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
<PAGE>
----------------
DAVENPORT
----------------
EQUITY FUND
----------------
ANNUAL REPORT
March 31, 2000
THE DAVENPORT EQUITY FUND
INVESTMENT ADVISER
Davenport & Company LLC
One James Center
901 East Cary Street
Richmond, Virginia 23219-4037
1-800-281-3217
ADMINISTRATOR
Integrated Fund Services, Inc.
312 Walnut Street
P.O. Box 5354
Cincinnati, Ohio 45201-5354
CUSTODIAN
Firstar Bank
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt III
OFFICERS
Joseph L. Antrim III, President
Coleman Wortham III, Vice President
J. Lee Keiger III, Vice President
John P. Ackerly IV, Vice President
<PAGE>
LETTER TO SHAREHOLDERS MAY 8, 2000
================================================================================
Dear Fellow Shareholder:
We are pleased to report that for the quarter ended March 31, 2000 your Fund was
up 4.3%. For the year ended March 31, 2000, the Fund increased 14.9% (since
inception, the Fund has returned 16.0% on an average annual basis). For
comparison, the Standard & Poors 500 Index and the Lipper Multi Cap Value
Universe were up 2.3% and 0.2%, respectively, for the quarter, and 17.9% and
5.4%, respectively, for the year ended March 31, 2000.
The daily gyrations of stocks could not have been better for keeping CNN viewers
glued to their sets. New Economy stocks maintained a strong lead going into the
last month of the quarter and as of March 7, 2000, the NASDAQ was up 19%, while
the Dow Jones Industrial Average was down 15%. The New Economy bulls'
explanation for the 34 percentage point divergence is that technology companies
are not impacted by rising interest rates because they are not users of credit
and their sales and earnings are not economically sensitive. Cynical types might
offer that technology investors are naive and do not understand that rising
interest rates are bad for all stocks. After all, the old axiom "don't fight the
Fed" is ingrained in many of our minds as a fundamental rule of investing.
In Peter Lynch's book on fundamental investing, Beating the Street, he lists 20
Golden Rules for investing. (Peter Lynch was the renowned manager of the
Fidelity Magellan Fund from 1977-1990). Rule number nine states, "Avoid hot
stocks in hot industries. Great companies in cold, non-growth industries are
consistent winners." This tenet may have served Mr. Lynch well during his tenure
when investing in undiscovered/undervalued stocks was successful, but if one
remained steadfast to his rule, you missed a majority of the market's run the
last three years. As the battle for market leadership wages on, we would guess
that Mr. Lynch's advice will not seem as old fashioned as it may seem today to
technology bulls, but perhaps will never sound as timely as it did in 1990.
SECURITIES ANALYSIS by Benjamin Graham and David Dodd has served as a guide for
investing for almost seventy years. According to chapter thirty five, "For the
vast majority of common stocks the dividend record and prospects have always
been the most important factor controlling investment quality and value." Given
the market's current lack of interest in dividends, this statement seems
humorous to many and to others a sad testament to the speculative nature of
current stock market conditions.
We continue to analyze the extreme valuation differences between many Old
Economy stocks and New Economy stocks. For example, how should one value a
company like Cisco? If one followed Mr. Lynch's rule you would never invest in
the leading routers and switching company in the World. After all, one could
hardly argue that Cisco, as the largest or second largest company in North
America, depending on the day, is undiscovered. Warren Buffet would not consider
investing in Cisco, because to paraphrase him, he does not understand technology
and is not going to try. For disciples of Securities Analysis, even considering
purchasing a stock that does not pay a dividend and trades at fifty times book
value would be blasphemy.
Cisco is an expensive stock based on most valuation metrics, and yet revenues
are growing at close to a 50% annual rate and earnings are growing much faster.
The company enjoys a near monopoly position in its field and has an enviable
reputation in making strategic acquisitions. One interesting element about the
company is that at the end of every day they know on an earnings per share basis
how much money they made or lost. Management of a company that can track its
earnings daily should not be surprised by the final tally at quarter end.
However, should a stock price like Cisco's that is based on tremendous future
growth ever disappoint, Wall Street investors will be shocked at how quickly and
how hard the stock is punished.
2
<PAGE>
We understand the risks of investing in technology as well as the risk of
"sticking your head in the sand and avoiding the group." In our investment
process we strive to find the appropriate balance. After all, our retirement
plan is invested in a similar manner. This balance is often uncomfortable, but
as the indices that were so far apart in mid-March have since converged we are
reminded of the benefits of diversification. We invest with an eye to
participate in the tremendous potential of the technology sector by
concentrating on the market leaders without losing sight of our overall value
bias. We believe the benefits of technological advancements should begin to add
value to companies outside the sector.
We are interested in investing in companies with strong management that
prudently and productively allocate the capital entrusted to them by
shareholders. The Internet and other technological advancements have increased
the level of competition and opportunities for all companies. Many companies are
investing heavily in technology. As with any significant capital expenditure, it
will take time to discover which companies are investing wisely and which are
investing foolishly. We believe the market will continue to reward companies
that earn superior returns on their investment. This is one investment doctrine
that has and should stand the test of time.
As stewards of our clients' assets and our own retirement plan, we take our
fiduciary responsibility seriously. We continue to believe in the benefits of a
well-diversified portfolio. To us this means having exposure to all major
economic sectors of the market. To some, diversification has become a "fuddy
duddy" term for those that are old fashioned. To us it is prudent in an
environment in which the Dow Jones Industrial Average is up 300 points and the
Nasdaq is down 300 points.
We look forward to facing the challenges in the market and reporting our
progress to you in the months to come. We thank you for your continued interest.
Sincerely,
Davenport & Company LLC
For additional Fund inquiries please contact your investment executive, or call
Davenport Asset Management at (888) 285-1863 or (804) 697-2999 to discover how
we can add value to your investments.
3
<PAGE>
PERFORMANCE INFORMATION
================================================================================
Comparison of the Change in Value of a $10,000 Investment in the
Davenport Equity Fund and the Standard & Poor's 500 Index
3/00
------
Davenport Equity Fund $16,241
Standard & Poor's 500 Index $13,894
--------------------------------------------------------------------------------
------------------------------
Davenport Equity Fund
Average Annual Total Return
1 Year Since Inception*
14.93% 16.04%
------------------------------
*Initial public offering of shares was January 15, 1998
Past performance is not predictive of future performance.
4
<PAGE>
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
================================================================================
ASSETS
Investments in securities:
At acquisition cost ........................... $ 61,085,301
============
At market value (Note 1) ...................... $ 77,689,962
Dividends receivable .................................. 63,471
Receivable for investment securities sold ............. 1,155,948
Receivable for capital shares sold .................... 328,543
Other assets .......................................... 24,458
------------
TOTAL ASSETS .................................. 79,262,382
------------
LIABILITIES
Dividends payable ..................................... 1,869
Payable for investment securities purchased ........... 1,127,571
Payable for capital shares redeemed ................... 355,584
Accrued investment advisory fees (Note 3) ............. 133,499
Accrued administration fees (Note 3) .................. 10,900
Other accrued expenses and liabilities ................ 7,107
------------
TOTAL LIABILITIES ............................. 1,636,530
------------
NET ASSETS .................................................... $ 77,625,852
------------
Net assets consist of:
Paid-in capital ............................................... $ 62,317,952
Accumulated net realized losses from security transactions .... (1,296,761)
Net unrealized appreciation on investments .................... 16,604,661
------------
Net assets .................................................... $ 77,625,852
============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) . 5,645,532
============
Net asset value, offering price and
redemption price per share (Note 1) ................... $ 13.75
============
See accompanying notes to financial statements.
5
<PAGE>
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
================================================================================
INVESTMENT INCOME
Dividends ............................................ $ 876,600
Interest ............................................. 30,352
-----------
TOTAL INVESTMENT INCOME ...................... 906,952
-----------
EXPENSES
Investment advisory fees (Note 3) .................... 501,397
Administration fees (Note 3) ......................... 118,941
Printing of shareholder reports ...................... 11,281
Professional fees .................................... 10,626
Registration fees .................................... 10,443
Custodian fees ....................................... 10,030
Trustees' fees and expenses .......................... 8,206
Other expenses ....................................... 1,076
-----------
TOTAL EXPENSES ............................... 672,000
-----------
NET INVESTMENT INCOME ........................................ 234,952
-----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions ....... (8,938)
Net change in unrealized appreciation/
depreciation on investments .................. 9,438,445
-----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ............. 9,429,507
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................... $ 9,664,459
===========
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
THE DAVENPORT EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
============================================================================================
Year Year
Ended Ended
March 31, March 31,
2000 1999
--------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C>
Net investment income ............................. $ 234,952 $ 282,941
Net realized losses from security transactions .... (8,938) (1,287,823)
Net change in unrealized appreciation/
depreciation on investments ............... 9,438,445 5,647,305
------------ ------------
Net increase in net assets from operations ................ 9,664,459 4,642,423
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ........................ (257,524) (284,973)
From net realized gains ........................... -- (22,572)
------------ ------------
Decrease in net assets from distributions to shareholders . (257,524) (307,545)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ......................... 21,275,796 33,435,301
Net asset value of shares issued in reinvestment
of distributions to shareholders .......... 246,511 292,444
Payments for shares redeemed ...................... (9,661,290) (6,398,898)
------------ ------------
Net increase in net assets from capital share transactions 11,861,017 27,328,847
------------ ------------
TOTAL INCREASE IN NET ASSETS .............................. 21,267,952 31,663,725
NET ASSETS
Beginning of year ................................. 56,357,900 24,694,175
------------ ------------
End of year (including undistributed net investment
income of $0 and $22,572, respectively) ... $ 77,625,852 $ 56,357,900
============ ============
CAPITAL SHARE ACTIVITY
Sold .............................................. 1,693,284 3,018,408
Reinvested ........................................ 19,633 26,301
Redeemed .......................................... (760,199) (569,249)
------------ ------------
Net increase in shares outstanding ................ 952,718 2,475,460
Shares outstanding at beginning of year ........... 4,692,814 2,217,354
------------ ------------
Shares outstanding at end of year ................. 5,645,532 4,692,814
============ ============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
THE DAVENPORT EQUITY FUND
FINANCIAL HIGHLIGHTS
======================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
======================================================================================================
Year Year Period
Ended Ended Ended
March 31, March 31, March 31,
2000 1999 1998(a)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of period ................. $ 12.01 $ 11.14 $ 10.00
---------- ---------- ----------
Income from investment operations:
Net investment income .......................... 0.04 0.06 0.01
Net realized and unrealized gains on investments 1.75 0.88 1.13
---------- ---------- ----------
Total from investment operations ....................... 1.79 0.94 1.14
---------- ---------- ----------
Less distributions:
Dividends from net investment income ........... (0.05) (0.06) --
Distributions from net realized gains .......... -- (0.01) --
---------- ---------- ----------
Total distributions .................................... (0.05) (0.07) --
---------- ---------- ----------
Net asset value at end of period ....................... $ 13.75 $ 12.01 $ 11.14
========== ========== ==========
Total return ........................................... 14.93% 8.53% 11.40%
========== ========== ==========
Net assets at end of period (000's) .................... $ 77,626 $ 56,358 $ 24,694
========== ========== ==========
Ratio of net expenses to average net assets(b) ......... 1.01% 1.14% 1.15%(c)
Ratio of net investment income to average net assets ... 0.35% 0.64% 0.76%(c)
Portfolio turnover rate ................................ 17% 15% 17%(c)
</TABLE>
(a) Represents the period from the commencement of operations (January 15,
1998) through March 31, 1998.
(b) Absent investment advisory fees waived and expenses reimbursed by the
Adviser, the ratio of expenses to average net assets would have been
2.13%(c) for the period ended March 31, 1998.
(c) Annualized.
See accompanying notes to financial statements.
8
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
MARKET
SHARES COMMON STOCKS-- 96.6% VALUE
--------------------------------------------------------------------------------
AIRCRAFT & PARTS-- 1.7%
24,333 Honeywell International, Inc. .................... $ 1,282,045
------------
BASIC MATERIALS-- 2.6%
22,531 Alcoa, Inc. ...................................... 1,582,803
18,025 Cleveland-Cliffs, Inc. ........................... 429,220
------------
2,012,023
------------
CHEMICALS AND DRUGS-- 3.7%
22,531 Merck & Co., Inc. ................................ 1,399,738
40,556 Schering-Plough Corporation ...................... 1,490,433
------------
2,890,171
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES -- 21.6%
37,732 Cisco Systems, Inc.(a) ........................... 2,917,155
12,363 Citrix Systems, Inc.(a) .......................... 819,049
19,377 EMC Corporation(a) ............................... 2,422,125
15,489 Hewlett-Packard Company .......................... 2,053,261
21,179 Intel Corporation ................................ 2,794,304
10,554 International Business Machines Corporation ...... 1,245,372
15,581 Lucent Technologies, Inc. ........................ 946,546
20,728 Media General, Inc. - Class A .................... 1,085,629
10,364 Microsoft Corporation(a) ......................... 1,101,175
9,463 Motorola, Inc. ................................... 1,347,295
------------
16,731,911
------------
CONGLOMERATES-- 1.1%
460 Berkshire Hathaway, Inc. - Class B(a) ............ 837,200
------------
CONSUMER PRODUCTS-- 15.5%
24,333 American Home Products Corporation ............... 1,304,857
38,303 Amgen, Inc.(a) ................................... 2,350,847
19,104 Avery Dennison Corporation ....................... 1,166,538
29,290 Bristol-Myers Squibb Company ..................... 1,691,498
19,377 Ford Motor Company ............................... 890,131
19,377 Gillette Company ................................. 730,271
18,025 Johnson & Johnson ................................ 1,262,877
42,809 SYSCO Corporation ................................ 1,527,746
24,158 Zale Corporation(a) .............................. 1,139,956
------------
12,064,721
------------
DURABLE GOODS-- 9.8%
11,265 General Electric Company ......................... 1,748,187
16,222 Koninklijke Philips Electronics N.V .............. 2,779,031
18,926 Martin Marietta Materials, Inc. .................. 898,985
81,695 Tredegar Corporation, Inc. ....................... 2,200,659
------------
7,626,862
------------
9
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
MARKET
SHARES COMMON STOCKS-- 96.6% (Continued) VALUE
--------------------------------------------------------------------------------
ENTERTAINMENT-- 4.4%
30,079 AT&T Corporation - Liberty Media Group - Class A(a) $ 1,782,181
39,204 Walt Disney Company .............................. 1,622,066
------------
3,404,247
------------
FINANCIAL SERVICES-- 11.6%
20,278 American International Group, Inc. ............... 2,220,441
32,445 BB&T Corporation ................................. 910,488
34,425 Capital One Financial Corporation ................ 1,650,248
18,025 CCB Financial Corporation ........................ 797,606
29,630 Federal Realty Investments Trust ................. 572,229
9,914 Markel Corporation(a) ............................ 1,442,487
14,870 SunTrust Banks, Inc. ............................. 858,742
8,111 Wachovia Corporation ............................. 547,999
------------
9,000,240
------------
FOOD/BEVERAGES-- 3.7%
23,455 Anheuser-Busch Company, Inc. ..................... 1,460,074
14,870 Coca-Cola Company ................................ 697,961
38,391 Sara Lee Corporation ............................. 691,038
------------
2,849,073
------------
OIL/ENERGY-- 9.9%
9,222 Atlantic Richfield Company ....................... 783,870
11,265 Chevron Corporation .............................. 1,041,308
34,950 Conoco, Inc. - Class B ........................... 895,594
22,620 Enron Corporation ................................ 1,693,672
14,871 Exxon Mobil Corporation .......................... 1,157,150
24,333 Halliburton Company .............................. 997,653
14,870 Schlumberger Limited ............................. 1,137,555
------------
7,706,802
------------
RETAIL STORES-- 4.8%
38,933 Circuit City Stores - Circuit City Group ......... 2,370,046
54,074 Walgreen Company ................................. 1,392,405
------------
3,762,451
------------
UTILITIES-- 6.2%
25,906 AT&T Corporation ................................. 1,457,212
26,136 Cox Communications, Inc. - Class A(a) ............ 1,267,596
17,574 MCI WorldCom, Inc.(a) ............................ 796,345
30,642 SBC Communications, Inc. ......................... 1,286,964
------------
4,808,117
------------
TOTAL COMMON STOCKS -- (Cost $58,371,202) ........ $ 74,975,863
------------
10
<PAGE>
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
MARKET
SHARES MONEY MARKETS-- 3.5% VALUE
--------------------------------------------------------------------------------
2,714,099 Firstar Stellar Treasury Fund (Cost $2,714,099) .. $ 2,714,099
------------
TOTAL INVESTMENTS AT VALUE-- 100.1%
(Cost $61,085,301) ............................... $ 77,689,962
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1%) (64,110)
------------
NET ASSETS-- 100.0% .............................. $ 77,625,852
============
(a) Non-income producing security.
See accompanying notes to financial statements.
11
<PAGE>
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Davenport Equity Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940. The Trust was
organized as a Massachusetts business trust on July 18, 1988. The Fund began
operations on January 15, 1998.
The Fund's investment objective is long-term growth of capital through
investment in a diversified portfolio of common stocks. Current income is
incidental to this objective and may not be significant.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price. Securities traded on a national stock exchange are valued based upon
the closing price on the principal exchange where the security is traded.
Repurchase agreements -- The Fund 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. At the time the Fund enters into the
joint repurchase agreement, the seller agrees that the value of the underlying
securities, including accrued interest, will at all times be equal to or exceed
the face amount of the repurchase agreement. In addition, the Fund actively
monitors and seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Dividend income is recorded on the ex-dividend date.
Dividends arising from net investment income are declared and paid quarterly to
shareholders of the Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and capital
gain distributions are determined in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are determined on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
12
<PAGE>
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of
investment securities of $61,085,301 as of March 31, 2000:
--------------------------------------------------------------------------------
Gross unrealized appreciation ......................... $ 20,405,923
Gross unrealized depreciation ......................... (3,801,262)
------------
Net unrealized appreciation ........................... $ 16,604,661
============
--------------------------------------------------------------------------------
As of March 31, 2000, the Fund had capital loss carryforwards for federal income
tax purposes of $1,290,580, which expire through the year 2008. In addition, the
Fund had net realized long-term capital losses of $6,181 during the period from
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
capital loss carryforwards and "post-October" losses may be utilized in future
years to offset net realized capital gains prior to distributing such gains to
shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2000, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $21,200,552 and $10,912,370, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Davenport & Company LLC (the Adviser)
under the terms of an Investment Advisory Agreement. Under the Investment
Advisory Agreement, the Fund pays the Adviser a fee, which is computed and
accrued daily and paid monthly, at an annual rate of .75% of its average daily
net assets. Certain officers of the Trust are also officers of the Adviser.
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 Fund. For these services, IFS receives a monthly fee from the
Fund at an annual rate of .20% on its average daily net assets up to $25
million; .175% on the next $25 million of such net assets; and .15% on such net
assets in excess of $50 million, subject to a $2,000 minimum monthly fee. In
addition, the Fund pays IFS out-of-pocket expenses including, but not limited
to, postage, supplies and costs of pricing the Fund's portfolio securities.
Certain officers of the Trust are also officers of IFS.
13
<PAGE>
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati Ohio
We have audited the accompanying statement of assets and liabilities of The
Davenport Equity Fund (a series of The Williamsburg Investment Trust), including
the portfolio of investments, as of March 31, 2000, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the two years in the period then ended and for the period January 15,
1998 (commencement of operations) to March 31, 1998. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 2000 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Davenport Equity Fund as of March 31, 2000, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the two years in
the period then ended and for the period January 15, 1998 to March 31, 1998, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 28, 2000
14
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
------------------------------
No Load Mutual Funds
ANNUAL REPORT
MARCH 31, 2000
Investment Adviser
T. LEAVELL & ASSOCIATES, INC.
Founded 1979
<PAGE>
LETTER FROM THE PRESIDENT MAY 15, 2000
================================================================================
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited Annual Report of The
Government Street Funds and The Alabama Tax Free Bond Fund for the year ended
March 31, 2000.
THE GOVERNMENT STREET EQUITY FUND
---------------------------------
The Government Street Equity Fund achieved a total investment return of
19.93% for its fiscal year ended March 31, 2000. During this same period, the
S&P 500 Index achieved a total return of 17.94%. In addition, the average return
for the 968 "Large-Cap Blend Funds" included in Morningstar, Inc.'s universe was
19.64% for the same twelve month period. (The Government Street Equity Fund is
classified by Morningstar as a Large-Cap Blend Fund.)
Investment returns during the twelve months ended March 31, 2000 continued
to reflect the disproportionately high return of growth stocks (particularly
technology issues) compared to value stocks. New terms have even been coined -
"new economy" stocks and "old economy" stocks - to describe the phenomenon of
stock valuations (and investment returns) of technology oriented companies
defying more traditional methods of securities analysis and valuation.
The Government Street Equity Fund continues its blended portfolio
management style with approximately one-half of its investments in both growth
and value stocks. This approach equates the importance of risk management with
the pursuit of investment returns, and, ultimately, provides the portfolio
environment that we believe is most conducive for compounding investment returns
over time.
In last year's annual report, we stated that "It is unlikely that the U.S.
stock market will continue indefinitely to be driven by the narrow leadership of
a handful of large capitalization stocks; nor is it reasonable to expect that
growth stocks will continue to outperform value stocks as they have over the
past 18 months." This statement remains an appropriate one today, though the 18
month period now has grown to 30 months.
The future for "new economy" stocks is exciting. The technological
innovation and advances already achieved in computing, biotechnology,
electronics, the Internet, wireless technology, communications, and their
applications are nothing short of stunning. Still, creating profitable business
enterprises from their technological achievements remain challenges for many of
these companies. Until there is a clearer picture of which ventures will survive
and prosper, the result is likely to be a highly volatile market for common
stocks. At the same time, it is a market that is likely to see a narrowing of
the gap that currently exists between growth and value stocks.
The selection of those companies whose current (and future) stock prices
are (or will be) justified by future earnings growth remains a daunting task for
investment managers. A more immediate concern, however, is the current monetary
policy of the Federal Reserve Board. The Fed's zeal in fighting the threat of
inflation over the past 10 months has brought the general level of interest
rates close to a point at which strong economies historically have faltered.
Neither "new" nor "old" economy companies are likely to prosper in an economic
environment where the cost of debt capital is 9% - 10%. However, it is in just
such a hostile environment where The Government Street Equity Fund's broadly
diversified portfolio of quality companies is most likely to prove its merit.
At March 31, 2000, the Fund was invested in 118 companies. Net assets of
the Fund were $116,446,622; net asset value was $57.07.
THE GOVERNMENT STREET BOND FUND
-------------------------------
For the first time since 1976-78, the U.S. economy has expanded at a rate
of 4% or more for 3 consecutive years. With an eye toward controlling inflation,
the Federal Reserve Board has moved to curb this booming economy by raising
short-term interest rates a total of 1.25% over a 10 month period - 5 times
since June, 1999.
In addition to rising interest rates, inflation concerns and worry about
Y2K computer disruptions sent bond prices sliding in 1999. As a result, the bond
market suffered its worst year since 1994 and the second worst since 1973.
1
<PAGE>
Despite these difficulties and despite the fact that the Federal Reserve
seems poised to continue its tightening during 2000, the bond market staged a
modest recovery during the first calendar quarter of the new year. The
Government Street Bond Fund achieved a return of 1.31% for the quarter ended
March 31, 2000, and this was enough to lift its total return for the fiscal year
ended March 31, 2000 to 0.67%. These returns compare favorably to those of the
Lehman Government/Corporate Intermediate Bond Index which were 1.50% and 2.09%,
respectively. The Fund's ratio of net investment income to average net assets
was 6.12% at fiscal year end.
The Government Street Bond Fund continues its emphasis on holding quality
securities while maintaining an intermediate-term average maturity. At fiscal
year-end, the Fund's average maturity was slightly over 6 years; just over 61%
of the Fund was invested in securities rated AAA.
The net assets of the Fund at March 31, 2000 were $45,155,791; net asset
value was $19.79; and the ratio of expenses to average net assets was 0.70%.
THE ALABAMA TAX FREE BOND FUND
------------------------------
We are proud to report that The Alabama Tax Free Bond Fund has received a
four star rating from Morningstar, Inc. for its overall performance, as well as
for the past 3 and 5 year periods coinciding with the end of its fiscal year on
March 31, 2000. The Morningstar ratings reflect risk-adjusted performance and
are subject to change every month. Ratings are calculated for the Fund's total
annual return in excess of the 90-day T-bill return with fee adjustments and a
risk factor that reflects Fund performance below the 90-day T-bill return. A
four star rating places the fund in the top 32.5% of all municipal bond funds
measured. For the five-year period ended March 31, 2000, that universe consisted
of 1,682 municipal bond mutual funds.
These ratings, however, do not mean that the Fund was able to escape the
impact of sharply rising interest rates during the past 12 months. The annual
rate of inflation as measured by the consumer price index, increased from 1.7%
at the beginning of 1999 to 3.7% at the end of March, 2000. This steady increase
in the rate of inflation, though relatively low in absolute terms, has caused
investors to demand higher yields from fixed income securities. The resulting
decline in bond prices has actually generated negative returns for many fixed
income investments over the past 15 months.
During the last quarter of its fiscal year, however, The Alabama Tax Free
Bond Fund achieved a total return of 1.71%. This allowed the fund to achieve a
positive return of 0.34% for the entire year. These returns compare favorably to
those of the Lipper Intermediate Municipal Bond Index which were 1.76% and
-0.27%, respectively, for the same periods. The Fund's ratio of net investment
income to average net assets was 4.32% at year end.
The net assets of the fund as of March 31, 2000 were $23,048,340; net asset
value was $10.13. The weighted average maturity of the Fund's portfolio was 7.2
years -consistent with its intermediate-term objective. The average credit
quality of the portfolio was "AA", and almost 60% of the individual securities
were rated "AAA".
The Alabama Tax Free Bond Fund continues to provide an attractive option
for investors who are seeking stability of principal as well as income which is
sheltered from federal and Alabama state income taxes.
Thank you for your continued confidence in The Government Street Funds and
The Alabama Tax Free Bond Fund. Please call us if we can be of further service
to you.
Very truly yours,
/s/ Thomas W. Leavell /s/ Richard Mitchell
Thomas W. Leavell Richard Mitchell
President President
T. Leavell & Associates, Inc. The Government Street Funds
The Alabama Tax Free Bond Fund
2
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
------------------------------------
The Government Street Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
19.93% 23.09% 15.59%
------------------------------------
[GRAPHIC OMITTED]
Mar 00
The Government Street Equity Fund $35,759
Standard & Poor's 500 Index $48,286
Consumer Price Index $12,535
Past performance is not predictive of future performance.
* Initial public offering of shares was June 3, 1991.
THE GOVERNMENT STREET BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Bond Fund, the Lehman Government/Corporate Intermediate Bond Index and
the 90-Day Treasury Bill Index
------------------------------------
The Government Street Bond Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
0.67% 5.89%.4 6.28%
------------------------------------
[GRAPHIC OMITTED]
Mar 00
The Government Street Bond Fund $17,116
Lehman Government/Corporate Intermediate Bond Index $17,979
90-Day Treasury Bill Index $15,205
Past performance is not predictive of future performance.
* Initial public offering of shares was June 3, 1991.
3
<PAGE>
THE ALABAMA TAX FREE BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Alabama Tax
Free Bond Fund, the Lehman 7-Year G.O. Municipal Bond Index, the Lehman 3-Year
Municipal Bond Index and the Lipper Intermediate Municipal Fund Index
-----------------------------------
The Alabama Tax Free Bond Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
0.34% 4.64% 4.47%
-----------------------------------
[GRAPHIC OMITTED]
Mar 00
The Alabama Tax Free Bond Fund $13,708
Lehman 7-Year G.O. Municipal Bond Index $14,807
Lehman 3-Year Municipal Bond Index $13,852
Lipper Intermediate Municipal Fund Index $13,553
Past performance is not predictive of future performance.
* Initial public offering of shares was January 15, 1993.
4
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000
<TABLE>
<CAPTION>
=======================================================================================================
GOVERNMENT GOVERNMENT ALABAMA
STREET STREET TAX FREE
EQUITY BOND BOND
FUND FUND FUND
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities:
At acquisition cost ............................. $ 60,100,244 $ 46,424,871 $ 22,792,699
============= ============= =============
At value (Note 1) ............................... $ 119,238,480 $ 44,512,863 $ 22,766,181
Interest receivable ................................ 15,997 723,356 300,166
Dividends receivable ............................... 66,389 -- --
Receivable for capital shares sold ................. 108,250 -- 11,188
Other assets ....................................... 6,462 4,007 1,857
------------- ------------- -------------
TOTAL ASSETS .................................... 119,435,578 45,240,226 23,079,392
------------- ------------- -------------
LIABILITIES
Dividends payable .................................. 1,367 15,271 9,644
Distributions payable .............................. 15,565 -- --
Payable for capital shares redeemed ................ 5,065 37,518 9,341
Payable for securities purchased ................... 2,885,903 -- --
Accrued investment advisory fees (Note 3) .......... 56,700 19,193 5,457
Accrued administration fees (Note 3) ............... 15,500 2,850 2,900
Other accrued expenses and liabilities ............. 8,856 9,603 3,710
------------- ------------- -------------
TOTAL LIABILITIES ............................... 2,988,956 84,435 31,052
------------- ------------- -------------
NET ASSETS ......................................... $ 116,446,622 $ 45,155,791 $ 23,048,340
============= ============= =============
Net assets consist of:
Paid-in capital .................................... $ 57,357,340 $ 47,973,345 $ 23,321,127
Distributions in excess of realized gains .......... (48,954) -- --
Accumulated net realized losses
from security transactions ...................... -- (905,546) (246,269)
Net unrealized appreciation (depreciation)
on investments .................................. 59,138,236 (1,912,008) (26,518)
------------- ------------- -------------
Net assets ......................................... $ 116,446,622 $ 45,155,791 $ 23,048,340
============= ============= =============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ...... 2,040,365 2,281,479 2,274,894
============= ============= =============
Net asset value, offering price and
redemption price per share (Note 1) ............. $ 57.07 $ 19.79 $ 10.13
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
=================================================================================================
GOVERNMENT GOVERNMENT ALABAMA
STREET STREET TAX FREE
EQUITY BOND BOND
FUND FUND FUND
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest ......................................... $ 50,372 $ 2,946,594 $ 1,079,194
Dividends ........................................ 1,141,189 73,921 28,794
----------- ----------- -----------
TOTAL INVESTMENT INCOME ....................... 1,191,561 3,020,515 1,107,988
----------- ----------- -----------
EXPENSES
Investment advisory fees (Note 3) ................ 606,159 221,781 78,222
Administration fees (Note 3) ..................... 170,044 33,179 33,491
Professional fees ................................ 11,945 11,945 8,845
Pricing costs .................................... 2,844 11,663 14,637
Custodian fees ................................... 14,399 6,459 4,296
Trustees' fees and expenses ...................... 8,280 8,280 8,280
Printing of shareholder reports .................. 8,613 6,949 6,623
Postage and supplies ............................. 6,480 4,149 2,886
Registration fees ................................ 5,789 4,671 1,634
Other expenses ................................... 7,561 305 1,756
----------- ----------- -----------
TOTAL EXPENSES ................................ 842,114 309,381 160,670
Fees waived by the Adviser (Note 3) .............. -- -- (15,400)
----------- ----------- -----------
NET EXPENSES .................................. 842,114 309,381 145,270
----------- ----------- -----------
NET INVESTMENT INCOME ............................... 349,447 2,711,134 962,718
----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses)
from security transactions .................... 798,881 (352,285) (46,986)
Net change in unrealized appreciation/depreciation
on investments ................................ 17,790,895 (2,047,757) (844,115)
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS ....................... 18,589,776 (2,400,042) (891,101)
----------- ----------- -----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ............................... $18,939,223 $ 311,092 $ 71,617
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
==============================================================================================================
GOVERNMENT STREET GOVERNMENT STREET
EQUITY FUND BOND FUND
-----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income ................. $ 349,447 $ 486,890 $ 2,711,134 $ 2,376,899
Net realized gains (losses)
from security transactions ......... 798,881 1,154,015 (352,285) (119,151)
Net change in unrealized appreciation/
depreciation on investments ........ 17,790,895 9,951,369 (2,047,757) (251,151)
------------- ------------- ------------- -------------
Net increase in net assets from operations 18,939,223 11,592,274 311,092 2,006,597
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............ (349,447) (487,774) (2,711,134) (2,380,755)
From net realized gains ............... (847,835) (3,083,650) -- --
------------- ------------- ------------- -------------
Decrease in net assets from
distributions to shareholders ......... (1,197,282) (3,571,424) (2,711,134) (2,380,755)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............. 16,032,742 10,535,714 9,164,881 7,618,281
Net asset value of shares issued in
reinvestment of distributions
to shareholders .................... 1,172,232 3,411,170 2,531,305 2,146,286
Payments for shares redeemed .......... (9,207,743) (6,903,321) (7,180,879) (3,257,836)
------------- ------------- ------------- -------------
Net increase in net assets from
capital share transactions ............ 7,997,231 7,043,563 4,515,307 6,506,731
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS ............. 25,739,172 15,064,413 2,115,265 6,132,573
NET ASSETS
Beginning of year ..................... 90,707,450 75,643,037 43,040,526 36,907,953
------------- ------------- ------------- -------------
End of year ........................... $ 116,446,622 $ 90,707,450 $ 45,155,791 $ 43,040,526
============= ============= ============= =============
Capital share activity
Sold .................................. 312,261 233,010 452,679 359,195
Reinvested ............................ 21,194 77,139 126,050 101,333
Redeemed .............................. (178,843) (151,673) (356,474) (153,761)
------------- ------------- ------------- -------------
Net increase in shares outstanding .... 154,612 158,476 222,255 306,767
Shares outstanding, beginning of year . 1,885,753 1,727,277 2,059,224 1,752,457
------------- ------------- ------------- -------------
Shares outstanding, end of year ....... 2,040,365 1,885,753 2,281,479 2,059,224
============= ============= ============= =============
</TABLE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
Alabama Tax Free
Bond Fund
----------------------------------
Year Year
Ended Ended
March 31, March 31,
2000 1999
--------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................. $ 962,718 $ 830,266
Net realized gains (losses)
from security transactions ......... (46,986) (347)
Net change in unrealized appreciation/
depreciation on investments ........ (844,115) 86,422
------------- -------------
Net increase in net assets from operations 71,617 916,341
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............ (962,718) (830,266)
From net realized gains ............... -- --
------------- -------------
Decrease in net assets from
distributions to shareholders ......... (962,718) (830,266)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............. 5,417,544 3,032,760
Net asset value of shares issued in
reinvestment of distributions
to shareholders .................... 799,134 609,745
Payments for shares redeemed .......... (3,837,209) (2,106,904)
------------- -------------
Net increase in net assets from
capital share transactions ............ 2,379,469 1,535,601
------------- -------------
TOTAL INCREASE IN NET ASSETS ............. 1,488,368 1,621,676
NET ASSETS
Beginning of year ..................... 21,559,972 19,938,296
------------- -------------
End of year ........................... $ 23,048,340 $ 21,559,972
============= =============
Capital share activity
Sold .................................. 530,939 286,831
Reinvested ............................ 78,412 57,694
Redeemed .............................. (379,054) (199,887)
------------- -------------
Net increase in shares outstanding .... 230,297 144,638
Shares outstanding, beginning of year . 2,044,597 1,899,959
------------- -------------
Shares outstanding, end of year ....... 2,274,894 2,044,597
============= =============
See accompanying notes to financial statements.
7
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
============================================================================================================
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 ...... $ 48.10 $ 43.79 $ 32.59 $ 29.41 $ 23.87
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income .................. 0.18 0.27 0.32 0.37 0.40
Net realized and unrealized
gains on investments ................ 9.39 6.01 12.28 4.50 5.75
--------- --------- --------- --------- ---------
Total from investment operations .......... 9.57 6.28 12.60 4.87 6.15
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ... (0.18) (0.27) (0.32) (0.36) (0.40)
Distributions from net realized gains .. (0.42) (1.70) (1.08) (1.33) (0.21)
--------- --------- --------- --------- ---------
Total distributions ....................... (0.60) (1.97) (1.40) (1.69) (0.61)
--------- --------- --------- --------- ---------
Net asset value at end of year ............ $ 57.07 $ 48.10 $ 43.79 $ 32.59 $ 29.41
========= ========= ========= ========= =========
Total return .............................. 19.93% 14.81% 39.31% 16.94% 25.96%
========= ========= ========= ========= =========
Net assets at end of year (000's) ......... $ 116,447 $ 90,707 $ 75,643 $ 49,629 $ 41,421
========= ========= ========= ========= =========
Ratio of net expenses to average net assets 0.83% 0.85% 0.86% 0.89% 0.94%
Ratio of net investment income
to average net assets .................. 0.35% 0.61% 0.82% 1.17% 1.50%
Portfolio turnover rate ................... 17% 22% 18% 20% 31%
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
============================================================================================================
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 ...... $ 20.90 $ 21.06 $ 20.47 $ 20.87 $ 20.33
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income .................. 1.23 1.27 1.32 1.34 1.35
Net realized and unrealized
gains (losses) on investments ....... (1.11) (0.16) 0.60 (0.40) 0.54
--------- --------- --------- --------- ---------
Total from investment operations .......... 0.12 1.11 1.92 0.94 1.89
--------- --------- --------- --------- ---------
Dividends from net investment income ...... (1.23) (1.27) (1.33) (1.34) (1.35)
--------- --------- --------- --------- ---------
Net asset value at end of year ............ $ 19.79 $ 20.90 $ 21.06 $ 20.47 $ 20.87
========= ========= ========= ========= =========
Total return .............................. 0.67% 5.38% 9.61% 4.60% 9.43%
========= ========= ========= ========= =========
Net assets at end of year (000's) ......... $ 45,156 $ 43,041 $ 36,908 $ 29,442 $ 28,718
========= ========= ========= ========= =========
Ratio of net expenses to average net assets 0.70% 0.73% 0.74% 0.75% 0.76%
Ratio of net investment income
to average net assets .................. 6.12% 6.01% 6.35% 6.44% 6.38%
Portfolio turnover rate ................... 20% 17% 10% 20% 10%
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
===============================================================================================================
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 ......... $ 10.54 $ 10.49 $ 10.18 $ 10.23 $ 9.96
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ..................... 0.44 0.44 0.44 0.43 0.42
Net realized and unrealized
gains (losses) on investments .......... (0.41) 0.05 0.31 (0.05) 0.27
--------- --------- --------- --------- ---------
Total from investment operations ............. 0.07 0.49 0.75 0.38 0.69
--------- --------- --------- --------- ---------
Dividends from net investment income ......... (0.44) (0.44) (0.44) (0.43) (0.42)
--------- --------- --------- --------- ---------
Net asset value at end of year ............... $ 10.13 $ 10.54 $ 10.49 $ 10.18 $ 10.23
========= ========= ========= ========= =========
Total return ................................. 0.34% 4.73% 7.44% 3.82% 7.02%
========= ========= ========= ========= =========
Net assets at end of year (000's) ............ $ 23,048 $ 21,560 $ 19,938 $ 16,801 $ 15,480
========= ========= ========= ========= =========
Ratio of net expenses to average net assets(a) 0.65% 0.65% 0.65% 0.66% 0.75%
Ratio of net investment income
to average net assets ..................... 4.32% 4.16% 4.19% 4.24% 4.11%
Portfolio turnover rate ...................... 19% 7% 2% 6% 4%
</TABLE>
(a) Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
0.72%, 0.76%, 0.75%, 0.78% and 0.86% for the years ended March 31, 2000,
1999, 1998, 1997, and 1996, respectively (Note 3).
See accompanying notes to financial statements.
10
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
SHARES COMMON STOCKS - 95.6% VALUE
--------------------------------------------------------------------------------
ADVERTISING - 0.5%
6,000 Omnicom Group, Inc. ........................ $ 560,625
-------------
AEROSPACE - 0.2%
7,000 Boeing Company ............................. 265,563
-------------
AIR COURIER SERVICES - 1.0%
31,000 FedEx Corporation(a) ....................... 1,209,000
-------------
CHEMICALS AND DRUGS - 9.8%
40,000 Becton Dickinson & Company ................. 1,052,500
15,000 Biomet, Inc. ............................... 545,625
30,000 Cardinal Health, Inc. ...................... 1,376,250
18,000 du Pont (E.I.) de Nemours & Company ........ 951,750
17,000 Eli Lilly & Company ........................ 1,071,000
15,000 Johnson & Johnson .......................... 1,050,938
24,900 Merck & Company, Inc. ...................... 1,546,912
5,500 Monsanto Company ........................... 283,250
29,200 Pfizer, Inc. ............................... 1,067,625
40,000 Schering-Plough Corporation ................ 1,470,000
10,000 Waters Corporation(a) ...................... 952,500
-------------
11,368,350
-------------
CONSTRUCTION - 2.1%
14,000 Caterpiller, Inc. .......................... 552,125
5,000 Clayton Homes, Inc. ........................ 50,625
3,000 Florida Rock Industries, Inc. .............. 84,000
8,500 Kaufman & Broad Home Corporation ........... 182,219
10,000 Lowe's Companies, Inc. ..................... 583,750
7,000 Masco Corporation .......................... 143,500
23,000 Valspar Corporation ........................ 881,188
-------------
2,477,407
-------------
CONSUMER PRODUCTS - 6.6%
21,000 Belo (A.H.) Corporation - Class A .......... 375,375
17,500 Clorox Company (The) ....................... 568,750
13,000 General Motors Corporation ................. 1,076,562
14,000 Gillette Company ........................... 527,625
6,500 Hewlett-Packard Company .................... 861,656
5,300 Lexmark International Group, Inc. - Class A(a) 560,475
4,000 Macromedia, Inc.(a) ........................ 361,250
5,500 Maytag Corporation ......................... 182,188
20,500 Microsoft Corporation(a) ................... 2,178,125
6,000 OshKosh B'Gosh, Inc. - Class A ............. 108,000
15,000 Procter & Gamble Company ................... 843,750
-------------
7,643,756
-------------
DURABLE GOODS - 18.2%
160,000 Cisco Systems, Inc.(a) ..................... 12,370,000
13,000 Costco Wholesale Corporation(a) ............ 683,313
23,500 General Electric Company ................... 3,646,906
6,000 Ingersoll-Rand Company ..................... 265,500
21,800 Intel Corporation .......................... 2,876,238
6,000 International Business Machines Corporation (IBM) 708,000
5,118 SPX Corporation(a) ......................... 583,132
-------------
21,133,089
-------------
11
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS - 95.6% (CONTINUED) VALUE
--------------------------------------------------------------------------------
ELECTRONICS - 5.2%
1,000 Broadcom Corporation(a) .................... $ 242,875
2,500 Harmonic Inc.(a) ........................... 208,125
4,000 KEMET Corporation(a) ....................... 253,000
15,640 Koninklijke (Royal) Philips Electronics N.V 2,679,328
11,000 Motorola, Inc. ............................. 1,566,125
1,600 Powertel, Inc.(a) .......................... 110,700
5,500 Seagate Technology, Inc.(a) ................ 331,375
9,000 Solectron Corporation(a) ................... 360,562
5,000 Tandy Corporation .......................... 253,750
-------------
6,005,840
-------------
FINANCIAL - 12.9%
6,000 Aegon N.V .................................. 483,375
26,000 AFLAC, Inc. ................................ 1,184,625
10,000 American Express Company ................... 1,489,375
19,000 Charles Schwab Corporation (The) ........... 1,079,438
6,000 Chase Manhattan Corporation ................ 523,125
20,000 Citigroup, Inc. ............................ 1,186,250
75,000 Firstar Corporation ........................ 1,720,312
22,000 FleetBoston Financial Corporation .......... 803,000
20,000 Freddie Mac ................................ 883,750
10,500 Marsh & McLennan Companies, Inc. ........... 1,158,281
17,000 MBNA Corporation ........................... 433,500
50,000 Mellon Financial Corporation ............... 1,475,000
20,000 Nasdaq-100 Shares(a) ....................... 2,192,500
21,000 Synovus Financial Corporation .............. 396,375
-------------
15,008,906
-------------
FOOD/BEVERAGES - 1.4%
10,000 Anheuser-Busch Companies, Inc. ............. 622,500
40,000 Coca-Cola Enterprises ...................... 862,500
3,500 SYSCO Corporation .......................... 124,906
-------------
1,609,906
-------------
HEALTH CARE - 0.4%
7,000 United HealthCare Corporation .............. 417,375
-------------
HOTELS - 0.2%
7,000 Marriott International, Inc. - Class A ..... 220,500
-------------
MANUFACTURING - 3.7%
5,000 Cooper Tire & Rubber Company ............... 62,813
8,387 Delphi Automotive Systems Corporation ...... 134,192
9,500 General Dynamics Corporation ............... 472,625
6,500 Honeywell International, Inc. .............. 342,469
12,200 Johnson Controls, Inc. ..................... 659,562
10,000 Leggett & Platt, Inc. ...................... 215,000
5,500 Mueller Industries, Inc.(a) ................ 167,062
14,000 Pall Corporation ........................... 314,125
38,786 Tyco International, Ltd. ................... 1,934,452
4,000 Worthington Industries, Inc. ............... 49,500
-------------
4,351,800
-------------
METAL AND MINING - 0.9%
12,000 Alcoa, Inc. ................................ 843,000
10,000 Newmont Mining Corporation ................. 224,375
-------------
1,067,375
-------------
MULTIMEDIA - 0.7%
8,000 Meredith Corporation ....................... 221,500
12,000 Viacom, Inc. - Class A(a) .................. 641,250
-------------
862,750
-------------
12
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS - 95.6% (CONTINUED) VALUE
--------------------------------------------------------------------------------
OIL/ENERGY - 5.1%
33,082 BP Amoco Plc ............................... $ 1,755,414
10,000 Burlington Resources, Inc. ................. 370,000
13,000 Chevron Corporation ........................ 1,201,688
10,000 Enron Corporation .......................... 748,750
14,650 Exxon Mobil Corporation .................... 1,139,953
7,500 Halliburton Company ........................ 307,500
12,000 Nabors Industries, Inc.(a) ................. 465,750
-------------
5,989,055
-------------
PAPER AND FOREST PRODUCTS - 0.8%
11,455 International Paper Company ................ 489,701
5,000 Mead Corporation ........................... 174,687
8,000 Willamette Industries, Inc. ................ 321,000
-------------
985,388
-------------
RACETRACKS - 0.2%
11,000 Speedway Motorsports, Inc.(a) .............. 274,312
-------------
RETAIL STORES - 6.4%
7,000 Abercrombie & Fitch Company - Class A(a) ... 112,000
16,000 Circuit City Stores - Circuit City Group ... 974,000
49,500 Home Depot, Inc. ........................... 3,192,750
7,500 Target Corporation ......................... 560,625
32,000 Wal-Mart Stores, Inc. ...................... 1,776,000
33,000 Walgreen Company ........................... 849,750
-------------
7,465,125
-------------
SERVICES - COMPUTER - 5.4%
12,500 Adobe Systems, Inc. ........................ 1,391,406
12,500 America Online, Inc.(a) .................... 840,625
22,200 Automatic Data Processing, Inc. ............ 1,071,150
24,000 Computer Sciences Corporation(a) ........... 1,899,000
9,500 Electronic Data Systems Corporation ........ 609,781
2,500 Inktomi Corporation(a) ..................... 487,500
-------------
6,299,462
-------------
SERVICES - CONSUMER - 0.0%
9,000 HEALTHSOUTH Corporation(a) ................. 50,062
-------------
TELECOMMUNICATION EQUIPMENT - 8.1%
6,600 Applied Materials, Inc.(a) ................. 622,050
4,000 JDS Uniphase Corporation(a) ................ 482,250
7,000 Lucent Technologies, Inc. .................. 425,250
4,000 Nokia Oyj .................................. 869,000
24,000 Nortel Networks Corporation ................ 3,024,000
36,000 Scientific-Atlanta, Inc. ................... 2,283,750
22,000 Tellabs, Inc.(a) ........................... 1,385,656
6,000 Titan Corporation(a) ....................... 306,000
-------------
9,397,956
-------------
UTILITIES - 5.8%
14,000 AT&T Corporation ........................... 787,500
24,000 BellSouth Corporation ...................... 1,128,000
18,490 Duke Energy Corporation .................... 970,725
59,900 SBC Communications, Inc. ................... 2,515,800
18,000 US WEST, Inc. .............................. 1,307,250
-------------
6,709,275
-------------
TOTAL COMMON STOCKS - 95.6% (COST $52,234,641) $111,372,877
-------------
13
<PAGE>
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKETS - 6.8% VALUE
--------------------------------------------------------------------------------
7,865,603 Firstar Stellar Treasury Fund (Cost $7,865,603) $ 7,865,603
-------------
TOTAL INVESTMENTS AT VALUE - 102.4%
(COST $60,100,244) ......................... $119,238,480
LIABILITIES IN EXCESS OF OTHER ASSETS - (2.4%) (2,791,858)
-------------
NET ASSETS - 100.0% ........................... $116,446,622
============
(a) Non-income producing security.
See accompanying notes to financial statements.
14
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
PAR VALUE U.S. TREASURY AND AGENCY OBLIGATIONS - 30.3%
--------------------------------------------------------------------------------
U.S. TREASURY NOTES - 5.8%
$ 20,000 8.75%, due 08/15/2000 ...................... $ 20,212
50,000 8.50%, due 11/15/2000 ...................... 50,641
140,000 8.00%, due 05/15/2001 ...................... 142,319
125,000 7.875%, due 08/15/2001 ..................... 127,227
850,000 5.75%, due 04/30/2003 ...................... 833,000
750,000 5.875%, due 11/15/2005 ..................... 734,297
750,000 5.50%, due 02/15/2008 ...................... 715,312
-------------
2,623,008
-------------
FEDERAL FARM CREDIT BANK BONDS - 1.7%
500,000 6.00%, due 01/07/2008 ...................... 465,726
325,000 6.06%, due 05/28/2013 ...................... 294,537
-------------
760,263
-------------
FEDERAL HOME LOAN BANK BONDS - 5.7%
500,000 7.57%, due 08/19/2004 ...................... 508,702
500,000 6.045%, due 12/10/2004 ..................... 479,370
750,000 5.925%, due 04/09/2008 ..................... 692,728
500,000 5.52%, due 09/23/2008 ...................... 446,906
500,000 5.42%, due 09/23/2008 ...................... 443,766
-------------
2,571,472
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS - 4.7%
500,000 6.345%, due 11/01/2005 ..................... 482,823
895,000 7.44%, due 09/20/2006 ...................... 881,969
800,000 7.04%, due 01/09/2007 ...................... 777,006
-------------
2,141,798
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS - 12.4%
500,000 6.63%, due 06/20/2005 ...................... 489,996
650,000 7.65%, due 10/06/2006 ...................... 642,975
500,000 7.36%, due 02/07/2007 ...................... 486,353
500,000 7.125%, due 3/15/2007 ...................... 499,564
400,000 7.70%, due 04/10/2007 ...................... 393,466
500,000 6.62%, due 06/25/2007 ...................... 486,013
500,000 7.16%, due 06/26/2007 ...................... 483,306
500,000 7.00%, due 07/17/2007 ...................... 482,930
750,000 6.08%, due 12/15/2010 ...................... 689,060
400,000 6.80%, due 08/27/2012 ...................... 380,208
600,000 6.875%, due 09/01/2012 ..................... 569,093
-------------
5,602,964
-------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(Cost $14,549,929) ......................... $ 13,699,505
-------------
15
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES - 15.8%
--------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 15.8%
$ 12,671 Pool #15032, 7.50%, due 02/15/2007 ......... $ 12,560
384,211 Pool #438434, 6.50%, due 01/15/2013 ........ 371,032
569,950 Pool #470177, 7.00%, due 03/15/2014 ........ 561,800
389,575 Pool #518403, 7.00%, due 09/15/2014 ........ 384,004
10,852 Pool #176413, 7.50%, due 09/15/2016 ........ 10,757
14,872 Pool #170784, 8.00%, due 12/15/2016 ........ 15,040
11,855 Pool #181540, 8.00%, due 02/15/2017 ........ 11,989
483,398 Pool #493659, 6.50%, due 12/15/2018 ........ 455,894
404,119 Pool #476695, 6.50%, due 10/15/2023 ........ 381,126
370,794 Pool #366710, 6.50%, due 02/15/2024 ........ 349,697
493,291 Pool #453826, 7.25%, due 09/15/2027 ........ 485,679
695,862 Pool #412360, 7.00%, due 11/15/2027 ........ 673,951
581,989 Pool #454162, 7.00%, due 05/15/2028 ........ 563,664
978,026 Pool #2617, 7.50%, due 07/20/2028 .......... 963,656
463,712 Pool #158794, 7.00%, due 09/15/2028 ........ 449,111
469,481 Pool #48760, 6.50%, due 12/15/2028 ......... 442,769
970,737 Pool #506618, 7.00%, due 03/15/2029 ........ 940,171
-------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $7,363,455) .......................... $ 7,072,900
-------------
================================================================================
PAR VALUE CORPORATE BONDS - 47.2% VALUE
--------------------------------------------------------------------------------
FINANCE - 22.9%
AmSouth Bancorp,
$ 550,000 7.75%, due 05/15/2004 ...................... $ 549,482
-------------
Banc One Corporation,
600,000 7.00%, due 07/15/2005 ...................... 580,922
500,000 6.875%, due 08/01/2006 ..................... 480,026
-------------
1,060,948
-------------
Bank of America Corporation,
496,000 8.375%, due 03/15/2002 ..................... 504,257
750,000 7.125%, due 03/01/2009 ..................... 727,602
-------------
1,231,859
-------------
Bear Stearns Company,
170,000 9.375%, due 06/01/2001 ..................... 173,348
-------------
Duke Capital Corporation,
750,000 7.50%, due 10/01/2009 ...................... 736,626
-------------
General Electric Capital Corporation,
100,000 7.24%, due 01/15/2002 ...................... 100,268
150,000 7.50%, due 03/15/2002 ...................... 151,054
-------------
251,322
-------------
J.P. Morgan & Company,
500,000 7.25%, due 01/15/2002 ...................... 498,152
500,000 6.00%, due 01/15/2009 ...................... 444,994
-------------
943,146
-------------
Merrill Lynch & Company, Inc.,
745,000 7.375%, due 08/17/2002 ..................... 742,989
1,000,000 7.00%, due 04/27/2008 ...................... 957,499
-------------
1,700,488
-------------
16
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS - 47.2% (CONTINUED) VALUE
--------------------------------------------------------------------------------
NationsBank,
$ 550,000 7.625%, due 04/15/2005 ..................... $ 548,578
-------------
Regions Financial Corporation,
350,000 7.80%, due 12/01/2002 ...................... 350,700
-------------
Salomon, Inc.,
507,000 7.50%, due 02/01/2003 ...................... 506,893
-------------
Sears Roebuck Acceptance Corporation,
700,000 6.00%, due 03/20/2003 ...................... 670,710
-------------
SouthTrust Bank of Alabama, N.A.,
665,000 7.00%, due 11/15/2008 ...................... 637,881
-------------
Transamerica Financial Corporation,
1,000,000 7.50%, due 03/15/2004 ...................... 986,990
-------------
TOTAL FINANCE CORPORATE BONDS ................. 10,348,971
-------------
INDUSTRIAL - 19.4%
BP America, Inc.,
265,000 8.50%, due 04/15/2001 ...................... 268,815
-------------
Coca-Cola Company,
600,000 6.625%, due 08/01/2004 ..................... 582,636
-------------
Conoco, Inc.,
750,000 6.35%, due 04/15/2009 ...................... 698,798
-------------
duPont (E.I.) de Nemours & Company,
150,000 9.15%, due 04/15/2000 ...................... 150,086
425,000 6.75%, due 10/15/2002 ...................... 420,345
-------------
570,431
-------------
Ford Motor Company,
1,000,000 7.25%, due 10/01/2008 ...................... 985,710
-------------
General Motors Corporation,
565,000 7.10%, due 03/15/2006 ...................... 554,726
-------------
Hanson Overseas,
1,100,000 7.375%, due 01/15/2003 ..................... 1,090,914
-------------
International Business Machines Corporation,
1,000,000 7.25%, due 11/01/2002 ...................... 1,003,604
-------------
Kimberly-Clark Corporation,
240,000 8.625%, due 05/01/2001 ..................... 243,930
-------------
Mobil Corporation,
100,000 8.375%, due 02/12/2001 ..................... 101,095
-------------
Philip Morris Companies, Inc.,
700,000 7.125%, due 10/01/2004 ..................... 657,017
-------------
Raytheon Company,
800,000 6.50%, due 07/15/2005 ...................... 754,045
-------------
17
<PAGE>
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS - 47.2% (CONTINUED) VALUE
--------------------------------------------------------------------------------
Wal-Mart Stores, Inc.,
$ 170,000 9.10%, due 07/15/2000 ...................... $ 171,000
100,000 8.625%, due 04/01/2001 ..................... 101,492
1,000,000 7.50%, due 05/15/2004 ...................... 1,015,667
-------------
1,288,159
-------------
TOTAL INDUSTRIAL CORPORATE BONDS .............. 8,799,880
-------------
UTILITY - 4.9%
AT&T Corporation,
1,000,000 6.00%, due 03/15/2009 ...................... 903,787
-------------
BellSouth Corporation,
250,000 7.75%, due 02/15/10 ........................ 253,850
-------------
Emerson Electric Company,
587,000 6.30%, due 11/01/2005 ...................... 558,380
-------------
Scana Corporation,
500,000 6.05%, due 01/13/2003 ...................... 482,744
-------------
TOTAL UTILITY CORPORATE BONDS ................. 2,198,761
-------------
TOTAL CORPORATE BONDS
(Amortized Cost $22,123,380) ............... $ 21,347,612
-------------
================================================================================
PAR VALUE MUNICIPAL OBLIGATIONS - 2.2% VALUE
--------------------------------------------------------------------------------
Alabama State Public School & College Auth.,
$ 1,000,000 7.15%, due 09/01/2009 (Cost $972,490) ...... $ 977,229
-------------
================================================================================
SHARES MONEY MARKETS - 3.1% VALUE
--------------------------------------------------------------------------------
1,415,617 Firstar Stellar Treasury Fund (Cost $1,415,617) $ 1,415,617
-------------
TOTAL INVESTMENTS AT VALUE - 98.6%
(COST $46,424,871) ......................... $ 44,512,863
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.4% .. 642,928
-------------
NET ASSETS - 100.0% ........................... $ 45,155,791
============
See accompanying notes to financial statements.
18
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS - 94.1% VALUE
--------------------------------------------------------------------------------
Alabama Mental Health Finance Auth. Special Tax,
$ 300,000 5.00%, due 05/01/2006 ...................... $ 299,988
-------------
Alabama Special Care Facilities Financing Auth. Rev.,
400,000 5.375%, due 11/01/2012 ..................... 401,588
-------------
Alabama State, GO,
100,000 5.70%, due 12/01/2002 ...................... 102,522
-------------
Alabama State Industrial Access Road & Bridge Corp., GO,
100,000 5.25%, due 06/01/2003 ...................... 100,862
-------------
Alabama State Mun. Elec. Auth. Power Supply Rev.,
150,000 5.625%, due 09/01/2000 ..................... 150,856
400,000 6.50%, due 09/01/2005, prerefunded
09/01/2001 at 101 ....................... 414,708
340,000 5.75%, due 09/01/2001 ...................... 344,991
-------------
910,555
-------------
Alabama State Public School & College Auth. Rev.,
100,000 4.40%, due 12/01/2000 ...................... 100,190
205,000 5.00%, due 12/01/2005 ...................... 205,588
250,000 5.25%, due 11/01/2005 ...................... 253,852
200,000 5.125%, due 11/01/2010 ..................... 199,586
300,000 5.00%, due 11/01/2012 ...................... 291,261
225,000 5.125%, due 11/01/2013 ..................... 219,319
-------------
1,269,796
-------------
Alabama Water Pollution Control Rev.,
190,000 6.25%, due 08/15/2004 ...................... 199,971
-------------
Anniston, AL, GO,
250,000 5.50%, due 01/01/2004 ...................... 255,920
-------------
Anniston, AL, Regional Medical Center Board Hospital Rev.,
20,000 7.375%, due 07/01/2006, ETM ................ 21,211
-------------
Athens, AL, School Warrants,
335,000 5.05%, due 08/01/2015 ...................... 318,096
-------------
Auburn University, Alabama, Rev.,
150,000 5.20%, due 06/01/2004 ...................... 151,893
325,000 5.25%, due 04/01/2005 ...................... 329,417
-------------
481,310
-------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003 ...................... 206,508
400,000 5.00%, due 02/01/2007 ...................... 399,056
200,000 4.55%, due 02/01/2009 ...................... 181,604
-------------
787,168
-------------
Baldwin Co., AL, Board of Education Rev.,
300,000 5.90%, due 12/01/2001 ...................... 303,279
-------------
Birmingham, AL, GO,
100,000 5.80%, due 04/01/2002 ...................... 102,115
200,000 5.90%, due 04/01/2003 ...................... 206,170
-------------
308,285
-------------
19
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS - 94.1% (CONTINUED) VALUE
--------------------------------------------------------------------------------
Birmingham, AL, Industrial Water Board Rev.,
$ 100,000 5.00%, due 03/01/2001 ...................... $ 100,700
100,000 6.00%, due 07/01/2007 ...................... 106,197
-------------
206,897
-------------
Birmingham, AL, Medical Clinic Board Rev.,
60,000 7.30%, due 07/01/2005, ETM ................. 63,625
-------------
Birmingham, AL, Waterworks & Sewer Board Rev.,
50,000 5.90%, due 01/01/2003 ...................... 51,914
400,000 6.15%, due 01/01/2006 ...................... 416,976
-------------
468,890
-------------
Birmingham-Southern College, AL, Private Education
Bldg. Auth. Rev.,
500,000 5.10%, due 12/01/2012 ...................... 480,215
-------------
DCH Health Care Auth. of Alabama Rev.,
55,000 5.00%, due 06/01/2004 ...................... 54,976
-------------
Decatur, AL, GO,
300,000 5.00%, due 06/01/2009 ...................... 298,020
-------------
Decatur, AL, Water Rev.,
100,000 5.00%, due 05/01/2014 ...................... 95,233
-------------
Dothan, AL, GO,
500,000 5.50%, due 09/01/2014 ...................... 504,620
-------------
Fairhope, AL, Public Improvements Warrants,
295,000 5.10%, due 06/01/2014 ...................... 281,126
-------------
Fairhope, AL, Utility Rev.,
200,000 5.10%, due 12/01/2008 ...................... 200,150
-------------
Florence, AL, School Warrants,
200,000 4.65%, due 12/01/2012 ...................... 185,208
400,000 5.75%, due 09/01/2015 ...................... 406,404
-------------
591,612
-------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009 ...................... 299,751
-------------
Hoover, AL, Board of Education Special Tax,
200,000 6.625%, due 02/01/2010, prerefunded
02/01/2001 at 102 ....................... 207,812
-------------
Hoover, AL, Board of Education, GO,
400,000 6.00%, due 02/15/2006 ...................... 420,524
-------------
Houston Co., AL, GO,
250,000 5.00%, due 07/01/2002 ...................... 251,512
300,000 5.60%, due 10/15/2014 ...................... 305,352
-------------
556,864
-------------
Huntsville, AL, GO,
115,000 5.15%, due 08/01/2000 ...................... 115,399
100,000 5.20%, due 11/01/2000 ...................... 100,630
500,000 5.50%, due 11/01/2002 ...................... 509,845
100,000 5.90%, due 11/01/2005 ...................... 104,589
250,000 5.25%, due 11/01/2011 ...................... 250,592
300,000 5.40%, due 02/01/2010 ...................... 303,714
-------------
1,384,769
-------------
20
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS - 94.1% (CONTINUED) VALUE
--------------------------------------------------------------------------------
Huntsville, AL, Electric Systems Rev.,
$ 150,000 6.10%, due 12/01/2000 ...................... $ 151,866
150,000 5.00%, due 12/01/2003 ...................... 150,888
250,000 4.80%, due 12/01/2012 ...................... 235,210
-------------
537,964
-------------
Huntsville, AL, Water Systems Rev.,
150,000 5.15%, due 05/01/2004 ...................... 151,587
150,000 5.25%, due 05/01/2005 ...................... 151,694
200,000 4.70%, due 11/01/2013 ...................... 183,100
-------------
486,381
-------------
Jefferson Co., AL, GO,
150,000 5.55%, due 04/01/2002 ...................... 152,206
100,000 5.00%, due 04/01/2004 ...................... 100,179
-------------
252,385
-------------
Jefferson Co., AL, Board of Education Capital
Outlay Warrants,
300,000 5.70%, due 02/15/2011 ...................... 315,144
-------------
Jefferson Co., AL, Sewer Rev.,
140,000 5.15%, due 09/01/2002 ...................... 141,471
50,000 5.50%, due 09/01/2003, ETM ................. 51,136
300,000 5.75%, due 09/01/2005 ...................... 310,845
-------------
503,452
-------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007 ...................... 307,872
-------------
Madison Co., AL, Board of Education Capital
Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004 ...................... 179,611
250,000 5.10%, due 09/01/2011 ...................... 245,495
-------------
425,106
-------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007 ...................... 334,675
200,000 4.40%, due 02/01/2011 ...................... 182,148
400,000 4.85%, due 02/01/2013 ...................... 376,120
-------------
892,943
-------------
Mobile Co., AL, Board of Education Capital
Outlay Warrants,
400,000 5.00%, due 03/01/2008 ...................... 398,176
-------------
Mobile Co., AL, Gas Tax Antic. Warrants,
100,000 4.50%, due 02/01/2003 ...................... 98,844
-------------
Mobile, AL, GO,
200,000 5.40%, due 08/15/2000 ...................... 200,952
25,000 6.30%, due 08/01/2001 ...................... 25,590
25,000 6.25%, due 08/01/2001 ...................... 25,574
275,000 6.20%, due 02/15/2007, ETM ................. 292,496
180,000 5.75%, due 02/15/2016 ...................... 182,601
-------------
727,213
-------------
Mobile, AL, Water & Sewer Commissioners Rev.,
55,000 6.30%, due 01/01/2003 ...................... 57,034
-------------
Montgomery Co., AL, GO,
100,000 5.20%, due 11/01/2006 ...................... 100,846
-------------
Montgomery, AL, GO,
200,000 4.70%, due 05/01/2002 ...................... 199,918
500,000 5.10%, due 10/01/2008 ...................... 501,025
-------------
700,943
-------------
21
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS - 94.1% (CONTINUED) VALUE
--------------------------------------------------------------------------------
Montgomery, AL, Waterworks & Sanitation Rev.,
$ 200,000 5.85%, due 03/01/2003 ...................... $ 205,042
400,000 5.60%, due 09/01/2009 ...................... 411,956
-------------
616,998
-------------
Mountain Brook, AL, Board of Education Capital
Outlay Warrants,
405,000 4.80%, due 02/15/2011 ...................... 387,241
-------------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010 ...................... 411,972
-------------
Opelika, AL, GO,
100,000 4.60%, due 03/01/2003 ...................... 99,458
100,000 5.30%, due 07/01/2003 ...................... 101,570
-------------
201,028
-------------
Scottsboro, AL, Waterworks Sewer & Gas Rev.,
200,000 4.35%, due 08/01/2011 ...................... 180,372
-------------
Shelby Co., AL, GO,
205,000 5.20%, due 08/01/2000 ...................... 205,744
50,000 5.35%, due 08/01/2001 ...................... 50,544
-------------
256,288
-------------
Shelby Co., AL, Hospital Board Rev.,
35,000 6.60%, due 02/01/2001, ETM ................. 35,666
25,000 6.60%, due 02/01/2002, ETM ................. 25,801
40,000 6.60%, due 02/01/2003, ETM ................. 41,818
-------------
103,285
-------------
Tuscaloosa, AL, Board of Education Special
Tax Warrants,
75,000 5.70%, due 02/15/2005 ...................... 77,358
125,000 6.00%, due 02/15/2009 ...................... 129,911
300,000 4.85%, due 02/15/2013 ...................... 281,844
-------------
489,113
-------------
Tuscaloosa, AL, Board of Education, GO,
100,000 5.10%, due 02/01/2004 ...................... 100,823
300,000 4.625%, due 08/01/2008 ..................... 287,652
-------------
388,475
-------------
University of Alabama General Fee Series A Rev.,
50,000 5.00%, due 11/01/2000 ...................... 50,248
240,000 5.10%, due 10/01/2002 ...................... 242,239
400,000 5.25%, due 06/01/2010 ...................... 402,344
100,000 5.375%, due 06/01/2013 ..................... 100,287
-------------
795,118
-------------
Vestavia Hills, AL, Board of Education Capital
Outlay Rev.,
55,000 5.25%, due 02/01/2004 ...................... 55,857
-------------
Vestavia Hills, AL, Warrants,
125,000 4.90%, due 04/01/2005 ...................... 124,639
-------------
TOTAL ALABAMA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS - 94.1%
(Cost $21,716,842) ......................... $ 21,690,324
-------------
22
<PAGE>
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKETS - 4.7%
--------------------------------------------------------------------------------
1,075,857 Firstar Tax-Free Fund (Cost $1,075,857) ....... $ 1,075,857
-------------
TOTAL INVESTMENTS AT VALUE - 98.8%
(COST $22,792,699) ......................... $ 22,766,181
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.2% .. 282,159
-------------
NET ASSETS - 100.0% ........................... $ 23,048,340
============
ETM - Escrowed to maturity.
See accompanying notes to financial statements.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Government Street Equity Fund, The Government Street Bond Fund, and The
Alabama Tax Free Bond Fund (the Funds) are each a no-load series of The
Williamsburg Investment Trust (the Trust). The Trust, an open-end management
investment company registered under the Investment Company Act of 1940, was
organized as a Massachusetts business trust on July 18, 1988.
The Government Street Equity Fund's investment objective is to seek capital
appreciation through the compounding of dividends and capital gains, both
realized and unrealized, on its investments in common stocks.
The Government Street Bond Fund's investment objectives are to preserve capital,
to provide current income and to protect the value of the portfolio against the
effects of inflation.
The Alabama Tax Free Bond Fund's investment objectives are to provide current
income exempt from both federal income taxes and the personal income taxes of
Alabama and to preserve capital.
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 The Government Street Equity
Fund; declared and paid monthly to shareholders of The Government Street Bond
Fund; and declared daily and paid monthly to shareholders of The Alabama Tax
Free Bond Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income dividends and capital gain
distributions are determined in accordance with income tax regulations.
24
<PAGE>
Security transactions - Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Federal income tax - It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies,
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 2000:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
GOVERNMENT GOVERNMENT ALABAMA
STREET STREET TAX FREE
EQUITY FUND BOND FUND BOND FUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized appreciation ............ $ 60,272,476 $ 87,338 $ 233,036
Gross unrealized depreciation ............ (1,183,194) (1,999,346) (329,106)
------------ ------------ ------------
Net unrealized appreciation (depreciation) $ 59,089,282 $ (1,912,008) $ (96,070)
============ ============ ============
Federal income tax cost .................. $ 60,149,198 $ 46,424,871 $ 22,862,251
============ ============ ============
------------------------------------------------------------------------------------------
</TABLE>
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for The Government Street Equity Fund and The
Alabama Tax Free Bond Fund is due to certain timing differences in the
recognition of capital losses under income tax regulations and generally
accepted accounting principles.
As of March 31, 2000, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had capital loss carryforwards for federal income tax purposes of
$760,308 and $176,717, respectively, which expire through the year 2008. In
addition, The Government Street Bond Fund had net realized capital losses of
$145,238 during the period from 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 capital loss carryforwards and "post-October"
losses may be utilized in future years to offset net realized capital gains
prior to distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2000, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $22,178,843 and $16,307,402, respectively, for The Government Street
Equity Fund, $11,563,587 and $7,842,909, respectively, for The Government Street
Bond Fund, and $5,922,774 and $3,884,720, respectively, for The Alabama Tax Free
Bond Fund.
25
<PAGE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly, at an
annual rate of .60% of its average daily net assets up to $100 million and .50%
of such assets in excess of $100 million. The Government Street Bond Fund pays
the Adviser a fee at an annual rate of .50% of its average daily net assets up
to $100 million and .40% of such net assets in excess of $100 million. The
Alabama Tax Free Bond Fund pays the Adviser a fee at an annual rate of .35% of
its average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
The Adviser currently intends to limit the total operating expenses of The
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $15,400 of its investment advisory fees for the
Fund during the year ended March 31, 2000.
Certain Trustees and officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
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 The
Government Street Equity Fund at an annual rate of .20% of its average daily net
assets up to $25 million; .175% of the next $25 million of such assets; and .15%
of such net assets in excess of $50 million. From The Government Street Bond
Fund, IFS receives a monthly fee of .075% of its average daily net assets up to
$200 million and .05% of such assets in excess of $200 million. From The Alabama
Tax Free Bond Fund, IFS receives a monthly fee of .15% of its average daily net
assets up to $200 million and .10% of such assets in excess of $200 million. The
fee for each Fund is subject to a $2,000 monthly minimum. In addition, each Fund
pays 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.
4. FEDERAL TAX INFORMATION FOR SHAREHOLDERS (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 March 31, 2000, The
Government Street Equity Fund declared and paid a long-term capital gain
distribution of $0.4190 per share. As required by federal regulations,
shareholders will receive notification of their portion of a Fund's taxable
capital gain distribution, if any, paid during the 2000 calendar year early in
2001.
In accordance with federal tax requirements, The Alabama Tax Free Bond Fund
designates its respective dividends paid from net investment income during the
year ended March 31, 2000, as "exempt-interest dividends."
26
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Government Street Equity Fund, The Government Street Bond Fund and The
Alabama Tax Free Bond Fund, (each a series of The Williamsburg Investment
Trust), including the portfolios of investments, as of March 31, 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 and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Government Street Equity Fund, The Government Street Bond Fund and The Alabama
Tax Free Bond Fund, as of March 31, 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
27
<PAGE>
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
------------------------------
No Load Mutual Funds
INVESTMENT ADVISER
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, AL 36633
ADMINISTRATOR
Integrated Fund Services, Inc.
P.O. Box 5354
Cincinnati, OH 45201-5354
1-800-443-4249
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
BOARD OF TRUSTEES
Richard Mitchell, President
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
PORTFOLIO MANAGERS
Thomas W. Leavell,
The Government Street Equity Fund
Mary Shannon Hope,
The Government Street Bond Fund
Timothy S. Healey,
The Alabama Tax Free Bond Fund
<PAGE>
THE
JAMESTOWN
FUNDS
No-Load Funds
ANNUAL REPORT
March 31, 2000
Investment Adviser
Lowe, Brockenbrough & Company, Inc.
Richmond, Virginia
THE JAMESTOWN FUNDS
INVESTMENT ADVISER
Lowe, Brockenbrough & Company, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
ADMINISTRATOR
Integrated Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1-800-443-4249
INDEPENDENT AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
<PAGE>
LETTER TO SHAREHOLDERS MAY 19, 2000
================================================================================
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited Annual Report of the
Jamestown Funds for the year ended March 31, 2000.
THE JAMESTOWN BALANCED FUND
For the fiscal year ended March 31, 2000, the Jamestown Balanced Fund produced a
total return of 15.9% compared to the Lipper Balanced Index of 10.4%. The equity
market was strong over the past twelve months, but volatility increased to
historic highs as the market struggled between excellent corporate profit growth
and rising interest rates. Technology stocks continued as the driving force
behind the market advance with a 78.2% return over the past year. The Federal
Reserve raised the Federal Funds rate five times during the past twelve months,
and the Lehman Intermediate Bond Index only rose 2.1%.
The Jamestown Balanced Fund returned 18.2% on an annualized basis for the three
years ended March 31, 2000, comparing favorably to the 15.6% return for the
Lipper Balanced Index. For the five year period, the Fund generated a return of
17.8% versus 15.7% for the comparable Lipper Balanced Index.
The Fund grew in size to over $128 million in total net assets with 279
shareholders as of March 31, 2000.
THE JAMESTOWN EQUITY FUND
For the fiscal year ended March 31, 2000, the Jamestown Equity Fund had a total
return of 24.0%, outperforming the 19.3% return for the Lipper Large Cap Core
Index and the 17.9% return for the S&P 500 Index. Over the twelve months, the
equity market was driven by the 78.2% return generated by technology stocks.
Capital Goods stocks slightly outpaced the S&P 500 with a gain of 19.2%, but all
of the remaining major sectors underperformed the S&P 500. Despite very strong
corporate earnings growth, the market became increasingly concerned about the
Federal Reserve's desire to slow the economy by raising interest rates and
volatility increased significantly.
The Jamestown Equity Fund returned 24.5% on an annualized basis for the three
years ended March 31, 2000, versus 26.5% for the Lipper Large Cap Core Index.
For the five year period, the Fund returned 23.3% as compared to 24.5% for the
Index.
The Fund grew in size to over $77 million in total net assets with 361
shareholders as of March 31, 2000.
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ended March 31, 2000, the Jamestown Tax Exempt Virginia Fund
had a total return of 0.1%, compared to -0.2% for the Lipper Intermediate
Municipal Fund Index and -0.1% for the Lehman Municipal Bond Index. Yields rose
and prices dropped on municipal bonds as the Federal Reserve decided to raise
the federal funds rate by 25 basis points five times over the past twelve
months. As of March 31, 2000, this benchmark rate stood at 6.0%.
Some key characteristics of the Jamestown Tax Exempt Virginia Fund are as
follows:
Average Effective Maturity ............. 7.6 years
Average Effective Duration ............. 5.9 years
Average Weighted Coupon ................ 5.31%
SEC Yield .............................. 4.43%
Average Credit Quality ................. AA
2
<PAGE>
The Jamestown Tax Exempt Virginia Fund returned 4.3% on an annualized basis for
the three years ended March 31, 2000, versus 4.4% for the comparable Lipper
Intermediate Municipal Fund Index. For the five year period, the Jamestown Tax
Exempt Virginia Fund generated an annualized return of 4.7%, as to compared to
the 4.9% return for the Lipper Intermediate Municipal Fund Index.
The Jamestown Tax Exempt Virginia Fund grew in size to over $29 million in total
net assets with 79 shareholders as of March 31, 2000.
THE JAMESTOWN INTERNATIONAL EQUITY FUND
For the year ended March 31, 2000, the Jamestown International Equity Fund had a
total return of 39.4%. This return compares favorably with the 36.9% return
generated by the Lipper International Index and the 25.1% return of the Morgan
Stanley EAFE Index. The period was characterized by a strong rebound in Japan
and other Asian markets after the financial and economic crisis of late 1998.
Most European markets lagged the Asian markets after several years of strong
outperformance.
Throughout the year, the Fund benefited from a heavy weighting in
telecommunication and technology companies. As was the case in domestic markets,
shares of companies in the telecommunications and technology fields led the
markets higher around the globe. Foreign markets also benefited from a strong
economic rebound after the currency induced problems of 1998.
For the three years ended March 31, 2000, the Jamestown International Equity
Fund returned 25.2% on an annualized basis, versus 17.8% for the comparable
Lipper Index and 16.3% for the EAFE Index.
The Fund grew in size to over $85 million in total net assets with 292
shareholders as of March 31, 2000.
Thank you for your continued confidence in The Jamestown Funds.
Sincerely,
/s/ Austin Brockenbrough, III
Austin Brockenbrough, III
President
Jamestown Tax Exempt Virginia Fund
Jamestown International Equity Fund
/s/ Henry C. Spalding, Jr.
Henry C. Spalding, Jr.
President
Jamestown Balanced Fund
Jamestown Equity Fund
3
<PAGE>
The Jamestown Balanced Fund
--------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Balanced Fund, the Standard & Poor's 500 Index and the Consumer Price Index
3/00
------
The Jamestown Balanced Fund $33,922
Standard & Poor's 500 Index $60,176
Consumer Price Index $13,290
--------------------------------------------------------------------------------
-------------------------------------
The Jamestown Balanced Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
15.90% 17.88% 13.12%
-------------------------------------
*Initial public offering of shares was July 3, 1989.
Past performance is not predictive of future performance.
The Jamestown Equity Fund
--------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
3/00
------
The Jamestown Equity Fund $32,944
Standard & Poor's 500 Index $40,543
Consumer Price Index $11,971
--------------------------------------------------------------------------------
-------------------------------------
The Jamestown Equity Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
24.04% 23.30% 17.64%
-------------------------------------
*Initial public offering of shares was December 1, 1992.
Past performance is not predictive of future performance.
4
<PAGE>
The Jamestown Tax Exempt Virginia Fund
--------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Tax Exempt Virginia Fund, the Lipper Intermediate Municipal Fund Index and
the Lehman Municipal Bond Index
3/00
------
The Jamestown Tax Exempt Virginia Fund $13,066
Lipper Intermediate Municipal Fund Index $12,619
Lehman Municipal Bond Index $13,980
--------------------------------------------------------------------------------
-------------------------------------
The Jamestown Tax Exempt Virginia Fund
Average Annual Total Returns
1 Year 5 Years Since Inception*
0.04% 4.74% 4.14%
-------------------------------------
*Initial public offering of shares was September 1, 1993.
Past performance is not predictive of future performance.
The Jamestown International Equity Fund
--------------------------------------------------------------------------------
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
International Equity Fund and the Morgan Stanley EAFE Index
3/00
------
The Jamestown International Equity Fund $19,478
Morgan Stanley EAFE Index $15,517
--------------------------------------------------------------------------------
-------------------------------------
The Jamestown International Equity Fund
Average Annual Total Returns
1 Year Since Inception*
39.35% 18.12%
-------------------------------------
*Initial public offering of shares was April 16, 1996.
Past performance is not predictive of future performance.
5
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000
================================================================================================================================
Jamestown Jamestown
Jamestown Jamestown Tax Exempt International
Balanced Equity Virginia Equity
Fund Fund Fund Fund
--------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
<S> <C> <C> <C> <C>
At acquisition cost ........................ $ 86,007,684 $ 45,080,116 $ 29,189,683 $ 57,812,502
============= ============ ============ ============
At value (Note 1) .......................... $ 127,621,603 $ 78,047,274 $ 29,010,792 $ 83,187,240
Cash denominated in foreign currency (Note 5) ...... -- -- -- 1,014,108
Dividends receivable ............................... 40,485 33,484 854 228,963
Interest receivable ................................ 666,120 -- 384,475 7,913
Receivable for securities sold ..................... -- -- 509,208 1,357,060
Receivable for capital shares sold ................. 369,902 3,000 400,000 3,000,244
Receivable from Administrator ...................... -- -- -- 38,875
Other assets ....................................... 11,555 24,227 2,067 29,543
------------- ------------ ------------ ------------
TOTAL ASSETS ............................... 128,709,665 78,107,985 30,307,396 88,863,946
------------- ------------ ------------ ------------
LIABILITIES
Bank overdraft ..................................... -- -- -- 580,501
Dividends payable .................................. 33,332 2,241 27,341 --
Distributions payable .............................. 168,989 218,819 -- --
Payable for securities purchased ................... -- -- 1,102,938 1,722,859
Payable for capital shares redeemed ................ 214,418 26,871 22,605 591,465
Accrued investment advisory fees (Note 3) .......... 67,684 40,582 9,671 73,087
Accrued administration fees (Note 3) ............... 16,910 10,743 3,565 12,390
Net unrealized depreciation on forward foreign
currency exchange contracts (Note 6) ....... -- -- -- 4,317
Other accrued expenses and liabilities ............. 7,247 -- 3,033 30,047
------------- ------------ ------------ ------------
TOTAL LIABILITIES .......................... 508,580 299,256 1,169,153 3,014,666
------------- ------------ ------------ ------------
NET ASSETS ................................................. $ 128,201,085 $ 77,808,729 $ 29,138,243 $ 85,849,280
============= ============ ============ ============
Net assets consist of:
Paid-in capital .................................... $ 86,734,918 $ 44,951,824 $ 29,590,313 $ 54,126,327
Accumulated net realized gains (losses) from
security and foreign currency transactions . -- -- (273,179) 6,391,613
Distributions in excess of net realized gains ...... (147,752) (110,253) -- --
Net unrealized appreciation (depreciation)
on investments ............................. 41,613,919 32,967,158 (178,891) 25,374,738
Net unrealized depreciation on translation of
assets and liabilities in foreign currencies -- -- -- (43,398)
------------- ------------ ------------ ------------
Net assets ................................................. $ 128,201,085 $ 77,808,729 $ 29,138,243 $ 85,849,280
============= ============ ============ ============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ......... 6,466,082 2,990,536 2,975,269 4,772,780
============= ============ ============ ============
Net asset value, offering price and redemption
price per share (Note 1) ........................... $ 19.83 $ 26.02 $ 9.79 $ 17.99
============= ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
=================================================================================================================================
Jamestown Jamestown
Jamestown Jamestown Tax Exempt International
Balanced Equity Virginia Equity
Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Dividends ............................................ $ 633,703 $ 526,930 $ 1,349,019 $ 944,370
Foreign withholding taxes on dividends ............... -- -- -- (108,753)
Interest ............................................. 2,523,311 155,258 17,785 109,668
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ...................... 3,157,014 682,188 1,366,804 945,285
------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) .................... 759,276 436,091 110,838 660,974
Administration fees (Note 3) ......................... 193,587 119,167 41,496 147,384
Custodian fees ....................................... 14,992 8,496 4,362 82,536
Registration fees .................................... 17,081 15,218 1,871 17,976
Professional fees .................................... 13,945 8,326 8,326 11,946
Pricing costs ........................................ 10,220 777 7,969 9,481
Trustees' fees and expenses .......................... 8,464 8,464 8,464 8,464
Printing of shareholder reports ...................... 5,858 6,419 3,694 5,344
Other expenses ....................................... 5,157 5,928 2,378 9,137
------------ ------------ ------------ ------------
TOTAL EXPENSES ............................... 1,028,580 608,886 189,398 953,242
Expenses reimbursed through a directed
brokerage arrangement (Note 4) ............... (24,000) (18,000) -- --
------------ ------------ ------------ ------------
NET EXPENSES ................................. 1,004,580 590,886 189,398 953,242
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ................................ 2,152,434 91,302 1,177,406 (7,957)
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS AND FOREIGN CURRENCIES (Note 5)
Net realized gains (losses) from:
Security transactions ........................ 4,813,070 2,953,963 (273,179) 9,161,355
Foreign currency transactions ................ -- -- -- 59,241
Net change in unrealized appreciation/depreciation on:
Investments .................................. 10,736,573 12,102,255 (842,700) 13,892,377
Foreign currency translation ................. -- -- -- (48,490)
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES ............................... 15,549,643 15,056,218 (1,115,879) 23,064,483
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................................... $ 17,702,077 $ 15,147,520 $ 61,527 $ 23,056,526
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================================================================
Jamestown Jamestown
Balanced Fund Equity 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 ............................ $ 2,152,434 $ 2,044,580 $ 91,302 $ 194,305
Net realized gains (losses) from
security transactions .................... 4,813,070 1,234,403 2,953,963 (369,569)
Net change in unrealized appreciation/depreciation
on investments ........................... 10,736,573 4,507,324 12,102,255 5,043,678
------------- ------------- ------------ ------------
Net increase in net assets from operations ............... 17,702,077 7,786,307 15,147,520 4,868,414
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ....................... (2,152,434) (2,047,558) (91,302) (198,327)
From net realized gains from security transactions (4,880,959) (1,302,068) (2,680,161) --
------------- ------------- ------------ ------------
Decrease in net assets from distributions
to shareholders .................................. (7,033,393) (3,349,626) (2,771,463) (198,327)
------------- ------------- ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................ 8,830,494 13,392,101 8,147,118 11,342,221
Net asset value of shares issued in reinvestment
of distributions to shareholders ......... 6,724,517 3,140,088 2,521,395 171,755
Payments for shares redeemed ..................... (10,826,415) (9,573,352) (8,651,809) (4,982,200)
------------- ------------- ------------ ------------
Net increase in net assets from capital share
transactions .................................... 4,728,596 6,958,837 2,016,704 6,531,776
------------- ------------- ------------ ------------
TOTAL INCREASE IN NET ASSETS ............................. 15,397,280 11,395,518 14,392,761 11,201,863
NET ASSETS
Beginning of year ................................ 112,803,805 101,408,287 63,415,968 52,214,105
------------- ------------- ------------ ------------
End of year ...................................... $ 128,201,085 $ 112,803,805 $ 77,808,729 $ 63,415,968
============= ============= ============ ============
CAPITAL SHARE ACTIVITY
Sold ............................................. 472,789 766,478 349,898 565,307
Reinvested ....................................... 346,587 178,274 98,084 8,737
Redeemed ......................................... (579,486) (554,334) (372,354) (248,873)
------------- ------------- ------------ ------------
Net increase in shares outstanding ............... 239,890 390,418 75,628 325,171
Shares outstanding, beginning of year ............ 6,226,192 5,835,774 2,914,908 2,589,737
------------- ------------- ------------ ------------
Shares outstanding, end of year .................. 6,466,082 6,226,192 2,990,536 2,914,908
============= ============= ============ ============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
=================================================================================================================================
Jamestown Tax Exempt Jamestown
Virginia Fund International Equity Fund
----------------------------- -----------------------------
Year Year Year Year
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income (loss) ......................... $ 1,177,406 $ 886,964 $ (7,957) $ 178,500
Net realized gains (losses) from:
Security transactions ........................ (273,179) 36,651 9,161,355 2,205,161
Foreign currency transactions ................ -- -- 59,241 (56,520)
Net change in unrealized appreciation/depreciation on:
Investments .................................. (842,700) 81,607 13,892,377 1,511,375
Foreign currency translation ................. -- -- (48,490) (120,768)
------------ ------------ ------------ ------------
Net increase in net assets from operations ................... 61,527 1,005,222 23,056,526 3,717,748
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ........................... (1,177,406) (886,964) (176,037) (238,226)
From net realized gains from security transactions ... (26,368) (11,065) (3,331,220) --
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders ...................................... (1,203,774) (898,029) (3,507,257) (238,226)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............................ 8,385,959 8,922,497 90,812,642 9,046,185
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. 782,744 487,854 3,459,170 231,344
Payments for shares redeemed ......................... (4,514,008) (2,104,477) (81,991,058) (1,280,438)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ........................... 4,654,695 7,305,874 12,280,754 7,997,091
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS ................................. 3,512,448 7,413,067 31,830,023 11,476,613
NET ASSETS
Beginning of year .................................... 25,625,795 18,212,728 54,019,257 42,542,644
------------ ------------ ------------ ------------
End of year .......................................... $ 29,138,243 $ 25,625,795 $ 85,849,280 $ 54,019,257
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ................................................. 851,453 871,702 5,427,637 673,952
Reinvested ........................................... 79,693 47,603 230,579 17,619
Redeemed ............................................. (462,080) (206,362) (4,847,275) (102,274)
------------ ------------ ------------ ------------
Net increase in shares outstanding ................... 469,066 712,943 810,941 589,297
Shares outstanding, beginning of year ................ 2,506,203 1,793,260 3,961,839 3,372,542
------------ ------------ ------------ ------------
Shares outstanding, end of year ...................... 2,975,269 2,506,203 4,772,780 3,961,839
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
----------------------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
--------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 18.12 $ 17.38 $ 15.17 $ 14.77 $ 12.76
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ...................... 0.35 0.34 0.37 0.35 0.36
Net realized and unrealized gains
on investments ..................... 2.49 0.95 4.31 1.45 2.50
---------- ---------- ---------- ---------- ----------
Total from investment operations ................... 2.84 1.29 4.68 1.80 2.86
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ....... (0.35) (0.34) (0.37) (0.35) (0.36)
Distributions from net realized gains ...... (0.78) (0.21) (2.10) (1.05) (0.49)
---------- ---------- ---------- ---------- ----------
Total distributions ................................ (1.13) (0.55) (2.47) (1.40) (0.85)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ..................... $ 19.83 $ 18.12 $ 17.38 $ 15.17 $ 14.77
========== ========== ========== ========== ==========
Total return ....................................... 15.90% 7.56% 32.42% 12.29% 22.79%
========== ========== ========== ========== ==========
Net assets at end of year (000's) .................. $ 128,201 $ 112,804 $ 101,408 $ 70,654 $ 61,576
========== ========== ========== ========== ==========
Ratio of gross expenses to average net assets ...... 0.88% 0.88% 0.90% 0.91% 0.93%
Ratio of net expenses to average net assets (a) .... 0.86% 0.86% 0.87% 0.87% 0.88%
Ratio of net investment income to average net assets 1.85% 1.95% 2.21% 2.31% 2.52%
Portfolio turnover rate ............................ 62% 69% 90% 58% 72%
</TABLE>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
----------------------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ................... $ 21.76 $ 20.16 $ 15.66 $ 13.96 $ 11.29
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income .......................... 0.03 0.07 0.11 0.13 0.15
Net realized and unrealized gains on investments 5.18 1.60 6.47 2.00 2.98
---------- ---------- ---------- ---------- ----------
Total from investment operations ....................... 5.21 1.67 6.58 2.13 3.13
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ........... (0.03) (0.07) (0.11) (0.13) (0.15)
Distributions from net realized gains .......... (0.92) -- (1.97) (0.30) (0.31)
---------- ---------- ---------- ---------- ----------
Total distributions .................................... (0.95) (0.07) (2.08) (0.43) (0.46)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ......................... $ 26.02 $ 21.76 $ 20.16 $ 15.66 $ 13.96
========== ========== ========== ========== ==========
Total return ........................................... 24.04% 8.33% 43.74% 15.27% 28.00%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ...................... $ 77,809 $ 63,416 $ 52,214 $ 31,180 $ 17,857
========== ========== ========== ========== ==========
Ratio of gross expenses to average net assets .......... 0.91% 0.92% 0.93% 0.98% 1.14%
Ratio of net expenses to average net assets(a) ......... 0.88% 0.89% 0.90% 0.92% 1.01%
Ratio of net investment income to average net assets ... 0.14% 0.35% 0.60% 0.85% 1.27%
Portfolio turnover rate ................................ 67% 66% 59% 44% 54%
</TABLE>
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Year
----------------------------------------------------------------------------------------------------------------------------------
Years Ended March 31,
--------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year ............... $ 10.22 $ 10.16 $ 9.83 $ 9.85 $ 9.68
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ...................... 0.42 0.43 0.44 0.45 0.45
Net realized and unrealized gains (losses)
on investments ..................... (0.42) 0.07 0.33 (0.02) 0.17
---------- ---------- ---------- ---------- ----------
Total from investment operations ................... 0.00 0.50 0.77 0.43 0.62
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ....... (0.42) (0.43) (0.44) (0.45) (0.45)
Distributions from net realized gains ...... (0.01) (0.01) -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ................................ (0.43) (0.44) (0.44) (0.45) (0.45)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ..................... $ 9.79 $ 10.22 $ 10.16 $ 9.83 $ 9.85
========== ========== ========== ========== ==========
Total return ....................................... 0.04% 4.92% 8.00% 4.39% 6.51%
========== ========== ========== ========== ==========
Net assets at end of year (000's) .................. $ 29,138 $ 25,626 $ 18,213 $ 11,197 $ 8,779
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets (a) .... 0.69% 0.73% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets 4.27% 4.17% 4.40% 4.51% 4.57%
Portfolio turnover rate ............................ 47% 31% 33% 24% 14%
</TABLE>
(a) Absent investment advisory fees waived and/or expenses reimbursed by the
Adviser, the ratios of expenses to average net assets would have been
0.78%, 0.88% and 1.04% for the years ended March 31, 1998, 1997 and 1996,
respectively.
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
------------------------------------------------------------------------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2000 1999 1998 1997(a)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at beginning of period .............. $ 13.63 $ 12.61 $ 9.81 $ 10.00
---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) ................ (0.00) 0.05 (0.01) (0.01)
Net realized and unrealized gains (losses)
on investments and foreign currencies 5.19 1.04 2.91 (0.14)
---------- ---------- ---------- ----------
Total from investment operations .................... 5.19 1.09 2.90 (0.15)
---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ........ (0.04) (0.07) (0.10) (0.04)
Distributions from net realized gains ....... (0.79) -- -- --
---------- ---------- ---------- ----------
Total distributions ................................. (0.83) (0.07) (0.10) (0.04)
---------- ---------- ---------- ----------
Net asset value at end of period .................... $ 17.99 $ 13.63 $ 12.61 $ 9.81
========== ========== ========== ==========
Total return ........................................ 39.35% 8.67% 29.67% (1.56)%(c)
========== ========== ========== ==========
Net assets at end of period (000's) ................. $ 85,849 $ 54,019 $ 42,543 $ 29,290
========== ========== ========== ==========
Ratio of net expenses to average net assets (b) ..... 1.56% 1.51% 1.56% 1.60%(c)
Ratio of net investment income (loss) to
average net assets .......................... (0.01)% 0.38% (0.05)% (0.15)%(c)
Portfolio turnover rate ............................. 52% 39% 47% 70%(c)
</TABLE>
(a) Represents the period from the commencement of operations (April 16, 1996)
through March 31, 1997.
(b) Absent investment advisory fees waived by the Adviser, the ratio of
expenses to average net assets would have been 1.71%(c) for the period
ended March 31, 1997.
(c) Annualized.
See accompanying notes to financial statements.
13
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (individually, a Fund,
and, collectively, the Funds) are each a no-load series of the Williamsburg
Investment Trust (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940. The Trust was organized as
a Massachusetts business trust on July 18, 1988.
The Jamestown Balanced Fund's investment objectives are long-term growth of
capital and income through investment in a balanced portfolio of equity and
fixed income securities. Capital protection and low volatility are important
investment goals.
The Jamestown Equity Fund's investment objective is long-term growth of capital
through investment in a diversified portfolio composed primarily of common
stocks. Current income is incidental to this objective and may not be
significant.
The Jamestown Tax Exempt Virginia Fund's investment objectives are to provide
current income exempt from federal income taxes and from the personal income
taxes of Virginia, to preserve capital, to limit credit risk and to take
advantage of opportunities to increase and enhance the value of an investment in
the Fund. The Fund invests primarily in debt obligations issued by the State of
Virginia and its political subdivisions, agencies, authorities and
instrumentalities and by other issuers the interest from which is exempt from
the personal income taxes of Virginia. The marketability and market value of
these obligations could be affected by certain Virginia political and economic
developments.
The Jamestown International Equity Fund's investment objective is to achieve
superior total returns through investment in equity securities of issuers
located outside the United States.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price. Securities traded on a national or foreign stock exchange are valued
based upon the closing price on the principal exchange where the security is
traded. It is expected that fixed income securities will ordinarily be traded in
the over-the-counter market, and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service. If a pricing service cannot provide a valuation, securities
will be valued in good faith at fair value using methods consistent with those
determined by the Board of Trustees. Foreign securities are translated from the
local currency into U.S. dollars using currency exchange rates supplied by a
quotation service.
Repurchase agreements -- The Jamestown Balanced Fund and The Jamestown Equity
Fund 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. At the time the Funds enter into the joint repurchase
agreement, the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the face
amount of the repurchase agreement. In addition, each Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
14
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are amortized in accordance with income tax regulations.
Distributions to shareholders -- Dividends arising from net investment income,
if any, are declared and paid quarterly to shareholders of The Jamestown
Balanced Fund, The Jamestown Equity Fund and The Jamestown International Equity
Fund and are declared daily and paid monthly to shareholders of The Jamestown
Tax Exempt Virginia Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income dividends and capital gain
distributions are determined in accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
Securities traded on a "to-be-announced" basis -- The Jamestown Balanced Fund
occasionally trades securities on a "to-be-announced" (TBA) basis. In a TBA
transaction, the Fund has committed to purchase securities for which all
specific information is not yet known at the time of the trade, particularly the
face amount in mortgage-backed securities transactions. Securities purchased on
a TBA basis are not settled until they are delivered to the Fund, normally 15 to
45 days later. These transactions are subject to market fluctuations and their
current value is determined in the same manner as for other portfolio
securities.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of
investment securities as of March 31, 2000:
<TABLE>
<CAPTION>
Jamestown Jamestown Jamestown Jamestown
Balanced Equity Tax Exempt International
Fund Fund Virginia Fund Equity Fund
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized appreciation ............ $ 43,267,359 $ 33,535,684 $ 219,563 $ 28,750,360
Gross unrealized depreciation ............ (1,801,192) (678,779) (398,454) (3,375,622)
------------ ------------ ------------ ------------
Net unrealized appreciation (depreciation) $ 41,466,167 $ 32,856,905 $ (178,891) $ 25,374,738
============ ============ ============ ============
Federal income tax cost .................. $ 86,155,436 $ 45,190,369 $ 29,189,683 $ 57,812,502
============ ============ ============ ============
-------------------------------------------------------------------------------------------------------------
</TABLE>
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for The Jamestown Balanced Fund and The Jamestown
Equity Fund is due to certain timing differences in the recognition of capital
losses under income tax regulations and generally accepted accounting
principles.
15
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
As of March 31, 2000, The Jamestown Tax Exempt Virginia Fund had capital loss
carryforwards for federal income tax purposes of $151,518 which expire on March
31, 2008. In addition, the Fund had net realized capital losses of $121,661
during the period from 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 capital loss carryforwards and "post-October"
losses may be utilized in future years to offset net realized capital gains, if
any, prior to distributing such gains to shareholders.
Reclassification of capital accounts - For the year ended March 31, 2000, The
Jamestown International Equity Fund reclassed net investment losses of $124,753
against accumulated net realized gains from security transactions on the
Statement of Assets and Liabilities. Such reclassification, the result of
permanent differences between financial statement and income tax reporting
requirements, has no effect on the Fund's net assets or net asset value per
share.
2. INVESTMENT TRANSACTIONS
Investment transactions, other than short-term investments, were as follows for
the year ended March 31, 2000:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Jamestown Jamestown Jamestown Jamestown
Balanced Equity Tax Exempt International
Fund Fund Virginia Fund Equity Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Purchases of investment securities ........................ $67,120,366 $42,668,817 $16,647,573 $40,946,687
=========== =========== =========== ===========
Proceeds from sales and maturities of investment securities $68,488,975 $43,567,254 $11,572,325 $32,780,734
=========== =========== =========== ===========
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
The Funds' investments are managed by Lowe, Brockenbrough & Company, Inc. (the
Adviser), under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Jamestown Balanced Fund pays the Adviser a
fee, which is computed and accrued daily and paid monthly, at an annual rate of
.65% on its average daily net assets up to $250 million, .60% on the next $250
million of such net assets and .55% on such net assets in excess on $500
million. The Jamestown Equity Fund pays the Adviser a fee at an annual rate of
.65% on its average daily net assets up to $500 million and .55% on such net
assets in excess on $500 million. The Jamestown Tax Exempt Virginia Fund pays
the Adviser a fee at an annual rate of .40% on its average daily net assets up
to $250 million, .35% on the next $250 million of such net assets and .30% on
such net assets in excess of $500 million. The Jamestown International Equity
Fund pays the Adviser a fee at an annual rate of 1.00% on its average daily net
assets. Certain Trustees and officers of the Trust are also officers of the
Adviser.
The Adviser retains Oechsle International Advisors, LLC (Oechsle) to provide The
Jamestown International Equity Fund with a continuous program of supervision of
the Fund's assets, including the composition of its portfolio, and to furnish
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities, pursuant to the terms of a Sub-Advisory
Agreement. Under the Sub-Advisory Agreement, the Adviser, not the Fund, pays
Oechsle a fee in the amount of one-half of the monthly advisory fee received by
the Adviser, net of any investment advisory fee waivers.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
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
of The Jamestown Balanced Fund and The Jamestown Equity Fund at an annual rate
of .20% on its respective average daily net assets up to $25 million; .175% on
the next $25 million of such net assets; and .15% on such net assets in excess
of $50 million, subject to a $2,000 minimum monthly fee with respect to each
Fund. From The Jamestown Tax Exempt Virginia Fund, IFS receives a monthly fee at
an annual rate of .15% on its average daily net assets up to $200 million and
.10% on such net assets in excess of $200 million, subject to a $2,000 minimum
monthly fee. From The Jamestown International Equity Fund, IFS receives a
monthly fee at an annual rate of .25% on its average daily net assets up to $25
million; .225% on the next
16
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
$25 million of such net assets; and .20% on such net assets in excess of $50
million, subject to a $4,000 minimum monthly fee. In addition, each Fund pays
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 and an affiliate of IFS.
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of The Jamestown Balanced Fund
and The Jamestown Equity Fund, each Fund's custodian fees and a portion of other
operating expenses have been paid through an arrangement with a third-party
broker-dealer who is compensated through commission trades. Payment of expenses
by the broker-dealer is based on a percentage of commissions earned. Expenses
reimbursed through the directed brokerage arrangement totaled $24,000 and
$18,000 for The Jamestown Balanced Fund and The Jamestown Equity Fund,
respectively, for the year ended March 31, 2000.
5. FOREIGN CURRENCY TRANSLATION
With respect to The Jamestown International Equity Fund, amounts denominated in
or expected to settle in foreign currencies are translated into U.S. dollars
based on exchange rates on the following basis:
A. The market values of investment securities and other assets and liabilities
are translated at the closing rate of exchange each day.
B. Purchases and sales of investment securities and income and expenses are
translated at the rate of exchange prevailing on the respective dates of
such transactions.
C. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from those
resulting from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gains or
losses on investments.
Reported net realized foreign exchange gains or losses arise from 1) purchases
and sales of foreign currencies, 2) currency gains or losses realized between
the trade and settlement dates on securities transactions and 3) the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Reported net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities, other than
investment securities, resulting from changes in exchange rates.
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Jamestown International Equity Fund enters into forward foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The Fund may
enter into these contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific transactions or portfolio positions. The objective of the Fund's
foreign currency hedging transactions is to reduce risk that the U.S. dollar
value of the Fund's securities denominated in foreign currency will decline in
value due to changes in foreign currency exchange rates. All foreign currency
exchange contracts are "marked-to-market" daily at the applicable translation
rates resulting in unrealized gains or losses. Realized and unrealized gains or
losses are included in the Fund's Statement of Assets and Liabilities and
Statement of Operations. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar.
17
<PAGE>
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
As of March 31, 2000, the Jamestown International Equity Fund had forward
foreign currency exchange contracts outstanding as follows:
--------------------------------------------------------------------------------
Net Unrealized
Settlement To Receive Initial Market Appreciation
Date (To Deliver) Value Value (Depreciation)
--------------------------------------------------------------------------------
Contracts To Sell
04/04/00 (167,062) EUR $ 159,628 $ 159,901 $ (273)
04/28/00 (28,509) EUR 27,283 27,326 (43)
04/28/00 (407,731) EUR 390,198 390,820 (622)
04/03/00 (2,847) GBP 4,513 4,542 (29)
04/05/00 (52,032) GBP 82,522 83,005 (483)
04/06/00 (86,970) GBP 138,308 138,742 (434)
04/04/00 (2,744,907) SEK 317,606 317,802 (196)
04/05/00 (2,035,385) SEK 235,155 235,674 (519)
---------- ----------- ---------
Total sell contracts 1,355,213 1,357,812 (2,599)
---------- ----------- ---------
Contracts To Buy
04/04/00 36,028 EUR (34,695) (34,483) (212)
04/28/00 430,521 EUR (415,453) (412,665) (2,788)
04/04/00 164,496 GBP (261,137) (262,419) 1,282
---------- ----------- ---------
Total buy contracts (711,285) (709,567) (1,718)
---------- ----------- ---------
Net contracts $ 643,928 $ 648,245 $ (4,317)
========== =========== =========
--------------------------------------------------------------------------------
EUR - Euro Dollar
GBP - British Pound Sterling
SEK - Swedish Krona
7. 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
Jamestown Balanced Fund declared and paid a long-term capital gain distribution
of $0.1023 per share, the Jamestown Equity Fund declared and paid a long-term
capital gain distribution of $0.0642 per share, the Jamestown Tax Exempt
Virginia Fund declared and paid a long-term capital gain distribution of $0.0090
per share and the Jamestown International Equity Fund declared and paid a
long-term capital gain distribution of $0.7709 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. Additionally, on March 31, 2000, the Jamestown Balanced Fund
declared and paid a long-term capital gain distribution of $0.6810 per share and
the Jamestown Equity Fund declared and paid a long-term capital gain
distribution of $0.8593 per share. As required by federal regulations,
shareholders will receive notification of their portion of the Funds' taxable
capital gain distribution, if any, paid during the 2000 calendar year early in
2001.
18
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
SHARES COMMON STOCKS-- 68.7% VALUE
--------------------------------------------------------------------------------
ADVERTISING-- 2.0%
55,000 Interpublic Group of Companies, Inc. ............. $ 2,598,750
------------
COMMERCIAL BANKING-- 1.8%
18,000 Bank of America Corporation ...................... 943,875
24,000 Fannie Mae ....................................... 1,354,500
------------
2,298,375
------------
COMMUNICATIONS-- 4.3%
57,000 Equifax, Inc. .................................... 1,439,250
26,000 Lucent Technologies, Inc. ........................ 1,579,500
54,000 MCI WorldCom, Inc.(a) ............................ 2,446,875
------------
5,465,625
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES-- 20.1%
16,000 America Online, Inc.(a) .......................... 1,076,000
79,000 Cisco Systems, Inc.(a) ........................... 6,107,688
34,000 Computer Sciences Corporation(a) ................. 2,690,250
36,000 Dell Computer Corporation ........................ 1,941,750
24,000 EMC Corporation(a) ............................... 3,000,000
34,000 Intel Corporation ................................ 4,485,875
25,000 Microsoft Corporation(a) ......................... 2,656,250
48,000 Oracle Corporation(a) ............................ 3,747,000
------------
25,704,813
------------
CONSUMER PRODUCTS-- 7.5%
60,000 Avon Products, Inc. .............................. 1,743,750
16,000 General Electric Company ......................... 2,483,000
20,000 International Paper Company ...................... 855,000
42,000 Kimberly-Clark Corporation ....................... 2,352,000
60,000 Sysco Corporation ................................ 2,141,250
------------
9,575,000
------------
DRUGS/MEDICAL EQUIPMENT-- 6.5%
12,000 Bristol-Myers Squibb Company ..................... 693,000
21,000 Lilly (Eli) & Company ............................ 1,323,000
33,000 Merck and Company, Inc. .......................... 2,050,125
56,000 Schering-Plough Corporation ...................... 2,058,000
23,300 Warner-Lambert Company ........................... 2,271,750
------------
8,395,875
------------
ELECTRONICS-- 2.8%
18,000 Hewlett-Packard Company .......................... 2,386,125
31,000 Solectron Corporation(a) ......................... 1,241,938
------------
3,628,063
------------
FINANCIAL SERVICES-- 2.5%
33,000 Capital One Financial Corporation ................ 1,581,937
27,000 Citigroup, Inc. .................................. 1,601,437
------------
3,183,374
------------
19
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS-- 68.7% (Continued) VALUE
--------------------------------------------------------------------------------
FIRE SYSTEMS-- 2.8%
73,000 Tyco International Ltd. .......................... $ 3,640,875
------------
INSURANCE-- 2.9%
22,000 American International Group, Inc. ............... 2,409,000
19,000 Jefferson-Pilot Corporation ...................... 1,264,688
------------
3,673,688
------------
MEDIA-- 1.7%
27,000 MediaOne Group, Inc.(a) .......................... 2,187,000
------------
OIL AND GAS DRILLING-- 6.6%
48,000 Coastal Corporation .............................. 2,208,000
22,442 Exxon Mobil Corporation .......................... 1,746,268
54,000 Halliburton Company .............................. 2,214,000
42,000 Texaco, Inc. ..................................... 2,252,250
------------
8,420,518
------------
RETAIL STORES-- 5.5%
56,000 AutoZone, Inc.(a) ................................ 1,554,000
30,000 Circuit City Stores, Inc. ........................ 1,826,250
21,000 Home Depot, Inc. ................................. 1,354,500
32,500 Target Corporation ............................... 2,429,375
------------
7,164,125
------------
UTILITIES - TELEPHONE-- 1.7%
46,000 BellSouth Corporation ............................ 2,162,000
------------
TOTAL COMMON STOCKS (Cost $45,243,587) ........... $ 88,098,081
------------
================================================================================
PAR
VALUE U.S. TREASURY OBLIGATIONS-- 6.8% VALUE
--------------------------------------------------------------------------------
U.S. TREASURY NOTES-- 6.3%
$2,040,000 6.50%, due 05/31/2001 ............................ $ 2,040,326
400,000 6.375%, due 08/15/2002 ........................... 399,000
3,000,000 5.75%, due 08/15/2003 ............................ 2,938,590
2,615,000 7.00%, due 07/15/2006 ............................ 2,702,446
------------
8,080,362
------------
U.S. TREASURY INFLATION-PROTECTION NOTES-- 0.5%
410,779 3.625%, due 07/15/2002 ........................... 409,559
218,017 3.375%, due 01/15/2007 ........................... 209,976
------------
619,535
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $8,900,995) $ 8,699,897
------------
20
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
PAR
VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS-- 2.5% VALUE
--------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-- 1.9%
$1,000,000 6.25%, due 07/15/2004 ............................ $ 969,220
1,500,000 6.625%, due 09/15/2009 ........................... 1,442,340
------------
2,411,560
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-- 0.6%
900,000 6.25%, due 05/15/2029 ............................ 811,404
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $3,370,992) ................................ $ 3,222,964
------------
================================================================================
PAR
VALUE MORTGAGE-BACKED SECURITIES-- 1.4% VALUE
--------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-- 0.5%
$ 475,000 Pool #1471-G, 7.00%, due 03/15/2008 .............. $ 470,692
175,000 Pool #1655-HB, 6.50%, due 10/15/2008 ............. 170,844
------------
641,536
FEDERAL NATIONAL MORTGAGE ASSOCIATION-- 0.9%
425,000 Series #93-18-PJ, 6.50%, due 12/25/2007 .......... 414,638
801,181 Pool #380512, 6.15%, due 08/01/2008 .............. 747,101
------------
1,161,739
------------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $1,884,575) $ 1,803,275
------------
================================================================================
PAR
VALUE ASSET-BACKED SECURITIES-- 2.0% VALUE
--------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION-- 0.8%
$ 360,381 Series #97-3-A1, 6.493%, adjustable rate,
due 04/25/2006 ................................. $ 357,678
582,316 Series #98-1-A1, 6.603%, adjustable rate,
due 01/25/2007 ................................. 579,404
------------
937,082
------------
OTHER ASSET-BACKED SECURITIES-- 1.2%
California Infrastructure Trust #97-1-A3,
700,000 6.17%, due 03/25/2003 .......................... 696,717
Fleetwood Credit Corporation Grantor Trust #95-A-A,
229,783 8.45%, due 11/15/2010 .......................... 231,650
MBNA Master Credit Card Trust #98-J-A,
500,000 5.25%, due 02/15/2006 .......................... 470,625
NationsCredit Grantor Trust #96-1-A,
166,596 5.85%, due 09/15/2011 .......................... 159,620
------------
1,558,612
------------
TOTAL ASSET-BACKED SECURITIES (Cost $2,513,600) .. $ 2,495,694
------------
21
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
PAR
VALUE MUNICIPAL OBLIGATIONS-- 2.9% VALUE
--------------------------------------------------------------------------------
Virginia State Housing Dev. Authority Revenue,
$2,540,000 6.50%, due 10/01/2007 .......................... $ 2,427,046
1,400,000 6.70%, due 10/01/2008 .......................... 1,349,194
------------
TOTAL MUNICIPAL OBLIGATIONS (Cost $3,907,422) .... $ 3,776,240
------------
================================================================================
PAR
VALUE CORPORATE BONDS-- 13.7% VALUE
--------------------------------------------------------------------------------
Associates Corporation, N.A.,
$ 675,000 5.85%, due 01/15/2001 .......................... $ 668,797
Beneficial Corporation Medium Term Notes,
230,000 6.35%, due 12/03/2001 .......................... 227,247
Chrysler Financial Corporation,
1,000,000 5.90%, due 01/26/2001 .......................... 992,540
Coca-Cola Enterprises,
385,000 5.75%, due 11/01/2008 .......................... 344,032
Conoco, Inc.,
750,000 5.90%, due 04/15/2004 .......................... 714,278
Duke Realty L.P. Medium Term Notes,
390,000 6.75%, due 05/30/2008 .......................... 363,024
Enron Corporation,
750,000 6.45%, due 11/15/2001 .......................... 738,502
Equity Residential Properties Trust,
875,000 6.65%, due 11/15/2003 .......................... 840,070
Finova Capital Corporation,
1,000,000 6.25%, due 08/15/2000 .......................... 996,690
Ford Motor Credit Company Medium Term Notes,
250,000 8.00%, due 06/15/2002 .......................... 252,815
475,000 7.20%, due 06/15/2007 .......................... 463,548
General Electric Capital Corporation,
420,000 6.52%, due 10/08/2002 .......................... 413,986
General Motors Acceptance Corporation Medium Term Notes,
525,000 6.65%, due 05/24/2000 .......................... 525,336
Goldman Sachs Group,
950,000 6.65%, due 05/15/2009 .......................... 889,675
GTE Northwest, Inc.,
750,000 6.30%, due 06/01/2010 .......................... 684,082
IBM Corporation,
650,000 6.375%, due 06/15/2000 ......................... 649,805
International Lease Finance Corporation Medium Term Notes,
425,000 6.42%, due 09/11/2000 .......................... 424,601
425,000 6.55%, due 09/15/2000 .......................... 424,817
International Paper Company,
735,000 8.68%, due 09/14/2001 .......................... 750,082
KeyCorp Medium Term Notes,
675,000 6.75%, due 05/29/2001 .......................... 673,313
Manitoba (Province of) Medium Term Notes,
205,000 5.50%, due 10/01/2008 .......................... 183,370
May Department Stores,
510,000 5.95%, due 11/01/2008 .......................... 466,380
22
<PAGE>
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
PAR
VALUE CORPORATE BONDS-- 13.7% (Continued) VALUE
--------------------------------------------------------------------------------
Merrill Lynch & Company Medium Term Notes,
$ 265,000 7.26%, due 03/25/2002 .......................... $ 261,687
National City Corporation,
575,000 7.20%, due 05/15/2005 .......................... 563,540
Norwest Financial, Inc.,
615,000 5.375%, due 09/30/2003 ......................... 580,369
Pacific Bell,
435,000 6.625%, due 11/01/2009 ......................... 408,261
Pacific Bell Medium Term Notes,
400,000 6.875%, due 08/15/2006 ......................... 388,708
Prologis Trust,
225,000 7.00%, due 10/01/2003 .......................... 217,546
Sears Roebuck Acceptance Corporation,
465,000 6.99%, due 09/30/2002 .......................... 461,196
TRW, Inc.,
245,000 6.25%, due 01/15/2010 .......................... 215,081
Union Camp Corporation,
475,000 6.50%, due 11/15/2007 .......................... 444,120
U.S. WEST Capital Funding, Inc. Medium Term Notes,
615,000 6.375%, due 07/15/2008 ......................... 568,198
Worldcom, Inc.,
772,000 6.125%, due 08/15/2001 ......................... 760,242
------------
TOTAL CORPORATE BONDS (Cost $18,216,999) ......... $ 17,555,938
------------
================================================================================
SHARES MONEY MARKETS-- 1.5% VALUE
--------------------------------------------------------------------------------
1,969,514 Firstar Stellar Treasury Fund (Cost $1,969,514) .. $ 1,969,514
------------
TOTAL INVESTMENTS AT VALUE-- 99.5%
(Cost $86,007,684) ............................... $127,621,603
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.5% ..... 579,482
------------
NET ASSETS-- 100.0% .............................. $128,201,085
============
(a) Non-income producing security.
See accompanying notes to financial statements.
23
<PAGE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
SHARES COMMON STOCKS-- 99.0% VALUE
--------------------------------------------------------------------------------
ADVERTISING-- 2.9%
48,000 Interpublic Group of Companies, Inc. ............. $ 2,268,000
------------
COMMERCIAL BANKING-- 2.5%
15,000 Bank of America Corporation ...................... 786,562
17,000 Fannie Mae ....................................... 959,437
4,000 Freddie Mac ...................................... 176,750
------------
1,922,749
------------
COMMUNICATIONS-- 6.3%
50,000 Equifax, Inc. .................................... 1,262,500
24,000 Lucent Technologies, Inc. ........................ 1,458,000
47,500 MCI WorldCom, Inc.(a) ............................ 2,152,344
------------
4,872,844
------------
COMPUTERS/COMPUTER TECHNOLOGY SERVICES-- 28.0%
14,000 America Online, Inc.(a) .......................... 941,500
60,000 Cisco Systems, Inc.(a) ........................... 4,638,750
30,000 Computer Sciences Corporation(a) ................. 2,373,750
32,000 Dell Computer Corporation(a) ..................... 1,726,000
21,000 EMC Corporation(a) ............................... 2,625,000
30,000 Intel Corporation ................................ 3,958,125
23,000 Microsoft Corporation(a) ......................... 2,443,750
40,000 Oracle Corp.(a) .................................. 3,122,500
------------
21,829,375
------------
CONSUMER PRODUCTS-- 11.0%
52,000 Avon Products, Inc. .............................. 1,511,250
14,000 General Electric Company ......................... 2,172,625
19,000 International Paper Company ...................... 897,750
37,000 Kimberly-Clark Corporation ....................... 2,072,000
53,000 SYSCO Corporation ................................ 1,891,438
------------
8,545,063
------------
DRUGS/MEDICAL EQUIPMENT-- 9.5%
11,000 Bristol-Myers Squibb Company ..................... 635,250
18,000 Lilly (Eli) & Company ............................ 1,134,000
29,000 Merck & Co., Inc. ................................ 1,801,625
49,000 Schering-Plough Corporation ...................... 1,800,750
20,600 Warner-Lambert Company ........................... 2,008,500
------------
7,380,125
------------
ELECTRONICS-- 4.1%
16,000 Hewlett-Packard Company .......................... 2,121,000
27,000 Solectron Corporation(a) ......................... 1,081,688
------------
3,202,688
------------
FINANCIAL SERVICES-- 3.6%
30,000 Capital One Financial Corporation ................ 1,438,125
23,250 Citigroup, Inc. .................................. 1,379,016
------------
2,817,141
------------
FIRE SYSTEMS-- 4.3%
67,000 Tyco International, Ltd. ......................... 3,341,625
------------
24
<PAGE>
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS-- 99.0% VALUE
--------------------------------------------------------------------------------
INSURANCE-- 4.5%
19,000 American International Group, Inc. ............... $ 2,080,500
21,000 Jefferson-Pilot Corporation ...................... 1,397,812
------------
3,478,312
------------
MEDIA-- 2.5%
24,000 MediaOne Group, Inc.(a) .......................... 1,944,000
------------
OIL AND GAS DRILLING -- 9.6%
43,000 Coastal Corporation .............................. 1,978,000
19,802 Exxon Mobil Corporation .......................... 1,540,843
49,000 Halliburton Company .............................. 2,009,000
37,000 Texaco, Inc. ..................................... 1,984,125
------------
7,511,968
------------
RETAIL STORES-- 7.8%
50,000 AutoZone, Inc.(a) ................................ 1,387,500
23,000 Circuit City Stores - Circuit City Group ......... 1,400,125
18,000 Home Depot, Inc. ................................. 1,161,000
28,500 Target Corporation ............................... 2,130,375
------------
6,079,000
------------
UTILITIES - TELEPHONE-- 2.4%
40,000 Bell South Corporation ........................... 1,880,000
------------
TOTAL COMMON STOCKS-- 99.0% (Cost $44,105,732) ... $ 77,072,890
------------
================================================================================
SHARES MONEY MARKETS-- 1.3% VALUE
--------------------------------------------------------------------------------
974,384 Firstar Stellar Treasury Fund (Cost $974,384) .... $ 974,384
------------
TOTAL INVESTMENTS AT VALUE-- 100.3%
(Cost $45,080,116) ............................... $ 78,047,274
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.3%) ... (238,545)
------------
NET ASSETS-- 100.0% .............................. $ 77,808,729
============
(a) Non-income producing security.
See accompanying notes to financial statements.
25
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS-- 98.5% VALUE
--------------------------------------------------------------------------------
Albemarle Co., Virginia, Industrial
Dev. Authority, Revenue,
$ 750,000 3.90%, floating rate, due 10/01/2022 ........... $ 750,000
Chesterfield Co., Virginia, GO,
350,000 6.25%, due 07/15/2005,
partially prerefunded 07/15/2001 ............. 364,063
750,000 4.00%, due 01/01/2006 .......................... 701,812
Fairfax Co., Virginia, GO,
210,000 5.60%, due 05/01/2003 .......................... 212,337
600,000 5.00%, due 06/01/2014 .......................... 578,706
Fairfax Co., Virginia, Park Authority, Revenue,
300,000 6.25%, due 07/15/2005 .......................... 312,687
Greater Richmond, Virginia, Convention
Center Authority, Revenue,
550,000 5.50%, due 06/15/2008 .......................... 560,494
Hampton, Virginia, GO,
1,000,000 5.50%, due 02/01/2012 .......................... 1,029,750
Hanover Co., Virginia, Industrial Dev.
Authority, Revenue,
1,000,000 6.50%, due 08/15/2009 .......................... 1,100,860
225,000 6.25%, due 10/01/2011 .......................... 233,543
Henrico Co., Virginia, Economic Dev.
Authority, Revenue,
1,000,000 5.50%, due 11/01/2008 .......................... 1,030,980
Henrico Co., Virginia, Water and Sewer, Revenue,
500,000 4.625%, due 05/01/2017 ......................... 441,030
James City Co., Virginia, GO,
500,000 5.25%, due 12/15/2015 .......................... 492,605
Loudoun Co., Virginia, GO,
1,000,000 4.50%, due 12/01/2002 .......................... 997,710
Lynchburg, Virginia, GO,
500,000 5.30%, due 05/01/2014 .......................... 499,090
Medical College of Virginia Hospitals
Authority, Revenue,
700,000 5.00%, due 07/01/2013 .......................... 673,043
Norfolk, Virginia, Industrial Dev.
Authority, Revenue,
1,000,000 6.50%, due 06/01/2021, prerefunded 06/01/2001 .. 1,042,830
Norfolk, Virginia, GO,
500,000 5.25%, due 06/01/2008 .......................... 504,460
300,000 5.75%, due 06/01/2011 .......................... 310,665
Petersburg, Virginia, GO,
500,000 5.125%, due 01/15/2013 ......................... 492,820
Pocahontas Parkway Assoc., Virginia
Toll Road, Revenue,
900,000 5.00%, due 08/15/2005 .......................... 865,107
Portsmouth, Virginia, GO,
800,000 5.00%, due 08/01/2017 .......................... 748,816
Prince William Co., Virginia, Park
Authority, Revenue,
250,000 6.10%, due 10/15/2004 .......................... 261,658
Prince William Co., Virginia, Service
Authority Water & Sewer, Revenue,
500,000 5.00%, due 07/01/2003 .......................... 504,285
Richmond, Virginia, GO,
400,000 6.25%, due 01/15/2018 .......................... 407,412
Richmond, Virginia, Metropolitan Authority,
Expressway, Revenue,
500,000 6.05%, due 07/15/2005 .......................... 520,880
26
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 98.5% (Continued) VALUE
--------------------------------------------------------------------------------
Richmond, Virginia, Redev. & Housing
Authority, Revenue,
$ 500,000 5.00%, due 03/01/2018 .......................... $ 444,530
1,000,000 3.95%, floating rate, due 04/01/2029 ........... 1,000,000
Roanoke, Virginia, GO,
300,000 6.40%, due 08/01/2012, prerefunded 08/01/2001 .. 315,168
1,000,000 5.00%, due 08/01/2009 .......................... 997,720
Roanoke, Virginia, Industrial Dev.
Authority, Hospital, Revenue,
250,000 3.85%, floating rate, due 07/01/2019 ........... 250,000
Spotsylvania Co., Virginia, GO,
400,000 5.75%, due 07/15/2011, prerefunded 07/15/2002 .. 415,812
Suffolk, Virginia, GO,
350,000 5.80%, due 06/01/2011 .......................... 366,884
University of Virginia, Revenue,
1,000,000 5.25%, due 06/01/2012 .......................... 1,004,120
Upper Occoquan, Virginia, Sewer
Authority, Revenue,
700,000 5.00% due 07/01/2015 ........................... 663,432
Virginia Beach, Virginia, GO,
1,000,000 5.25%, due 08/01/2010 .......................... 1,015,070
325,000 6.20%, due 09/01/2013, prerefunded 09/01/2004 .. 347,500
Virginia College Building Authority,
Educational Facilities, Revenue,
750,000 4.25%, due 02/01/2001 .......................... 750,585
Virginia State Housing Dev. Authority,
Commonwealth Mortgages, Revenue,
1,000,000 6.05%, due 01/01/2013 .......................... 1,027,490
Virginia State Housing Dev. Authority,
Multi-Family, Revenue,
150,000 6.60%, due 11/01/2012 .......................... 157,032
150,000 6.30%, due 11/01/2015 .......................... 154,472
Virginia State Public Building Authority, Revenue,
500,000 6.00%, due 08/01/2003 .......................... 513,695
Virginia State Public School Authority, Revenue,
1,000,000 5.25%, due 08/01/2009 .......................... 1,019,140
Virginia State Resource Authority, Solid
Waste Disposal System, Revenue,
500,000 5.50%, due 04/01/2015 .......................... 495,470
Virginia State Transportation Board, Revenue,
350,000 6.25%, due 05/15/2012, prerefunded 05/15/2004 .. 370,958
Virginia State, GO,
1,000,000 5.375%, due 06/01/2003 ......................... 1,021,050
Winchester, Virginia, I20ndustrial Dev. Authority,
Educational Facilities, Revenue,
500,000 5.00%, due 10/01/2018 .......................... 460,305
York Co., Virginia, Certificates of
Participation, Revenue,
250,000 6.625%, due 03/01/2012 ......................... 256,860
------------
TOTAL VIRGINIA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS-- 98.5% (Cost $28,863,827) $ 28,684,936
------------
27
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES MONEY MARKETS-- 1.1% VALUE
--------------------------------------------------------------------------------
325,856 Firstar Tax-Free Fund (Cost $325,856) ............ $ 325,856
------------
TOTAL INVESTMENTS AT VALUE-- 99.6%
(Cost $29,189,683) ............................... $ 29,010,792
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.4% ..... 127,451
------------
NET ASSETS-- 100.0% .............................. $ 29,138,243
============
See accompanying notes to financial statements.
28
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2000
================================================================================
SHARES COMMON STOCKS-- 96.9% VALUE
--------------------------------------------------------------------------------
BRAZIL-- 0.9%
31,333 Embratel Participacoes SA ........................ $ 802,908
------------
CANADA-- 3.9%
16,600 BCE, Inc. ........................................ 2,069,569
21,200 The Seagram Company Ltd. ......................... 1,257,281
------------
3,326,850
------------
FRANCE-- 8.6%
17,216 Aventis SA ....................................... 942,312
5,760 Carrefour SA ..................................... 738,023
27,453 Rhodia SA ........................................ 491,245
8,970 Suez Lyonnaise des Eaux .......................... 1,541,577
6,613 Total Fina Elf ................................... 990,329
9,369 Valeo SA ......................................... 461,259
18,676 Vivendi .......................................... 2,153,463
------------
7,318,208
------------
GERMANY-- 14.2%
17,772 Aventis SA ....................................... 935,331
39,136 Bayerische Motoren Werke (BMW) AG ................ 1,233,952
18,498 Dresdner Bank AG ................................. 759,362
13,471 Mannesmann AG .................................... 4,305,394
29,770 Metallgesellschaft AG ............................ 554,070
2,571 SAP AG ........................................... 1,851,293
10,490 Siemens AG ....................................... 1,510,701
395 United Internet AG ............................... 113,393
18,346 Veba AG .......................................... 937,452
------------
12,200,948
------------
GREECE-- 0.5%
14,200 Hellenic Telecommunications Organization SA (OTE) 404,311
------------
HONG KONG-- 3.6%
166,000 China Telecom (Hong Kong) Ltd. ................... 1,455,018
91,000 Hutchison Whampoa Ltd. ........................... 1,642,009
------------
3,097,027
------------
HUNGARY-- 0.2%
2,020 Richter Gedeon Ltd. - GDR ........................ 132,816
------------
ITALY-- 5.9%
330,623 Banca Nazionale del Lavoro (BNL)(a) .............. 1,126,288
156,522 Credito Italiano SpA ............................. 623,068
102,006 Mediaset SpA ..................................... 2,026,374
106,116 Telecom Italia SpA ............................... 1,301,774
------------
5,077,504
------------
JAPAN-- 26.8%
161,000 Fuji Bank Ltd. ........................... 1,514,795
36,000 Fujitsu Ltd. ..................................... 1,105,640
26,000 Kao Corporation .................................. 795,983
5,400 Matsushita Communication Industrial Co., Ltd. .... 995,076
11,000 Murata Manufacturing Company Ltd. ................ 2,675,864
29
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS-- 96.9% (CONTINUED) VALUE
--------------------------------------------------------------------------------
JAPAN-- 26.8% (Continued)
72,000 Nikko Securities Company Ltd. .................... $ 1,090,898
84 Nippon Telegraph and Telephone Corporation ....... 1,334,958
27,000 Nomura Securities Company Ltd. ................... 881,880
103 NTT Mobile Communication Network, Inc. ........... 4,227,856
16,000 Pioneer Corporation .............................. 453,956
6,300 Rohm Company ..................................... 2,192,853
201,000 Sakura Bank Ltd. ................................. 1,530,551
45,000 Sanwa Bank Ltd. .................................. 468,581
2,080 Shohkoh Fund & Company Ltd. ...................... 302,169
400 Softbank Corporation ............................. 410,046
6,000 Taisho Pharmaceutical Co., Ltd. .................. 207,088
23,000 Takeda Chemical Industries ....................... 1,637,011
4,500 Takefugi Corporation ............................. 482,621
13,000 Yamanouchi Pharmaceutical Company Ltd. ........... 712,329
------------
23,020,155
------------
KOREA-- 1.4%
12,290 Korea Telecom Corporation - ADR .................. 537,688
17,586 SK Telecom Co., Ltd. ............................. 685,843
------------
1,223,531
------------
MEXICO-- 0.9%
11,734 Telefonos de Mexico SA ........................... 786,178
------------
NETHERLANDS-- 11.2%
12,158 Gucci Group NV - ADR ............................. 1,081,302
10,333 ING Groep NV ..................................... 559,641
30,609 KPN NV ........................................... 3,504,519
6,581 KPNQwest NV ...................................... 350,133
5,058 Laurus NV ........................................ 53,235
6,848 Philips Electronics NV ........................... 1,150,681
19,280 Vendex International NV .......................... 317,323
38,996 VNU NV ........................................... 2,296,755
12,845 World Online International NV .................... 287,004
------------
9,600,593
------------
SINGAPORE-- 1.0%
66,000 DBS Group Holdings Ltd. .......................... 872,026
------------
SPAIN-- 1.7%
59,313 Telefonica SA .................................... 1,498,375
------------
SWEDEN-- 1.9%
18,716 Telefonaktiebolaget LM Ericsson AB ............... 1,644,149
------------
SWITZERLAND-- 2.0%
2,203 Clariant AG ...................................... 829,421
668 Novartis AG ...................................... 913,594
------------
1,743,015
------------
30
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS-- 96.9% (CONTINUED) VALUE
--------------------------------------------------------------------------------
UNITED KINGDOM-- 12.2%
29,082 Astra Zeneca Group PLC ........................... $ 1,173,317
248,780 British Aerospace PLC ............................ 1,397,013
78,869 Cable & Wireless PLC ............................. 1,480,898
108,355 Diageo PLC ....................................... 827,129
7,490 Energis PLC ...................................... 349,861
53,231 Glaxo Wellcome PLC ............................... 1,522,605
47,968 Railtrack Group PLC .............................. 560,534
160,613 Reed International PLC ........................... 1,175,436
168,537 Somerfield PLC ................................... 149,221
97,780 Telewest Communications PLC ...................... 751,084
188,599 Vodafone Group PLC ............................... 1,051,548
------------
10,438,646
------------
TOTAL COMMON STOCKS-- 96.9% (Cost $57,812,502) ... $ 83,187,240
OTHER ASSETS IN EXCESS OF LIABILITIES-- 3.1% ..... 2,662,040
------------
NET ASSETS-- 100.0% .............................. $ 85,849,280
============
(a) Non-income producing security.
See accompanying notes to financial statements.
31
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (each a series of The
Williamsburg Investment Trust), including the portfolios of investments, as of
March 31, 2000, and the related statements of operations for the year then
ended, and the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
indicated thereon. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 2000 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial positions of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund as of March 31, 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 the financial
highlights for the periods referred to above, in conformity with generally
accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 28, 2000
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