November 20, 2000
THE FLIPPIN, BRUCE & PORTER FUNDS
---------------------------------
FBP Contrarian Equity Fund
FBP Contrarian Balanced Fund
Supplement to Prospectus dated August 1, 2000
The Prospectus, dated August 1, 2000, of the Flippin, Bruce & Porter Funds
(the "Funds") is hereby amended to reflect the following new information:
New Transfer Agent
------------------
The Funds have approved Ultimus Fund Solutions, LLC as the new transfer agent of
the Funds.
New Toll-Free Number
--------------------
The Funds' toll-free number has changed. Call 1-866-738-1127 for information or
assistance.
Address of Funds
----------------
Inquiries concerning the Funds or shareholder accounts, and orders to purchase
or redeem shares of the Funds should now be addressed to:
The Flippin, Bruce & Porter Funds
c/o Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
For persons desiring to invest in the Funds by bank wire, your bank should now
use the following wire instructions:
Firstar Bank
ABA #042000013
For FBP Funds #19945-6740
For either: FBP Contrarian Equity Fund or
FBP Contrarian Balanced Fund
For further credit to: [shareholder's name and account #]
For further information concerning purchases or redemptions of Fund shares, see
"How to Purchase Shares" and "How to Redeem Shares" in the Prospectus.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE
FLIPPIN, BRUCE & PORTER
FUNDS
FBP CONTRARIAN EQUITY FUND
FBP CONTRARIAN BALANCED FUND
AUGUST 1, 2000
REVISED NOVEMBER 20, 2000
SERIES OF
WILLIAMSBURG INVESTMENT TRUST
135 MERCHANT STREET, SUITE 230
CINCINNATI, OHIO 45246
TELEPHONE 1-866-738-1127
Table of Contents
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INVESTMENT OBJECTIVES AND POLICIES........................................... 2
DESCRIPTION OF BOND RATINGS.................................................. 6
INVESTMENT LIMITATIONS....................................................... 8
TRUSTEES AND OFFICERS........................................................ 9
INVESTMENT ADVISOR........................................................... 14
ADMINISTRATOR................................................................ 15
DISTRIBUTOR.................................................................. 15
OTHER SERVICES............................................................... 16
BROKERAGE.................................................................... 16
SPECIAL SHAREHOLDER SERVICES................................................. 17
PURCHASE OF SHARES........................................................... 18
REDEMPTION OF SHARES......................................................... 19
NET ASSET VALUE DETERMINATION................................................ 19
ALLOCATION OF TRUST EXPENSES................................................. 20
ADDITIONAL TAX INFORMATION................................................... 20
CAPITAL SHARES AND VOTING.................................................... 21
CALCULATION OF PERFORMANCE DATA.............................................. 23
FINANCIAL STATEMENTS AND REPORTS............................................. 25
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of both the FBP Contrarian Equity Fund
and the FBP Contrarian Balanced Fund (the "Funds") dated August 1, 2000. The
Prospectus may be obtained from the Funds, at the address and phone number shown
above, at no charge.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both the FBP Contrarian Balanced
Fund (the "Balanced Fund"), formerly the FBP Contrarian Fund, and the FBP
Contrarian Equity Fund (the "Equity Fund") unless otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
WRITING COVERED CALL OPTIONS. The writing of call options by the Funds is
subject to limitations established by each of the exchanges governing the
maximum number of options which may be written or held by a single investor or
group of investors acting in concert, regardless of whether the options were
written or purchased on the same or different exchanges or are held in one or
more accounts or through one or more different exchanges or through one or more
brokers. Therefore the number of calls the Funds may write (or purchase in
closing transactions) may be affected by options written or held by other
entities, including other clients of the Advisor. An exchange may order the
liquidation of positions found to be in violation of these limits and may impose
certain other sanctions.
WARRANTS AND RIGHTS. Warrants are essentially options to purchase equity
securities at specific prices and are valid for a specific period of time.
Prices of warrants do not necessarily move in concert with the prices of the
underlying securities. Rights are similar to warrants but generally have a short
duration and are distributed directly by the issuer to its shareholders. Rights
and warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts ("ADRs"). The Funds may
invest in foreign securities in order to take advantage of opportunities for
growth where, as with domestic securities, they are depressed in price because
they are out of favor with most of the investment community. The same factors
would be considered in selecting foreign securities as with domestic securities,
as discussed in the Prospectus. Foreign securities investment presents special
considerations not typically associated with investments in domestic securities.
Foreign taxes may reduce income. Currency exchange rates and regulations may
cause fluctuation in the value of foreign securities. Foreign securities are
subject to different regulatory environments than in the United States and,
compared to the United States, there may be a lack of uniform accounting,
auditing and financial reporting standards, less volume and liquidity and more
volatility, less public information, and less regulation of foreign issuers.
Countries have been known to expropriate or nationalize assets, and foreign
investments may be subject to political, financial or social instability or
adverse diplomatic developments. There may be difficulties in obtaining service
of process on foreign issuers and difficulties in enforcing judgments with
respect to claims under the U.S. securities laws against such issuers. Favorable
or unfavorable differences between U.S. and
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foreign economies could affect foreign securities values. The U.S. Government
has, in the past, discouraged certain foreign investments by U.S. investors
through taxation or other restrictions and it is possible that such restrictions
could be imposed again.
SECURITIES OF UNSEASONED COMPANIES. The securities of unseasoned companies
(those in business less than three years, including predecessors and, in the
case of bonds, guarantors) may have a limited trading market, which may
adversely affect disposition. The management of such companies frequently does
not have substantial business experience. Furthermore, they may be competing
with other companies which are well established, more experienced and better
financed. If other investors attempt to dispose of such holdings when the Funds
desire to do so, the Funds could receive lower prices than might otherwise be
obtained. Because of the increased risk over larger, better known companies,
each Fund limits its investments in the securities of unseasoned issuers to no
more than 5% of its total assets.
SHARES OF OTHER INVESTMENT COMPANIES. Each Fund may invest up to 5% of its net
assets in shares of other investment companies, including Standard & Poor's
Depository Receipts ("SPDRs") and shares of the DIAMONDS Trust ("DIAMONDs").
SPDRs are exchange-traded securities that represent ownership in the SPDR Trust,
a long-term unit investment trust which has been established to accumulate and
hold a portfolio of common stocks that is intended to track the price
performance and dividend yield of the Standard & Poor's Composite Stock Price
Index. Holders of SPDRs are entitled to receive proportionate quarterly
distributions corresponding to the dividends which accrue on the S&P 500 stocks
in the underlying portfolio, less accumulated expenses of the SPDR Trust.
DIAMONDs operate similarly to SPDRs, except that the DIAMONDS Trust is intended
to track the price performance and dividend yield of the Dow Jones Industrial
Average. SPDRs and DIAMONDs are unlike traditional mutual funds in that they are
available for purchase or sale during the trading day like a share of stock,
rather than at closing net asset value per share. This characteristic of SPDRs
and DIAMONDs is a risk separate and distinct from the risk that its net asset
value will decrease.
To the extent the Funds invest in securities of other investment companies, Fund
shareholders would indirectly pay a portion of the operating costs of such
companies. These costs include management, brokerage, shareholder servicing and
other operational expenses. Indirectly, then, shareholders may pay higher
operational costs than if they owned the underlying investment companies
directly.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time a
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during which the
repurchase agreement is in effect.
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The majority of these transactions run day to day, and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Funds hold a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Advisor will carefully consider the creditworthiness during the
term of the repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times at least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Funds' custodian either directly or through a securities depository.
U.S. GOVERNMENT SECURITIES. The Balanced Fund may invest in debt obligations
which are issued or guaranteed by the U.S. Government, its agencies and
instrumentalities ("U.S. Government Securities") as described herein. U.S.
Government Securities include the following securities: (1) U.S. Treasury
obligations of various interest rates, maturities and issue dates, such as U.S.
Treasury bills (mature in one year or less), U.S. Treasury notes (mature in one
to seven years), and U.S. Treasury bonds (mature in more than seven years), the
payments of principal and interest of which are all backed by the full faith and
credit of the U.S. Government; (2) obligations issued or guaranteed by U.S.
Government agencies or instrumentalities, some of which are backed by the full
faith and credit of the U.S. Government, e.g., obligations of the Government
National Mortgage Association ("GNMA"), the Farmers Home Administration and the
Export Import Bank; some of which do not carry the full faith and credit of the
U.S. Government but which are supported by the right of the issuer to borrow
from the U.S. Government, e.g., obligations of the Tennessee Valley Authority,
the U.S. Postal Service, the Federal National Mortgage Association ("FNMA"), and
the Federal Home Loan mortgage Corporation ("FHLMC"); and some of which are
backed only by the credit of the issuer itself, e.g., obligations of the Student
Loan Marketing Association, the Federal Home Loan Banks and the Federal Farm
Credit Bank; and (3) any of the foregoing purchased subject to repurchase
agreements as described herein. The Balanced Fund does not intend to invest in
"zero coupon" Treasury securities. The guarantee of the U.S. Government does not
extend to the yield or value of the Fund's shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have lower
yields. To the extent such securities were purchased at a premium, such
prepayments could result in capital losses. The U.S. Government does not
guarantee premiums and market value of U.S. Government Securities.
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DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they mature
in thirteen months or less from the date of acquisition and are otherwise
eligible for purchase by the Funds. Money market instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks, Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and "accepted" by a bank,
are the customary means of effecting payment for merchandise sold in
import-export transactions and are a source of financing used extensively in
international trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Funds acquire a Bankers' Acceptance, the
bank which "accepted" the time draft is liable for payment of interest and
principal when due. The Bankers' Acceptance, therefore, carries the full faith
and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured
interest- bearing debt obligation of a bank. CDs acquired by the Funds would
generally be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured,
short term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity generally ranges from two to 270 days and is usually sold on a
discounted basis rather than as an interest-bearing instrument. The Funds will
invest in Commercial Paper only if it is rated in the highest rating category by
any nationally recognized statistical rating organization ("NRSRO") or, if not
rated, the issuer must have an outstanding unsecured debt issue rated in the
three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Advisor's assessment. Commercial Paper may include Master Notes
of the same quality. MASTER NOTES are unsecured obligations which are redeemable
upon demand of the holder and which permit the investment of fluctuating amounts
at varying rates of interest. Master Notes are acquired by the Funds only
through the Master Note program of the Funds' custodian, acting as administrator
thereof. The Advisor will monitor, on a continuous basis, the earnings power,
cash flow and other liquidity ratios of the issuer of a Master Note held by the
Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Balanced Fund may purchase
securities on a when-issued basis or for settlement at a future date if the Fund
holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date, the
Balanced Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period between
the execution and settlement of the purchase or sale. As a result, the exposure
to the counterparty of the purchase or sale is increased. Although the Balanced
Fund would generally purchase securities on a forward commitment or when-issued
basis with the intention of taking delivery, the Fund may sell such a security
prior to the settlement date if the Advisor felt such action was appropriate. In
such a case the Fund could incur a short-term gain or loss.
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 33.3% of its total assets
to meet redemption requests which might otherwise require untimely disposition
of portfolio holdings. To the extent the Funds borrow for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the particular
Fund's assets declines,
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the Fund would be forced to liquidate portfolio securities when it is
disadvantageous to do so. The Funds would incur interest and other transaction
costs in connection with such borrowing. A Fund will not make any additional
investments while its outstanding borrowings exceed 5% of the current value of
its total assets.
LOWER RATED FIXED INCOME SECURITIES. The Balanced Fund will invest to a limited
extent in fixed income securities which are rated lower than A by Moody's and
S&P. Issues rated lower than A are speculative in certain respects. The Balanced
Fund limits its investment in issues rated less than Baa by Moody's and BBB by
S&P to 5% of the Balanced Fund's net assets and the Balanced Fund will not
invest in issues rated lower than B by either rating service. The Advisor
carefully evaluates such lower rated issues prior to purchase to ascertain that
the issuer's financial condition is, in the Advisor's judgment, improving.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an NRSRO
represents the organization's opinion as to the credit quality of the security
being traded. However, the ratings are general and are not absolute standards of
quality or guarantees as to the creditworthiness of an issuer. Consequently, the
Advisor believes that the quality of fixed-income securities in which the
Balanced Fund may invest should be continuously reviewed and that individual
analysts give different weightings to the various factors involved in credit
analysis. A rating is not a recommendation to purchase, sell or hold a security
because it does not take into account market value or suitability for a
particular investor. When a security has received a rating from more than one
NRSRO, each rating is evaluated independently. Ratings are based on current
information furnished by the issuer or obtained by the NRSROs from other sources
that they consider reliable. Ratings may be changed, suspended or withdrawn as a
result of changes in or unavailability of such information, or for other
reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
Aaa: Bonds rated Aaa are judged to be of the best quality. These bonds carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large in Aa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements that make the long term risks
appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered upper medium grade obligations. Factors giving security to principal
and interest are considered adequate but elements may be present that suggest a
susceptibility to impairment sometime in the future.
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Baa: Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba: Bonds rated Ba are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
B: Bonds rated B generally lack characteristics of desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated Aa,
A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower end of
its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB, B, CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major exposures or adverse conditions.
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To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
Credit quality in the markets for lower rated fixed income securities can change
unexpectedly, and even recently issued credit ratings may not fully reflect the
actual risks posed by a particular security. The Advisor believes that the
yields from the lower rated securities purchased by the Balanced Fund will more
than compensate for any additional risk. During periods of deteriorating
economic conditions or increased interest rates, trading in the secondary market
for lower rated securities may become thin and market liquidity may be
significantly reduced. Under such conditions, valuation of the securities at
fair value becomes more difficult and judgment plays a greater role. Beside
credit and liquidity concerns, prices for lower rated securities may be affected
by legislative and regulatory developments.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's outstanding
shares represented in person or by proxy at a meeting at which more than 50% of
its outstanding shares are represented, or (ii) more than 50% of its outstanding
shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities of
any one issuer or purchase more than 10% of the outstanding voting
securities or of any class of securities of any one issuer;
(2) Invest 25% or more of the value of its total assets in any one industry or
group of industries (except that securities of the U.S. Government, its
agencies and instrumentalities are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or trustees
of the Trust or its Advisor who own beneficially more than 1/2 of 1% of the
outstanding securities of such issuer together own more than 5% of the
outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management of another
issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Funds
may invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things, and the Funds may
invest in certain mortgage backed securities as described in the Prospectus
under "Investment Objectives, Investment Policies and Risk Considerations";
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(6) Underwrite securities issued by others, except to the extent a Fund may be
deemed to be an underwriter under the federal securities laws in connection
with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such short-term
credits as may be necessary for the clearance of transactions);
(8) Make short sales of securities or maintain a short position, except short
sales "against the box." (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no additional
cost securities identical to those sold short.);
(9) Participate on a joint or joint and several basis in any trading account in
securities;
(10) Make loans of money or securities, except that the Funds may invest in
repurchase agreements; or
(11) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors), if more than 5% of its total assets would be invested
in such securities.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation. However, in the case of the
borrowing limitation (the first restriction in the Prospectus) each Fund will,
to the extent necessary, reduce its existing borrowings to comply with the
limitation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Advisor has no present intention of engaging
in such transactions at this time or during the coming year.
TRUSTEES AND OFFICERS
The Board of Trustees supervises the activities of the Williamsburg Investment
Trust (the "Trust"). Following are the Trustees and executive officers of the
Trust, their present position with the Trust or Funds, age, principal occupation
during the past 5 years and their aggregate compensation from the Trust for the
fiscal year ended March 31, 2000:
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<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (age 63) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 46) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 63) Physician $12,500
Trustee** Dermatology Associates of
931 Broad Street Road Virginia, P.C.,
Manakin Sabot, Virginia 23103 Richmond, Virginia
J. Finley Lee (age 60) Julian Price Professor Emeritus of $12,500
Trustee Business Administration
614 Grist Mill Lane University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
Richard Mitchell (age 51) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 61) Chancellor of $12,500
Trustee University of Richmond,
University of Richmond Richmond, Virginia;
G19 Boatright Library Director of Tredegar
Richmond, Virginia 23173 Industries, Inc. (plastics manufacturer)
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Harris V. Morrissette (age 40) President of $12,500
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling)
Erwin H. Will, Jr. (age 67) Chief Investment Officer of $12,500
Trustee Virginia Retirement System,
1200 East Main Street Richmond, Virginia
Richmond, Virginia 23219
Samuel B. Witt III (age 64) Senior Vice President and $13,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 37) Portfolio Manager of None
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Joseph L. Antrim III (age 55) Executive Vice President of None
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 34) Assistant Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
The Jamestown International Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Robert G. Dorsey (age 43) Managing Director of Ultimus Fund None
Vice President Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, President
of Countrywide Fund Services, Inc.
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John M. Flippin (age 58) Principal of None
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 47) Principal of None
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
600 Luckie Drive
Luckie Building, Suite 305
Birmingham, Alabama 35223
J. Lee Keiger III (age 45) First Vice President and Chief Financial None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter III (age 59) Principal of None
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger Managing Director of Ultimus Fund None
Treasurer Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
of Countrywide Fund Services, Inc.
Henry C. Spalding, Jr. (age 62) Executive Vice President of None
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 44) Managing Director of Ultimus Fund None
Secretary Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
and Secretary of Countrywide Fund
Services, Inc. and affiliated companies
12
<PAGE>
Connie R. Taylor (age 49) Administrator of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 41) Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 54) President and Chief Executive None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
--------------------------------------------
</TABLE>
**Indicates that Trustee is an Interested Person for purposes of the Investment
Company Act of 1940. Charles M. Caravati, Jr. is the father of Charles M.
Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee and Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their findings
and recommendations as to accounting and financial matters, including the
adequacy of internal controls. On the basis of this review the Audit Committee
makes recommendations to the Trustees as to the appointment of independent
accountants for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 7, 2000, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 2.70% of the then-outstanding shares of the Equity Fund and
less than 1% of the then-outstanding shares of the Balanced Fund. As of that
same date, The Trust Company of Knoxville, 620 Market Street, Knoxville,
Tennessee 37902, owned of record 19.86% of the then-outstanding shares of the
Equity Fund and Strafe Company, P.O. Box 160, Westerville, Ohio 43086, owned of
record 5.36% of the then-outstanding shares of the Balanced Fund.
13
<PAGE>
INVESTMENT ADVISOR
Flippin, Bruce & Porter, Inc. (the "Advisor") supervises each Fund's investments
pursuant to an Investment Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until April 1,
2001 and will be renewed thereafter for one year periods only so long as such
renewal and continuance is specifically approved at least annually by the Board
of Trustees or by vote of a majority of the Funds' outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Advisor by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by the
Board of Trustees of the Trust or by the Advisor. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Advisor, with respect to each Fund, based upon each Fund's
average daily net assets, is at the following annual rates: On the first $250
million, 0.70%; on the next $250 million, 0.65%; and on assets over $500
million, 0.50%. For the fiscal years ended March 31, 2000, 1999 and 1998, the
Equity Fund paid the Advisor advisory fees of $401,831, $288,068 and $184,384,
respectively. For the fiscal years ended March 31, 2000, 1999 and 1998, the
Balanced Fund paid the Advisor advisory fees of $477,345, $435,257 and $365,477,
respectively.
John M. Flippin, John T. Bruce and R. Gregory Porter III own all the capital
stock of the Advisor and therefore control the Advisor. In addition to acting as
Advisor to the Funds, the Advisor also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals.
The Advisor provides a continuous investment program for the Funds, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Funds. The Advisor determines what securities
and other investments will be purchased, retained or sold by the Funds, and does
so in accordance with the investment objectives and policies of the Funds as
described herein and in the Prospectus. The Advisor places all securities orders
for the Funds, determining with which broker, dealer or issuer to place the
orders. The Advisor must adhere to the brokerage policies of the Funds in
placing all orders, the substance of which policies are that the
The Advisor must seek at all times the most favorable price and execution for
all securities brokerage transactions. The Advisor also provides, at its own
expense, certain Executive Officers to the Trust, and pays the entire cost of
distributing Fund shares.
The Advisor may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
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<PAGE>
ADMINISTRATOR
The Fund has retained Ultimus Fund Solutions, LLC (the "Administrator"), 135
Merchant Street, Suite 230, Cincinnati, Ohio 45246, to provide administrative,
pricing, accounting, dividend, disbursing, shareholder servicing and transfer
agent services. The Administrator maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of each Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
The Administrator also provides accounting and pricing services to the Funds and
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services. The
Administrator supervises the preparation of tax returns, reports to shareholders
of the Funds, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees.
For the performance of these administrative services, each Fund pays the
Administrator a fee at the annual rate of 0.15% of the average value of its
daily net assets up to $25,000,000, 0.125% of such assets from $25,000,000 to
$50,000,000 and 0.10% of such assets in excess of $50,000,000. In addition, the
Funds pay out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
Prior to November 20, 2000, Integrated Fund Services, Inc. ("Integrated"), P.O.
Box 5354, Cincinnati, Ohio 45201, provided the Funds with administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. Integrated is a wholly-owned indirect subsidiary of The Western
and Southern Life Insurance Company. For the fiscal years ended March 31, 2000,
1999 and 1998, Integrated received fees of $99,752, $73,470 and $48,798,
respectively, from the Equity Fund and $114,954, $105,848 and $91,365,
respectively, from the Balanced Fund.
DISTRIBUTOR
Ultimus Fund Distributors, LLC (the "Distributor"), 135 Merchant Street, Suite
230, Cincinnati, Ohio 45246, serves as principal underwriter for the Funds
pursuant to an Underwriting Agreement. Shares are sold on a continuous basis by
the Distributor. The Distributor has agreed to use its best efforts to solicit
orders for the sale of Fund shares, but it is not obliged to sell any particular
amount of shares. The Underwriting Agreement provides that, unless sooner
terminated, it will continue in effect for two years from the date of its
execution, and for continuous one-year periods thereafter if such continuance is
approved at least annually (i) by the Board of Trustees or a vote of a majority
of the outstanding shares, and (ii) by a majority of the Trustees who are not
"interested persons" of the Trust or of the Distributor by vote cast in person
at a meeting called for the purpose of voting on such approval. The Underwriting
Agreement may be terminated by the Funds at any time, without the payment of any
penalty, by vote of a majority of the Board of Trustees of the Trust or by vote
of a majority of the outstanding shares of the Funds on sixty days written
notice to the Distributor, or by the Distributor at any time, without the
payment of any penalty, on sixty days written notice to the Trust. The
Underwriting Agreement will automatically terminate in the event of its
assignment. The Distributor is an affiliate of the Administrator, and Robert G.
Dorsey, John F. Splain are each Managing Directors of the Distributor and
officers of the Trust.
15
<PAGE>
OTHER SERVICES
The firm of Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800,
Philadelphia, Pennsylvania 19103 has been retained by the Board of Trustees to
perform an independent audit of the books and records of the Trust, to review
the Funds' federal and state tax returns and to consult with the Trust as to
matters of accounting and federal and state income taxation.
The Custodian of the Funds' assets is Firstar Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Funds
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all portfolio
securities transactions. The Advisor (subject to the general supervision of the
Board of Trustees) directs the execution of the Funds' portfolio transactions.
The Trust has adopted a policy which prohibits the Advisor from effecting Fund
portfolio transactions with broker-dealers which may be interested persons of
either Fund, the Trust, any Trustee, officer or director of the Trust or its
investment advisors or any interested person of such persons.
The Balanced Fund's fixed income portfolio transactions will normally be
principal transactions executed in over-the-counter markets and will be executed
on a "net" basis, which may include a dealer markup. The Funds' common stock
portfolio transactions will normally be exchange traded and will be effected
through broker-dealers who will charge brokerage commissions. Options would also
normally be exchange traded involving the payment of commissions. With respect
to securities traded only in the over-the-counter market, orders will be
executed on a principal basis with primary market makers in such securities
except where better prices or executions may be obtained on an agency basis or
by dealing with other than a primary market maker.
For the fiscal years ended March 31, 2000, 1999 and 1998, the total amount of
brokerage commissions paid by the Balanced Fund was $51,285, $43,130 and
$20,094, respectively. For the fiscal years ended March 31, 2000, 1999 and 1998,
the total amount of brokerage commissions paid by the Equity Fund was $73,194,
$45,762 and $36,236, respectively.
While there is no formula, agreement or undertaking to do so, the Adviser may
allocate a portion of either Fund's brokerage commission to persons or firms
providing the Advisor with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic, political,
fundamental and technical market and interest rate data, and other statistical
or research services. Much of the information so obtained may also be used by
the Advisor for the benefit of the other clients it may have. Conversely, the
Funds may benefit from such transactions effected for the benefit of other
clients. In all cases, the Advisor is obligated to effect transactions for the
Funds based upon obtaining the most favorable price and execution. Factors
considered by the Advisor in
16
<PAGE>
determining whether the Funds will receive the most favorable price and
execution include, among other things: the size of the order, the broker's
ability to effect and settle the transaction promptly and efficiently and the
Advisor's perception of the broker's reliability, integrity and financial
condition.
CODE OF ETHICS. The Trust, the Advisor and the Distributor have adopted Codes of
Ethics under Rule 17j-1 of the 1940 Act which permit personnel subject to the
Codes to invest in securities, including securities that may be purchased or
held by the Funds. The Codes of Ethics adopted by the Trust, the Advisor and the
Distributor are on public file with, and are available from, the SEC.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly or quarterly investment in shares through automatic charges
to their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
public offering price on or about the last business day of the month or quarter.
The shareholder may change the amount of the investment or discontinue the plan
at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $25,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed within three
business days of the valuation date. If the designated recipient is other than
the registered shareholder, the signature of each shareholder must be guaranteed
on the application (see "Signature Guarantees"). A corporation (or partnership)
must also submit a "Corporate Resolution" (or "Certification of Partnership")
indicating the names, titles and required number of signatures authorized to act
on its behalf. The application must be signed by a duly authorized officer(s)
and the corporate seal affixed. No redemption fees are charged to shareholders
under this plan. Costs in conjunction with the administration of the plan are
borne by the Funds. Shareholders should be aware that such systematic
withdrawals may deplete or use up entirely their initial investment and may
result in realized long term or short term capital gains or losses. The
Systematic Withdrawal Plan may be terminated at any time by the Funds upon sixty
days' written notice or by a shareholder upon written notice to the Funds.
Applications and further
17
<PAGE>
details may be obtained by calling the Funds at 1-866-738-1127, or by writing
to:
The Flippin, Bruce & Porter Funds
Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is at
the sole discretion of the Advisor based upon the suitability of the securities
accepted for inclusion as a long term investment of the Funds, the marketability
of such securities, and other factors which the Advisor may deem appropriate. If
accepted, the securities will be valued using the same criteria and methods as
described in "How Net Asset Value is Determined" in the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Funds to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Funds. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Funds who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on
the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next determined
after the order is received. An order received prior to the close of the regular
session of trading on the New York Stock Exchange (the "Exchange"), generally
4:00 p.m. Eastern time, will be executed at the price computed on the date of
receipt; and an order received after that time will be executed at the price
computed on the next Business Day. An order to purchase shares is not binding on
the Funds until confirmed in writing (or unless other arrangements have been
made with the Funds, for example in the case of orders utilizing wire transfer
of funds) and payment has been received.
18
<PAGE>
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Funds are required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Funds within 60 days.
Each Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial investment
minimums for the purpose of reducing the cost to the Funds (and consequently to
the shareholders) of communicating with and servicing their shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Funds, the Advisor and certain parties
related thereto, including clients of the Advisor or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the
"Commission"), (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Fund to dispose of securities owned by it, or to fairly determine the
value of its assets, and (iii) for such other periods as the Commission may
permit.
If your instructions request a redemption by wire, you will be charged a
processing fee by the Fund's Custodian. Any redemption may be more or less than
the shareholder's cost depending on the market value of the securities held by
the Funds. There is currently no charge by the Administrator for wire
redemptions. However, the Administrator reserves the right, upon thirty days'
written notice, to make reasonable charges for wire redemptions. All charges
will be deducted from your account by redemption of shares in your account. Your
bank or brokerage firm may also impose a charge for processing the wire. In the
event that wire transfer of funds is impossible or impractical, the redemption
proceeds will be sent by mail to the designated account.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as
19
<PAGE>
follows. The net asset value of each Fund is determined as of the close of the
regular session of trading on the Exchange (currently 4:00 p.m. Eastern time) on
each "Business Day." A Business Day means any day, Monday through Friday, except
for the following holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Fourth of July, Labor Day,
Thanksgiving Day and Christmas. Net asset value per share of each Fund is
determined by dividing the total value of all Fund securities and other assets,
less liabilities, by the total number of shares then outstanding. Net asset
value includes interest on fixed income securities, which is accrued daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Advisor
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of shares (including
registration and qualification fees and expenses); costs and expenses of
membership and attendance at meetings of certain associations which may be
deemed by the trustees to be of overall benefit to the Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Funds. General Trust expenses are allocated among
the series, or Funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each Fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to each Fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund has qualified and intends to continue to
qualify as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). Among its requirements to qualify
under Subchapter M, each Fund must distribute annually at least 90% of its net
investment income. In addition to this distribution requirement, each Fund must
derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities' loans, gains from the disposition
of stock or securities, and certain other income.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter M,
they will not be subject to federal income tax to the extent they distribute
their taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on each Fund to the extent
it does not distribute at least 98% of its ordinary taxable income for a
calendar year, plus 98% of its capital gain net taxable income for the one year
period ending each October 31, plus certain undistributed amounts from prior
years. While each Fund intends to distribute its taxable income and capital
gains in a manner so as to avoid imposition of the federal excise and income
taxes, there can be no assurance that the Funds indeed will make sufficient
distributions to avoid entirely imposition of federal excise or income taxes.
20
<PAGE>
Should additional series, or funds, be created by the Trustees, each fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "Purchase of
Shares" above.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from each Fund. Each Fund will send shareholders
information each year on the tax status of dividends and disbursements. A
dividend or capital gains distribution paid shortly after shares have been
purchased, although in effect a return of investment, is subject to federal
income taxation. Dividends from net investment income, along with capital gains,
will be taxable to shareholders, whether received in cash or shares and no
matter how long you have held Fund shares, even if they reduce the net asset
value of shares below your cost and thus in effect result in a return of a part
of your investment.
Profits on closing purchase transactions and premiums on lapsed calls written
are considered capital gains for financial reporting purposes and are short-term
gains for federal income tax purposes. When short-term gains are distributed to
shareholders, they are taxed as ordinary income. If the Funds desire to enter
into a closing purchase transaction, but there is no market when they desire to
do so, they would have to hold the securities underlying the call until the call
lapses or until the call is executed.
Shareholders should be aware that dividends from the Funds which are derived in
whole or in part from interest on U.S. Government securities may not be taxable
for state income tax purposes. Other state income tax implications and federal
income tax implications may apply. You should consult your tax advisor for
further information.
ADDITIONAL TAX INFORMATION. The FBP Contrarian Equity Fund had net realized
capital losses of $758,759 during the period November 1, 1999 through March 31,
2000, which are treated for federal income tax purposes as arising during the
Fund's tax year ending March 31, 2001. These "post-October" losses may be
utilized in future years to offset net realized capital gains prior to
distributing such gains to shareholders.
CAPITAL SHARES AND VOTING
The Funds are each no-load, diversified, open-ended series of the Williamsburg
Investment Trust (the "Trust"), an investment company organized as a
Massachusetts business trust in July 1988. The Board of Trustees has overall
responsibility for management of the Fund under the laws of Massachusetts
governing the responsibilities of Trustees of business trusts.
21
<PAGE>
Shares of the Funds, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust, cast in person or by proxy at a meeting called for that purpose; or (c)
by a written declaration signed by shareholders holding not less than two-thirds
of the outstanding shares of the Trust and filed with the Trust's custodian.
Shareholders have certain rights, as set forth in the Declaration of Trust,
including the right to call a meeting of the shareholders for the purpose of
voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders. Stock certificates will not be
issued for your shares. Evidence of ownership will be given by issuance of
periodic account statements which will show the number of shares owned.
The Declaration of Trust of the Trust currently provides for the shares of ten
funds, or series, to be issued. Shares of all ten series have currently been
issued in addition to the Equity Fund and the Balanced Fund described in this
Prospectus; shares of The Jamestown Balanced Fund, The Jamestown Equity Fund,
The Jamestown International Equity Fund and The Jamestown Tax Exempt Virginia
Fund, which are managed by Lowe, Brockenbrough & Company, Inc. of Richmond,
Virginia; shares of The Government Street Equity Fund, The Government Street
Bond Fund and the Alabama Tax Free Bond Fund, which are managed by T. Leavell &
Associates, Inc. of Mobile, Alabama; and shares of The Davenport Equity Fund,
which is managed by Davenport & Company LLC of Richmond, Virginia. The Trustees
are permitted to create additional series, or funds, at any time.
Upon liquidation of the Trust or a particular Fund of the Trust, holders of the
outstanding shares of the Fund being liquidated shall be entitled to receive, in
proportion to the number of shares of the Fund held by them, the excess of that
Fund's assets over its liabilities. Each outstanding share is entitled to one
vote for each full share and a fractional vote for each fractional share, on all
matters which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory agreement
for a particular Fund. The shares of the Fund will have noncumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect all of the Trustees if they so choose.
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<PAGE>
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of a Fund ("T") is computed by using the redeemable value at the end of a
specified period of time ("ERV") of a hypothetical initial investment of $1,000
("P") over a period of time ("n") according to the formula P(1+T)^n = ERV. The
average annual total return quotations for the Equity Fund for the one year,
five year and since inception (July 30, 1993) period ended March 31, 2000 are
-5.40%, 16.62% and 14.88%, respectively. The average annual total return
quotations for the Balanced Fund for the one year, five year, ten year and since
inception (July 3, 1989) periods ended March 31, 2000, are -1.87%, 14.07%,
11.96% and 10.94%, respectively.
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation): it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
6
Yield = 2[a-b/cd + 1) - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a Fund
owns the security. Generally, interest earned (for the purpose of "a" above) on
debt obligations is computed by reference to the
23
<PAGE>
yield to maturity of each obligation held based on the market value of the
obligation (including actual accrued interest) at the close of business on the
last business day prior to the start of the 30-day (or one month) period for
which yield is being calculated, or, with respect to obligations purchased
during the month, the purchase price (plus actual accrued interest). The yields
of the Balanced Fund and the Equity Fund for the 30 days ended March 31, 2000
were 2.65% and 1.32%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, each Fund may compare its performance to the S&P 500
Index, which is generally considered to be representative of the performance of
unmanaged common stocks that are publicly traded in the United States securities
markets. Comparative performance may also be expressed by reference to a ranking
prepared by a mutual fund monitoring service, such as Lipper Analytical
Services, Inc. or Morningstar, Inc., or by one or more newspapers, newsletters
or financial periodicals. Performance comparisons may be useful to investors who
wish to compare the Funds' past performance to that of other mutual funds and
investment products. Of course, past performance is not a guarantee of future
results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain a
more complete view of the Funds' performance before investing. Of course, when
comparing the Funds' performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Funds may quote total returns that are calculated
on non-standardized base periods. The total returns represent the historic
change in the value of an investment in the Funds based on monthly reinvestment
of dividends over a specified period of time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Funds may also disclose from time to
time information about their portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as
24
<PAGE>
S&P and Moody's). The Funds may also depict the historical performance of the
securities in which the Funds may invest over periods reflecting a variety of
market or economic conditions either alone or in comparison with alternative
investments, performance indices of those investments, or economic indicators.
The Funds may also include in advertisements and in materials furnished to
present and prospective shareholders statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be employed
to meet specific financial goals, such as saving for retirement, children's
education, or other future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Funds as of March 31, 2000, together with the report of the independent
accountants thereon, are included on the following pages.
25
<PAGE>
THE
FLIPPIN, BRUCE & PORTER
FUNDS
ANNUAL REPORT
March 31, 2000
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
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
Integrated 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
Erwin H. Will, Jr.
Samuel B. Witt, III
<PAGE>
LETTER TO SHAREHOLDERS MAY 23, 2000
================================================================================
We are pleased to report on the progress of your Fund and its investments for
the fiscal year ended March 31, 2000. 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 Three Five
Months Years Years
---------------------------------
FBP Contrarian Equity Fund .............. -5.40% 12.28% 16.62%
FBP Contrarian Balanced Fund ............ -1.87% 11.59% 14.07%
REVIEW AND OUTLOOK
The past year has been a difficult period of performance as the value style of
management has been out of favor. Common stock returns were dominated by the
excitement of high growth industries such as technology, telecommunication,
biotechnology and most anything related to the Internet, as valuations expanded
to unprecedented levels. Simultaneously, valuations for stocks with value
characteristics compressed to lows not witnessed in many years. As a general
rule, stocks with the highest valuations performed the best, while those with
attractive valuations performed poorly. Federal Reserve actions to raise
short-term interest rates to slow the economy and prevent future inflation
negatively impacted the earnings expectations of traditional value stocks.
Additionally, momentum investing came into vogue as the thought of owning
companies for any reason other than price appreciation was dismissed. Much of
this thinking changed during mid March, just before the fiscal year-end. Since
March 10, 2000, which was the day the NASDAQ Index peaked, the Funds have
improved nicely in valuation while the previous high technology leaders have
dropped substantially in price.
The outlook for the economy this year continues to be excellent. Gross Domestic
Product is expected to increase about 4.5 to 5% for the year. Unemployment
remains low and inflation should only move up modestly to 2.5 - 3%. Corporate
profits are now forecasted to increase 10 - 15%, which is higher than previously
expected. The risk to this outlook is future interest rate increases by the
Federal Reserve, which could slow the economy more than expected. Such action on
a short-term basis can be negative for financial markets, but longer term is a
positive. The economy is adapting quickly to technological advances and we
believe it is the established companies in the marketplace, or "Old Economy"
stocks, that will benefit as they change their business models and become more
competitive.
Our investment process for stocks is geared toward thorough fundamental
research, combined with an understanding of historical valuation relationships
to judge which investments are appropriate for the Funds. The recovery in price
in recent weeks, we believe, reflects an indication of the potential for the
Funds. We continue to find high quality companies with real earnings and assets,
which are trading, in many cases, well below normal valuations and at levels not
seen for many years. We are taking advantage of opportunities in the bond market
by gradually increasing the corporate and agency investments in the Balanced
Fund, as a result of widening yield spreads over U.S. Treasuries.
2
<PAGE>
Again, we recognize that this past year has been a disappointment in
performance, for all of us as shareholders. We believe strongly in our
investment approach and its ability to provide competitive returns on a
long-term basis. Our firm continues to grow and we are committed to providing
the necessary people and resources to meet the Funds' investment objectives. We
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
COMPARATIVE CHARTS
Performance for each Fund is compared below 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
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
March 2000
----------
FBP Contrarian Equity Fund $25,246
Standard & Poor's 500 Index $38,346
Consumer Price Index $11,772
Past performance is not predictive of future performance.
------------------------------------
FBP Contrarian Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
(5.40)% 16.62% 14.88%
------------------------------------
* Initial public offering of shares was July 30, 1993
3
<PAGE>
FBP CONTRARIAN BALANCED FUND
Comparison of the Change in Value of a $10,000 Investment in the FBP Contrarian
Balanced Fund, the Stancerd & Poor's 500 Index and the Consumer Price Index
March 2000
----------
FBP Contrarian Balanced Fund $30,545
Standard & Poor's 500 Index $61,556
Consumer Price Index $13,719
Past performance is not predictive of future performance.
------------------------------------
FBP Contrarian Balanced Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
(1.87)% 14.07% 11.96%
------------------------------------
* Initial public offering of shares was July 3, 1989
4
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
SHARES COMMON STOCKS -- 96.3% VALUE
--------------------------------------------------------------------------------
CHEMICALS-- 2.7%
7,000 Dow Chemical Company ............................. $ 798,000
20,000 Great Lakes Chemical Corporation ................. 680,000
------------
1,478,000
------------
COMMERCIAL BANKING -- 12.2%
50,000 Banc One Corporation ............................. 1,718,750
34,000 BankAmerica Corporation .......................... 1,782,875
16,000 Chase Manhattan Corporation ...................... 1,395,000
31,875 Citigroup, Inc. .................................. 1,890,586
------------
6,787,211
------------
COMMUNICATIONS-- 2.6%
11,500 GTE Corporation .................................. 816,500
18,000 Harris Corporation ............................... 622,125
------------
1,438,625
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES-- 12.5%
20,000 Compaq Computer Corporation ...................... 532,500
20,000 Electronic Data Systems Corporation .............. 1,283,750
6,600 Hewlett-Packard Company(b) ....................... 874,913
24,000 International Business Machines Corporation ...... 2,832,000
50,000 Novell, Inc.(a) .................................. 1,431,250
------------
6,954,413
------------
CONSUMER GOODS & SERVICES -- 7.6%
50,000 American Greetings Corporation - Class A ......... 912,500
84,000 Archer-Daniels-Midland Company ................... 871,500
76,000 Cendant Corporation(a) ........................... 1,406,000
11,400 Philip Morris Companies, Inc. .................... 240,825
40,000 Shaw Industries, Inc. ............................ 607,500
13,000 UST, Inc. ........................................ 203,125
------------
4,241,450
DRUGS/MEDICAL EQUIPMENT-- 7.5%
11,000 Amgen, Inc.(a) ................................... 675,125
16,000 Bristol-Myers Squibb Company ..................... 924,000
16,000 Johnson & Johnson ................................ 1,121,000
35,000 Mallinckrodt, Inc. ............................... 1,006,250
7,600 Merck & Company, Inc. ............................ 472,150
------------
4,198,525
------------
DURABLE GOODS-- 5.5%
30,000 Armstrong World Industries, Inc. ................. 536,250
43,000 Engelhard Corporation ............................ 650,375
4,150 General Electric Company ......................... 644,028
88,000 Waste Management, Inc. ........................... 1,204,500
------------
3,035,153
------------
5
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS -- 96.3% (CONTINUED) VALUE
--------------------------------------------------------------------------------
FINANCE-- 4.8%
25,000 SLM Holding Corporation .......................... $ 832,813
37,000 The St. Paul Companies, Inc. ..................... 1,262,625
56,000 United Dominion Realty ........................... 563,500
------------
2,658,938
------------
FUNERAL SERVICES-- 0.5%
100,000 Service Corporation International ................ 300,000
------------
INSURANCE-- 5.8%
24,400 Aetna Life & Casualty Company .................... 1,358,775
5,500 The Chubb Corporation ............................ 371,594
90,000 UnumProvident Corporation ........................ 1,530,000
------------
3,260,369
------------
OIL & GAS-- 6.4%
20,000 El Paso Energy Corporation ....................... 807,500
16,400 Equitable Resources, Inc. ........................ 734,925
15,000 Kerr-McGee Corporation ........................... 866,250
13,000 Schlumberger Limited ............................. 994,500
3,523 Transocean Sedco Forex, Inc. ..................... 180,773
------------
3,583,948
------------
PACKAGING-- 1.7%
58,000 Crown Cork & Seal Company, Inc. .................. 928,000
------------
PHOTOGRAPHICAL PRODUCTS-- 2.3%
24,000 Eastman Kodak Company ............................ 1,303,500
------------
PRINTING-- 2.4%
65,000 R. R. Donnelley & Sons Company ................... 1,360,937
------------
RETAIL STORES-- 14.7%
19,000 Avado Brands, Inc. ............................... 53,437
40,000 CBRL Group, Inc. ................................. 400,000
30,000 Circuit City Stores, Inc. ........................ 1,826,250
85,000 Dillard's, Inc. .................................. 1,397,187
48,000 IKON Office Solutions, Inc. ...................... 297,000
45,000 K-Mart Corporation(a) ............................ 435,938
45,000 SUPERVALU, INC ................................... 852,188
60,000 The Pep Boys - Manny, Moe & Jack ................. 356,250
80,000 Toys R Us, Inc.(a) ............................... 1,185,000
25,400 Wal-Mart Stores, Inc. ............................ 1,409,700
------------
8,212,950
------------
TRANSPORTATION-- 6.3%
30,000 FedEx Corporation(a) ............................. 1,170,000
35,000 Trinity Industries, Inc. ......................... 829,063
39,000 Union Pacific Corporation ........................ 1,525,875
------------
3,524,938
------------
6
<PAGE>
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS -- 96.3% (CONTINUED) VALUE
--------------------------------------------------------------------------------
TRAVEL & INVESTMENT SERVICES-- 0.8%
3,000 American Express Company(b) ...................... $ 446,813
------------
TOTAL COMMON STOCKS-- (Cost $45,715,560) ......... $ 53,713,770
------------
================================================================================
SHARES SHORT-TERM CORPORATE NOTES-- 4.1% VALUE
--------------------------------------------------------------------------------
987,359 American Family Services Demand Note ............. $ 987,359
590,000 Warner Lambert Variable Demand Note .............. 590,000
175,148 Wisconsin Corporate Central Credit
Union Variable Demand Note ..................... 175,148
536,000 Wisconsin Electric Power Company
Variable Demand Note ........................... 536,000
------------
TOTAL SHORT-TERM CORPORATE NOTES (COST $2,288,507) $ 2,288,507
------------
TOTAL INVESTMENTS AT VALUE-- 100.4%
(COST $48,004,067) ............................. $ 56,002,277
LIABILITIES IN EXCESS OF OTHER ASSETS--(0.4%) (211,614)
------------
NET ASSETS-- 100.0% .............................. $ 55,790,663
============
(a) Non-income producing security.
(b) Security covers a call option.
================================================================================
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 2000
================================================================================
MARKET
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
--------------------------------------------------------------------------------
Hewlett-Packard Company,
66 05/20/00 at $140 ............. $ 54,450 $ 79,404
============ ============
See accompanying notes to financial statements.
7
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
SHARES COMMON STOCKS -- 69.1% VALUE
--------------------------------------------------------------------------------
CHEMICALS-- 2.4%
8,200 Dow Chemical Company ............................. $ 934,800
14,100 Great Lakes Chemical Corporation ................. 479,400
------------
1,414,200
------------
COMMERCIAL BANKING-- 8.2%
35,000 Banc One Corporation ............................. 1,203,125
20,000 BankAmerica Corporation .......................... 1,048,750
15,350 Chase Manhattan Corporation ...................... 1,338,328
22,000 Citigroup, Inc. .................................. 1,304,875
------------
4,895,078
------------
COMMUNICATIONS-- 2.8%
15,000 GTE Corporation .................................. 1,065,000
17,000 Harris Corporation ............................... 587,563
------------
1,652,563
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES-- 9.1%
11,500 Compaq Computer Corporation ...................... 306,188
20,000 Electronic Data Systems Corporation .............. 1,283,750
4,100 Hewlett-Packard Company(b) ....................... 543,506
17,600 International Business Machines Corporation ...... 2,076,800
43,000 Novell, Inc.(a) .................................. 1,230,875
------------
5,441,119
------------
CONSUMER GOODS & SERVICES -- 6.0%
33,000 American Greetings Corporation - Class A ......... 602,250
66,150 Archer-Daniels-Midland Company ................... 686,306
70,000 Cendant Corporation(a) ........................... 1,295,000
19,000 Philip Morris Companies, Inc. .................... 401,375
29,000 Shaw Industries, Inc. ............................ 440,437
8,500 UST, Inc. ........................................ 132,813
------------
3,558,181
------------
DRUGS/MEDICAL EQUIPMENT-- 5.1%
7,500 Amgen, Inc.(a) ................................... 460,313
12,200 Bristol-Myers Squibb Company ..................... 704,550
10,000 Johnson & Johnson ................................ 700,625
28,000 Mallinckrodt, Inc. ............................... 805,000
6,400 Merck & Company, Inc. ............................ 397,600
------------
3,068,088
------------
DURABLE GOODS-- 4.5%
30,000 Armstrong World Industries, Inc. ................. 536,250
30,500 Engelhard Corporation ............................ 461,312
6,000 General Electric Company ......................... 931,125
55,000 Waste Management, Inc.(a) ........................ 752,812
------------
2,681,499
------------
8
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 69.1% (CONTINUED) VALUE
--------------------------------------------------------------------------------
FINANCE-- 3.8%
24,000 SLM Holding Corporation .......................... $ 799,500
29,000 The St. Paul Companies, Inc. ..................... 989,625
50,000 United Dominion Realty ........................... 503,125
------------
2,292,250
------------
FUNERAL SERVICES-- 0.4%
70,000 Service Corporation International ................ 210,000
------------
INSURANCE-- 4.0%
11,300 Aetna Life & Casualty Company .................... 629,269
7,000 American International Group ..................... 766,500
60,000 UnumProvident Corporation ........................ 1,020,000
------------
2,415,769
------------
OIL & GAS-- 4.7%
20,000 El Paso Energy Corporation ....................... 807,500
6,800 Equitable Resources, Inc. ........................ 304,725
10,000 Kerr-McGee Corporation ........................... 577,500
12,000 Schlumberger Limited ............................. 918,000
3,388 Transocean Sedco Forex Inc. ...................... 173,846
------------
2,781,571
------------
PACKAGING-- 1.1%
40,000 Owens-Illinios, Inc. ............................. 675,000
------------
PHOTOGRAPHICAL PRODUCTS-- 1.0%
11,000 Eastman Kodak Company ............................ 597,437
------------
PRINTING-- 1.6%
46,000 R. R. Donnelley & Sons Company ................... 963,125
------------
RETAIL STORES-- 9.3%
23,300 Avado Brands, Inc. ............................... 65,531
15,000 CBRL Group, Inc. ................................. 150,000
21,200 Circuit City Stores, Inc. ........................ 1,290,550
59,000 Dillard's, Inc. .................................. 969,812
34,000 IKON Office Solutions, Inc. ...................... 210,375
39,500 K-Mart Corporation(a) ............................ 382,656
34,000 SUPERVALU, INC ................................... 643,875
48,000 Toys R Us, Inc.(a) ............................... 711,000
20,000 Wal-Mart Stores, Inc. ............................ 1,110,000
------------
5,533,799
------------
TRANSPORTATION-- 3.8%
20,200 FedEx Corporation(a) ............................. 787,800
20,000 Trinity Industries, Inc. ......................... 473,750
25,000 Union Pacific Corporation ........................ 978,125
------------
2,239,675
------------
9
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 69.1% (CONTINUED) VALUE
--------------------------------------------------------------------------------
TRAVEL & INVESTMENT SERVICES-- 1.3%
5,500 American Express Company ......................... $ 819,156
------------
TOTAL COMMON STOCKS (Cost $26,842,565) ........... $ 41,238,510
------------
================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS-- 16.2% VALUE
--------------------------------------------------------------------------------
U.S. TREASURY NOTES-- 11.7%
$1,000,000 5.875%, due 06/30/00 ........................... $ 999,688
1,000,000 4.625%, due 12/31/00 ........................... 986,875
500,000 5.625%, due 02/28/01 ........................... 496,563
1,000,000 4.875%, due 03/31/01 ........................... 985,000
750,000 5.625%, due 05/15/01 ........................... 743,204
750,000 6.125%, due 12/31/01 ........................... 744,610
500,000 6.625%, due 04/30/02 ........................... 500,782
500,000 6.375%, due 08/15/02 ........................... 498,594
500,000 6.25%, due 02/15/03 ............................ 497,344
500,000 7.25%, due 05/15/04 ............................ 515,469
------------
6,968,129
------------
FEDERAL HOME LOAN BANK BONDS -- 4.5%
1,000,000 7.00%, due 07/02/09 ............................ 957,267
855,000 6.75%, due 03/28/14 ............................ 783,563
1,000,000 8.00%, due 08/19/14 ............................ 974,805
------------
2,715,635
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $9,764,605) .............................. $ 9,683,764
------------
================================================================================
PAR VALUE CORPORATE BONDS -- 11.9% VALUE
--------------------------------------------------------------------------------
FINANCE-- 5.0%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/08 ........................... $ 734,204
General Motors Acceptance Corporation,
1,000,000 5.50%, due 01/14/02 ............................ 969,670
Macsaver Financial Services,
500,000 7.60%, due 08/01/07 ............................ 295,000
Northern Trust Company,
1,000,000 7.10%, due 08/01/09 ............................ 964,766
------------
2,963,640
------------
INDUSTRIAL-- 5.3%
Hertz Corporation,
1,000,000 6.00%, due 01/15/03 ............................ 954,910
Hilton Hotels Corporation,
300,000 7.70%, due 07/15/02 ............................ 292,741
The Kroger Company,
1,000,000 7.65%, due 04/15/07 ............................ 976,036
10
<PAGE>
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
PAR VALUE CORPORATE BONDS-- 11.9% (CONTINUED) VALUE
--------------------------------------------------------------------------------
INDUSTRIAL-- 5.3% (CONTINUED)
Raychem Corporation,
$1,000,000 7.20%, due 10/15/08 ............................ $ 967,304
------------
3,190,991
UTILITIES-- 1.6%
Ohio Power Company,
1,000,000 6.75%, due 07/01/04 ............................ 969,190
------------
TOTAL CORPORATE BONDS (Cost $7,459,141) .......... $ 7,123,821
------------
================================================================================
SHARES SHORT-TERM CORPORATE NOTES-- 2.3% VALUE
--------------------------------------------------------------------------------
705,884 Warner Lambert Variable Demand Note ............ $ 705,884
198,946 Wisconsin Corporate Central Credit
Union Variable Demand Note ................... 198,946
470,256 Wisconsin Electric Power Company
Variable Demand Note ......................... 470,256
------------
TOTAL SHORT-TERM CORPORATE NOTES (COST $1,375,086) $ 1,375,086
------------
TOTAL INVESTMENTS AT VALUE-- 99.5%
(COST $45,441,397) ............................. $ 59,421,181
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.5% 251,363
------------
NET ASSETS-- 100.0% $ 59,672,544
============
(a) Non-income producing security.
(b) Security covers a call option.
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTIONS WRITTEN
MARCH 31, 2000
================================================================================
MARKET
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
--------------------------------------------------------------------------------
Hewlett-Packard Company,
41 05/20/00 at $110 ............ $ 33,825 $ 49,327
============ ============
See accompanying notes to financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000
============================================================================================
FBP FBP
Contrarian Contrarian
Equity Balanced
Fund Fund
--------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C>
At acquisition cost ................................. $ 48,004,067 $ 45,441,397
============ ============
At value (Note 1) ................................... $ 56,002,277 $ 59,421,181
Dividends and interest receivable ...................... 116,203 367,863
Receivable for capital shares sold ..................... 6,681 11,845
Other assets ........................................... 6,282 6,913
------------ ------------
TOTAL ASSETS ........................................ 56,131,443 59,807,802
------------ ------------
LIABILITIES
Dividends payable ...................................... 3,330 19,859
Payable for capital shares redeemed .................... 222,146 26,764
Accrued investment advisory fees (Note 3) .............. 31,121 34,421
Accrued administration fees (Note 3) ................... 8,115 8,815
Other accrued expenses and liabilities ................. 21,618 11,574
Covered call options, at value (Notes 1 and 4)
(premiums received $79,404 and $49,327, respectively) 54,450 33,825
------------ ------------
TOTAL LIABILITIES ................................... 340,780 135,258
------------ ------------
NET ASSETS ................................................ $ 55,790,663 $ 59,672,544
============ ============
Net assets consist of:
Paid-in capital ........................................ $ 48,526,258 $ 45,317,605
Accumulated net realized gains (losses)
from security transactions .......................... (758,759) 359,653
Net unrealized appreciation on investments ............. 8,023,164 13,995,286
------------ ------------
Net assets ................................................ $ 55,790,663 $ 59,672,544
============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ............. 2,679,549 3,371,292
============ ============
Net asset value, offering price and redemption
price per share (Note 1) ............................... $ 20.82 $ 17.70
============ ============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2000
===================================================================================================
FBP FBP
Contrarian Contrarian
Equity Balanced
Fund Fund
---------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C>
Interest ........................................................ $ 129,796 $ 1,272,671
Dividends ....................................................... 877,412 734,532
----------- -----------
TOTAL INVESTMENT INCOME ...................................... 1,007,208 2,007,203
----------- -----------
EXPENSES
Investment advisory fees (Note 3) ............................... 401,831 477,345
Administration fees (Note 3) .................................... 99,752 114,954
Custodian fees .................................................. 11,622 10,814
Professional fees ............................................... 8,226 11,826
Postage and supplies ............................................ 4,600 10,164
Trustees' fees and expenses ..................................... 8,279 8,279
Registration fees ............................................... 13,401 8,136
Printing of shareholder reports ................................. 7,047 4,447
Pricing costs ................................................... 1,373 4,456
Insurance expense ............................................... 1,898 2,785
Other expenses .................................................. 1,744 414
----------- -----------
TOTAL EXPENSES ............................................... 559,773 653,620
----------- -----------
NET INVESTMENT INCOME .............................................. 447,435 1,353,583
----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on security transactions ..................... 19,813 3,284,271
Net realized gains on option contracts written .................. 181,902 155,564
Net change in unrealized appreciation/depreciation on investments (4,466,329) (5,918,726)
----------- -----------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS .................. (4,264,614) (2,478,891)
----------- -----------
NET DECREASE IN NET ASSETS FROM OPERATIONS ......................... $(3,817,179) $(1,125,308)
=========== ===========
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
========================================================================================================================
FBP Contrarian FBP Contrarian
Equity Fund Balanced Fund
---------------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income ............................ $ 447,435 $ 242,390 $ 1,353,583 $ 1,191,705
Net realized gains on:
Security transactions ......................... 19,813 685,564 3,284,271 2,907,950
Option contracts written ...................... 181,902 40,022 155,564 45,055
Net change in unrealized appreciation/
depreciation on investments ................... (4,466,329) 2,399,274 (5,918,726) 954,092
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations (3,817,179) 3,367,250 (1,125,308) 5,098,802
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ....................... (447,435) (243,458) (1,353,716) (1,195,675)
From net realized gains .......................... (960,474) (725,822) (3,080,182) (2,953,025)
------------ ------------ ------------ ------------
Decrease in net assets from
distributions to shareholders .................... (1,407,909) (969,280) (4,433,898) (4,148,700)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................ 37,998,156 9,849,442 10,283,683 9,396,418
Net asset value of shares issued in reinvestment
of distributions to shareholders .............. 1,209,728 836,052 4,276,985 4,014,589
Payments for shares redeemed ..................... (23,170,015) (3,427,898) (14,291,631) (5,338,725)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ....................... 16,037,869 7,257,596 269,037 8,072,282
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ....................................... 10,812,781 9,655,566 (5,290,169) 9,022,384
NET ASSETS
Beginning of year ................................ 44,977,882 35,322,316 64,962,713 55,940,329
------------ ------------ ------------ ------------
End of year (including undistributed net
investment income of $0, $0,
$0 and $133, respectively) .................... $ 55,790,663 $ 44,977,882 $ 59,672,544 $ 64,962,713
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ............................................. 1,730,106 471,229 541,893 494,996
Reinvested ....................................... 55,478 39,117 232,354 213,289
Redeemed ......................................... (1,098,843) (164,500) (759,067) (284,114)
------------ ------------ ------------ ------------
Net increase in shares outstanding ............... 686,741 345,846 15,180 424,171
Shares outstanding at beginning of year .......... 1,992,808 1,646,962 3,356,112 2,931,941
------------ ------------ ------------ ------------
Shares outstanding at end of year ................ 2,679,549 1,992,808 3,371,292 3,356,112
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
-----------------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
---------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 22.57 $ 21.45 $ 16.08 $ 14.21 $ 11.21
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ........................... 0.18 0.13 0.19 0.22 0.24
Net realized and unrealized gains (losses)
on investments ............................... (1.38) 1.50 5.98 2.24 3.05
--------- --------- --------- --------- ---------
Total from investment operations ................... (1.20) 1.63 6.17 2.46 3.29
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ............ (0.18) (0.13) (0.19) (0.22) (0.24)
Distributions from net realized gains ........... (0.37) (0.38) (0.61) (0.37) (0.05)
--------- --------- --------- --------- ---------
Total distributions ................................ (0.55) (0.51) (0.80) (0.59) (0.29)
--------- --------- --------- --------- ---------
Net asset value at end of year ..................... $ 20.82 $ 22.57 $ 21.45 $ 16.08 $ 14.21
========= ========= ========= ========= =========
Total return ....................................... (5.40%) 7.74% 38.90% 17.65% 29.54%
========= ========= ========= ========= =========
Net assets at end of year (000's) .................. $ 55,791 $ 44,978 $ 35,322 $ 16,340 $ 9,090
========= ========= ========= ========= =========
Ratio of net expenses to average net assets(a) ..... 1.04% 1.08% 1.12% 1.21% 1.25%
Ratio of net investment income to average net assets 0.83% 0.63% 1.04% 1.50% 1.89%
Portfolio turnover rate ............................ 20% 18% 10% 9% 12%
</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% and 1.67% for the
years ended March 31, 1997, and 1996, respectively.
See accompanying notes to financial statements.
15
<PAGE>
<TABLE>
<CAPTION>
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
=============================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
-----------------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
---------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 19.36 $ 19.08 $ 15.87 $ 14.86 $ 12.80
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ........................... 0.40 0.39 0.41 0.42 0.43
Net realized and unrealized gains (losses)
on investments ............................... (0.74) 1.21 4.26 1.49 2.44
--------- --------- --------- --------- ---------
Total from investment operations ................... (0.34) 1.60 4.67 1.91 2.87
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ............ (0.40) (0.39) (0.41) (0.42) (0.43)
Distributions from net realized gains ........... (0.92) (0.93) (1.05) (0.48) (0.38)
--------- --------- --------- --------- ---------
Total distributions ................................ (1.32) (1.32) (1.46) (0.90) (0.81)
--------- --------- --------- --------- ---------
Net asset value at end of year ..................... $ 17.70 $ 19.36 $ 19.08 $ 15.87 $ 14.86
========= ========= ========= ========= =========
Total return ....................................... (1.87%) 8.74% 30.22% 13.15% 22.86%
========= ========= ========= ========= =========
Net assets at end of year (000's) .................. $ 59,673 $ 64,963 $ 55,940 $ 40,854 $ 35,641
========= ========= ========= ========= =========
Ratio of net expenses to average net assets ........ 1.02% 1.04% 1.04% 1.08% 1.17%
Ratio of net investment income to average net assets 2.11% 2.05% 2.33% 2.65% 3.04%
Portfolio turnover rate ............................ 31% 25% 21% 24% 17%
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
================================================================================
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 may 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.
17
<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, 2000:
--------------------------------------------------------------------------------
FBP Contrarian FBP Contrarian
Equity Fund Balanced Fund
--------------------------------------------------------------------------------
Gross unrealized appreciation .......... $ 15,706,080 $ 18,083,642
Gross unrealized depreciation .......... (7,682,916) (4,088,356)
============ ============
Net unrealized appreciation ............ $ 8,023,164 $ 13,995,286
============ ============
Federal income tax cost ................ $ 47,924,663 $ 45,392,070
============ ============
--------------------------------------------------------------------------------
The FBP Contrarian Equity Fund had net realized capital losses of $758,759
during the period November 1, 1999 through March 31, 2000, which are treated for
federal income tax purposes as arising during the Fund's tax year ending March
31, 2001. These "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, 2000, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $25,429,205 and $10,031,955, respectively, for the FBP Contrarian
Equity Fund and $19,083,165 and $18,269,933, 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, effective February 1, 2000, each Fund pays the
Advisor a fee, which is computed and accrued daily and paid monthly, at an
annual rate of .70% 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. Prior to February 1, 2000, each Fund paid the Advisor a fee,
which was 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.
18
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Integrated Fund Services, Inc. (IFS), IFS provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, IFS 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 IFS 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 IFS, or of IFS
Fund Distributors, Inc., the exclusive underwriter of each Funds' shares.
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31, 2000
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 55 $ 31,062 85 $ 65,437
Options written ........................ 509 310,480 396 241,145
Options expired ........................ (363) (181,903) (295) (155,564)
Options exercised ...................... (135) (80,235) (145) (101,691)
---------- ---------- ---------- ----------
Options outstanding at end of year ..... 66 $ 79,404 41 $ 49,327
========== ========== ========== ==========
---------------------------------------------------------------------------------------------------
</TABLE>
5. FEDERAL TAX INFORMATION (UNAUDITED)
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from net realized gains, if any, made
by the Funds during the year ended March 31, 2000.
On October 31, 1999, the FBP Contrarian Equity Fund declared and paid a
long-term capital gain distribution of $0.3775 per share and the FBP Contrarian
Balanced Fund declared and paid a long-term capital gain distribution of $0.8736
per share and a short-term capital gain distribution of $0.0501 per share. As
required by federal regulations, shareholders received notification of their
portion of the Funds' taxable capital gain distribution, if any, paid during the
1999 calendar year early in 2000.
19
<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, 2000, 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, 2000 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
FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund as of March 31,
2000, 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 28, 2000
