ 30,797,483 $ 20,849,733 $ 663,809 $ 11,482,361
============ ============ ============ ============
Federal income tax cost ........ $ 80,304,140 $ 42,065,376 $ 24,600,110 $ 40,485,195
============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------
</TABLE>
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for The Jamestown Balanced Fund and The Jamestown
Equity Fund is due to certain timing differences in the recognition of capital
losses under income tax regulations and generally accepted accounting
principles.
14
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
As of March 31, 1999, The Jamestown Equity Fund had capital loss carryforwards
for federal income tax purposes of $368,885 which expire on March 31, 2007.
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains, if any, prior to distributing such gains to
shareholders.
2. INVESTMENT TRANSACTIONS
Investment transactions, other than short-term investments, were as follows for
the year ended March 31, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Jamestown Jamestown Jamestown Jamestown
Balanced Equity Tax Exempt International
Fund Fund Virginia Fund Equity Fund
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases of investment securities .. $78,675,464 $44,346,054 $13,068,282 $24,316,515
=========== =========== =========== ===========
Proceeds from sales and maturities
of investment securities ......... $69,731,979 $34,909,266 $ 6,457,178 $17,425,753
=========== =========== =========== ===========
- -------------------------------------------------------------------------------------------------
</TABLE>
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 CFS 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, or of CW Fund
Distributors, Inc., the exclusive underwriter of each Funds' shares.
15
<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 $24,000 and
$17,500 for The Jamestown Balanced Fund and The Jamestown Equity Fund,
respectively, for the year ended March 31, 1999.
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.
16
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
As of March 31, 1999, the Jamestown International Equity Fund had forward
foreign currency exchange contracts outstanding as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Net Unrealized
Settlement To Receive Initial Market Appreciation
Date (To Deliver) Value Value (Depreciation)
- ---------------------------------------------------------------------------------------
Contracts To Sell
<S> <C> <C> <C> <C>
04/01/99 1,440 AUD $ (901) $ (909) $ (8)
04/07/99 36,597 NZD (19,488) (19,514) (26)
04/08/99 78,824 NZD (41,737) (42,030) (293)
04/09/99 81,117 NZD (43,114) (43,252) (138)
06/17/99 292,000,000 JPY (2,498,781) (2,492,507) 6,274
----------- ----------- -------
Total sell contracts (2,604,021) (2,598,212) 5,809
----------- ----------- -------
Contracts To Buy
04/01/99 32,370 AUD 20,490 20,441 (49)
04/06/99 33,723 AUD 21,229 21,293 64
----------- ----------- -------
Total buy contracts 41,719 41,734 15
----------- ----------- -------
Net contracts $(2,562,302) $(2,556,478) $ 5,824
=========== =========== =======
- ---------------------------------------------------------------------------------------
</TABLE>
AUD - Australian Dollar
JPY - Japanese Yen
NZD - New Zealand Dollar
17
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
SHARES COMMON STOCKS -- 68.8% VALUE
- --------------------------------------------------------------------------------
ADVERTISING -- 1.4%
20,000 Interpublic Group of Companies, Inc. ........... $ 1,557,500
------------
COMMERCIAL BANKING -- 5.4%
26,000 BankAmerica Corporation ........................ 1,836,250
32,000 Fannie Mae ..................................... 2,216,000
37,600 First Union Corporation ........................ 2,009,250
------------
6,061,500
------------
COMMUNICATIONS -- 7.2%
10,000 Ascend Communications, Inc.(a) ................. 836,870
56,000 Equifax, Inc. .................................. 1,925,000
17,900 Lucent Technologies, Inc. ...................... 1,928,725
38,000 MCI WorldCom, Inc.(a) .......................... 3,365,375
------------
8,055,970
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 11.6%
25,500 Cisco Systems, Inc.(a) ......................... 2,793,844
46,400 Computer Sciences Corporation(a) ............... 2,560,700
16,900 Intel Corporation .............................. 2,013,212
22,000 Microsoft Corporation(a) ....................... 1,971,750
51,000 Oracle Corporation(a) .......................... 1,345,125
35,000 Sundstrand Corporation ......................... 2,432,500
------------
13,117,131
------------
CONSUMER PRODUCTS -- 10.3%
25,000 Avon Products, Inc. ............................ 1,176,562
62,000 Crane Company .................................. 1,499,625
22,000 General Electric Company ....................... 2,433,750
20,000 Gillette Company ............................... 1,188,750
42,000 Kimberly-Clark Corporation ..................... 2,013,375
81,000 Sara Lee Corporation ........................... 2,004,750
50,000 Sysco Corporation .............................. 1,315,625
------------
11,632,437
------------
DRUGS/MEDICAL EQUIPMENT-- 9.2%
35,000 Abbott Laboratories ............................ 1,638,437
35,000 Becton, Dickinson and Company .................. 1,340,920
24,000 Bristol-Myers Squibb Company ................... 1,543,500
18,000 Lilly (Eli) & Company .......................... 1,527,750
24,200 Merck and Company, Inc. ........................ 1,940,538
44,000 Schering-Plough Corporation .................... 2,433,750
------------
10,424,895
------------
ELECTRONICS -- 1.0%
16,000 Hewlett-Packard Company ........................ 1,085,000
------------
FINANCIAL SERVICES -- 1.0%
18,000 Citigroup, Inc. ................................ 1,149,750
------------
18
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 68.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FIRE SYSTEMS -- 2.5%
40,000 Tyco International Ltd. ........................ $ 2,870,000
------------
FOOD SERVICES -- 1.7%
41,000 H.J. Heinz Company ............................. 1,942,375
------------
HEALTH CARE CENTERS -- 2.6%
44,000 McKesson HBOC, Inc. ............................ 2,904,000
------------
INSURANCE -- 4.6%
25,500 American International Group, Inc. ............. 3,075,938
31,500 Jefferson-Pilot Corporation .................... 2,134,125
------------
5,210,063
------------
OIL AND GAS DRILLING -- 5.4%
63,000 Coastal Corporation ............................ 2,079,000
54,000 Halliburton Company ............................ 2,079,000
9,000 Mobil Corporation .............................. 792,000
18,400 Schlumberger, Ltd. ............................. 1,107,450
------------
6,057,450
------------
RETAIL STORES -- 4.9%
65,000 AutoZone, Inc.(a) .............................. 1,974,375
15,000 Circuit City Stores, Inc. ...................... 1,149,375
36,000 Dayton Hudson Corporation ...................... 2,398,500
------------
5,522,250
------------
TOTAL COMMON STOCKS (COST $46,685,568) ......... $ 77,590,321
------------
================================================================================
PAR
VALUE U.S. TREASURY OBLIGATIONS -- 5.8% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY BONDS -- 1.5%
$ 900,000 6.625%, due 02/15/2027 ......................... $ 992,106
780,000 5.25%, due 02/15/2029 .......................... 737,342
------------
1,729,448
------------
U.S. TREASURY NOTES -- 3.7%
875,000 7.75%, due 11/30/1999 .......................... 891,949
2,040,000 6.50%, due 05/31/2001 .......................... 2,100,241
1,115,000 7.00%, due 07/15/2006 .......................... 1,219,877
------------
4,212,067
U.S. TREASURY INFLATION-PROTECTION NOTES -- 0.6%
399,153 3.625%, due 07/15/2002 ......................... 396,535
212,086 3.375%, due 01/15/2007 ......................... 204,133
------------
600,668
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $6,645,282) $ 6,542,183
------------
19
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR
VALUE MORTGAGE-BACKED SECURITIES -- 8.0% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.8%
$ 36,627 Pool #G50153, 4.50%, due 05/01/1999 ............ $ 36,125
246,070 Pool #1490-PE, 5.75%, due 07/15/2006 ........... 246,223
475,000 Pool #1471-G, 7.00%, due 03/15/2008 ............ 489,098
175,000 Pool #1655-HB, 6.50%, due 10/15/2008 ........... 178,444
------------
949,890
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.8%
382,836 Pool #73718, 7.23%, due 11/01/2003 ............. 403,548
345,320 Pool #375448, 6.66%, due 10/01/2004 ............ 358,270
216,197 Series #93-63-PE, 6.25%, due 06/25/2005 ........ 216,332
616,402 Pool #375296, 6.92%, due 08/01/2007 ............ 650,305
425,000 Series #93-18-PJ, 6.50%, due 12/25/2007 ........ 430,045
708,406 Pool #380190, 6.325%, due 04/01/2008 ........... 721,512
730,564 Pool #380512, 6.15%, due 08/01/2008 ............ 739,696
145,625 Pool #70, 8.50%, due 01/01/2012 ................ 153,083
120,476 Series #88-29-B, 9.50%, due 12/25/2018 ......... 128,683
188,546 Series #90-35-E, 9.50%, due 04/25/2020 ......... 202,568
500,000 Series #98-M4-B, 6.424%, due 12/01/2023 ........ 500,000
543,164 Pool #252092, 6.00%, due 11/01/2028 ............ 528,021
137,900 Pool #448624, 6.50%, due 11/01/2028 ............ 137,310
421,364 Pool #448629, 6.50%, due 11/01/2028 ............ 419,561
345,744 Pool #448699, 6.00%, due 11/01/2028 ............ 336,105
911,793 Pool #448649, 6.50%, due 12/01/2028 ............ 907,891
866,953 Pool #453624, 6.00%, due 12/01/2028 ............ 842,783
------------
7,675,713
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 0.4%
382,981 Pool #343536, 7.50%, due 02/15/2023 ............ 395,444
------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $8,986,550) $ 9,021,047
------------
20
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR
VALUE ASSET-BACKED SECURITIES -- 3.1% VALUE
- --------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION -- 1.1%
$ 480,103 Series #97-3-A1, 5.604%, adjustable rate,
due 04/25/2006 ............................... $ 478,041
746,444 Series #98-1-A1, 5.212%, adjustable rate,
due 01/25/2007 ............................... 744,549
------------
1,222,590
------------
OTHER ASSET-BACKED SECURITIES -- 2.0%
Advanta Mortgage Loan Trust #92-2-A2,
27,710 7.03%, due 03/25/2011 ........................ 27,641
AFG Receivables Trust #95-A-A,
36,323 6.15%, due 09/15/2000 ........................ 36,323
California Infrastructure Trust #97-1-A3,
700,000 6.17%, due 03/25/2003 ........................ 706,776
Fleetwood Credit Corporation Grantor Trust #95-A-A,
275,202 8.45%, due 11/15/2010 ........................ 284,560
Green Tree Financial Corporation #98-A-A1C,
356,263 6.18%, due 06/15/2019 ........................ 358,366
Nomura Asset Securties Corporation #96-MD5-A1A,
601,559 7.07%, due 04/13/2036 ........................ 621,862
NationsCredit Grantor Trust #96-1-A,
195,475 5.85%, due 09/15/2011 ........................ 194,068
------------
2,229,596
------------
TOTAL ASSET-BACKED SECURITIES (COST $3,447,782) $ 3,452,186
------------
================================================================================
PAR
VALUE CORPORATE BONDS -- 12.8% VALUE
- --------------------------------------------------------------------------------
Associates Corporation, N.A.,
$ 675,000 5.85%, due 01/15/2001 ........................ $ 678,301
Beneficial Corporation Medium Term Notes,
230,000 6.35%, due 12/03/2001 ........................ 232,689
Caterpillar Financial, Inc. Medium Term Notes,
450,000 6.80%, due 06/15/1999 ........................ 451,444
Chrysler Financial Corporation,
1,000,000 5.90%, due 01/26/2001 ........................ 1,008,010
Coca-Cola Enterprises,
385,000 5.75%, due 11/01/2008 ........................ 372,784
Duke Realty L.P. Medium Term Notes,
390,000 6.75%, due 05/30/08 .......................... 385,515
Enron Corporation,
750,000 6.45%, due 11/15/2001 ........................ 758,017
Equity Residential Properties Trust,
875,000 6.65%, due 11/15/2003 ........................ 876,356
Finova Capital Corporation,
1,000,000 6.25%, due 08/15/2000 ........................ 1,007,140
Ford Motor Credit Company Medium Term Notes,
225,000 7.55%, due 07/19/1999 ........................ 226,568
475,000 7.20%, due 06/15/2007 ........................ 501,814
General Motors Acceptance Corporation Medium Term Notes,
525,000 6.65%, due 05/24/2000 ........................ 531,652
International Lease Finance Corporation,
265,000 6.375%, due 08/01/2002 ....................... 269,078
21
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR
VALUE CORPORATE BONDS -- 12.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
International Lease Finance Corporation Medium Term Notes,
$ 425,000 6.42%, due 09/11/2000 ........................ $ 429,526
425,000 6.55%, due 09/15/2000 ........................ 430,295
International Paper Company,
735,000 8.68%, due 09/14/2001 ........................ 778,924
KeyCorp Medium Term Notes,
675,000 6.75%, due 05/29/2001 ........................ 689,155
Manitoba (Province of) Medium Term Notes,
205,000 5.50%, due 10/01/2008 ........................ 198,352
May Department Stores,
510,000 5.95%, due 11/01/2008 ........................ 503,212
Merrill Lynch & Company Medium Term Notes,
265,000 7.26%, due 03/25/2002 ........................ 262,350
National City Corporation,
575,000 7.20%, due 05/15/2005 ........................ 595,660
Norwest Financial, Inc.,
140,000 6.05%, due 11/19/1999 ........................ 140,676
400,000 5.375%, due 09/30/2003 ....................... 391,860
Pacific Bell,
185,000 6.625%, due 11/01/2009 ....................... 191,997
Pacific Bell Medium Term Notes,
400,000 6.875%, due 08/15/2006 ....................... 419,364
Prologis Trust,
225,000 7.00%, due 10/01/2003 ........................ 225,356
Sears Roebuck Acceptance Corporation,
400,000 6.99%, due 09/30/2002 ........................ 412,908
Suntrust Banks,
310,000 6.125%, due 02/15/2004 ....................... 309,547
TRW, Inc.,
245,000 6.25%, due 01/15/2010 ........................ 232,287
Union Camp Corporation,
425,000 6.50%, due 11/15/2007 ........................ 425,523
U.S. WEST Capital Funding, Inc. Medium Term Notes,
550,000 6.375%, due 07/15/2008 ....................... 559,526
------------
TOTAL CORPORATE BONDS (COST $14,459,095) ....... $ 14,495,886
------------
TOTAL INVESTMENTS AT VALUE
(COST $80,224,277) -- 98.5% .................. $111,101,623
------------
22
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(B) -- 1.6% VALUE
- --------------------------------------------------------------------------------
Firstar Bank, 3.75%, dated 03/31/1999, due
$ 1,868,000 04/01/1999, repurchase proceeds $1,868,195
(Cost $1,868,000) ............................ $ 1,868,000
------------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 100.1% ................ $112,969,623
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1)% (165,818)
------------
NET ASSETS -- 100.0% $112,803,805
============
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $28,093,565 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $1,935,077.
See accompanying notes to financial statements.
23
<PAGE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
SHARES COMMON STOCKS -- 99.2% VALUE
- --------------------------------------------------------------------------------
ADVERTISING -- 2.0%
16,000 Interpublic Group of Companies, Inc. ........... $ 1,246,000
------------
COMMERCIAL BANKING -- 7.9%
21,000 BankAmerica Corporation ........................ 1,483,125
27,000 Fannie Mae ..................................... 1,869,750
30,600 First Union Corporation ........................ 1,635,188
------------
4,988,063
------------
COMMUNICATIONS -- 10.6%
13,000 Ascend Communications, Inc. (a) ................ 1,087,937
49,000 Equifax, Inc. .................................. 1,684,375
12,000 Lucent Technologies, Inc. ...................... 1,293,000
30,000 MCI WorldCom, Inc.(a) .......................... 2,656,875
------------
6,722,187
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 17.0%
20,250 Cisco Systems, Inc.(a) ......................... 2,218,641
39,500 Computer Sciences Corporation(a) ............... 2,179,906
15,000 Intel Corporation .............................. 1,786,875
19,000 Microsoft Corporation(a) ....................... 1,702,875
45,000 Oracle Corporation(a) .......................... 1,186,875
24,000 Sunstrand Corporation .......................... 1,668,000
------------
10,743,172
------------
CONSUMER PRODUCTS -- 15.8%
21,000 Avon Products, Inc. ............................ 988,312
69,000 Crane Company .................................. 1,668,937
17,000 General Electric Company ....................... 1,880,625
15,000 Gillette Company ............................... 891,562
37,000 Kimberly-Clark Corporation ..................... 1,773,687
70,000 Sara Lee Corporation ........................... 1,732,500
42,000 Sysco Corporation .............................. 1,105,125
------------
10,040,748
------------
DRUGS/MEDICAL EQUIPMENT -- 12.2%
15,000 Abbott Laboratories ............................ 702,187
28,000 Becton, Dickinson and Company .................. 1,072,750
20,000 Bristol-Myers Squibb Company ................... 1,286,250
15,000 Lilly (Eli) & Company .......................... 1,273,125
22,000 Merck and Company, Inc. ........................ 1,764,125
29,000 Schering-Plough Corporation .................... 1,604,063
------------
7,702,500
------------
ELECTRONICS -- 1.6%
15,000 Hewlett-Packard Company ........................ 1,017,188
------------
FINANCIAL SERVICES -- 1.6%
15,500 Citigroup, Inc. ................................ 990,063
------------
24
<PAGE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FIRE SYSTEMS -- 3.8%
34,000 Tyco International Ltd. ........................ $ 2,439,500
------------
FOOD SERVICES -- 2.5%
34,000 H.J. Heinz Company ............................. 1,610,750
------------
HEALTH CARE CENTERS -- 3.7%
36,000 McKesson HBOC, Inc. ............................ 2,376,000
------------
INSURANCE -- 6.7%
20,550 American International Group, Inc. ............. 2,478,844
26,500 Jefferson-Pilot Corporation .................... 1,795,375
------------
4,274,219
------------
OIL AND GAS DRILLING -- 7.8%
53,000 Coastal Corporation ............................ 1,749,000
44,000 Halliburton Company ............................ 1,694,000
7,000 Mobil Corporation .............................. 616,000
14,500 Schlumberger Ltd. .............................. 872,719
------------
4,931,719
------------
RETAIL STORES -- 6.0%
56,000 AutoZone, Inc.(a) .............................. 1,701,000
32,000 Dayton Hudson Corporation ...................... 2,132,000
------------
3,833,000
------------
TOTAL COMMON STOCKS (COST $42,050,206) ......... $ 62,915,109
------------
================================================================================
FACE
AMOUNT REPURCHASE AGREEMENTS(B) -- 1.1% VALUE
- --------------------------------------------------------------------------------
$ 679,000 Firstar Bank, 3.75%, dated 03/31/1999,
due 04/01/1999, repurchase proceeds
$679,071 (Cost $679,000) ..................... $ 679,000
------------
TOTAL INVESTMENTS AND REPURCHASE
AGREEMENTS AT VALUE -- 100.3% ................ $ 63,594,109
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3)% (178,141)
------------
NET ASSETS -- 100.0% ........................... $ 63,415,968
============
(a) Non-income producing security.
(b) Joint repurchase agreement is fully collateralized by $28,093,565 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $703,390.
See accompanying notes to financial statements.
25
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 95.8% VALUE
- --------------------------------------------------------------------------------
Alexandria, Virginia, Industrial
Dev. Authority, Revenue,
$ 900,000 3.00%, adjustable rate, due 07/01/2022 ....... $ 900,000
Arlington Co., Virginia, GO,
300,000 5.60%, due 08/01/2006 ........................ 327,030
1,000,000 5.00%, due 10/01/2013 ........................ 1,030,010
Brunswick Co., Virginia, Industrial
Dev. Authority, Revenue,
300,000 5.45%, due 07/01/2006 ........................ 324,183
Chesterfield Co., Virginia, GO,
350,000 6.25%, due 07/15/2005 ........................ 376,068
750,000 4.00%, due 01/01/2006 ........................ 751,283
Fairfax Co., Virginia, GO,
350,000 5.60%, due 05/01/2003 ........................ 357,196
600,000 5.00%, due 06/01/2014 ........................ 610,560
Fairfax Co., Virginia, Park Authority, Revenue,
300,000 6.25%, due 07/15/2005 ........................ 326,064
Fairfax Co., Virginia, Sewer, Revenue,
350,000 5.625%, due 07/15/2008 ....................... 383,863
Hanover Co., Virginia, Industrial
Dev. Authority, Revenue,
225,000 6.25%, due 10/01/2011 ........................ 241,229
Henrico Co., Virginia, GO,
500,000 4.70%, due 01/15/2002 ........................ 514,820
Henrico Co., Virginia, Water and Sewer, Revenue,
500,000 4.625%, due 05/01/2017 ....................... 475,830
James City Co., Virginia, GO,
500,000 5.25%, due 12/15/2015 ........................ 513,315
Loudoun Co., Virginia, GO,
300,000 5.50%, due 06/01/2009 ........................ 324,855
Lynchburg, Virginia, GO,
500,000 5.30%, due 05/01/2014 ........................ 520,000
Medical College of Virginia Hospitals
Authority, Revenue,
700,000 5.00%, due 07/01/2013 ........................ 703,535
Newport News, Virginia, GO,
400,000 5.40%, due 07/01/2002 ........................ 405,240
400,000 5.15%, due 01/01/2010 ........................ 414,728
Norfolk, Virginia, GO,
300,000 5.75%, due 06/01/2011 ........................ 321,756
500,000 5.00%, due 07/01/2014 ........................ 506,365
Petersburg, Virginia, GO,
500,000 5.125%, due 01/15/2013 ....................... 515,295
Peumansend Creek, Virginia, Regional
Jail Authority, Revenue,
300,000 5.75%, due 06/01/2017 ........................ 320,454
Pittsylvania Co., Virginia, GO,
300,000 5.65%, due 07/01/2006 ........................ 328,833
Portsmouth, Virginia, GO,
800,000 5.00%, due 08/01/2017 ........................ 797,096
Prince William Co., Virginia, GO,
400,000 4.90%, due 08/01/2005 ........................ 420,172
Prince William Co., Virginia, Park Authority, Revenue,
250,000 6.10%, due 10/15/2004 ........................ 273,330
26
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 95.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Prince William Co., Virginia, Service Auth.
Water & Sewer, Revenue,
$ 500,000 5.00%, due 07/01/2003 ........................ $ 523,315
Richmond, Virginia, GO,
400,000 6.25%, due 01/15/2018 ........................ 423,872
Richmond, Virginia, Metropolitan Authority,
Expressway, Revenue,
500,000 6.05%, due 07/15/2005 ........................ 541,815
Richmond, Virginia, Redev. & Housing
Authority, Revenue,
500,000 5.00%, due 03/01/2018 ........................ 493,360
Riverside, Virginia, Regional Jail Authority, Revenue,
300,000 5.30%, due 07/01/2002 ........................ 314,553
Roanoke, Virginia, GO,
700,000 5.00%, due 08/01/2012 ........................ 717,269
300,000 6.40%, due 08/01/2012 ........................ 326,331
Spotsylvania Co., Virginia, GO,
400,000 5.75%, due 07/15/2011 ........................ 430,944
Suffolk, Virginia, GO,
350,000 5.80%, due 06/01/2011 ........................ 381,052
Upper Occoquan, Virginia, Sewer Authority, Revenue,
700,000 5.00% due 07/01/2015 ......................... 703,549
Virginia Beach, Virginia, GO,
325,000 6.20%, due 09/01/2013 ........................ 365,593
Virginia College Building Authority,
Educational Facilities, Revenue,
885,000 3.05%, floating rate, due 11/01/2026 ......... 885,000
Virginia Commonwealth University, Revenue,
250,000 5.75%, due 05/01/2006 ........................ 274,162
Virginia Polytechnic Institute and
State University, Revenue,
625,000 5.45%, due 06/01/2013 ........................ 659,256
Virginia State, GO,
500,000 5.25%, due 07/01/2011 ........................ 526,595
500,000 5.375%, due 06/01/2015 ....................... 519,990
Virginia State Housing Dev. Authority,
Commonwealth Mortgages, Revenue,
150,000 5.60%, due 01/01/2002 ........................ 154,415
Virginia State Housing Dev. Authority,
Multi-Family, Revenue,
150,000 6.60%, due 11/01/2012 ........................ 163,401
150,000 6.30%, due 11/01/2015 ........................ 161,268
Virginia State Public Building Authority, Revenue,
500,000 6.00%, due 08/01/2003 ........................ 529,810
Virginia State Public School Authority, Revenue,
750,000 5.25%, due 08/01/2009 ........................ 804,368
Virginia State Resource Authority,
Solid Waste Disposal System, Revenue,
500,000 5.50%, due 04/01/2015 ........................ 519,995
Virginia State Transportation Board, Revenue,
350,000 6.25%, due 05/15/2012, prerefunded 05/15/2004 389,847
Winchester, Virginia, Industrial Dev.
Authority, Educational Facilities, Revenue,
500,000 5.00% due 10/01/2018 ......................... 493,870
York Co., Virginia, Certificates of
Participation, Revenue,
250,000 6.625%, due 03/01/2012 ....................... 261,542
------------
TOTAL VIRGINIA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (COST $23,884,473) ..... $ 24,548,282
------------
27
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKETS -- 2.8% VALUE
- --------------------------------------------------------------------------------
715,637 Firstar Tax-Free Fund (Cost $715,637) .......... $ 715,637
------------
TOTAL INVESTMENTS AT VALUE
(COST $24,600,110) -- 98.6% .................. $ 25,263,919
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.4% .. 361,876
------------
NET ASSETS -- 100.0% ........................... $ 25,625,795
============
See accompanying notes to financial statements.
28
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999
================================================================================
SHARES COMMON STOCKS -- 96.2% VALUE
- --------------------------------------------------------------------------------
AUSTRALIA -- 2.2%
85,700 Australia and New Zealand Banking Group Ltd. ... $ 619,669
126,126 Coca-Cola Amatil Ltd. .......................... 544,796
------------
1,164,465
------------
BELGIUM -- 1.4%
11,380 Kredietbank NV ................................. 758,651
------------
CANADA -- 2.5%
18,100 BCE, Inc. ...................................... 798,635
11,200 The Seagram Company Ltd. ....................... 560,814
------------
1,359,449
------------
FRANCE -- 8.8%
4,314 Groupe Danone .................................. 1,085,639
8,970 Suez Lyonnaise des Eaux ........................ 1,659,840
11,129 Valeo SA ....................................... 871,078
4,685 Vivendi ........................................ 1,152,701
------------
4,769,258
------------
GERMANY -- 5.1%
7,721 DaimlerChrysler AG ............................. 671,849
17,517 Hoechst AG ..................................... 759,291
10,500 Mannesmann AG .................................. 1,341,025
------------
2,772,165
------------
GREECE -- 0.4%
8,840 Hellenic Telecommunications Organization SA (OTE) 214,366
------------
HONG KONG -- 1.8%
72,000 Cheung Kong (Holdings) Ltd. .................... 548,157
57,000 Hutchison Whampoa Ltd. ......................... 448,668
------------
996,825
------------
INDIA -- 0.3%
4,220 Richter Gedeon Rt. - GDR ....................... 136,871
------------
ITALY -- 9.9%
330,623 Banca Nazionale del Lavoro (BNL)(a) ............ 1,156,488
9,100 Banca Popolare di Bergamo Credito Varesino SpA . 230,872
167,922 Credito Italiano SpA ........................... 906,443
116,200 Mediaset SpA ................................... 1,092,665
186,202 Telecom Italia SpA ............................. 1,978,073
------------
5,364,541
------------
JAPAN -- 18.3%
24,000 Canon, Inc. .................................... 593,768
25,000 Denso Corporation .............................. 490,796
500 Isetan Company ................................. 4,771
11,000 Ito-Yokado Company Ltd. ........................ 707,760
26,000 Kao Corporation ................................ 574,094
33,000 Matsushita Electric Industrial Company Ltd. .... 643,671
29
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 96.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
JAPAN -- 18.3% (CONTINUED)
13,000 Murata Manufacturing Company Ltd. .............. $ 691,548
35,000 Nikko Securities Co., Ltd. ..................... 162,543
103 Nippon Telegraph and Telephone Corporation ..... 1,008,866
27,000 Nomura Securities Company Ltd. ................. 282,699
36 NTT Mobile Communication Network, Inc. ......... 1,778,266
7,000 Rohm Company ................................... 836,359
167,000 Sakura Bank, Ltd. .............................. 506,232
660 Shohkoh Fund & Co., Ltd. ....................... 334,375
18,000 Takeda Chemical Industries ..................... 697,627
3,700 Takefugi Corporation ........................... 284,303
42,000 Toshiba Corporation ............................ 286,904
------------
9,884,582
------------
NETHERLANDS -- 9.2%
13,500 Gucci Group NV - ADR ........................... 1,086,750
27,014 KPN NV ......................................... 1,074,705
5,058 Laurus NV ...................................... 122,852
13,310 Royal Dutch Petroleum Company .................. 707,697
22,128 Vendex International NV ........................ 533,928
36,406 VNU NV ......................................... 1,418,871
------------
4,944,803
------------
NEW ZEALAND -- 1.7%
192,383 Telecom Corporation of New Zealand Ltd. ........ 935,692
------------
PHILIPPINES -- 0.4%
540,000 Filinvest Land, Inc.(a) ........................ 44,594
24,192 Metropolitan Bank & Trust Company(a) ........... 191,975
------------
236,569
------------
PORTUGAL -- 1.6%
18,904 Portugal Telecom SA ............................ 846,759
------------
SINGAPORE -- 0.2%
12,000 Development Bank of Singapore Ltd. ............. 90,946
------------
SPAIN -- 3.8%
55,549 Argentaria SA .................................. 1,334,948
16,826 Telefonica de Espana ........................... 713,716
------------
2,048,664
------------
SWEDEN -- 2.4%
15,760 Hennes and Mauritz AB - Class B ................ 1,188,277
7,710 Skandinaviska Enskilda Banken - Class A ........ 94,230
------------
1,282,507
------------
SWITZERLAND -- 4.7%
581 Novartis AG .................................... 942,491
89 Roche Holding AG - Genusschein ................. 1,085,366
796 Schweizerische Lebensversicherungs
-und Rentenanstalt .......................... 507,147
------------
2,535,004
------------
30
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 96.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
UNITED KINGDOM -- 21.5%
36,943 Allied Zurich PLC .............................. $ 498,261
318,671 ASDA Group PLC ................................. 781,934
202,380 British Aerospace PLC .......................... 1,351,730
89,143 British American Tobacco PLC ................... 741,819
86,375 British Sky Broadcasting Group PLC ............. 745,281
94,155 Diageo PLC ..................................... 1,063,201
47,580 Glaxo Wellcome PLC ............................. 1,592,238
50,079 Imperial Chemical Industries PLC ............... 447,059
41,592 Railtrack Group PLC ............................ 952,073
66,944 Reed International PLC ......................... 609,502
168,537 Somerfield PLC ................................. 863,820
105,931 Vodafone Group PLC ............................. 1,978,521
------------
11,625,439
------------
TOTAL COMMON STOCKS (COST $40,485,195) ......... $ 51,967,556
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.8% 2,051,701
------------
NET ASSETS -- 100.0% $ 54,019,257
============
(a) Non-income producing security.
See accompanying notes to financial statements.
31
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (each a series of The
Williamsburg Investment Trust), including the portfolios of investments, as of
March 31, 1999, and the related statements of operations for the year then
ended, and the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
indicated thereon. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial positions of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund as of March 31, 1999,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended and the financial
highlights for the periods referred to above, in conformity with generally
accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 30, 1999
32
<PAGE>
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33
<PAGE>
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34
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
35
<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>
- --------------------------------------------------------------------------------
THE TATTERSALL BOND FUND
------------------------
No Load Mutual Fund
ANNUAL REPORT
March 31, 1999
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 TATTERSALL FUNDS
Dear Tattersall Bond Fund Shareholder:
All of us at Tattersall Advisory Group are excited about the opportunities our
clients will have through our association with The First Capital Group of First
Union. As a result of access to First Capital Group's additional research and
human resources, we will soon be able to incorporate enhanced investment
capabilities into our products. Although this will not occur immediately, we
should be able to utilize these enhancing strategies by year-end. We would like
to emphasize the fact that we will remain an autonomous company with the same
people, the same investment philosophy, the same investment process, and the
same location. Another benefit afforded by the merger and one specifically for
Bond Fund clients, will take the form of lower expenses within the Fund. Overall
expenses paid will be reduced by 15 to 20% immediately upon formal shareholder
approval of the merger between The Tattersall Bond Fund and Evergreen's current
institutional Core Bond Fund.
The Tattersall Bond Fund continues to perform well, relative to the Lehman
Aggregate Index. The Fund's returns are as follows:
Bond Fund Lehman Aggregate
1Qtr99 -0.04% -0.51%
1 Year 6.33% 6.27%
3 Years 11.49% 11.09%
5 Years 8.12% 8.03%
Since Inception 7.81% 8.22%
As always we ask that you feel free to call should you have any questions or if
we may be of any assistance.
Sincerely,
/s/ Craig D. Truitt
Craig D. Truitt
Vice President
Tattersall Funds
Shareholder Services o Countrywide Fund Services, Inc. o P.O. Box 5354
Cincinnati, Ohio 45201-5354 o 800-443-4249
Investment Advisor o Tattersal Advisory Group o 6802 Paragon Place, Suite 200
Richmond, Virginia 23230-1655 o 804-289-2663
<PAGE>
THE TATTERSALL BOND FUND
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Tattersall
Bond Fund, the Lehman Brothers Government Corporate Index, the Consumer Price
Index and the Lehman Brothers Aggregate Index
03/31/99
--------
The Tattersall Bond Fund $18,737
Lehman Brothers Government Corporate Index $19,336
Consumer Price Index $12,263
Lehman Brothers Aggregate Index $19,331
- --------------------------------------------------------------------------------
---------------------------------------
The Tattersall Bond Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
6.53% 7.94% 7.87%
---------------------------------------
* Initial public offering of shares was July 3, 1989
Past performance is not predictive of future performance.
<PAGE>
THE TATTERSALL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
ASSETS
Investments in securities:
At acquisition cost $ 103,941,499
=============
At value (Note 1) $ 104,555,927
Investments in repurchase agreements (Note 1) 9,779,000
Cash 631
Interest and dividends receivable 1,187,714
Receivable for securities sold 7,228,233
Receivable for capital shares sold 3,721
Other assets 6,353
-------------
TOTAL ASSETS 122,761,579
-------------
LIABILITIES
Dividends payable 65,219
Payable for securities purchased 10,903,286
Payable for capital shares redeemed 6,459
Accrued investment advisory fees (Note 3) 24,938
Accrued administration fees (Note 3) 7,200
Accrued distribution expenses (Note 3) 978
Other accrued expenses and liabilities 3,869
-------------
TOTAL LIABILITIES 11,011,949
-------------
NET ASSETS $ 111,749,630
=============
Net assets consist of:
Paid-in capital $ 111,144,935
Distributions in excess of net realized gains (9,733)
Net unrealized appreciation on investments 614,428
-------------
Net assets $ 111,749,630
=============
PRICING OF INSTITUTIONAL SHARES
Net assets applicable to Institutional Shares $ 109,028,154
=============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 10,212,863
=============
Net asset value, offering price and
redemption price per share (Note 1) $ 10.68
=============
PRICING OF SERVICE GROUP SHARES
Net assets applicable to Service Group Shares $ 2,721,476
=============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 254,932
=============
Net asset value, offering price and
redemption price per share (Note 1) $ 10.68
=============
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL BOND FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1999
INVESTMENT INCOME
Interest $ 6,473,084
Dividends 483,139
-----------
TOTAL INVESTMENT INCOME 6,956,223
-----------
EXPENSES
Investment advisory fees (Note 3) 418,525
Administration fees (Note 3) 98,726
Custodian fees 18,459
Professional fees 15,245
Pricing costs 15,146
Trustees' fees and expenses 8,220
Printing of shareholder reports 7,441
Registration fees 6,234
Distribution expenses, Service Group Shares (Note 3) 4,201
Postage and supplies 3,799
Insurance expense 3,269
Other expenses 4,317
-----------
TOTAL EXPENSES 603,582
Fees waived by the Adviser (Note 3) (23,693)
Expenses reimbursed through a directed
brokerage arrangement (Note 4) (18,717)
-----------
NET EXPENSES 561,172
-----------
NET INVESTMENT INCOME 6,395,051
-----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions 1,960,347
Net change in unrealized appreciation/
depreciation on investments (1,449,745)
-----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 510,602
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 6,905,653
===========
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
MARCH 31, MARCH 31,
1999 1998
------------- -------------
FROM OPERATIONS
<S> <C> <C>
Net investment income $ 6,395,051 $ 5,273,886
Net realized gains from security transactions 1,960,347 1,826,210
Net change in unrealized appreciation/depreciation
on investments (1,449,745) 2,574,722
------------- -------------
Net increase in net assets from operations 6,905,653 9,674,818
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Institutional Shares (6,248,934) (5,189,396)
From net investment income, Service Group Shares (154,241) (99,842)
From net realized gains from security transactions, Institutional Shares (2,212,023) --
From net realized gains from security transactions, Service Group Shares (55,284) --
------------- -------------
Decrease in net assets from distributions to shareholders (8,670,482) (5,289,238)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
INSTITUTIONAL SHARES
Proceeds from shares sold 17,978,857 15,597,164
Net asset value of shares issued in reinvestment
of distributions to shareholders 8,176,315 5,049,237
Payments for shares redeemed (11,649,216) (5,227,155)
------------- -------------
Net increase in net assets from Institutional Shares transactions 14,505,956 15,419,246
------------- -------------
SERVICE GROUP SHARES
Proceeds from shares sold 378,203 4,316,277
Net asset value of shares issued in reinvestment
of distributions to shareholders 209,525 99,842
Payments for shares redeemed (897,925) (1,401,739)
------------- -------------
Net increase (decrease) in net assets from Service Group Shares transactions (310,197) 3,014,380
------------- -------------
TOTAL INCREASE IN NET ASSETS 12,430,930 22,819,206
NET ASSETS
Beginning of year 99,318,700 76,499,494
------------- -------------
End of year - (including undistributed net investment
income of $0 and $8,124, respectively) $ 111,749,630 $ 99,318,700
============= =============
CAPITAL SHARE ACTIVITY
INSTITUTIONAL SHARES
Sold 1,641,524 1,446,450
Reinvested 747,985 472,113
Redeemed (1,063,344) (486,114)
------------- -------------
Net increase in shares outstanding 1,326,165 1,432,449
Shares outstanding, beginning of year 8,886,698 7,454,249
------------- -------------
Shares outstanding, end of year 10,212,863 8,886,698
============= =============
SERVICE GROUP SHARES
Sold 34,302 402,367
Reinvested 19,167 9,229
Redeemed (81,847) (128,286)
------------- -------------
Net increase (decrease) in shares outstanding (28,378) 283,310
Shares outstanding, beginning of year 283,310 --
------------- -------------
Shares outstanding, end of year 254,932 283,310
============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL BOND FUND - INSTITUTIONAL SHARES
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $ 10.83 $ 10.26 $ 10.39 $ 9.97 $ 10.15
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.61 0.58 0.68 0.70 0.62
Net realized and unrealized gains (losses) on investments 0.09 0.63 (0.12) 0.41 (0.18)
-------- -------- -------- -------- --------
Total from investment operations 0.70 1.21 0.56 1.11 0.44
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.63) (0.64) (0.69) (0.69) (0.62)
Distributions from net realized gains (0.22) -- -- -- --
-------- -------- -------- -------- --------
Total distributions (0.85) (0.64) (0.69) (0.69) (0.62)
-------- -------- -------- -------- --------
Net asset value at end of year $ 10.68 $ 10.83 $ 10.26 $ 10.39 $ 9.97
======== ======== ======== ======== ========
Total return 6.53% 12.06% 5.52% 11.23% 4.56%
======== ======== ======== ======== ========
Net assets at end of year (000's) $109,028 $ 96,250 $ 76,499 $ 74,774 $ 72,029
======== ======== ======== ======== ========
Ratio of gross expenses to average net assets 0.54% 0.53% 0.53% 0.56% 0.57%
Ratio of net expenses to average net assets (a) 0.50% 0.50% 0.50% 0.53% 0.53%
Ratio of net investment income to average net assets 5.73% 6.06% 6.48% 6.54% 6.28%
Portfolio turnover rate 221% 235% 207% 268% 381%
</TABLE>
(a) Ratios were determined based on net expenses after investment advisory fee
waivers for the years ended March 31, 1999 and 1998 (Note 3) and expense
reimbursements through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL BOND FUND - SERVICE GROUP SHARES
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a
Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
MARCH 31, MARCH 31,
1999 1998 (A)
-------- --------
<S> <C> <C>
Net asset value at beginning of period $ 10.83 $ 10.69
-------- --------
Income from investment operations:
Net investment income 0.61 0.37
Net realized and unrealized gains on investments 0.07 0.08
-------- --------
Total from investment operations 0.68 0.45
-------- --------
Less distributions:
Dividends from net investment income (0.61) (0.31)
Distributions from net realized gains (0.22) --
-------- --------
Total distributions (0.83) (0.31)
-------- --------
Net asset value at end of period $ 10.68 $ 10.83
======== ========
Total return 6.37% 8.55%(c)
======== ========
Net assets at end of period (000's) $ 2,721 $ 3,069
======== ========
Ratio of gross expenses to average net assets 0.69% 0.68%(c)
Ratio of net expenses to average net assets (b) 0.65% 0.65%(c)
Ratio of net investment income to average net assets 5.59% 5.96%(c)
Portfolio turnover rate 221% 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 investment advisory fee
waivers (Note 3) and expense reimbursements through a directed brokerage
arrangement (Note 4).
(c) Annualized.
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
PAR VALUE VALUE
--------- -----
U.S. TREASURY OBLIGATIONS - 16.3%
U.S. TREASURY BONDS - 8.5%
$ 7,450,000 8.125%, due 08/15/2021 $ 9,469,620
------------
U.S. TREASURY NOTES - 6.8%
6,015,000 5.75%, due 10/31/2002 6,125,917
1,380,000 7.00%, due 07/15/2006 1,509,803
------------
7,635,720
------------
U.S. TREASURY INFLATION-PROTECTION NOTES - 1.0%
1,152,213 3.375%, due 01/15/2007 1,109,005
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $18,336,756) $ 18,214,345
------------
MORTGAGE-BACKED SECURITIES - 38.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 7.3%
$ 825,000 Pool #1197-H, 6.75%, due 02/15/2007 $ 840,205
1,000,000 Pool #1457-PK, 7.00%, due 01/15/2008 1,033,750
925,000 Pool #1460-I, 7.00%, due 01/15/2008 957,079
834,652 Pool #E00220, 7.00%, due 06/01/2008 854,084
825,000 Pool #1655-HB, 6.50%, due 10/15/2008 841,236
1,375,000 Series #2110-PJ, 6.00%, due 08/15/2019 1,371,122
1,076,227 Series #1251-Z, 8.00%, due 04/15/2022 1,125,324
1,175,000 Series #2132-PD, 6.00%, due 11/15/2027 1,137,180
------------
8,159,980
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 17.9%
1,181,081 Pool #375139, 7.13%, due 05/01/2004 1,234,599
1,453,618 Pool #375299, 6.81%, due 08/01/2004 1,502,677
592,534 Pool #73061, 8.66%, due 01/01/2005 651,787
616,662 Pool #73126, 7.00%, due 07/01/2005 635,661
1,503,000 Series #92-52G, 8.00%, due 04/25/2007 1,589,888
650,052 Series #92-61-ZB, 7.50%, due 05/25/2007 675,644
765,000 Series #92-179-H, 7.00%, due 09/01/2007 783,406
543,154 Pool #375538, 6.70%, due 11/01/2007 560,722
973,132 Pool #381276, 5.99%, due 01/01/2009 966,746
535,000 TBA, 6.09%, due 05/01/2009 531,489
1,410,000 Series #96-53-PG, 6.50%, due 12/18/2011 1,425,411
1,425,000 TBA, 6.00%, due 04/01/2014 1,413,867
628,956 Series #G92-23-Z, 7.50%, due 05/25/2021 664,335
808,255 Series #G92-44-Z, 8.00%, due 07/25/2022 854,472
1,508,080 Pool #426608, 6.00%, due 10/01/2028 1,466,035
572,548 Pool #442336, 6.00%, due 10/01/2028 556,586
1,353,113 Pool #443196, 6.00%, due 10/01/2028 1,315,388
584,399 Pool #444515, 6.50%, due 10/01/2028 581,898
964,485 Pool #451862, 6.50%, due 11/01/2028 960,357
650,582 Pool #456436, 6.00%, due 12/01/2028 632,444
1,000,000 TBA, 6.00%, due 04/01/2029 971,563
------------
19,974,975
------------
<PAGE>
THE TATTERSALL BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
PAR VALUE VALUE
--------- -----
MORTGAGE-BACKED SECURITIES - CONTINUED
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 10.7%
$ 919,195 Pool #780897, 7.50%, due 09/15/2010 $ 949,988
58,769 Pool #223997, 8.85%, due 05/15/2018 62,921
456,932 Pool #224002, 8.85%, due 07/15/2018 489,219
103,000 Pool #316205, 7.50%, due 02/15/2022 106,352
1,406,943 Pool #373331, 7.50%, due 05/15/2022 1,452,725
284,021 Pool #333658, 7.50%, due 01/15/2023 293,263
245,835 Pool #349314, 7.50%, due 02/15/2023 253,835
586,194 Pool #342526, 7.50%, due 02/15/2023 605,269
524,914 Pool #352143, 7.50%, due 07/15/2023 541,994
663,848 Pool #780798, 7.50%, due 12/15/2027 684,201
2,082,227 Pool #780728, 7.50%, due 03/15/2028 2,146,068
1,649,667 Pool #2660, 7.50%, due 10/20/2028 1,694,060
1,408,773 Pool #503000, 6.50%, due 02/15/2029 1,403,546
1,250,000 TBA, 7.50%, due 05/15/2029 1,285,547
------------
11,968,988
------------
OTHER MORTGAGE-BACKED SECURITIES - 2.2%
Contimortgage Home Equity Loan Trust #98-2-A4,
925,000 6.19%, due 01/15/2014 921,235
GMAC Commercial Mortgage Securities, Inc. #98-C1-A2,
625,000 6.70%, due 03/15/2008 636,133
GS Mortgage Securities Corporation II #98-C1-A2,
875,000 6.62%, due 10/18/2030 880,196
------------
2,437,564
------------
TOTAL MORTGAGE-BACKED SECURITIES (COST $42,583,006) $ 42,541,507
------------
ASSET-BACKED SECURITIES - 6.7%
STUDENT LOAN MARKETING ASSOCIATION - 4.6%
$ 1,845,962 Series #97-2-A1, 5.042%, adjustable rate,
due 10/25/2005 $ 1,837,237
1,568,080 Series #97-3-A1, 5.604%, adjustable rate,
due 04/25/2006 1,561,342
1,770,140 Series #98-1-A1, 5.212%, adjustable rate,
due 01/25/2007 1,765,645
------------
5,164,224
------------
<PAGE>
THE TATTERSALL BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
PAR VALUE VALUE
--------- -----
ASSET-BACKED SECURITIES - CONTINUED
OTHER ASSET-BACKED SECURITIES - 2.1%
CIT RV Trust #95-B-A1,
$ 165,331 6.50%, due 04/15/2011 $ 167,066
CIT RV Trust #96-A-A1,
413,917 5.40%, due 12/15/2011 412,675
Fleetwood Credit Corporation Grantor Trust #94-A-A,
333,684 4.70%, due 07/15/2009 328,679
Fleetwood Credit Corporation Grantor Trust #96-A-A,
316,937 6.75%, due 10/15/2011 322,008
Green Tree Financial Corporation #98-A,
1,104,418 6.18%, due 06/15/2019 1,107,179
------------
2,337,607
------------
TOTAL ASSET-BACKED SECURITIES (COST $7,494,857) $ 7,501,831
------------
CORPORATE BONDS - 24.3%
Alcoa, Inc.,
$ 775,000 6.50%, due 06/15/2018 $ 752,169
Associates Corporation N.A.,
700,000 5.75%, due 10/15/2003 695,639
Avalon Properties, Inc.,
485,000 6.625%, due 01/15/2005 479,141
Bank of New York Company, Inc.,
610,000 6.50%, due 12/01/2003 623,926
BellSouth Telecommunications,
445,000 6.375%, due 06/01/2028 423,791
Beneficial Corporation Medium Term Notes,
800,000 6.33%, due 10/09/2001 805,288
Boeing Company,
350,000 6.625%, due 02/15/2038 332,626
BRE Properties, Inc.,
425,000 7.125%, due 02/15/2013 402,815
Coca-Cola Enterprises,
440,000 6.75%, due 01/15/2038 428,630
Dana Corporation,
425,000 7.00%, due 03/15/2028 413,359
<PAGE>
THE TATTERSALL BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
PAR VALUE VALUE
--------- -----
CORPORATE BONDS - CONTINUED
Duke Realty LP,
$ 470,000 7.05%, due 03/01/2006 $ 471,316
Equity Residential Properties Trust,
875,000 6.55%, due 11/15/2001 879,121
450,000 6.63%, due 04/13/2005 444,384
Finova Capital Corporation,
385,000 6.25%, due 08/15/2000 387,749
Firstar Bank Milwaukee,
2,450,000 6.25%, due 12/01/2002 2,478,322
Ford Motor Company,
335,000 8.90%, due 01/15/2032 418,924
Ford Motor Credit Company,
1,395,000 5.80%, due 01/12/2009 1,340,051
General Motors Acceptance Corporation,
500,000 5.85%, due 01/14/2009 481,380
General Motors Acceptance Corporation Medium Term Notes,
725,000 6.80%, due 04/17/2001 741,421
General Motors Corporation,
235,000 8.80%, due 03/01/2021 285,739
Household Finance Corporation,
1,000,000 6.50%, due 11/15/2008 997,970
International Lease Finance Corporation Medium Term Notes,
1,315,000 6.42%, due 09/11/2000 1,329,005
May Department Stores,
275,000 7.45%, due 09/15/2011 300,908
650,000 6.70%, due 09/15/2028 641,914
Mellon Financial Company,
915,000 7.625%, due 11/15/1999 928,167
Morgan Stanley Dean Witter & Company,
500,000 6.09%, due 03/09/2001 502,495
National City Corporation,
900,000 7.20%, due 05/15/2005 932,337
Norwest Financial, Inc.,
450,000 6.05%, due 11/19/1999 452,174
PNC Funding Corporation,
600,000 6.125%, due 02/15/2009 587,268
Prologis Trust,
450,000 7.00%, due 10/01/2003 450,711
SBC Communications, Inc.,
600,000 6.625%, due 11/01/2009 622,692
<PAGE>
THE TATTERSALL BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
PAR VALUE VALUE
--------- -----
CORPORATE BONDS - CONTINUED
Sears Roebuck Acceptance Corporation,
$ 1,500,000 5.63%, due 02/07/2001 $ 1,498,770
750,000 6.86%, due 07/03/2001 766,762
750,000 6.99%, due 09/30/2002 774,203
Sprint Capital Corporation,
1,240,000 6.875%, due 11/15/2028 1,224,376
Suntrust Banks,
340,000 6.125%, due 02/15/2004 339,504
Union Camp Corporation,
325,000 6.50%, due 11/15/2007 325,400
United Parcel Service of America, Inc.,
420,000 8.375%, due 04/01/2030 503,979
Wachovia Corporation,
675,000 6.15%, due 03/15/2009 667,568
------------
TOTAL CORPORATE BONDS (COST $27,118,496) $ 27,131,994
------------
SHARES
------
CLOSED-END MUTUAL FUNDS - 8.2%
37,400 Blackrock 1999 Term Trust, Inc. $ 369,325
241,400 Blackrock 2001 Term Trust, Inc. 2,172,600
104,700 Blackrock North American Government Income Trust 1,047,000
125,300 Blackrock Strategic Term Trust, Inc. 1,151,194
7,400 Excelsior Income Shares, Inc. 121,175
15,500 First Commonwealth Fund 160,812
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. 34,594
16,400 Income Opportunities Fund, Inc. - 1999 159,900
73,100 MFS Government Markets Income Trust 466,012
12,000 Morgan Stanley Dean Witter Government Income Trust 104,250
------------
TOTAL CLOSED-END FUNDS (COST $8,408,384) $ 9,166,250
------------
TOTAL INVESTMENTS AT VALUE
(COST $103,941,499) - 93.6% $104,555,927
------------
<PAGE>
THE TATTERSALL BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
FACE AMOUNT VALUE
- ----------- -----
REPURCHASE AGREEMENTS (A) - 8.7%
Firstar Bank., 3.75%, dated 03/31/99, due 04/01/99
$ 9,779,000 repurchase proceeds $9,780,019 (Cost $9,779,000) $ 9,779,000
------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS
AT VALUE - 102.3% $114,334,927
LIABILITIES IN EXCESS OF OTHER ASSETS - (2.3)% (2,585,297)
------------
NET ASSETS - 100.0% $111,749,630
============
(a) Joint repurchase agreement is fully collateralized by $28,093,565 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $10,130,236.
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
The Tattersall Bond Fund, formerly 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 (normally
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 TATTERSALL BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
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.
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 TATTERSALL BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
The following information is based upon the federal income tax cost of portfolio
investments of $104,098,150 as of March 31, 1999:
Gross unrealized appreciation................. $ 1,320,656
Gross unrealized depreciation................. (862,879)
-----------
Net unrealized appreciation................... $ 457,777
===========
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 year ended March 31, 1999, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $239,650,862 and $229,306,091, 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 $23,693 of its investment advisory
fees for the year ended March 31, 1999. 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 CFS 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 TATTERSALL BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
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 year ended March 31, 1999, Service Group Shares incurred
$4,201 of distribution expenses under the Plan.
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of the Fund, the Fund's
custodian fees and a portion of other operating expenses have been paid through
an arrangement with a third-party broker-dealer who is compensated through
security trades. Expenses reimbursed through the directed brokerage arrangement
totaled $18,717 for the year ended March 31, 1999.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of
The Tattersall Bond Fund, formerly The Jamestown Bond Fund, (a series of The
Williamsburg Investment Trust), including the portfolio of investments, as of
March 31, 1999, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
March 31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
The Tattersall Bond Fund as of March 31, 1999, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 30, 1999
<PAGE>
- --------------------------------------------------------------------------------
THE TATTERSALL SHORT TERM BOND FUND
-----------------------------------
No Load Mutual Fund
ANNUAL REPORT
March 31, 1999
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 TATTERSALL FUNDS
Dear Tattersall Short Term Bond Fund Shareholder:
The Tattersall Short Term Bond Fund was originally designed to provide
institutional investors with a low cost, first-step alternative to short-term
"bank" investments. The Tattersall Short Term Bond Fund has performed well
versus bank investment options as well as Treasury Bills over time. The first
quarter of this year provided the bond market with a rough ride throughout the
period. However, the Short Term Bond Fund generated a strong return relative to
the market in general. The Fund's returns are as follows:
Short Term Bond Fund US Treasury Bills
1Qtr99 1.13% 1.06%
1 Year 5.37% 4.88%
3 Years 5.56% 5.20%
5 Years 5.75% 5.30%
Since Inception 5.18% 4.72%
We are pleased to have been able to provide investment services to you over the
past seven years and trust that you have benefited from the returns generated
for your portfolio. Some time ago we sent a letter to your attention regarding
our agreement to become an autonomous investment management arm of First Union's
First Capital Group. We have evaluated numerous options over this time period
for the Fund and are pleased to report that we are able to offer you several
options regarding your investment in the Short Term Bond Fund. Because of the
economies of scale offered by our merger with First Union, we are also pleased
to report that every option provided, with the exception of your requesting a
complete liquidation, would offer excellent investment management services
through the Evergreen Funds at a substantially lower expense ratio than the
current fund.
Attached you will find our customary market comments and overview. As always, we
would be pleased to assist you in any manner possible and look forward to
working with you in the future.
Sincerely,
/s/ Craig D. Truitt
Craig D. Truitt
Vice President
Tattersall Funds
Shareholder Services o Countrywide Fund Services, Inc. o P.O. Box 5354
Cincinnati, Ohio 45201-5354 o 800-443-4249
Investment Advisor o Tattersal Advisory Group o 6802 Paragon Place, Suite 200
Richmond, Virginia 23230-1655 o 804-289-2663
<PAGE>
FIRST QUARTER 1999
It's all about the economy - the sheer strength of it. It remained on a roll
during the first quarter, and was a major influence on the behavior of the U.S.
financial markets. Stocks liked it; bonds did not. It caused the stock market to
become a magnet for dollars, sucking in every last investor and defying gravity
for the big push through DOW 10000. By contrast, the economy repelled bond
investors, re-igniting their fears of inflation and Federal Reserve tightening.
Although the quarter started with a global focus with the launch of the euro and
Brazil's surprise devaluation, it quickly shifted to domestic issues when a
barrage of economic statistics confirmed nothing but strength. This was
particularly true during February when long term interest rates rose 0.50% and
threatened a correction in the stock market. Good news on inflation, however,
calmed bond investors during March, gave the Federal Reserve the reason it
needed to keep policy on hold, and lifted stock prices once again. As a result
of rising interest rates and a steepening yield curve, the Lehman Aggregate,
Government/Corporate and Intermediate Government/Corporate Indices had negative
returns for the quarter while two-year and shorter benchmarks were slightly
positive. Stock returns were strong as the S&P returned 5.0%
Amid the gloom of the overall bond market, our strategy of overweighting sectors
significantly boosted performance relative to the market. Just as the strong
economy helped the stock market, it also helped corporate bonds. Liquidity
improved as did investors' tolerance for risk and appetite for corporates, which
caused yield spreads to tighten to Treasuries. The mortgage market benefited
from rising Treasury rates and declining volatility, both of which helped allay
prepayment fears. Demand from all types of buyers improved the sponsorship of
the mortgage market during the quarter, helping to narrow their yield spreads to
Treasuries. Our emphasis on convexity was correct. The asset-backed market
followed the narrowing trend of both mortgages and corporates and outperformed
Treasuries. Finally, closed-end funds continued their discount narrowing which
added to overall outperformance.
LOOKING AHEAD
It will still be all about the economy, as far as we can tell. It will be about
global economies as well: when and to what extent Japan will recover; if an when
Europe slips into recession; and how weak Latin America will be. The U.S. has
certainly been out of sync with the rest of the world, which is one reason why
inflation has been so well behaved. This may well change, however, if the rest
of the world recovers with the U.S. remaining strong. Resources could become
strained and pricing power could return, threatening bond investors' complacency
about inflation. This would more than likely trigger a tightening response from
the Federal Reserve causing a shift up in the yield curve. What is more likely
to occur, however, barring any unforseen external or internal shocks to the
system, is that the U.S. economy will be winding down as other world economies
are recovering. This would keep inflation steady at a low rate, and keep the
Federal Reserve on hold with a bias to ease. Under this scenario, interest rates
should begin to fall as slack develops in the economy. We will continue to
monitor our interest rate barometer for signs of the timing of such a move.
Although our overweighting in sectors contributed significantly to
outperformance during the first quarter, we believe that some degree of
overweighting is still appropriate. As investors are willing to take on both
credit risk and convexity risk, spreads on corporates and mortgages should
continue to narrow further, although not at the aggressive pace that they did in
the first quarter. A yield curve that has steepened recently should also give us
some opportunities to benefit from the roll associated with owning bulleted
instead of amortizing securities.
The severe liquidity problems and spread widening of late last summer are still
fresh enough in our minds to prevent us from being too complacent about spread
products. When the reward of extra yield no longer compensates us for risk, then
we will ease off from our sector weighting sin favor of Treasuries. That time,
however, has not yet come.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Tattersall
Short Term Bond Fund, the Merrill Lynch 1-3 Year Treasury Index,
the Consumer Price Index and the 90-Day Treasury Bill Index
03/31/99
--------
The Tattersall Short Term Bond Fund $14,398
Merrill Lynch 1-3 Year Treasury Index $15,098
Consumer Price Index $11,981
90-Day Treasury Bill Index $13,926
- --------------------------------------------------------------------------------
---------------------------------------
The Tattersall Short Term Bond Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
5.36% 5.60% 5.19%
---------------------------------------
* Initial public offering of shares was July 3, 1989
Past performance is not predictive of future performance.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
ASSETS
Investments in securities:
At acquisition cost $ 5,597,311
===========
At value (Note 1) $ 5,599,621
Investments in repurchase agreements (Note 1) 745,000
Cash 328
Interest receivable 72,353
Receivable from capital shares sold 127,426
Due from Adviser (Note 3) 14,692
Other assets 835
-----------
TOTAL ASSETS 6,560,255
-----------
LIABILITIES
Accrued administration fees (Note 3) 2,000
Other accrued expenses and liabilities 3,254
-----------
TOTAL LIABILITIES 5,254
-----------
NET ASSETS $ 6,555,001
===========
Net assets consist of:
Paid-in capital $ 7,139,137
Undistributed net investment income 77
Accumulated net realized losses from security transactions (586,523)
Net unrealized appreciation on investments 2,310
-----------
Net assets $ 6,555,001
===========
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 684,639
===========
Net asset value, offering price and
redemption price per share (Note 1) $ 9.57
===========
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
STATEMENT OF OPERATIONS
Year Ended March 31, 1999
INVESTMENT INCOME
Interest $ 467,355
---------
EXPENSES
Investment advisory fees (Note 3) 30,713
Administration fees (Note 3) 24,000
Professional fees 11,645
Trustees' fees and expenses 8,220
Pricing costs 4,779
Printing of shareholder reports 4,330
Custodian fees 3,689
Postage and supplies 2,044
Other expenses 2,386
---------
TOTAL EXPENSES 91,806
Fees waived and expenses reimbursed by the Adviser (Note 3) (50,855)
---------
NET EXPENSES 40,951
---------
NET INVESTMENT INCOME 426,404
---------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 5,493
Net change in unrealized appreciation/
depreciation on investments 5,142
---------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 10,635
---------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 437,039
=========
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
Years Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
Year Year
Ended Ended
March 31, March 31,
1999 1998
------------ ------------
FROM OPERATIONS
<S> <C> <C>
Net investment income $ 426,404 $ 566,720
Net realized gains (losses) from security transactions 5,493 (45,768)
Net change in unrealized appreciation/depreciation
on investments 5,142 48,104
------------ ------------
Net increase in net assets from operations 437,039 569,056
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (427,625) (568,054)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 2,646,493 2,162,478
Net asset value of shares issued in reinvestment
of distributions to shareholders 427,625 568,054
Payments for shares redeemed (6,740,395) (2,444,148)
------------ ------------
Net increase (decrease) in net assets from capital share transactions (3,666,277) 286,384
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,656,863) 287,386
NET ASSETS
Beginning of year 10,211,864 9,924,478
------------ ------------
End of year - (including undistributed net investment
income of $77 and $1,298, respectively) $ 6,555,001 $ 10,211,864
============ ============
CAPITAL SHARE ACTIVITY
Sold 273,704 223,127
Reinvested 44,522 59,049
Redeemed (695,898) (252,774)
------------ ------------
Net increase (decrease) in shares outstanding (377,672) 29,402
Shares outstanding, beginning of year 1,062,311 1,032,909
------------ ------------
Shares outstanding, end of year 684,639 1,062,311
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Years Ended March 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year $ 9.61 $ 9.61 $ 9.72 $ 9.64 $ 9.82
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.54 0.54 0.58 0.62 0.60
Net realized and unrealized gains (losses)
on investments (0.03) -- (0.11) 0.08 (0.17)
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.51 0.54 0.47 0.70 0.43
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.55) (0.54) (0.58) (0.62) (0.61)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year $ 9.57 $ 9.61 $ 9.61 $ 9.72 $ 9.64
========== ========== ========== ========== ==========
Total return 5.36% 5.76% 5.01% 7.38% 4.53%
========== ========== ========== ========== ==========
Net assets at end of year (000's) $ 6,555 $ 10,212 $ 9,924 $ 9,426 $ 14,122
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets (a) 0.50% 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to average net assets 5.21% 5.64% 5.96% 6.27% 6.04%
Portfolio turnover rate 63% 109% 62% 157% 144%
</TABLE>
(a) Absent investment advisory fees waived and expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
1.12%, 0.95%, 0.94%, 0.85% and 0.85% for the years ended March 31, 1999,
1998, 1997, 1996 and 1995, respectively (Note 3).
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
Par Value Value
- --------- -----
U.S. TREASURY OBLIGATIONS - 4.5%
U.S. TREASURY NOTES - 1.4%
$ 40,000 6.50%, due 05/31/2001 $ 41,181
50,000 5.75%, due 10/31/2002 50,922
-----------
92,103
-----------
U.S. TREASURY INFLATION-PROTECTION NOTES - 3.1%
204,694 3.625%, due 07/15/2002 203,351
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $295,575) $ 295,454
-----------
MORTGAGE-BACKED SECURITIES - 11.2%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.2%
$ 146,315 Pool #E00584, 6.00%, due 11/01/2013 $ 145,456
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.3%
84,655 Pool #124029, 8.00%, due 12/01/2002 85,810
191,282 Series #94-13-PE, 5.80%, due 12/25/2006 191,401
134,127 Pool #313383, 6.50%, due 11/01/2009 135,529
-----------
412,740
-----------
OTHER MORTGAGE-BACKED SECURITIES - 2.7%
GE Capital Mortgage Services, Inc. #94-2-A4,
174,528 6.00%, due 01/25/2009 174,636
-----------
TOTAL MORTGAGE-BACKED SECURITIES (COST $729,409) $ 732,832
-----------
ASSET-BACKED SECURITIES - 9.9%
CIT RV Trust #96-A-A1,
$ 154,769 5.40%, due 12/15/2011 $ 154,305
Fleetwood Credit Corporation Grantor Trust #97-B-A,
164,786 6.40%, due 05/15/2013 166,121
Student Loan Marketing Association #97-2-A1,
327,880 5.042%, adjustable rate, due 10/25/2005 326,330
-----------
TOTAL ASSET-BACKED SECURITIES (COST $644,767) $ 646,756
-----------
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
CORPORATE BONDS - 39.0%
Associates Corporation N.A.,
$ 175,000 5.85%, due 01/15/2001 $ 175,856
Caterpillar Financial, Inc.,
300,000 5.81%, due 07/05/2000 301,719
Countrywide Home Loans, Inc.,
140,000 5.62%, due 10/16/2000 139,662
Dillards, Inc.,
140,000 5.79%, due 11/15/2001 138,799
Enron Corporation,
290,000 6.45%, due 11/15/2001 293,100
Household Finance Corporation,
225,000 6.975%, due 06/07/2000 229,050
International Bank Reconstruction and Development,
265,000 5.10%, due 09/15/1999 265,277
International Lease Finance Corporation Medium Term Notes,
245,000 6.55%, due 09/15/2000 248,053
Norwest Financial, Inc.,
300,000 6.05%, due 11/19/1999 301,449
Phillips Petroleum Company,
150,000 9.00%, due 06/01/2001 159,792
Safeway, Inc.,
130,000 5.75%, due 11/15/2000 130,092
Xerox Corporation Medium Term Notes,
175,000 7.13%, due 04/30/1999 175,233
-----------
Total Corporate Bonds (Cost $2,561,063) $ 2,558,082
-----------
COMMERCIAL PAPER - 20.8%
$ 275,000 Allmerica Financial Corporation, due 05/04/1999 $ 273,788
275,000 American Express Company, due 05/19/1999 273,247
275,000 Archer-Daniels-Midland Company, due 04/30/1999 273,934
275,000 Du Pont (E.I.) De Nemours and Company, due 06/08/1999 272,512
275,000 Prudential Funding Corporation, due 05/25/1999 273,016
-----------
TOTAL COMMERCIAL PAPER (COST $1,366,497) $ 1,366,497
-----------
Total Investments at Value (Cost $5,597,311) - 85.4% $ 5,599,621
-----------
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
PORTFOLIO OF INVESTMENTS
March 31, 1999
Face
Amount Value
REPURCHASE AGREEMENTS (a) - 11.4%
$ 745,000 Firstar Bank, 3.75%, dated 03/31/1999, due 04/01/1999
repurchase proceeds $745,078 (Cost $745,000) $ 745,000
-----------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS
AT VALUE - 96.8% $ 6,344,621
OTHER ASSETS IN EXCESS OF LIABILITIES - 3.2% 210,380
-----------
NET ASSETS - 100.0% $ 6,555,001
===========
(a) Joint repurchase agreement is fully collaterized by $28,093,565 U.S.
Treasury Note, 5.625%, due 02/28/2001. The aggregate market value of the
collateral at March 31, 1999 was $28,533,385. The Fund's pro-rata interest
in the collateral at March 31, 1999 was $771,873.
See accompanying notes to financial statements.
<PAGE>
THE TATTERSALL SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
The Tattersall Short Term Bond Fund, formerly 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 (normally
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.
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
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THE TATTERSALL SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
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 $5,597,311 as of March 31, 1999:
Gross unrealized appreciation....................... $ 19,146
Gross unrealized depreciation....................... (16,836)
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Net unrealized appreciation......................... $ 2,310
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As of March 31, 1999, the Fund had capital loss carryforwards for federal
income tax purposes of $586,523 which expire on March 31, 2006. These capital
loss carryforwards may be utilized in future years to offset net realized
capital gains, if any, prior to distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 1999, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $2,878,247 and $2,736,697, respectively.
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THE TATTERSALL SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
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 $30,713 and reimbursed the Fund for $20,142 of other operating expenses for
the year ended March 31, 1999. 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 CFS out-of-pocket
expenses including, but not limited to, postage, supplies and cost of pricing
the Fund's portfolio securities. Certain officers of the Trust are also officers
of CFS.
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of The
Tattersall Short Term Bond Fund, formerly The Jamestown Short Term Bond Fund, (a
series of The Williamsburg Investment Trust), including the portfolio of
investments, as of March 31, 1999, and the related statement of operations for
the year then ended, and the statement of changes in net assets for each of the
two years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Tattersall Short Term Bond Fund as of March 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 30, 1999
