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THE
GOVERNMENT STREET
FUNDS
NO-LOAD MUTUAL FUNDS
PROSPECTUS
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
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T. LEAVELL & ASSOCIATES, INC.
INVESTMENT ADVISER
Founded 1979
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THE GOVERNMENT STREET BOND FUND
THE GOVERNMENT STREET EQUITY FUND
THE ALABAMA TAX FREE BOND FUND
These securities have not been approved or disapproved by the Securities and
Exchange Commission nor has the Securities and Exchange Commission passed upon
the accuracy or adequacy of this Prospectus. Any representation to the contrary
is a criminal offense.
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TABLE OF CONTENTS
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Risk/Return Summary ......................................................... 3
Synopsis of Costs and Expenses .............................................. 10
How to Purchase Shares....................................................... 11
How to Redeem Shares ........................................................ 12
How Net Asset Value is Determined ........................................... 14
Management of the Funds ..................................................... 15
Dividends, Distributions and Taxes .......................................... 17
Additional Investment Information ........................................... 20
Financial Highlights ........................................................ 23
INVESTMENT ADVISER
T. LEAVELL & ASSOCIATES, INC.
MOBILE, ALABAMA
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
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
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RISK/RETURN SUMMARY
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WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?
The investment objective of THE GOVERNMENT STREET EQUITY FUND is to seek capital
appreciation through the compounding of dividends and of capital gains, both
realized and unrealized. The Fund will seek to attain its objective by investing
in common stocks.
The investment objectives of THE GOVERNMENT STREET BOND FUND are to preserve
capital, to provide current income and to protect the value of the portfolio
against the effects of inflation.
The investment objectives of THE ALABAMA TAX FREE BOND FUND are to provide
current income exempt from federal income taxes and from the personal income
taxes of Alabama and to preserve capital.
WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
THE GOVERNMENT STREET EQUITY FUND
The Equity Fund's portfolio consists primarily of the common stocks of medium to
large capitalization companies which are broadly diversified among economic
sectors and industries. The Fund generally will remain fully invested in common
stocks.
The Equity Fund is governed by an investment philosophy that seeks to reduce
risk (the variability of returns) in the portfolio while increasing compounded
returns. The Adviser combines quantitative analysis of securities with more
basic fundamental analysis to construct an efficiently diversified portfolio.
The selection process begins with a stock list of approximately 550 common
stocks. This list is the S&P 500 plus "special consideration" stocks. The stocks
on this list are screened monthly for fundamental strength based on balance
sheet quality and financial ratios (including but not limited to debt/equity,
return on equity, return on assets and net worth). The net result is a stock
universe of approximately 350 stocks.
Stocks in the universe are then characterized by their diversification
characteristics. Stocks are grouped into either "growth" or "value" stocks
(depending upon their respective price/book values). Each group ("growth" or
"value") is then sorted into capitalization sectors (small, medium or large)
using the capitalization sector weightings of the S&P 500 as benchmarks. These 6
sectors are the basis for the diversification that is inherent in the portfolio.
To ensure broad diversification, a target representation for each sector is
established. There is equal representation of "growth"
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and "value" stocks. The capitalization distribution is based on the sector
weightings of the S&P 500.
An optimization program is then employed to suggest the most efficient
combination of stocks in terms of risk and return. The optimization program is
based upon the expected return of each stock, the historical variability of each
stock and the statistical relationships between all stock pairs in the universe.
The optimization process is subject to constraints that limit the amount of
exposure of any one stock to no more than approximately 4% of the cost basis of
the portfolio. The result of the optimization is a portfolio that is broadly
diversified.
The performance of the Equity Fund and of its individual securities is monitored
on an ongoing basis. To maintain the quality and diversification that is
desired, the portfolio is continuously evaluated, and it is re-balanced
periodically.
THE GOVERNMENT STREET BOND FUND
In seeking to achieve its investment objectives, the Bond Fund will emphasize
preservation of capital by limiting investments in the portfolio to fixed income
securities rated in the 4 highest quality ratings by any of the nationally
recognized statistical rating organizations ("NRSROs"). These securities are
referred to as "investment grade."
Under normal circumstances, approximately 40% of the Bond Fund's total assets
will be invested in U.S. Government Securities. These include U.S. Treasury
Securities and securities issued or guaranteed as to interest and principal by
agencies or instrumentalities of the U.S. Government. The Fund may also invest
in corporate debt securities.
The maturities of securities in the portfolio will range from less than 1 year
to 15 years from the date of purchase. The Fund will be adjusted from time to
time to maintain an average maturity of between 3 and 7 years, depending upon
the Adviser's market interest rate forecasts.
The Adviser will select corporate bonds and/or notes based on the overall credit
quality of the issuer, the bonds' relative interest rate spread over U.S.
Treasury Securities of comparable maturity, and call features. In the event that
a corporate fixed income security held by the Fund is downgraded and it is no
longer rated among the 4 highest ratings by at least two of the NRSROs, the
Adviser has the discretion to determine whether the security will be sold or
retained by the Fund. The corporate fixed income securities selected for the
portfolio may include floating rate securities that adjust their effective
interest rate at predetermined periodic intervals.
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THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund invests primarily (i.e., at least 80% of its
assets under normal conditions) in municipal bonds and notes and other debt
instruments, the interest on which is exempt from federal income taxes and from
the personal income taxes of Alabama and not subject to the alternative minimum
tax. These obligations are issued primarily by Alabama, its political
subdivisions, municipalities, agencies, instrumentalities or public authorities
and other qualifying issuers.
The securities will be rated in the 3 highest quality ratings by any of the
NRSROs (or unrated municipal securities that the Adviser determines are of
comparable quality). Under normal circumstances, the Fund's average maturity is
expected to be 3 to 10 years.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
THE GOVERNMENT STREET EQUITY FUND
The return on and value of an investment in the Equity Fund will fluctuate in
response to stock market movements. Stocks and other equity securities are
subject to market risks and fluctuations in value due to general economic
conditions, political stability and other factors. The Fund's portfolio might
also decrease in value in response to the activities and financial prospects of
an individual company in the Fund's portfolio. As a result, there is a risk that
you could lose money by investing in the Equity Fund.
While medium-sized companies generally have potential for rapid growth, they
often involve higher risks because they lack the management experience,
financial resources, product diversification and competitive strengths of larger
corporations. In addition, in many instances, the securities of medium-sized
companies are traded only over-the-counter or on a regional securities exchange,
and the frequency and volume of their trading is substantially less than is
typical of larger companies. Therefore, the securities of medium sized companies
may be subject to wider price fluctuations.
THE GOVERNMENT STREET BOND FUND
The fixed income securities in which the Bond Fund will invest are subject to
fluctuation in value. Fluctuations may be based on movements in interest rates
or from changes in creditworthiness of the issuers, which may result from
adverse business and economic developments or proposed corporate transactions,
such as a leveraged buy-out or recapitalization of the issuer. Consequently,
should interest rates increase or the creditworthiness of an issuer deteriorate,
the value of the Bond Fund's fixed income securities would decrease in value,
and the Fund's net asset value would decrease.
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Securities rated in the lower end of the "investment grade" category are
considered speculative in certain respects. Changes in economic or other
conditions are more likely to lead to a weakened capacity to make interest and
principal payments than with higher grade securities. Although the Adviser
utilizes the ratings of various credit rating services as a factor in
establishing creditworthiness, it relies primarily upon its own analysis of
factors establishing creditworthiness.
While obligations of some U.S. Government sponsored entities are supported by
the full faith and credit of the U.S. Government, several are supported by the
right of the issuer to borrow from the U.S. Government, and still others are
supported only by the credit of the issuer itself. The guarantee of the U.S.
Government does not extend to the yield or value of the U.S. Government
Securities held by the Bond Fund or to the Bond Fund's shares.
The Fund is not intended to be a complete investment program and you could lose
money by investing in the Bond Fund.
THE ALABAMA TAX FREE BOND FUND
The net asset value of the shares of The Alabama Tax Free Bond Fund will change
as the general levels of interest rates fluctuate. When interest rates rise, the
value of the Fund's portfolio can be expected to decline. There is also the risk
that the issuer of a bond may not be able to make interest and principal
payments when due.
Because the Fund invests primarily in bonds from the State of Alabama, it is
particularly sensitive to political and economic factors that negatively affect
Alabama. In addition, there is the risk that substantial changes in federal
income tax law could cause municipal bond prices to decline. This is because the
demand for municipal bonds is strongly influenced by the value of tax-exempt
income to investors.
As a non-diversified fund, The Alabama Tax Free Bond Fund may be invested in
fewer issuers than a diversified fund. If the Fund concentrates in a particular
segment of the bond market, economic or political factors affecting one bond in
that segment may affect other bonds within the same segment. These factors may
cause greater fluctuations in the Fund's value and may make the Fund more
susceptible to any single risk.
PERFORMANCE SUMMARY
The bar charts and performance tables shown below provide an indication of the
risks of investing in each Fund by showing the changes in the performance of the
Fund from year to year since its inception and by showing how the average annual
returns of each Fund compare to those of a broad-based securities market index.
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How each Fund has performed in the past is not necessarily an indication of how
it will perform in the future.
THE GOVERNMENT STREET EQUITY FUND
[GRAPHIC OMITTED]
1992 1993 1994 1995 1996 1997 1998 1999
6.04% 3.15% -2.78% 27.42% 21.48% 27.84% 23.73% 17.71%
During the period shown in the bar chart, the highest return for a quarter was
20.92% during the quarter ended December 31, 1998 and the lowest return for a
quarter was -9.05% during the quarter ended September 30, 1998.
The year-to-date return through September 30, 2000 is 2.24%.
THE GOVERNMENT STREET BOND FUND
[GRAPHIC OMITTED]
1992 1993 1994 1995 1996 1997 1998 1999
6.34% 8.80% -2.69% 15.46% 3.67% 7.83% 7.43% -1.02%
During the period shown in the bar chart, the highest return for a quarter was
5.24% during the quarter ended June 30, 1995 and the lowest return for a quarter
was -2.38% during the quarter ended March 31, 1994.
The year-to-date return through September 30, 2000 is 6.15%.
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THE ALABAMA TAX FREE BOND FUND
[GRAPHIC OMITTED]
1994 1995 1996 1997 1998 1999
-3.18% 12.42% 3.77% 6.32% 5.13% -0.98%
During the period shown in the bar chart, the highest return for a quarter was
4.67% during the quarter ended March 31, 1995 and the lowest return for a
quarter was -3.17% during the quarter ended March 31, 1994.
The year-to-date return through September 30, 2000 is 4.88%.
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AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED
DECEMBER 31, 1999
Since Inception
One Year Five Years (June 3, 1991)
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The Government Street
Equity Fund ............................ 17.71% 23.58% 15.46%
Standard & Poor's
500 Index1 ............................. 21.04% 28.56% 19.91%
Since Inception
One Year Five Years (June 3, 1991)
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The Government Street
Bond Fund .............................. -1.02% 6.54% 6.31%
Lehman Government/Corporate
Intermediate Bond Index2 ............... 0.38% 7.10% 6.89%
90-Day Treasury
Bill Index3 ............................ 4.85% 5.35% 4.84%
Since Inception
(January 15,
One Year Five Years 1993)
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The Alabama Tax Free
Bond Fund .............................. -0.98% 5.24% 4.38%
Lipper Intermediate Municipal
Bond Fund Index4 ....................... -1.53% 5.19% 4.20%
Lehman 7-Year G.O. Municipal
Bond Index.5 ........................... -0.16% 6.50% 5.57%
Lehman 3-Year
Municipal Bond Index6 .................. 1.97% 5.17% 4.64%
1 The Standard & Poor's 500 Index is a widely recognized, unmanaged index of
common stock prices.
2 The Lehman Government/Corporate Intermediate Bond Index is an unmanaged
index generally representative of intermediate-term bonds.
3 The 90-Day Treasury Bill Index is an unmanaged index generally
representative of the average yield of 90-day Treasury bills.
4 The Lipper Intermediate Municipal Bond Fund Index is an index of
intermediate-term municipal bond funds tracked by Lipper Analytical
Services, Inc.
5 The Lehman 7-Year G.O. Municipal Bond Index is an unmanaged index generally
representative of 7-year general obligation tax-exempt bonds.
6 The Lehman 3-Year Municipal Bond Index is an unmanaged index generally
representative of 3-year tax-exempt bonds.
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SYNOPSIS OF COSTS AND EXPENSES
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This table describes the fees and expenses that you will pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES (fees paid directly from your investment).......None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
The The The
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
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Management Fee ....................... 0.60% 0.50% 0.35%
Administrator's Fees ................. 0.17% 0.08% 0.15%
Other Expenses ....................... 0.06% 0.12% 0.22%
----- ----- -----
Total Annual Fund
Operating Expenses ................... 0.83% 0.70% 0.72%(1)
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(1) The Adviser has voluntarily agreed to waive all or a portion of its fee and
to reimburse certain expenses of The Alabama Tax Free Bond Fund necessary
to limit total operating expenses to 0.65% of the Fund's average net
assets. The Adviser reserves the right to terminate this waiver or any
reimbursement at any time in the Adviser's sole discretion.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. It assumes that you invest
$10,000 in a Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
The The The
Government Government Alabama
Street Street Tax Free
Equity Fund Bond Fund Bond Fund
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1 year ...................... $ 85 $ 72 $ 74
3 years ..................... 265 224 230
5 years ..................... 460 390 401
10 years .................... 1,025 871 894
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HOW TO PURCHASE SHARES
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There are no sales commissions charged to investors. You may obtain assistance
in opening accounts from Ultimus Fund Solutions, LLC (the "Administrator") by
calling toll-free 1-866- 738-1125, or by writing to the Funds at the address
shown below for regular mail orders. You may also obtain assistance through any
broker-dealer authorized to sell shares of the Funds. The broker-dealer may
charge you a fee for its services.
Your investment will purchase shares at each Fund's net asset value ("NAV") next
determined after your order is received by the Fund in proper order as indicated
herein. The minimum initial investment in each Fund is $5,000; however, the
minimum is $1,000 for an individual retirement account ("IRA") or self-employed
retirement plan ("Keogh") investment in The Government Street Equity Fund or The
Government Street Bond Fund. The Funds may, in the Adviser's sole discretion,
accept certain accounts with less than the stated minimum initial investment.
Payment must be made by check or money order drawn on a U.S. bank and payable in
U.S. dollars. If your order is received by the Administrator, whether by mail,
bank wire or facsimile order from a qualified broker-dealer, prior to the close
of the regular session of trading on the New York Stock Exchange (the
"Exchange"), generally 4:00 p.m. Eastern time, you will purchase shares at the
NAV determined on that business day. If your order is not received by the close
of the regular session of trading on the Exchange, your order will purchase
shares at the NAV determined on the next business day.
You should be aware that the Funds' account application contains provisions in
favor of the Funds, the Administrator and certain of their affiliates, excluding
such entities from certain liabilities (including, among others, losses
resulting from unauthorized shareholder transactions) relating to the various
services made available to investors.
If an order to purchase shares is cancelled because your check does not clear,
you will be responsible for any resulting losses or fees incurred by a Fund or
the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, to:
The Government Street Funds
c/o Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
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BANK WIRE ORDERS. You may invest directly by bank wire. To establish a new
account or add to an existing account by wire, please call the Funds at
1-866-738-1125 before wiring to advise the Funds of the investment, the dollar
amount and the account registration. For initial purchases, you should be
prepared to provide us, by mail or facsimile, with a completed, signed Account
Application. This will ensure prompt and accurate handling of your investment.
Please have your bank use the following wiring instructions to purchase by wire:
Firstar Bank, N.A.
ABA# 042000013
For The Government Street Funds #19945-6682
For The [name of fund]
For [Shareholder name and account number or tax
identification number]
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire at any time
by purchasing shares at the then current NAV as aforementioned. The minimum
additional investment allowed for The Government Street Equity Fund or The
Government Street Bond Fund is $500. Before making additional investments by
bank wire, please call the Funds at 1-866-738-1125 to alert the Funds that your
wire is to be sent. Follow the wire instructions above to send your wire. When
calling for any reason, please have your account number ready, if known. Mail
orders should include, when possible, the "Invest by Mail" stub which is
attached to your Fund confirmation statement. Otherwise, be sure to identify
your account in your letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables you to make
regular monthly or quarterly investment in shares through automatic charges to
your checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
NAV on or about the 15th day and/or the last business day of the month or both.
You may change the amount of the investment or discontinue the plan at any time
by writing to the Administrator.
HOW TO REDEEM SHARES
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You may redeem shares of a Fund on each day that the Fund is open for business
by sending a written request to the Funds. The Funds are open for business on
each day the Exchange is open for business. Any redemption may be for more or
less than the purchase price of
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your shares depending on the market value of the applicable Fund's portfolio
securities. All redemption orders received in proper form, as indicated herein,
by the Administrator prior to the close of the regular session of trading on the
Exchange, generally 4:00 p.m., Eastern time, will redeem shares at the NAV
determined as of that business day's close of trading. Otherwise, your order
will redeem shares on the next business day. You may also redeem your shares
through a broker-dealer who may charge you a fee for its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $1,000 (due to redemptions or transfers,
but not due to market action) upon 60 days' written notice. If the shareholder
brings his account value up to $1,000 or more during the notice period, the
account will not be redeemed. Redemptions from retirement plans may be subject
to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds at 1-866-738-1125 or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to:
The Government Street Funds
c/o Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
Your request for redemption must include:
1) your letter of instruction or a stock assignment specifying the account
number, and the number of shares or dollar amount to be redeemed. This
request must be signed by all registered shareholders in the exact names in
which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension
or profit sharing plans, and other organizations.
Your redemption proceeds will be mailed to you within 3 business days after
receipt of your redemption request. However, a Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. You may reduce or avoid such delay (which may
take up to 15 days) if you purchase by certified check, government check or wire
transfer. In such cases, the NAV next determined after receipt of the request
for redemption will be used in processing the redemption and your redemption
proceeds will be mailed to you upon clearance of your check to purchase shares.
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You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your bank ($5,000 minimum). Shares of the Funds
may not be redeemed by wire on days in which your bank is not open for business.
Redemption proceeds will only be sent to the bank account or person named in
your Account Application currently on file with the Funds. You can change your
redemption instructions any time you wish by filing a letter including your new
redemption instructions with the Funds.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a redemption in an amount over $25,000, or a change in registration
or standing instructions for your account. Signature guarantees are required for
(1) requests to redeem shares having a value of greater than $25,000, (2) change
of registration requests, (3) requests to establish or change redemption
services other than through your initial account application and (4) if the
name(s) or the address on your account has been changed within 30 days of your
redemption request. Signature guarantees are acceptable from a member bank of
the Federal Reserve System, a savings and loan institution, credit union,
registered broker-dealer or a member firm of a U.S. Stock Exchange, and must
appear on the written request for redemption or change of registration.
SYSTEMATIC WITHDRAWAL PLAN. If your Fund shares are valued at $10,000 or more at
the current offering price you may establish a Systematic Withdrawal Plan to
receive a monthly or quarterly check in a stated amount not less than $100. Each
month or quarter as specified, the Funds will automatically redeem sufficient
shares from your account to meet the specified withdrawal amount. You may
establish this service whether dividends and distributions are reinvested or
paid in cash. Systematic withdrawals may be deposited directly to your bank
account by completing the applicable section on the Account Application form
accompanying this Prospectus, or by writing the Funds.
HOW NET ASSET VALUE IS DETERMINED
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The NAV of the Fund is determined on each business day that the Exchange is open
for trading, as of the close of the Exchange (currently 4:00 p.m., Eastern
time). NAV per share is determined by dividing the total value of all Fund
securities (valued at market value) and other assets, less liabilities, by the
total number of shares then outstanding. NAV includes interest on fixed income
securities, which is accrued daily. See the Statement of Additional Information
for further details.
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Securities which are traded over-the-counter are priced at the last sale price,
if available; otherwise, at the last quoted bid price. Securities traded on a
national stock exchange will be valued based upon the closing price on the
valuation date on the principal exchange where the security is traded. Fixed
income securities will ordinarily 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. The
prices provided by the pricing service are determined with consideration given
to institutional bid and last sale prices and take into account securities
prices, yields, maturities, call features, ratings, institutional trading in
similar groups of securities and developments related to specific securities.
The Trustees will satisfy themselves that such pricing services consider all
appropriate factors relevant to the value of such securities in determining
their fair value. Securities and other assets for which no quotations are
readily available will be valued in good faith at fair value using methods
determined by the Board of Trustees.
MANAGEMENT OF THE FUNDS
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INVESTMENT ADVISER. Subject to the authority of the Board of Trustees, T.
Leavell & Associates, Inc., 150 Government Street, P.O. Box 1307, Mobile,
Alabama 36633 (the "Adviser"), provides a continuous program of supervision of
each Fund's assets, including the composition of its portfolio, and furnishes
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities, pursuant to Investment Advisory Agreements
with the Trust. The Adviser is also responsible for the selection of
broker-dealers through which each Fund executes portfolio transactions, subject
to brokerage policies established by the Trustees, and provides certain
executive personnel to each Fund. The Adviser also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals.
THE GOVERNMENT STREET EQUITY FUND
Thomas W. Leavell is primarily responsible for managing the portfolio of the
Equity Fund. Mr. Leavell, who has served as portfolio manager since the Equity
Fund's inception, has been a principal of the Adviser since the founding of the
firm in 1979. Mr. Leavell holds a B.S. degree from Auburn University and an
M.B.A. from the University of Kentucky.
Compensation of the Adviser with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$100 million, 0.60%; on assets over $100 million, 0.50%.
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THE GOVERNMENT STREET BOND FUND
Mary Shannon Hope is primarily responsible for managing the portfolio of the
Bond Fund and has acted in this capacity since July, 1997. Mrs. Hope has been
employed by the Adviser since 1987. Mrs. Hope holds a B.S. degree from the
University of Alabama and an M.B.A. from the University of South Alabama.
Compensation of the Adviser with respect to the Bond Fund, based upon the Fund's
average daily net assets, is at the following annual rates: On the first $100
million, 0.50%; on assets over $100 million, 0.40%.
THE ALABAMA TAX FREE BOND FUND
Timothy S. Healey is primarily responsible for managing the portfolio of The
Alabama Tax Free Bond Fund and has acted in this capacity since the Fund's
inception. Mr. Healey is a Vice President of the Adviser and has been a
portfolio manager with the firm since 1986. Prior to joining the Adviser, Mr.
Healey served as second Vice President at Torchmark Advisory Co., Inc. in
Birmingham, Alabama. He holds a BS, Finance from the University of Alabama and
has been continuously engaged in the investment management business since 1975.
Compensation of the Adviser with respect The Alabama Tax Free Bond Fund, based
upon the Fund's average daily net assets, is at the following annual rates: on
the first $100 million, 0.35%; on assets over $100 million, 0.25%. The Adviser
currently intends to waive its invest-ment Advisory fees to the extent necessary
to limit the total operating expenses of the Fund to 0.65% per annum of its
average daily net assets. However, there is no assurance that any voluntary fee
waivers will continue in the current or future fiscal years, and expenses of the
Fund may therefore exceed 0.65% of its average daily net assets.
BOARD OF TRUSTEES. The Government Street Funds are each a series of Williamsburg
Investment Trust. The Trust is governed by a Board of Trustees which oversees
all operations of the Funds. A majority of the Trustees are independent and not
affiliated with the Adviser.
Richard Mitchell, President, The Government Street Funds; Executive Vice
President, T. Leavell & Associates, Inc. (since 1983). Education: B.A.,
University of Alabama, 1971; J.D., The College of William & Mary, 1974.
Austin Brockenbrough, III, President and Founding Partner, Lowe, Brockenbrough &
Co., Inc. (since 1970). Director, Tredegar Industries, Inc. Education: B.S.,
University of Richmond, 1962.
John T. Bruce, C.F.A., Principal, Flippin, Bruce & Porter, Inc.. Education:
B.S., Finance, Virginia Polytechnic Institute and State University, 1976.
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Charles M. Caravati, Jr., M.D., Physician. Education: B.S., University of
Virginia, 1959; M.D., University of Virginia, 1963.
J. Finley Lee, Jr., Julian Price Professor of Business Administration, Emeritus,
University of North Carolina. Director, Montgomery Indemnity Insurance Company.
Education: A.B., Davidson College, 1961; M.A., University of Florida, 1962;
Ph.D., University of Pennsylvania, 1965.
Richard L. Morrill, Chancellor and Distinguished University Professor of Ethics
and Democratic Values, University of Richmond. Director, Tredegar Industries.
Education: A.B., Brown University, 1961; B.D., Yale University, 1964; Ph.D.,
Duke University, 1967.
Harris V. Morrissette, President, Marshall Biscuit Company. Director, Energy
South, Inc., South Alabama Bank Corporation. Education: B.S., University of
Alabama, 1982.
Erwin H. Will, Jr., C.F.A., Chief Investment Officer, Virginia Retirement System
(Retired). Education: B.S., University of Virginia, 1956.
Samuel B. Witt, III, Sr. Vice President & General Counsel, Stateside Associates
Inc. Director, The Swiss Helvetia Fund. Education: B.A., Virginia Military
Institute, 1958; L.L.B., University of Virginia, 1964.
DIVIDENDS, DISTRIBUTIONS AND TAXES
================================================================================
THE GOVERNMENT STREET EQUITY FUND AND THE GOVERNMENT STREET BOND FUND
Each Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue code of 1986 and will distribute all of its
net income and realized capital gains to shareholders. Shareholders are liable
for taxes on distributions of net income and realized capital gains of the Funds
but, of course, shareholders who are not subject to tax on their income will not
be required to pay taxes on amounts distributed to them. The Equity Fund intends
to declare dividends quarterly payable in March, June, September and December,
on a date selected by the Trustees. The Bond Fund intends to declare and pay
dividends on the last business day of each month. In addition, distributions may
be made annually in December out of any net short-term or long-term capital
gains derived from the sale of securities realized through October 31 of that
year. Each Fund may make a supplemental distribution of capital gains at the end
of its fiscal year. The nature and amount of all dividends and distributions
will be identified separately when tax information is distributed by the Funds
at the end of each year. Each Fund
17
<PAGE>
intends to withhold 30% on taxable dividends and any other payments that are
subject to such withholding and are made to persons who are neither citizens nor
residents of the United States. The Equity Fund expects that its distributions
will consist primarily of capital gains. The Bond Fund expects that its
distributions will consist primarily of income.
There is no fixed dividend rate, and there can be no assurance as to the payment
of any dividends or the realization of any gains. Current practice of the Equity
Fund, subject to the discretion of the Board of Trustees, is for declaration and
payment of income dividends during the last week of each calendar quarter. All
dividends and capital gains distributions are reinvested in additional shares of
the Fund unless the shareholder requests in writing to receive dividends and/or
capital gains distributions in cash. That request must be received by the Funds
prior to the record date to be effective as to the next dividend. Tax
consequences to shareholders of dividends and distributions are the same if
received in cash or if received in additional shares of a Fund.
THE ALABAMA TAX FREE BOND FUND
Each month The Alabama Tax Free Bond Fund distributes a dividend substantially
equal to all the net investment income of the Fund. The Fund's net investment
income consists of non-capital gain income, less expenses. The Fund will declare
one or more long-term capital gain distributions to the shareholders of the Fund
during the calendar year if the Fund's profits from the sale of securities held
for longer than the applicable period exceed losses from these transactions
together with any net capital losses carried forward from prior years (to the
extent not used to offset short-term capital gains). If the Fund realizes net
short-term capital gains, they will also be distributed at that time. You may
elect to receive dividends and capital gain distributions in either cash or
additional shares. The Fund expects that its distributions will consist
primarily of investment income.
Because The Alabama Tax Free Bond Fund intends to distribute to shareholders
substantially all of its net investment income and net realized capital gains in
accordance with the timing requirements imposed by the Code, it is expected that
the Fund will not be required to pay any federal income or excise taxes. The
Fund also expects the dividends it pays to shareholders of the Fund from
interest on municipal obligations generally to be exempt from federal income tax
because the Trust intends the Fund to satisfy certain requirements of the Code.
One such requirement is that at the close of each quarter of the taxable year of
the Fund, at least 50% of the value of its total assets consists of obligations
whose interest is exempt from federal income tax. Distributions of income from
investments in taxable securities and from certain other investments of the Fund
(including capital gains from the sale of
18
<PAGE>
securities) will be taxable to the shareholder, whether distributed in cash or
in additional shares. However, it is expected that such amounts would not be
substantial in relation to the tax-exempt interest received by the Fund.
A statement will be sent to each shareholder of The Alabama Tax Free Bond Fund
promptly after the end of each calendar year setting forth the federal income
tax status of all distributions for each calendar year, including the portion
exempt from federal income taxes as "exempt-interest dividends;" the portion, if
any, that is a tax preference item under the federal alternative minimum tax;
the portion taxable as ordinary income; the portion taxable as capital gains;
and the portion representing a return of capital (which is free of current taxes
but results in a basis reduction). The Fund intends to withhold 30% on taxable
dividends and any other payments that are subject to such withholding and are
made to persons who are neither citizens nor residents of the U.S.
Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest and makes interest on certain
tax-exempt bonds and distributions by the Fund of such interest a tax preference
item for purposes of the individual and corporate alternative minimum tax. In
addition, all exempt-interest dividends may affect a corporate shareholder's
alternative minimum tax liability. Applicable tax law and changes therein may
also affect the availability of municipal obligations for investment by the Fund
and the value of the Fund's portfolio.
Under existing Alabama tax laws, as long as the Fund qualifies as a "regulated
investment company" under the Code, and provided the Fund is invested in
obligations the interest on which would be exempt from Alabama personal income
taxes if held directly by an individual shareholder (such as obligations of
Alabama or its political subdivisions, of the United States or of certain
territories or possessions of the United States), dividends received from the
Fund that represent interest received by the Fund on such obligations will be
exempt from Alabama personal income taxes. To the extent that distributions by
the Fund are derived from long-term or short-term capital gains on such
obligations, or from dividends or capital gains on other types of obligations,
such distributions will not be exempt from Alabama personal income tax.
Capital gains or losses realized from a redemption of shares of the Fund by an
Alabama resident will be taxable for Alabama personal income tax purposes.
Interest on indebtedness incurred (directly or indirectly) by a shareholder of
the Fund to purchase or carry shares of the Fund will not be deductible for
Alabama income tax purposes.
This discussion of the federal and state income tax consequences of an
investment in the Fund is not exhaustive on the subject. Consequently, investors
should seek qualified tax advice.
19
<PAGE>
ADDITIONAL INVESTMENT INFORMATION
================================================================================
Money market instruments will typically represent a portion of each Fund's
portfolio, as funds awaiting investment, to accumulate cash for anticipated
purchases of portfolio securities and to provide for shareholder redemptions and
operational expenses of the Fund. Money market instruments mature in 13 months
or less from the date of purchase and include U.S. Government Securities and
corporate debt securities (including those subject to repurchase agreements),
bankers' acceptances and certificates of deposit of domestic branches of U.S.
banks, and commercial paper (including variable amount demand master note). At
the time of purchase, money market instruments will have a short-term rating in
the highest category by any NRSRO or, if not rated, will have been issued by a
corporation having an outstanding unsecured debt issue rated in the 3 highest
categories of any NRSRO or, if not so rated, of equivalent quality in the
Adviser's opinion.
THE GOVERNMENT STREET EQUITY FUND
The Equity Fund may write covered call options. Call options written by the Fund
will give the holder the right to buy the underlying securities from the Fund at
a stated exercise price. These options are "covered" by the Fund because it will
own the underlying securities as long as the option is outstanding. The Fund
will receive a premium from writing a call option, which increases the Fund's
return in the event the option expires unexercised or is closed out at a profit.
The amount of the premium will reflect, among other things, the relationship of
the market price of the underlying security to the exercise price of the option
and the remaining term of the option. By writing a call option, the Fund limits
its opportunity to profit from any increase in the market value of the
underlying security above the exercise price of the option. The Fund's use of
covered call options is intended to increase the total return of the Fund's
investment portfolio. It is anticipated that the covered calls will be written
primarily against highly appreciated, low basis securities to increase income
flows. The Adviser expects that the Fund's use of covered calls will be very
limited in scope.
Money market instruments may be purchased by the Equity Fund for temporary
defensive purposes when the Adviser believes the prospect for capital
appreciation in the equity securities markets is not attractive. As a result of
engaging in these temporary measures, the Fund may not achieve its investment
objective.
THE GOVERNMENT STREET BOND FUND
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"certificates" representing undivided ownership interests in pools of mortgages.
Such certificates are guaranteed as to
20
<PAGE>
payment of principal and interest (but not as to price and yield) by the issuer.
In the case of securities issued by GNMA, the payment of principal and interest
would be backed by the full faith and credit of the U.S. Government. Mortgage
pass-through certificates issued by FNMA or FHLMC would be guaranteed as to
payment of principal and interest by the credit of the issuing U.S. Government
agency. Securities issued by other non-governmental entities (such as commercial
banks or mortgage bankers) may offer credit enhancement such as guarantees,
insurance, or letters of credit. Mortgage pass-through certificates are subject
to more rapid prepayment than their stated maturity date would indicate; their
rate of prepayment tends to accelerate during periods of declining interest
rates or increased property transfers and, as a result, the proceeds from such
prepayments may be reinvested in instruments which have lower yields. To the
extent such securities were purchased at a premium, such prepayments could
result in capital losses. The issuer of a pass-through mortgage certificate does
not guarantee premiums or market value of its issue.
Money market instruments may be purchased by the Bond Fund when the Adviser
believes interest rates are rising, the prospect for capital appreciation in the
longer term fixed income securities markets is not attractive, or when the
"yield curve" favors short-term fixed income securities versus longer term fixed
income securities.
THE ALABAMA TAX FREE BOND FUND
The Alabama Tax Free Bond Fund invests primarily in:
(a) Tax-exempt securities which are rated AAA, AA, or A by Standard & Poor's
Ratings Group ("S&P") or are rated Aaa, Aa, or A by Moody's Investors
Service, Inc. ("Moody's") (or of equivalent rating by any of the NRSROs.)
or which are considered by the Adviser to have essentially the same
characteristics and quality as securities having such ratings; and
(b) Notes of issuers having an issue of outstanding municipal obligations rated
AAA, AA or A by S&P or Aaa, Aa or A by Moody's or which are guaranteed by
the U.S. Government or which are rated MIG-1 or MIG-2 by Moody's.
Although the Fund normally invests all of its assets in obligations exempt from
federal and Alabama state income taxes, market conditions may from time to time
limit availability. During periods when the Fund is unable to purchase such
obligations, the Fund will invest the assets of the Fund in municipal
obligations the interest on which is exempt from federal income taxes, but which
is subject to the personal income taxes of Alabama.
21
<PAGE>
As a temporary defensive measure during times of adverse market conditions, up
to 50% of the assets of The Alabama Tax Free Fund may be held in cash or
invested in taxable short-term obligations. These may include:
(a) Obligations issued or guaranteed as to interest and principal by the U.S.
Government or its agencies or instrumentalities, which may be subject to
repurchase agreements; and
(b) Commercial paper which is rated A-1 or A-2 by S&P or P-1 or P-2 by Moody's
(or which is unrated but which is considered to have essentially the same
characteristics and qualities as commercial paper having such ratings),
obligations of banks with $1 billion of assets (including certificates of
deposit, bankers' acceptances and repurchase agreements), securities of
other investment companies, and cash.
Interest income from these short-term obligations may be taxable to shareholders
as ordinary income for federal and state income tax purposes. As a result of
engaging in these temporary measures, the Fund may not achieve its investment
objective.
The Fund may purchase municipal obligations, the interest on which may be
subject to the alternative minimum tax (for purposes of this Prospectus, the
interest thereon is nonetheless considered to be tax-exempt).
With respect to those municipal obligations which are not rated by an NRSRO, the
Fund will be more reliant on the Adviser's judgment, analysis and experience
than would be the case if such municipal obligations were rated. In evaluating
the creditworthiness of an issue, whether rated or unrated, the Adviser may take
into consideration, among other things, the issuer's financial resources, its
sensitivity to economic conditions and trends, the operating history of and the
community support for the facility financed by the issue, the ability of the
issuer's management and regulatory matters.
22
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in each
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Tait, Weller & Baker, whose report, along with
each Fund's financial statement, are included in its Statement of Additional
Information, which is available upon request.
THE GOVERNMENT STREET EQUITY FUND
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
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>
23
<PAGE>
THE GOVERNMENT STREET BOND FUND
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
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>
24
<PAGE>
THE ALABAMA TAX FREE BOND FUND
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
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.
25
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THE GOVERNMENT STREET FUNDS
INVESTMENT ADVISER
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, Alabama 36633
www.tleavell.com
ADMINISTRATOR
Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
(Toll-Free) 1-866-738-1125
CUSTODIAN
Firstar Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
<PAGE>
================================================================================
FOR MORE INFORMATION
Additional information about the Funds is included in the Statement of
Additional Information ("SAI"), which is incorporated by refer-ence in its
entirety. Additional information about the Funds' invest-ments is available in
the Funds' annual and semiannual reports to shareholders. In the Funds' annual
report, you will find a discussion of the market conditions and strategies that
significantly affected the Funds' performance during its last fiscal year.
To obtain a free copy of the SAI, the annual and semiannual reports or other
information about the Funds, or to make inquiries about the Funds, please call
Toll-Free
1-866-738-1125
Information about the Funds (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. Information about the opera-tion of the public reference room can be
obtained by calling the Commission at 1-202-942-8090. Reports and other
information about the Funds are available on the Edgar Database on the
Commission's Internet site at http://www.sec.gov. Copies of information on the
Commission's Internet site may be obtained, upon payment of a duplicating fee,
by electronic request at the following e-mail address: [email protected], or by
writing the Public Reference Section of the Commission, Washington, D.C.
20549-0102.
File No. 811-5685
================================================================================
<PAGE>
<TABLE>
<CAPTION>
THE GOVERNMENT STREET FUNDS
Send completed application to:
THE GOVERNMENT STREET FUNDS
c/o Shareholder Services
FUND SHARES APPLICATION P.O. Box 46707
(Please type or print clearly) Cincinnati, OH 45246-0707
=================================================================================================================================
<S> <C>
ACCOUNT REGISTRATION
/ / Individual ______________________________________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
/ / Joint* ______________________________________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship unless otherwise
indicated.
/ / UGMA/UTMA _____________________________________________ under the ________ Uniform Gifts/Transfers to Minors Act
(First Name) (Middle Initial) (Last Name) (State)
_________________________________________________________________________________________ as Custodian
(First Name) (Middle Name) (Last Name)
______________________________________________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
/ / For Corporations, ______________________________________________________________________________________________________
Partnerships, Trusts, Name of Corporation or Partnership. If a Trust, include the name(s) of Trustees in which account will
Retirement Plans and be registered, and the date of the Trust instrument.
Third Party IRAs.
______________________________________________________________________________________________________
(Taxpayer Identification Number)
---------------------------------------------------------------------------------------------------------------------------------
ADDRESS
Street or P.O. Box ______________________________________________________________________________________________________________
City _____________________________________________________________________________________State______________Zip ________________
Telephone ________________________________________U.S. Citizen ____Resident Alien ____Non Resident (Country of Residence)________
---------------------------------------------------------------------------------------------------------------------------------
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name ____________________________________________________________________________________________________________________________
Street or P.O. Box ______________________________________________________________________________________________________________
City _____________________________________________________________________________________State______________Zip ________________
---------------------------------------------------------------------------------------------------------------------------------
INITIAL INVESTMENT (Minimum initial investment: $5,000; $1,000 minimum for tax qualified account)
/ / Enclosed is a check payable to THE GOVERNMENT STREET FUNDS for $ ____________________ (Please indicate Fund(s) below)
/ / Funds were wired to Firstar Bank on _____________________ in the amount of $ ________________ (Please indicate Fund(s) below)
/ / GOVERNMENT STREET EQUITY FUND $________________
/ / GOVERNMENT STREET BOND FUND $________________
/ / ALABAMA TAX FREE BOND FUND $________________
By Mail: You may purchase shares by mail by completing and signing this application. Please mail with your check to the address
above.
By Wire: You may purchase shares by wire. PRIOR TO SENDING THE WIRE, PLEASE CONTACT THE FUNDS (TOLL-FREE) AT 1-866-738-1125 SO
THAT YOUR WIRE TRANSFER IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed application by mail
immediately thereafter to the Funds. The wire should be routed as follows:
FIRSTAR BANK, N.A.
ABA #042000013
FOR CREDIT TO GOVERNMENT STREET FUNDS #19945-6682
FOR THE [NAME OF FUND]
FOR [SHAREHOLDER NAME AND SOCIAL SECURITY OR TAXPAYER ID NUMBER]
---------------------------------------------------------------------------------------------------------------------------------
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
/ / Reinvest all dividends and capital gains distributions
/ / Reinvest all capital gain distributions; dividends to be paid in cash
/ / Pay all dividends and capital gain distributions in cash
/ / By Check / / By ACH to my bank checking or savings account. PLEASE ATTACH A VOIDED CHECK.
<PAGE>
---------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AUTHORIZATION FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND OTHER INSTITUTIONS
Please retain a copy of this document for your files. Any modification of the information contained in this section will require
an Amendment to this Application Form.
/ / New Application / / Amendment to previous Application dated________________________________Account No.____________________
Name of Registered Owner_________________________________________________________________________________________________________
The following named person(s) are currently authorized signatories of the Registered Owner. Any________________ of them is/are
authorized under the applicable governing document to act with full power to sell, assign or transfer securities of THE
GOVERNMENT STREET FUNDS for the Registered Owner and to execute and deliver any instrument necessary to effectuate the authority
hereby conferred:
Name Title Signature
_____________________________________ _____________________________________ _________________________________________
_____________________________________ _____________________________________ _________________________________________
_____________________________________ _____________________________________ _________________________________________
THE GOVERNMENT STREET FUNDS, or any agent of the Funds may, without inquiry, rely upon the instruction of any person(s)
purporting to be an authorized person named above, or in any Amendment received by the Funds or their agent. The Funds and their
Agent shall not be liable for any claims, expenses or losses resulting from having acted upon any instruction reasonably believed
to be genuine.
---------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile believed to be authentic.
/ / Please mail redemption proceeds to the name and address of record
/ / Please wire redemptions to the commercial bank account indicated below (subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value, in accordance with the instructions below:
(subject to a minimum $100 per distribution)
Dollar amount of each withdrawal $ ______________________________________ beginning the last business day of ____________________
Withdrawals to be made: / / Monthly / / Quarterly
/ / Please DEPOSIT DIRECTLY the proceeds to the bank account below
/ / Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of THE GOVERNMENT STREET FUNDS by withdrawing from the commercial bank account below, per the instructions
below:
Amount (minimum $100) $ ____________________________ Please make my automatic investment on:
$________________________ Government Street Equity Fund / / the last business day of each month
$________________________ Government Street Bond Fund / / the 15th day of each month
$________________________ Alabama Tax Free Bond Fund / / both the 15th and last business day
__________________________________________________________________
(Name of Bank)
is hereby authorized to charge to my account the bank draft amount here indicated. I understand the payment of this draft is
subject to all provisions of the contract as stated on my bank account signature card.
__________________________________________________________________
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account _____________________________________________________________________
Commercial bank account # _____________________________________________________________________________
ABA Routing # _________________________________________________________________________________________
City, State and Zip in which bank is located __________________________________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check from the above account.
---------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase shares of the Funds and affirm that I have received
a current prospectus and understand the invest-ment objectives and policies stated therein. The investor hereby ratifies any
instructions given pursuant to this Application and for himself and his successors and assigns does hereby release Ultimus Fund
Solutions, LLC, Williamsburg Investment Trust, T. Leavell & Associates, Inc., and their respective officers, employees, agents
and affiliates from any and all liability in the performance of the acts instructed herein provided that such entities have
exercised due care to determine that the instructions are genuine. I certify under the penalties of perjury that (1) the Social
Security Number or Tax Identification Number shown is correct and (2) I am not subject to backup withholding. The certifica-tions
in this paragraph are required from all non-exempt persons to prevent backup withholding of 31% of all taxable distributions and
gross redemption proceeds under the fed-eral income tax law. The Internal Revenue Service does not require my consent to any
provision of this document other than the certifications required to avoid backup with-holding. (Check here if you are subject to
backup withholding) / /.
_____________________________________________________________ ______________________________________________________________
APPLICANT DATE JOINT APPLICANT DATE
_____________________________________________________________ ______________________________________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
</TABLE>
<PAGE>
================================================================================
THE
JAMESTOWN
FUNDS
NO-LOAD FUNDS
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
THE JAMESTOWN INTERNATIONAL EQUITY FUND
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PROSPECTUS
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
Investment Advisor
Lowe, Brockenbrough & Company, Inc.
Richmond, Virginia
These securities have not been approved nor disapproved by the Securities and
Exchange Commission nor has the Securities and Exchange Commission passed upon
the accuracy or adequacy of this Prospectus. Any representation to the contrary
is a criminal offense.
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TABLE OF CONTENTS
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Risk/Return Summary ......................................................... 3
Synopsis of Costs and Expenses .............................................. 10
Investment Objectives, Principal Investment Strategies and Related Risks .... 11
How to Purchase Shares ...................................................... 22
How to Redeem Shares ........................................................ 24
How Net Asset Value is Determined ........................................... 26
Management of the Funds ..................................................... 26
Tax Status of Tax Exempt Virginia Fund ...................................... 28
Dividends, Distributions and Taxes .......................................... 31
Financial Highlights ........................................................ 33
PORTFOLIO MANAGERS
THE JAMESTOWN BALANCED FUND
Henry C. Spalding, Jr.
Charles M. Caravati III, CFA
Joseph A. Jennings III, CFA
THE JAMESTOWN EQUITY FUND
Henry C. Spalding, Jr.
Charles M. Caravati III, CFA
THE JAMESTOWN INTERNATIONAL EQUITY FUND
Kathleen Harris, CFA
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
Beth Ann Walk, CFA
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RISK/RETURN SUMMARY
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The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown
International Equity Fund and The Jamestown Tax Exempt Virginia Fund are
NO-LOAD, open-end series of the Williamsburg Investment Trust, a registered
management investment company commonly known as a "mutual fund." Each represents
a separate mutual fund with its own investment objectives and policies.
WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?
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 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 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 income and enhance the value of your
investment.
WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
JAMESTOWN BALANCED FUND
The percentage of assets of the Balanced Fund invested in equities and fixed
income securities is varied according to the Advisor's judgment of market and
economic conditions. The Advisor attempts to take advantage of the long-term
capital growth and income opportunities available in the securities markets
considering the investment goals of capital protection and low volatility. The
Fund will also invest in a variety of companies, industries and economic
sectors.
Equity securities, including common stocks, preferred stocks, convertible
preferred stocks and convertible bonds, are acquired for capital appreciation or
a combination of capital appreciation and income. Fixed income securi-
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ties, including corporate debt obligations and U.S. Government Securities, are
acquired for income and secondarily for capital appreciation.
JAMESTOWN EQUITY FUND
The Advisor seeks to achieve the Equity Fund's objective through investment in a
diversified portfolio composed primarily of common stocks, preferred stocks,
convertible preferred stocks and convertible bonds. Equity investments are made
using fundamental analysis, proprietary models and qualitative, judgmental
evaluation as selection criteria. The Fund seeks financially strong, relatively
large companies which offer above average earnings and relatively modest
valuations.
JAMESTOWN INTERNATIONAL EQUITY FUND
The International Equity Fund will establish concentrated positions in countries
and regions that look most attractive. The Fund will look for a favorable mix of
positive monetary outlook, attractive valuation levels, accelerating corporate
earnings, and a good supply and demand relationship for equities. The country or
region concentration will be further focused on liquid investments in specific
companies where broadly defined value and accelerating earnings have been
identified. The Fund will focus on both country and stock selection.
The Fund will seek to control risk by diversifying its assets among 12 or more
countries and approximately 80 stocks, and by possibly purchasing forward
currency exchange contracts to hedge against anticipated currency fluctuations.
JAMESTOWN TAX EXEMPT VIRGINIA FUND
At least 65% of the Tax Exempt Virginia Fund's assets will normally be invested
in Virginia tax-exempt securities and at least 80% of the Fund's annual income
will be exempt from federal income tax and excluded from the calculation of the
federal alternative minimum tax.
The Advisor emphasizes a disciplined balance between sector selection and
moderate portfolio duration shifts to enhance income and total return. The
Fund's portfolio duration will range between 2 and 15 years. The Fund intends to
concentrate its investments in "high quality" bonds by maintaining at least 75%
of assets in bonds rated A or better. The Fund also intends to invest in a broad
range of investment grade municipal obligations.
WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
JAMESTOWN BALANCED FUND
The portion of the Balanced Fund's portfolio invested in equity securities will
fluctuate in response to stock market movements, and the portion of the Fund's
portfolio invested in fixed income securities will fluctuate with
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changes in interest rates. Typically a rise in interest rates causes a decline
in the market value of fixed income securities. There is a risk that you could
lose money by investing in the Fund.
The Fund may not achieve the degree of capital appreciation that a portfolio
investing solely in equity securities might achieve. The investment results of
the Fund depend upon the ability of the Advisor to correctly anticipate the
relative performance of equity securities and fixed income securities of
varying maturities.
JAMESTOWN EQUITY FUND
The return on and value of an investment in the Equity Fund will fluctuate in
response to stock market movements. Equity securities are subject to market
risks and fluctuations in value due to earnings, economic conditions and other
factors beyond the control of the Advisor. As a result, there is a risk that you
could lose money by investing in the Fund.
JAMESTOWN INTERNATIONAL EQUITY FUND
Investments in securities of foreign issuers involve somewhat different
investment risks from those affecting securities of domestic issuers. In
addition to credit and market risk, investments in foreign securities involve
sovereign risk, which includes local political and economic developments,
potential nationalization, withholding taxes on dividend or interest payments
and currency blockage. Foreign companies may have less public or less reliable
information available about them and may be subject to less governmental
regulation than U.S. companies. Securities of foreign companies may be less
liquid or more volatile than securities of U.S. companies. As a result, there is
a risk that you could lose money by investing in the Fund.
JAMESTOWN TAX EXEMPT VIRGINIA FUND
Due to the Tax Exempt Virginia Fund's controlled duration and high quality
standards, it expects to exhibit less volatility than would mutual funds with
longer average maturities and lower quality portfolios. Prospective investors
should be aware that the net asset value of the shares of the Fund will change
as the general levels of interest rates fluctuate. When interest rates decline,
the value of a portfolio invested at higher yields can be expected to rise.
Conversely, when interest rates rise, the value of a portfolio invested at lower
yields can be expected to decline. As a result, there is a risk that you could
lose money by investing in the Fund.
As a non-diversified fund, the Fund may be invested in fewer issuers than a
diversified fund. Because a relatively high percentage of the assets of the Fund
may be invested in the securities of a limited number of issuers, the value of
shares of the Fund may be more sensitive to any single economic, business,
political or regulatory occurrence than the value of shares of a diversified
investment company.
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PERFORMANCE SUMMARY
The bar charts and performance tables shown below provide an indication of the
risks of investing in the Funds by showing the changes in the performance of the
Funds from year to year and by showing how the average annual returns of the
Funds compare to those of a broadbased securities market index. How the Funds
have performed in the past is not necessarily an indication of how the Funds
will perform in the future.
JAMESTOWN BALANCED FUND
30% 29.22%
25% 22.52%
20% 18.27%
15% 15.75% 16.27%
10% 8.32% 11.47%
5% 4.35%
0% 0.11%
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-5% -2.59%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
During the period shown in the bar chart, the highest return for a quarter was
16.58% during the quarter ended December 31, 1998 and the lowest return for a
quarter was -9.33% during the quarter ended September 30, 1990.
The year-to-date return through September 30, 2000 is 2.98%.
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JAMESTOWN EQUITY FUND
35% 34.27%
30%
25% 25.53% 23.97%
20% 21.06%
15% 16.65%
10%
5%
0% 2.06% 1.12%
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1993 1994 1995 1996 1997 1998 1999
During the period shown in the bar chart, the highest return for a quarter was
26.90% during the quarter ended December 31, 1998 and the lowest return for a
quarter was -14.56% during the quarter ended September 30, 1998.
The year-to-date return through September 30, 2000 is 2.14%.
JAMESTOWN INTERNATIONAL EQUITY FUND
40% 39.61%
35%
30%
25% 23.95%
20%
15% 12.43%
10%
5%
0%
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1997 1998 1999
During the period shown in the bar chart, the highest return for a quarter was
18.11% during the quarter ended December 31, 1998 and the lowest return for a
quarter was -13.79% during the quarter ended September 30, 1998.
The year-to-date return through September 30, 2000 is -14.53%.
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JAMESTOWN TAX EXEMPT VIRGINIA FUND
15%
12% 12.21%
9% 7.07%
6% 3.87% 5.40%
3%
0%
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-3% -1.74%
-6% -3.69%
1994 1995 1996 1997 1998 1999
During the period shown in the bar chart, the highest return for a quarter was
4.73% during the quarter ended March 31, 1995 and the lowest return for a
quarter was -4.37% during the quarter ended March 31, 1994.
The year-to-date return through September 30, 2000 is 5.34%.
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AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999
JAMESTOWN BALANCED FUND
1 YEAR 5 YEARS 10 YEARS
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Balanced Fund ............... 11.47% 18.78% 12.31%
Standard & Poor's
500 Index(1) ................ 21.04% 28.56% 18.21%
JAMESTOWN EQUITY FUND
SINCE INCEPTION
1 YEAR 5 YEARS INCEPTION DATE
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Equity Fund ................. 16.65% 24.16% 17.29% December 1, 1992
Standard & Poor's
500 Index(1) ................ 21.04% 28.56% 21.45%
JAMESTOWN INTENATIONAL EQUITY FUND
SINCE INCEPTION
1 YEAR INCEPTION DATE
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International Equity Fund ... 39.61% 18.89% April 16, 1996
Morgan Stanley Europe,
Australia and Far East
("EAFE") Index(2) ........... 26.98% 12.73%
JAMESTOWN TAX EXEMPT VIRGINIA FUND
SINCE INCEPTION
1 YEAR 5 YEARS INCEPTION DATE
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Tax Exempt Virginia Fund .... -1.74% 5.27% 3.96% September 1, 1993
Lehman Municipal
Bond Index(3) ............... -2.06% 6.91% 4.95%
(1) The Standard & Poor's 500 Index ("S&P 500") is a widely recognized,
unmanaged index of common stock prices.
(2) The Morgan Stanley EAFE Index is an unmanaged index which tracks the market
performance of small, medium and large capitalization companies in Europe,
Australia and the Far East.
(3) The Lehman Municipal Bond Index is an unmanaged index of bonds widely
recognized as a broad measure of the municipal bond market.
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SYNOPSIS OF COSTS AND EXPENSES
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THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY IF YOU BUY AND HOLD
SHARES OF THE FUNDS.
SHAREHOLDER FEES (fees paid directly from your investment): .............. None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):
BALANCED EQUITY INTERNATIONAL TAX EXEMPT
FUND FUND EQUITY FUND VIRGINIA FUND
-------- ------ ------------- -------------
Investment Advisory Fees .. 0.65% 0.65% 1.00% 0.40%
Administrator's Fees ...... 0.17% 0.18% 0.22% 0.15%
Other Expenses ............ 0.06% 0.08% 0.34% 0.14%
----- ----- ----- -----
Total Fund Operating
Expenses ................. 0.88% 0.91% 1.56% 0.69%
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EXAMPLE: This Example is intended to help you compare the cost of investing in
the Funds with the cost of investing in other mutual funds. It assumes that you
invest $10,000 in a Fund for the time periods indicated and then redeem all of
your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that a Fund's operating expenses remain
the same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
BALANCED EQUITY INTERNATIONAL TAX EXEMPT
FUND FUND EQUITY FUND VIRGINIA FUND
-------- ------ ------------ ------------
1 Year ...................... $ 90 $ 93 $ 159 $ 70
3 Years...................... 281 290 493 221
5 Years...................... 488 504 850 384
10 Years..................... 1,084 1,120 1,856 859
The footnotes to the Financial Highlights table contain information concerning a
decrease in the expense ratios of the Balanced Fund and the Equity Fund as a
result of a directed brokerage arrangement.
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INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES AND RELATED RISKS
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The investment objectives of the JAMESTOWN BALANCED FUND 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 investment objective of the JAMESTOWN EQUITY FUND 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 investment objective of the JAMESTOWN INTERNATIONAL EQUITY FUND is to
achieve superior total returns through investment in equity securities of
issuers located outside of the United States.
The investment objectives of the JAMESTOWN TAX EXEMPT VIRGINIA FUND 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 income and enhance the value of your
investment.
Any investment involves risk, and there can be no assurance that the Funds will
achieve their investment objectives. The investment objectives of each Fund may
not be altered without the prior approval of a majority (as defined by the
Investment Company Act of 1940) of the Fund's shares.
EQUITY FUND AND BALANCED FUND
EQUITY SELECTION. The Equity Fund and the equity portion of the Balanced Fund
will be primarily invested in common stocks, straight preferred stocks,
convertible preferred stocks and convertible bonds. Such investments are made
primarily for long term growth of capital, with income as a secondary
consideration. Equity securities are selected based on several criteria,
including, among other things:
1. Fundamental factors such as financial strength, management record, size of
the company, strategy and position of its major products and services.
2. Stock rankings, through the use of a proprietary computerized screening
process which ranks stocks by using near term earnings momentum (the
percentage change in projected earnings for the next four quarters compared
to actual earnings for the last four quarters), earnings revisions and
projected earnings growth. The model uses consensus earnings estimates
obtained from published investment research sources. Each of the compa-
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nies is also ranked relative to other companies in their sector based on a
forward price-earnings ratio.
3. Companies that screen well are then subjected to qualitative, judgmental
evaluation by the Advisor's equity team.
Attractive equity securities for investment would include companies that are
fundamentally attractive, rank well on the screening process, and pass the
review of the Advisor's equity team. The Advisor uses these selections to focus
on financially strong, relatively large companies which offer above average
earnings growth and relatively modest valuations. Securities convertible into
common stocks are evaluated based on both their equity attributes and fixed
income attributes.
FIXED INCOME SELECTION. The Balanced Fund's fixed income investments may include
corporate debt obligations and "U.S. Government Securities." U.S. Government
Securities include direct obligations of the U.S. Treasury and securities issued
or guaranteed as to interest and principal by agencies or instrumentalities of
the U.S. Government, including those subject to repurchase agreements. While
obligations of some U.S. Government sponsored entities are supported by the full
faith and credit of the U.S. Government, several are supported by the right of
the issuer to borrow from the U.S. Government, and still others are supported
only by the credit of the issuer itself. The guarantee of the U.S. Government
does not extend to the yield or value of the U.S. Government Securities held by
the Funds or to the Funds' shares.
Corporate debt obligations will consist of "investment grade" securities rated
at least Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard &
Poor's Ratings Group ("S&P") or, if not rated, of equivalent quality in the
opinion of the Advisor. Corporate debt obligations are acquired primarily for
their income return and secondarily for capital appreciation. No bond having a
Moody's or S&P rating less than A will be acquired if, as a result, more than
10% of the total value of the fixed income portion of the Balanced Fund's assets
would be invested in such bonds. This applies at the time of acquisition; a
decline in the value of the Balanced Fund's assets subsequent to acquisition
will not require a sale of previously acquired securities, nor will a change in
rating subsequent to acquisition require a sale. For as long as the Balanced
Fund holds a fixed income issue, the Advisor monitors the issuer's credit
standing.
Fixed income investment decisions are made on the basis of the yield relative to
yields available on the same maturity of U.S. Treasury Notes or Bonds
("Treasuries"). When the yield "spread" between Treasuries and other debt
instruments is great, then U.S. Government agency securities (which will
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have higher yields than U.S. Treasuries of the same maturity) or corporate bonds
are potentially attractive. When yield spreads are low, Treasuries would be the
preferred investment. The average maturity of the fixed income portion of the
Balanced Fund's portfolio will vary from 3 to 12 years. The average maturity of
the portfolio will be shifted to reflect the Advisor's assessment of changes in
credit conditions, international currency markets, economic environment, fiscal
policy, monetary policy and political climate.
PORTFOLIO ALLOCATION FOR THE BALANCED FUND. The Balanced Fund invests in a
balanced portfolio of equity and fixed income securities. Equity securities are
acquired for capital appreciation or a combination of capital appreciation and
income. Fixed income securities are acquired for income and secondarily for
capital appreciation.
In addition to the types of securities described above, the Advisor also invests
its assets among various companies, industries and economic sectors and adjusts
the Fund's portfolio allocation between common stocks and fixed income
securities in an attempt to take advantage of what the Advisor believes are the
best opportunities for long-term growth of capital and income, considering the
investment goals of capital protection and low volatility. In making
determinations of how to allocate the portfolio between equities and fixed
income securities, the Advisor analyzes the projected total return relationships
between 4 year stock market total returns (using the S&P 500 as a proxy for the
market) and U.S. Treasury Notes with a 4-year maturity. A 4-year time frame is
used in the Advisor's total return projections because the Advisor believes 4
years is a sufficiently long time period to assess the potential total return of
competing investments without being unduly influenced by short term economic and
market factors. The Advisor uses a dividend discount model, based upon
historical S&P 500 price to dividend relationships, to project 4-year stock
market total returns. This model compares the Advisor's projected S&P 500 4-year
dividend streams and resulting computer generated fourth year S&P 500 Index
values the current S&P 500 Index value to derive estimates of the total return
potential from stocks.
While the Advisor uses the foregoing analysis in portfolio allocation
considerations, it relies upon the judgment of its professional staff to make
conclusive portfolio allocation determinations, especially during times of
volatile stock market and interest rate fluctuation, in an attempt to achieve
the Balanced Fund's goal of low volatility. While the S&P 500 is used as a proxy
for the stock market in formulating portfolio allocation determinations, equity
investments are not limited to stocks included in the S&P 500 Index. There is no
assurance that the projected S&P 500 total rate of return will be realized by
the Balanced Fund, and the rate of return of the Balanced Fund's
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portfolio may be significantly different than the projected S&P 500 rate of
return.
The Advisor does not attempt to predict the proportion of income or growth of
capital to be realized by the Balanced Fund. However, the common stock and fixed
income allocations will each normally range from a minimum of 25% to a maximum
of 75% of the Balanced Fund's assets.
RISK CONSIDERATIONS. To the extent that the Equity Fund's portfolio is fully
invested in equity securities, and the major portion of the Balanced Fund's
portfolio is invested in equity securities, it may be expected that the net
asset value ("NAV") of each Fund will be subject to greater fluctuation than a
portfolio containing mostly fixed income securities. Stocks and other equity
securities are subject to market risks (rapid increase or decrease in value or
liquidity of the security) and fluctuations in value due to earnings, economic
conditions and other factors beyond the control of the Advisor. As a result,
there is a risk that you could lose money by investing in the Funds.
The value of the Balanced Fund's fixed income securities will generally vary
inversely with the direction of prevailing interest rate movements.
Consequently, should interest rates increase or the creditworthiness of an
issuer deteriorate, the value of the Balanced Fund's fixed income securities
would decrease in value, which would have a depressing influence on the Balanced
Fund's NAV.
At times when fixed income investments are emphasized, the Balanced Fund's NAV
would not be subject to as much stock market volatility but may be expected to
fluctuate inversely with the direction of interest rates. The Advisor believes
that, by utilizing the investment policies described herein, the Balanced Fund's
NAV may not rise as rapidly or as much as the stock market (as represented by
the S&P 500 Index) during rising market cycles, but that during declining market
cycles, the Balanced Fund would not suffer as great a decline in its NAV as the
S&P 500 Index. This should result, in the Advisor's opinion, in the Balanced
Fund and its shareholders experiencing less volatile year-to-year total returns
than would be experienced by the S&P 500 Index.
Corporate debt obligations rated less than A have speculative characteristics
and changes in economic conditions or other circumstances are more likely to
lead to a weakened capacity to pay principal and interest than is the case with
higher grade securities.
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INTERNATIONAL EQUITY FUND
Concentrated positions will be established in countries and regions that look
most attractive. In choosing a country or region for the portfolio, the
International Equity Fund will look for a favorable mix of positive monetary
outlook, attractive valuation levels, accelerating corporate earnings, and a
good supply and demand relationship for equities. In general, the country or
region concentration will be further focused on liquid investments in specific
companies where broadly defined value and accelerating earnings have been
identified.
Oechsle International Advisors, LLC (the "Sub-Advisor") believes that investors
must scan the world for investment opportunities. International diversification
is important because:
(1) non-U.S. stocks now account for more than 50 percent of the world's
stock market capitalization; and
(2) the Sub-Advisor believes that international investing meaningfully
reduces risk while potentially improving returns.
In 1967, the United States represented 70 percent of the world's stock market
capitalization, thus providing U.S. investors with ample choices at home.
However, by 1999 rapid growth in the economies of other countries and the
development of their equity markets reduced the U.S. percentage to approximately
50% of a much larger world market. Non-U.S. stocks represent a large,
significant pool presenting opportunities which investors can no longer ignore.
Furthermore, the Sub-Advisor believes that the inclusion of international stocks
to an existing portfolio of U.S. securities results in lower risk mainly due to
the fact that foreign economies and markets are not synchronized with the U.S.
economy or the U.S. equity market.
Recognition of the enhanced risk/reward characteristics of international
investing on the part of institutional investors is demonstrated by their
rapidly increasing exposure to international equity markets. By the end of 1998,
U.S. pension funds had invested nearly 15% of their equity portfolios in
international equities. This percentage is expected to significantly increase
over the next 5 years.
The Sub-Advisor combines top-down country selection with bottom-up stock
selection in order to exploit the inefficiencies within and between
international equity markets. Various academic studies have shown that 60 to 70
percent of a portfolio's returns are determined by the asset allocation mix,
while the remainder is the result of stock selection.
The Sub-Advisor believes that to consistently provide investors with superior
returns, it is imperative to focus on both country selection as well as stock
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selection. Three primary factors are reviewed in the country selection process
in order to rank all the countries for potential returns in U.S. dollars:
(1) A positive monetary environment that is likely to stimulate economic
growth;
(2) Accelerating corporate earnings in countries selling at reasonable
valuation levels given the expected growth; and
(3) The demand and supply relationship for equities in each country.
The Sub-Advisor seeks to control risk by diversifying across a number of foreign
markets. The Fund will generally have investments in 12 or more countries, and
the Fund will never be completely out of any major market in the Morgan Stanley
Europe, Australia and Far East ("EAFE") Index. The Fund will be further
diversified by holding, on average, 80 stocks in the portfolio. A quantitative
review of the portfolio serves to identify the risk and return parameters of the
investments.
Once the macro-economic framework is developed, the Sub-Advisor seeks to add
value through security selection. The Sub-Advisor focuses on medium and large
capitalization stocks, but the Fund may hold up to 25% of the Fund's assets in
companies that have a market capitalization of less than $1 billion. The minimum
market capitalization for an investment is $50 million. Turnover in the
portfolio will generally average between 25% and 50%.
The stock selection process is earnings driven with a particular focus on cash
earnings. In international markets where the accounting and reporting standards
are not as standardized as in the United States, the Sub-Advisor believes that
cash earnings are the best reflection of the true earnings power of a
corporation. The Sub-Advisor analyzes accounting and legal differences in order
to compare investments among different countries. The core of the equity
research process is driven by fundamental research. The Sub-Advisor's investment
research professionals annually visit more than 700 companies around the globe
that are potential investments. The Sub-Advisor feels that these company visits
are an essential part of understanding the cash generation capabilities of the
companies. The Sub-Advisor is headquartered in Boston and has offices and
investment professionals in Frankfurt, London and Tokyo.
When the Sub-Advisor believes that the currency of a particular foreign country
may suffer a substantial decline against the U.S. dollar, it may attempt to
hedge some portion or all of this anticipated risk by entering into a forward
contract to sell an amount of foreign currency approximating the value of some
or all of the Fund's portfolio obligations denominated in such foreign currency.
It may also enter into such contracts to protect against loss
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between trade and settlement dates resulting from changes in foreign currency
exchange rates. Such contracts will also have the effect of limiting any gains
to the Fund between trade and settlement dates resulting from changes in such
rates.
The Fund will use currency hedges only as a defensive measure. Given its outlook
for the various currencies, the Sub-Advisor first seeks beneficial currency
exposure through country allocation. Secondly, the Sub-Advisor will concentrate
investments in securities that are likely to benefit from the currency outlook.
Finally, as a defensive measure, the Sub-Advisor may hedge some of the Fund's
currency position to protect the portfolio against a rise in the dollar of the
United States. The Fund may hedge up to 50% of its investments in international
markets.
CERTAIN RISK CONSIDERATIONS
Investing in foreign securities involves considerations and possible risks not
typically involved in investing in securities of companies domiciled and
operating in the United States, including the instability of some governments,
the possibility of expropriation, limitations on the use or removal of funds or
other assets, changes in governmental administration or economic or monetary
policy (in the United States or elsewhere) or changed circumstances in dealings
between nations. The application of non-U.S. tax laws (e.g., the imposition of
withholding taxes on dividend or interest payments) or confiscatory taxation may
also affect investment in such securities. Higher expenses may result from
investment in non-U.S. securities than would result from investment in U.S.
securities because of the costs that must be incurred in connection with
conversions between various currencies and brokerage commissions that may be
higher than those in the United States. Securities markets located outside the
United States also may be less liquid, more volatile and less subject to
governmental supervision than those in the United States. Investments in
countries other than the United States could be affected by other factors not
present in the United States, including lack of uniform accounting, auditing and
financial reporting standards and potential difficulties in enforcing
contractual obligations.
CURRENCY RISKS. The Fund's investments that are denominated in a currency other
than the U.S. dollar are subject to the risk that the value of a particular
currency will change in relation to one or more other currencies including the
U.S. dollar. Among the factors that may affect currency values are trade
balances, the level of short-term interest rates, differences in relative values
of similar assets in different currencies, long-term opportunities for
investment and capital appreciation and political developments. The Fund may try
to hedge these risks by investing in forward currency exchange contracts, but
there can be no assurance that such strategies will be effective.
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MARKET RISKS. General price movements of securities and other investments may
significantly affect the value of the Fund's portfolio. With respect to the
investment strategy utilized by the Fund, there is always some, and occasionally
a significant, degree of market risk. Investing in small companies involves
certain special risks. Small companies may have limited product lines, markets,
or financial resources, and their management may be dependent on a limited
number of key individuals. The securities of small companies may have limited
market liquidity and may be subject to more abrupt or erratic market movements
than securities of larger, more established companies or the market averages in
general.
EMERGING MARKETS. The risks of foreign investing are of greater concern in the
case of investments in emerging markets which may exhibit greater price
volatility and have less liquidity. Furthermore, the economies of emerging
market countries generally are heavily dependent upon international trade and,
accordingly, have been and may continue to be adversely affected by trade
barriers, managed adjustments in relative currency values, and other
protectionist measures applied internally or imposed by the countries with which
they trade. These emerging market economies also have been and may continue to
be adversely affected by economic conditions in the countries with which they
trade.
TAX EXEMPT VIRGINIA FUND
The Tax Exempt Virginia Fund is designed primarily to allow individual and
institutional investors seeking tax exempt current income to take advantage of
the professional investment management expertise of the Advisor. The Fund
maintains a policy of generating at least 80% of the Fund's annual income exempt
from federal income tax and excluded from the calculation of the federal
alternative minimum tax for individual taxpayers. The Fund will maintain at
least 65% of its total assets in Virginia tax exempt securities during normal
market conditions. The Advisor utilizes a disciplined balance between sector
selection and moderate portfolio duration shifts. The Advisor's determination of
optimal duration for the Fund is based on economic indicators, inflation trends,
credit demands, monetary policy and global influences as well as psychological
and technical factors. The Fund endeavors to invest in securities and market
sectors which the Advisor believes are undervalued by the marketplace. The
selection of undervalued bonds by the Advisor is based on, among other things,
historical yield relationships, credit risk, market volatility and absolute
levels of interest rates, as well as supply and demand factors.
Although the Fund seeks to invest all the assets of the Fund in obligations
exempt from federal and Virginia state income taxes, market conditions may from
time to time limit the availability of such obligations. During periods
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when the Fund is unable to purchase such obligations for the portfolio of the
Fund, the Fund will seek to invest the assets of the Fund in Municipal
Obligations (as defined below) the interest on which would be exempt from
federal income taxes, but which would be subject to the personal income taxes of
Virginia. Also, as a temporary defensive measure during times of adverse market
conditions, up to 50% of the assets of the Fund may be held in cash or invested
in the short-term obligations described below.
DURATION. Duration is an important concept in the Advisor's fixed income
management philosophy. "Duration" and "maturity" are different concepts and
should not be substituted for one another for purposes of understanding the
investment philosophy of the Fund. The Advisor believes that for most fixed
income securities "duration" provides a better measure of interest rate
sensitivity than maturity. Whereas maturity takes into account only the final
principal payments to determine the risk of a particular bond, duration weights
all potential cash flows (principal, interest and reinvestment income) on an
expected present value basis, to determine the "effective life" of the security.
The Advisor intends to limit the portfolio duration of the Fund to a 2 year
minimum and a 15 year maximum. The precise point of the Fund's duration within
this range will depend on the Advisor's view of the market. For purposes of the
Fund, the duration calculation used is Macaulay duration adjusted for option
features (such as call features or prepayment options). Adjusting for option
features requires assumptions with respect to the probability of that option
being exercised. These assumptions will be determined by the Advisor based on
then current market conditions.
The Fund expects the average maturity of its portfolio to be longer than the
average duration. How much longer will depend upon, among other factors, the
composition of coupons (higher coupons imply shorter duration), as well as
overall interest rate levels (higher interest rates generally will result in
shorter duration relative to maturity).
INVESTMENT GRADE SECURITIES. The Fund intends to limit its investment purchases
to investment grade securities. The Fund defines investment grade securities as
those securities which, in the Advisor's opinion, have the characteristics
described by any of the nationally recognized statistical rating organizations
("NRSROs"), Moody's, S&P, Fitch Investors Service, Inc. ("Fitch") or Duff &
Phelps ("D&P"), in their 4 highest rating grades. For S&P, Fitch and D&P those
ratings are AAA, AA, A and BBB. For Moody's those ratings are Aaa, Aa, A and
Baa.
The Fund requires that 75% of its assets must be rated at least A by Moody's,
S&P, Fitch or D&P. There may also be instances where the Advisor purchases bonds
which are rated A by one rating agency and which are not rated
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or rated lower than A by other rating agencies, and such purchase would be
within the bounds of the 75% limitation previously stated. The final
determination of quality and value will remain with the Advisor. The Fund
intends to purchase bonds rated BBB by S&P, Fitch or D&P or Baa by Moody's only
if in the Advisor's opinion these bonds have some potential to improve in value
or credit rating. Although the Advisor utilizes the ratings of various credit
rating services as one factor in establishing creditworthiness, it relies
primarily upon its own analysis of factors establishing creditworthiness. For as
long as the Fund holds a fixed income issue, the Advisor monitors the issuer's
credit standing.
MUNICIPAL OBLIGATIONS. The Fund intends to invest in a broad range of investment
grade Municipal Obligations, including general obligation bonds, which are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest; revenue bonds, which are payable from the
revenue derived from a particular facility or class of facilities or, in some
cases, from annual appropriations made by the state legislature for the
repayment of interest and principal or other specific revenue source, but not
from the general taxing power; lease obligations backed by the municipality's
covenant to budget for the payments due under the lease obligation; and certain
types of industrial development bonds issued by or on behalf of public
authorities to obtain funds for privately-operated facilities, provided that the
interest paid on such securities qualifies as exempt from federal income tax.
The value of the securities in which the Fund will invest usually fluctuates
inversely with changes in prevailing interest rates.
As used in this Prospectus, the terms "Municipal Obligations" and "tax exempt
securities" are used interchangeably to refer to debt instruments issued by or
on behalf of states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies or
instrumentalities, the interest on which is exempt from federal income tax
(without regard to whether the interest thereon is also exempt from the personal
income taxes of any State).
SHORT TERM OBLIGATIONS. To protect the capital of shareholders of the Fund under
adverse market conditions, the Fund may from time to time deem it prudent to
hold cash or to purchase taxable short-term obligations for the Fund with a
resultant decrease in yield or increase in the proportion of taxable income.
These securities may consist of obligations of the United States Government, its
agencies or instrumentalities and repurchase agreements secured by such
instruments; certificates of deposit of domestic banks having capital, surplus
and undivided profits in excess of $100 million; bankers' acceptances of such
banks; and commercial paper and other corporate debt obligations which are rated
A-1 or A-2 by S&P or P-1 or P-2 by Moody's (or
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which are unrated but which are considered to have essentially the same
characteristics and qualities as commercial paper having such ratings).
RISK CONSIDERATIONS. Because of the concentration in Virginia Municipal
Obligations, the Fund is more susceptible to factors affecting Virginia issuers
than is a comparable municipal bond fund not concentrated in the obligations of
issuers located in a single state. Yields on Virginia Municipal Obligations
depend on a variety of factors, including: the general conditions of the
municipal bond market; the size of the particular offering; the maturity of the
obligations; and the rating of the issue. Further, any adverse economic
conditions or developments affecting the Commonwealth of Virginia or its
municipalities could impact the Fund's portfolio. The ability of the Fund to
achieve its investment objectives also depends on the continuing ability of the
issuers of Virginia Municipal Obligations and participation interests, or the
guarantors of either, to meet their obligations for the payment of interest and
principal when due. Certain Virginia constitutional amendments, legislative
measures, executive orders, administrative regulations and voter initiatives
could result in adverse consequences affecting Virginia Municipal Obligations.
The NAV of the shares of the Fund changes as the general levels of interest
rates fluctuate. When interest rates decline, the value of a portfolio invested
at higher yields can be expected to rise. Conversely, when interest rates rise,
the value of a portfolio invested at lower yields can be expected to decline.
The Fund has registered as a non-diversified management investment company so
that more than 5% of the assets of the Fund may be invested in the obligations
of each of one or more issuers. Because a relatively high percentage of the
assets of the Fund may be invested in the obligations of a limited number of
issuers, the value of shares of the Fund may be more sensitive to any single
economic, political or regulatory occurrence than the shares of a diversified
investment company would be.
The Fund may invest its assets in a relatively high percentage of Municipal
Obligations issued by entities having similar characteristics. The issuers may
pay their interest obligations from revenue of similar projects such as
multi-family housing, nursing homes, electric utility systems, hospitals or life
care facilities. This too may make the Fund more sensitive to economic,
political, or regulatory occurrences, particularly because such issuers would
likely be located in the same State. As the similarity in issuers increases, the
potential for fluctuation of the NAV of the Fund's shares also increases. The
Fund will only invest in securities of issuers which it believes will make
timely payments of interest and principal.
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HOW TO PURCHASE SHARES
================================================================================
There are NO SALES COMMISSIONS charged to investors. You may obtain assistance
in opening an account from Ultimus Fund Solutions, LLC (the "Administrator") by
calling toll-free 1-866-738-1126, or by writing to the Funds at the address
shown below for regular mail orders. You may also obtain assistance through any
broker-dealer authorized to sell shares of the Funds. The broker-dealer may
charge you a fee for its services.
Your investment will purchase shares at a Fund's NAV next determined after your
order is received by the Funds in proper order as indicated herein. The minimum
initial investment in the Funds is $5,000. The Funds may, in the Advisor's sole
discretion, accept certain accounts with less than the stated minimum initial
investment.
Payment must be made by check or money order drawn on a U.S. bank and payable in
U.S. dollars. All orders received by the Administrator, whether by mail, bank
wire or facsimile order from a qualified broker-dealer, prior to the close of
the regular session of trading on the New York Stock Exchange (the "Exchange"),
generally 4:00 p.m. Eastern time, will purchase shares at the NAV next
determined on that business day. If your order is not received by the close of
the regular session of trading on the Exchange, your order will purchase shares
at the NAV determined on the next business day.
You should be aware that the Funds' account application contains provisions in
favor of the Funds, the Administrator and certain of their affiliates, excluding
such entities from certain liabilities (including, among others, losses
resulting from unauthorized shareholder transactions) relating to the various
services made available to investors.
If an order to purchase shares is cancelled because your check does not clear,
you will be responsible for any resulting losses or fees incurred by the Funds
or the Administrator in the transaction.
REGULAR MAIL ORDERS. Please complete and sign the Account Application form
accompanying this Prospectus and send it with your check, made payable to the
appropriate Fund, and mail it to:
The Jamestown Funds
c/o Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
BANK WIRE ORDERS. You may invest directly by bank wire. To establish a new
account or add to an existing account by wire, please call the Funds at
1-866-738-1126 before wiring funds to advise the Funds of the investment,
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the dollar amount and the account registration. For initial purchases, you
should be prepared to provide us, by mail or facsimile, with a completed, signed
account application. This will ensure prompt and accurate handling of your
investment. Please have your bank use the following wiring instructions to
purchase by wire:
Firstar Bank, N.A.
ABA# 042000013
For The Jamestown Funds #19945-6716
For the [name of Fund] For [Shareholder name and account number
or tax identification number]
It is important that the wire contain all the information and that the Funds
receive prior telephone notification to ensure proper credit. Once your wire is
sent you should, as soon as possible thereafter, complete and mail your Account
Application to the Funds as described under "Regular Mail Orders" above.
ADDITIONAL INVESTMENTS. You may add to your account by mail or wire at any time
by purchasing shares at the then current NAV as aforementioned. Before making
additional investments by bank wire, please call the Funds at 1-866-738-1126 to
alert the Funds that your wire is to be sent. Follow the wire instructions above
to send your wire. When calling for any reason, please have your account number
ready, if known. Mail orders should include, when possible, the "Invest by Mail"
stub which is attached to your Fund confirmation statement. Otherwise, be sure
to identify your account in your letter.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables you to make
regular monthly or quarterly investment in shares through automatic charges to
your checking account. With your authorization and bank approval, the
Administrator will automatically charge your checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
NAV on or about the 15th day and/or the last business day of the month or both.
You may change the amount of the investment or discontinue the plan at any time
by writing to the Administrator.
EXCHANGE PRIVILEGE. You may use proceeds from the redemption of shares of any
Fund to purchase shares of another Fund offering shares for sale in your state
of residence. There is no charge for this exchange privilege. Before making an
exchange, you should read the portion of the Prospectus relating to the Fund
into which the shares are to be exchanged. The shares of the Fund to be acquired
will be purchased at the NAV next determined after acceptance of the exchange
request in writing by the Administrator. The
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exchange of shares of one Fund for shares of another Fund is treated, for
federal income tax purposes, as a sale on which you may realize taxable gain or
loss. To prevent the abuse of the exchange privilege to the disadvantage of
other shareholders, each Fund reserves the right to terminate or modify the
exchange offer upon 60 days' notice to shareholders.
HOW TO REDEEM SHARES
================================================================================
You may redeem shares of the Funds on each day that the Funds are open for
business by sending a written request to the Funds. The Funds are open for
business on each day the Exchange is open for business. Any redemption may be
for more or less than the purchase price of your shares depending on the market
value of the Funds' portfolio securities. All redemption orders received in
proper form, as indicated herein, by the Administrator prior to the close of the
regular session of trading on the Exchange, generally 4:00 p.m. Eastern time,
will redeem shares at the NAV determined as of that business day's close of
trading. Otherwise, your order will redeem shares on the next business day. You
may also redeem your shares through a broker-dealer who may charge you a fee for
its services.
The Board of Trustees reserves the right to involuntarily redeem any account
having an account value of less than $5,000 (due to redemptions, exchanges or
transfers, and not due to market action) upon 60 days' written notice. If you
bring your account value up to $5,000 or more during the notice period, your
account will not be redeemed. Redemptions from retirement plans may be subject
to tax withholding.
If you are uncertain of the requirements for redemption, please contact the
Funds, at 1-866-738-1126, or write to the address shown below.
REGULAR MAIL REDEMPTIONS. Your request should be addressed to The Jamestown
Funds, P.O. Box 46707, Cincinnati, Ohio 45246-0707. Your request for redemption
must include:
1) your letter of instruction or a stock assignment specifying the name of the
applicable Fund, the account number, and the number of shares or dollar
amount to be redeemed. This request must be signed by all registered
shareholders in the exact names in which they are registered;
2) any required signature guarantees (see "Signature Guarantees"); and
3) other supporting legal documents, if required in the case of estates,
trusts, guardianships, custodianships, corporations, partnerships, pension
or profit sharing plans, and other organizations.
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Your redemption proceeds will be mailed to you within 3 business days after
receipt of your redemption request. However, a Fund may delay forwarding a
redemption check for recently purchased shares while it determines whether the
purchase payment will be honored. You may reduce such delay (which may take up
to 15 days) if you purchase by certified check, government check or wire
transfer. In such cases, the NAV next determined after receipt by the
Administrator of your request for redemption will be used in processing your
redemption and your redemption proceeds will be mailed to you upon clearance of
your check to purchase shares.
You can choose to have redemption proceeds mailed to you at your address of
record, your bank, or to any other authorized person, or you can have the
proceeds sent by bank wire to your domestic bank ($5,000 minimum). You may not
redeem shares of the Funds by wire on days in which your bank is not open for
business. Redemption proceeds will only be sent to the bank account or person
named in your Account Application currently on file with the Funds. You can
change your redemption instructions anytime you wish by filing a letter
including your new redemption instructions with the Funds.
SIGNATURE GUARANTEES. To protect your account and the Funds from fraud,
signature guarantees are required to be sure that you are the person who has
authorized a redemption in an amount over $25,000 or a change in registration or
standing instructions for your account. Signature guarantees are required for
(1) requests to redeem shares having a value of greater than $25,000, (2) change
of registration requests, (3) requests to establish or change redemption
services other than through your initial account application and (4) if the
name(s) or the address on your account has been changed within 30 days of your
redemption request. Signature guarantees are acceptable from a member bank of
the Federal Reserve System, a savings and loan institution, credit union,
registered broker-dealer or a member firm of a U.S. Stock Exchange, and must
appear on the written request for redemption or change of registration.
SYSTEMATIC WITHDRAWAL PLAN. If your shares of any Fund are valued at $10,000 or
more at the current offering price, you may establish a Systematic Withdrawal
Plan to receive a monthly or quarterly check in a stated amount not less than
$100. Each month or quarter as specified, the Funds will automatically redeem
sufficient shares from your account to meet the specified withdrawal amount. You
may establish this service whether dividends and distributions are reinvested or
paid in cash. Systematic withdrawals may be deposited directly to your bank
account by completing the applicable section on the Account Application form
accompanying this Prospectus, or by writing the Funds.
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HOW NET ASSET VALUE IS DETERMINED
================================================================================
The NAV of each Fund is determined on each business day that the Exchange is
open for trading, as of the close of the Exchange (currently 4:00 p.m., Eastern
time). Securities held by the International Equity Fund may be primarily listed
on foreign exchanges or traded in foreign markets which are open on days (such
as Saturdays and U.S. holidays) when the Exchange is not open for business. As a
result, the NAV per share of the International Equity Fund may be significantly
affected by trading on days when the Fund is not open for business. NAV per
share is determined by dividing the total value of all Fund securities (valued
at market value) and other assets, less liabilities, by the total number of
shares then outstanding. NAV includes interest on fixed income securities, which
is accrued daily. See the Statement of Additional Information for further
details.
Securities which are traded over-the-counter are priced at the last sale price,
if available; otherwise, they are valued at the last quoted bid price.
Securities traded on a national stock exchange will be valued based upon the
closing price on the valuation date on the principal exchange where the security
is traded. 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. The prices provided by the pricing service are determined with
consideration given to institutional bid and last sale prices and take into
account securities prices, yields, maturities, call features, ratings,
institutional trading in similar groups of securities and developments related
to specific securities. The Trustees will satisfy themselves that such pricing
services consider all appropriate factors relevant to the value of such
securities in determining their fair value. Securities and other assets for
which no quotations are readily available will be valued in good faith at fair
value using methods determined by the Board of Trustees.
MANAGEMENT OF THE FUNDS
================================================================================
INVESTMENT ADVISOR. Subject to the authority of the Board of Trustees, Lowe,
Brockenbrough & Company, Inc., (the "Advisor"), provides the Balanced Fund, the
Equity Fund and the Tax Exempt Virginia Fund with a continuous program of
supervision of each Fund's assets, including the composition of its portfolio,
and furnishes advice and recommendations with respect to investments, investment
policies and the purchase and sale of securities, pursuant to Investment
Advisory Agreements with the Trust. Subject
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to the authority of the Board of Trustees, the Advisor provides the
International Equity Fund with general investment supervisory services pursuant
to an Investment Advisory Agreement with the Trust.
In addition to acting as Advisor to the Funds, the Advisor also provides
investment advice to corporations, trusts, pension and profit sharing plans,
other business and institutional accounts and individuals. The address of the
Advisor is 6620 West Broad Street, Suite 300, Richmond, Virginia 23230.
BALANCED FUND--Henry C. Spalding, Jr. and Charles M. Caravati III, CFA, are
primarily responsible for managing that portion of the Balanced Fund invested in
equity securities. Mr. Spalding became Executive Vice President of the Advisor
in 1988 and became Managing Director in 1998. Mr. Caravati has been in various
positions with the Advisor since 1992. Joseph A. Jennings III, CFA is primarily
responsible for managing that portion of the Balanced Fund invested in fixed
income securities and has acted in this capacity since September 1999. Prior to
joining the Adviser, Mr. Jennings was a Senior Vice President at Crestar Bank
from 1998 to 1999 and at Central Fidelity Bank from 1985 to 1998.
Compensation of the Advisor with respect to the Balanced Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$250 million, 0.65%; on the next $250 million, 0.60%; and on assets over $500
million, 0.55%.
EQUITY FUND--Henry C. Spalding, Jr. and Charles M. Caravati III, CFA, are
primarily responsible for managing the portfolio of the Equity Fund.
Compensation of the Advisor with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$500 million, 0.65%; and on assets over $500 million, 0.55%.
INTERNATIONAL EQUITY FUND--Compensation of the Advisor is at the annual rate of
1.00% of the Fund's average daily net assets.
Subject to the authority of the Board of Trustees and the supervision of the
Advisor, Oechsle International Advisors, LLC (the "Sub-Advisor") provides the
Fund with a continuous program of supervision of the International Equity Fund's
assets, including the composition of its portfolio, and furnishes advice and
recommendations with respect to investments, investment policies and the
purchase and sale of securities, pursuant to a Sub-Advisory Agreement with the
Trust and the Advisor.
Walter Oechsle, who has 38 years experience in the international investment
arena, began his career at Arnhold and S. Bleichroeder before moving to Putnam
to become the President and Chief Investment Officer of Putnam
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International Advisors. In 1986, Mr. Oechsle left with most of the team from
Putnam International Advisors and established the Sub-Advisor. The founding
partners of the Sub-Advisor have an average tenure of 18 years with the current
investment team. The Sub-Advisor has 18 investment professionals located in
offices in Boston, Frankfurt, London and Tokyo. The Sub-Advisor manages over $20
billion in international assets in separately managed and commingled accounts
for private and institutional investors. The Sub-Advisor's address is One
International Place, Boston, Massachusetts 02110.
Since January 1997, Kathleen Harris, CFA has primary responsibility for the
day-to-day management of the International Equity Fund's portfolio. Ms. Harris
has been employed by the Sub-Advisor since January 1995. Prior to her employment
with the Sub-Advisor, she was Portfolio Manager and Investment Director for the
State of Wisconsin Investment Board, where she managed international equity
assets. Walter Oechsle participates in the management of the Fund particularly
with respect to country asset allocation decisions, which are made by both Mr.
Oechsle and Ms. Harris.
Compensation of the Sub-Advisor is paid by the Advisor (not the Fund) in the
amount of one-half of the advisory fee received by the Advisor (net of any
advisory fee waivers).
TAX EXEMPT VIRGINIA FUND--Beth Ann Walk, CFA is primarily responsible for
managing the portfolio of the Tax Exempt Virginia Fund and has acted in this
capacity since the Fund's inception. Ms. Walk is a Portfolio Manager of the
Advisor and has been with the firm since 1983.
Compensation of the Advisor with respect to the Tax Exempt Virginia Fund, based
upon the Fund's average daily net assets, is at the following annual rates: On
the first $250 million, 0.40%; on the next $250 million, 0.35%; and on assets
over $500 million, 0.30%.
TAX STATUS OF TAX EXEMPT VIRGINIA FUND
================================================================================
FEDERAL INCOME TAXES. Because the Tax Exempt Virginia Fund intends to distribute
to shareholders substantially all of its net investment income and net realized
capital gains in accordance with the timing requirements imposed by the Code, it
is expected that the Fund will not be required to pay any federal income or
excise taxes. The Fund also expects the dividends it pays to shareholders of the
Fund from interest on Municipal Obligations generally to be exempt from federal
income tax because the Trust intends the Fund to satisfy certain requirements of
the Code. One such requirement is that at the close of each quarter of the
taxable year of the Fund, at least 50% of the value of its total assets consists
of obligations whose interest is exempt from federal income tax. Distributions
of income from investments in tax-
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able securities and from certain other investments of the Fund (including
capital gains from the sale of securities) will be taxable to the shareholder,
whether distributed in cash or in additional shares. However, it is expected
that such amounts would not be substantial in relation to the tax-exempt
interest received by the Fund.
A statement will be sent to each shareholder of the Fund promptly after the end
of each calendar year setting forth the federal income tax status of all
distributions for each calendar year, including the portion exempt from federal
income tax as "exempt-interest dividends;" the portion, if any, that is a tax
preference item under the federal alternative minimum tax; the portion taxable
as ordinary income; the portion taxable as capital gains; and the portion
representing a return of capital (which is free of current taxes but results in
a basis reduction).
Current federal tax law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest and makes interest on certain
tax-exempt bonds and distributions by the Fund of such interest a tax preference
item for purposes of the individual and corporate alternative minimum tax. In
addition, all exempt-interest dividends may affect a corporate shareholder's
alternative minimum tax liability. Applicable tax law and changes therein may
also affect the availability of Municipal Obligations for investment by the Fund
and the value of the Fund's portfolio. The tax discussion in this Prospectus is
for general information only. Prospective investors should consult their own tax
advisors as to the tax consequences of an investment in the Fund.
STATE INCOME TAXES. The Trust is organized as a Massachusetts business trust
and, under current law, the Fund is not liable for any income or franchise tax
in the Commonwealth of Massachusetts as long as it qualifies as a regulated
investment company under the Code. The Fund will have a business location in
Virginia and will be subject to the income tax laws of that state. A regulated
investment company generally will not be required to pay any Virginia income tax
so long as it (1) does not have to pay any federal income tax and (2) receives
no interest income that is exempt from federal income tax but is not exempt from
Virginia income tax, such as federally tax-exempt interest on obligations of a
state other than Virginia.
Set forth below is a brief description of the personal income tax status of an
investment in the Fund under Virginia tax laws currently in effect. A statement
setting forth the state income tax status of all distributions made during each
calendar year will be sent to shareholders annually.
The Virginia Department of Taxation has ruled that, under existing Virginia law,
as long as the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code and 50% or more of the value of the total assets
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<PAGE>
of the Fund consists of obligations whose interest is exempt from federal income
tax, dividends received from the Fund will not be subject to Virginia personal
income taxes to the extent that such dividends are either (1) excludable from
gross income for federal income tax purposes and attributable to interest on
obligations issued by the Commonwealth of Virginia or any of its political
subdivisions or instrumentalities or obligations issued by Guam, Puerto Rico or
the United States Virgin Islands or (2) attributable to interest on obligations
issued by the United States or any authority, commission, or instrumentality of
the United States in the exercise of borrowing power, and backed by the full
faith and credit of the United States. For shareholders who are subject to
Virginia income tax, dividends received from the Fund (whether paid in cash or
reinvested in additional shares) generally will be includable in Virginia
taxable income to the extent not described in the preceding sentence. Thus, for
example, the portion of dividends excludable from gross income for federal
income tax purposes and attributable to interest on obligations of a state other
than Virginia will not be exempt from Virginia income tax.
Capital gains distributed by the Fund and gain recognized on the sale or other
disposition of shares of the Fund generally will not be exempt from Virginia
income taxation.
Interest on indebtedness incurred (directly or indirectly) by a shareholder of
the Fund to purchase or carry shares of the Fund (1) will not be deductible for
Virginia income tax purposes to the extent that such interest expense relates to
the portions of dividends received from the Fund exempt from Virginia income tax
and (2) will be deductible for Virginia income tax purposes as an offset against
the portions of the dividends received from the Fund attributable to interest
income not exempt from Virginia income taxation to the extent that such interest
expense is not deducted in determining federal taxable income and is related to
such non-exempt portions.
The maximum marginal Virginia personal income tax rate is 5.75%. The same rate
applies to capital gains as to other taxable income.
The foregoing is a general and abbreviated summary of the applicable provisions
of the Code, Treasury regulations, and Virginia tax laws presently in effect.
For the complete provisions, reference should be made to the pertinent Code
sections, the Treasury regulations promulgated thereunder, and the applicable
Virginia tax laws. The Code, Treasury regulations, and Virginia tax laws are
subject to change by legislative, judicial or administrative action either
prospectively or retroactively. Shareholders are urged to consult their own tax
advisors regarding specific questions as to federal, state, local or foreign
taxes.
30
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
================================================================================
Each Fund intends to remain qualified as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986 (the "Code") and will
distribute all of its net income and realized capital gains to shareholders.
Shareholders are liable for taxes on distributions of net income and realized
capital gains of the Funds but, of course, shareholders who are not subject to
tax on their income will not be required to pay taxes on amounts distributed to
them. The Tax Exempt Virginia Fund intends to declare dividends on each business
day and to pay such dividends monthly. Each of the Balanced Fund, the Equity
Fund and the International Equity Fund intends to declare dividends quarterly,
payable in March, June, September and December, on a date selected by the
Trustees. In addition, distributions may be made annually in December out of any
net short-term or long-term capital gains derived from the sale of securities
realized through October 31 of that year. Each Fund may make a supplemental
distribution of capital gains at the end of its fiscal year. The nature and
amount of all dividends and distributions will be identified separately when tax
information is distributed by the Funds at the end of each year. The Funds
intend to withhold 30% on taxable dividends and any other payments that are
subject to such withholding and are made to persons who are neither citizens nor
residents of the United States.
Distributions resulting from the sale of foreign currencies and foreign
obligations, to the extent of foreign exchange gains, are taxed as ordinary
income or loss. If these transactions result in reducing the International
Equity Fund's net income, a portion of the income may be classified as a return
of capital (which will lower your tax basis). If the International Equity Fund
pays non-refundable taxes to foreign governments during the year, the taxes will
reduce the Fund's net investment income but still may be included in your
taxable income. However, you may be able to claim an offsetting tax credit or
itemized deduction on your return for your portion of foreign taxes paid by the
International Equity Fund.
Under applicable tax law, the International Equity Fund may be required to limit
its gains from hedging in foreign currency forwards, futures and options.
Although it is anticipated the International Equity Fund will comply with such
limits, the Fund's use of these hedging techniques involves greater risk of
unfavorable tax consequences than funds not engaging in such techniques. Hedging
may also result in the application of the mark-to-market and straddle provisions
of the Internal Revenue Code. These provisions could result in an increase (or
decrease) in the amount of taxable dividends paid by the Fund as well as affect
whether dividends paid by the Fund are classified as capital gain or ordinary
income.
31
<PAGE>
There is no fixed dividend rate, and there can be no assurance as to the payment
of any dividends or the realization of any gains for either Fund. Current
practice of the Balanced Fund, the Equity Fund and the International Equity
Fund, subject to the discretion of the Board of Trustees, is for declaration and
payment of income dividends during the last week of each calendar quarter. All
dividends and capital gains distributions are reinvested in additional shares of
the Funds unless the shareholder requests in writing to receive dividends and/or
capital gains distributions in cash. That request must be received by the Funds
prior to the record date to be effective as to the next dividend. Tax
consequences to shareholders of dividends and distributions are the same if
received in cash or if received in additional shares of the Funds.
32
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Funds (assuming reinvestment of all dividends and distributions). This
information has been audited by Tait, Weller & Baker, whose report, along with
the Funds' financial statements, are included in the Statement of Additional
Information, which is available upon request.
THE JAMESTOWN BALANCED FUND
<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 $ 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.
33
<PAGE>
THE JAMESTOWN EQUITY FUND
<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 $ 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.
34
<PAGE>
THE JAMESTOWN INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
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 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 Advisor, the ratio of
expenses to average net assets would have been 1.71% (c) for the period
ended March 31, 1997.
(c) Annualized.
35
<PAGE>
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
<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 .......................... $ 10.22 $ 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
Advisor, 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.
36
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THE JAMESTOWN FUNDS
INVESTMENT ADVISOR
Lowe, Brockenbrough & Company, Inc.
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
www.jamestownfunds.com
ADMINISTRATOR
Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
(Toll-Free) 1-866-738-1126
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>
================================================================================
FOR ADDITIONAL INFORMATION
Additional information about the Funds is included in the Statement of
Additional Information ("SAI") and which is incorporated by reference in its
entirety. Additional information about the Funds' investments is available in
the Funds' annual and semiannual reports to shareholders. In the Funds' annual
report, you will find a discussion of the market conditions and strategies that
significantly affected the Funds' performance during their last fiscal year.
To obtain a free copy of the SAI, the annual and semiannual reports or other
information about the Funds, or to make inquiries about the Funds, please call
Toll-Free
1-866-738-1126
Information about the Funds (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's public reference room in Washington,
D.C. Information about the operation of the public reference room can be
obtained by calling the Commission at 1-202-942-8090. Reports and other
information about the Funds are available on the EDGAR Database Commission's
Internet site at http://www.sec.gov. Copies of information on the Commission's
Internet site may be obtained, upon payment of a duplicating fee, by electronic
request at the following e-mail address: [email protected], or by writing the
Public Reference Section of the Commission, Washington, D.C. 20549-0102.
File No. 811-5685
================================================================================
<PAGE>
<TABLE>
<CAPTION>
THE JAMESTOWN FUNDS
Send completed application to:
THE JAMESTOWN FUNDS
c/o Shareholder Services
FUND SHARES APPLICATION P.O. Box 46707
(Please type or print clearly) Cincinnati, OH 45246-0707
==================================================================================================================================
ACCOUNT REGISTRATION
<S> <C>
/ / Individual ______________________________________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
/ / Joint* ______________________________________________________________________________________________________
(First Name) (Middle Initial) (Last Name) (Birthdate) (SS#)
*Joint accounts will be registered joint tenants with the right of survivorship unless otherwise
indicated.
/ / UGMA/UTMA _____________________________________________ under the ________ Uniform Gifts/Transfers to Minors Act
(First Name) (Middle Initial) (Last Name) (State)
_________________________________________________________________________________________ as Custodian
(First Name) (Middle Name) (Last Name)
______________________________________________________________________________________________________
(Birthdate of Minor) (SS # of Minor)
/ / For Corporations, ______________________________________________________________________________________________________
Partnerships, Trusts, Name of Corporation or Partnership. If a Trust, include the name(s) of Trustees in which account will
Retirement Plans and be registered, and the date of the Trust instrument.
Third Party IRAs.
______________________________________________________________________________________________________
(Taxpayer Identification Number)
---------------------------------------------------------------------------------------------------------------------------------
ADDRESS
Street or P.O. Box ______________________________________________________________________________________________________________
City _____________________________________________________________________________________State______________Zip ________________
Telephone ________________________________________U.S. Citizen ____Resident Alien ____Non Resident (Country of Residence)________
---------------------------------------------------------------------------------------------------------------------------------
DUPLICATE CONFIRMATION ADDRESS (if desired)
Name ____________________________________________________________________________________________________________________________
Street or P.O. Box ______________________________________________________________________________________________________________
City _____________________________________________________________________________________State______________Zip ________________
---------------------------------------------------------------------------------------------------------------------------------
INITIAL INVESTMENT (Minimum initial investment: $5,000; $1,000 minimum for tax qualified account)
/ / Enclosed is a check payable to THE JAMESTOWN FUNDS for $ _______________________ (Please indicate Fund(s) below)
/ / Funds wired to Firstar Bank on ________________________ in the amount of $ __________________ (Please indicate Fund(s) below)
/ / Jamestown Balanced Fund $_____________________ / / Jamestown International Equity Fund $_____________________
/ / Jamestown Equity Fund $_____________________ / / Jamestown Tax Exempt Virginia Fund $_____________________
By Mail: You may purchase shares by mail by completing and signing this application. Please mail with your check to the address
above.
By Wire: You may purchase shares by wire. PRIOR TO SENDING THE WIRE, PLEASE CONTACT THE FUNDS (TOLL-FREE) AT 1-866-738-1126 SO
THAT YOUR WIRE TRANSFER IS PROPERLY CREDITED TO YOUR ACCOUNT. Please forward your completed application by mail
immediately thereafter to the Funds. The wire should be routed as follows:
Firstar Bank, N.A.
ABA #042000013
For credit to The Jamestown Funds #19945-6716
For the [name of Fund]
For [shareholder name and Social Security or Taxpayer ID Number]
----------------------------------------------------------------------------------------------------------------------------------
DIVIDEND AND DISTRIBUTION INSTRUCTIONS
/ / Reinvest all dividends and capital gains distributions
/ / Reinvest all capital gain distributions; dividends to be paid in cash
/ / Pay all dividends and capital gain distributions in cash
/ / By Check / / By ACH to my bank checking or savings account. PLEASE ATTACH A VOIDED CHECK.
<PAGE>
----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AUTHORIZATION FOR USE BY CORPORATIONS, TRUSTS, PARTNERSHIPS AND OTHER INSTITUTIONS
Please retain a copy of this document for your files. Any modification of the information contained in this section will require
an Amendment to this Application Form.
/ / New Application / / Amendment to previous Application dated _______________________ Account No._____________________________
Name of Registered Owner _________________________________________________________________________________________________________
The following named person(s) are currently authorized signatories of the Registered Owner. Any________________ of them is/are
authorized under the applicable governing document to act with full power to sell, assign or transfer securities of THE JAMESTOWN
FUNDS for the Registered Owner and to execute and deliver any instrument necessary to effectuate the authority hereby conferred:
Name Title Signature
_____________________________________ _____________________________________ _________________________________________
_____________________________________ _____________________________________ _________________________________________
_____________________________________ _____________________________________ _________________________________________
THE JAMESTOWN FUNDS, or any agent of the Funds may, without inquiry, rely upon the instruction of any person(s) purporting to be
an authorized person named above, or in any Amendment received by the Funds or their agent. The Funds and their Agent shall not be
liable for any claims, expenses or losses resulting from having acted upon any instruction reasonably believed to be genuine.
----------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS
REDEMPTION INSTRUCTIONS
Please honor any redemption instruction received via telegraphic or facsimile believed to be authentic.
/ / Please mail redemption proceeds to the name and address of record
/ / Please wire redemptions to the commercial bank account indicated below (subject to a minimum wire transfer of $5,000)
SYSTEMATIC WITHDRAWAL
Please redeem sufficient shares from this account at the then net asset value, in accordance with the instructions below:
(subject to a minimum $100 per distribution)
Dollar amount of each withdrawal $ ____________________________ beginning the last business day of _______________________________
Withdrawals to be made: / / Monthly / / Quarterly
/ / Please DEPOSIT DIRECTLY the proceeds to the bank account below
/ / Please mail redemption proceeds to the name and address of record
AUTOMATIC INVESTMENT
Please purchase shares of THE JAMESTOWN FUNDS by withdrawing from the commercial bank account below, per the instructions below:
Amount (minimum $100) $ _______________________ Please make my automatic investment on:
$______________________ Jamestown Balanced Fund / / the last business day of each month
$______________________ Jamestown Equity Fund / / the 15th day of each month
$______________________ Jamestown International Equity Fund / / both the 15th and last business day
$______________________ Jamestown Tax Exempt Virginia Fund
_________________________________________________________________
(Name of Bank)
is hereby authorized to charge to my account the bank draft amount here indicated. I understand the payment of this draft is
subject to all provisions of the contract as stated on my bank account signature card.
__________________________________________________________________
(Signature as your name appears on the bank account to be drafted)
Name as it appears on the account ____________________________________________________________________________________
Commercial bank account # ____________________________________________________________________________________________
ABA Routing # ________________________________________________________________________________________________________
City, State and Zip in which bank is located _________________________________________________________________________
For AUTOMATIC INVESTMENT or SYSTEMATIC WITHDRAWAL please attach a voided check from the above account.
----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE AND TIN CERTIFICATION
I/We certify that I have full right and power, and legal capacity to purchase shares of the Funds and affirm that I have received
a current prospectus and understand the invest-ment objectives and policies stated therein. The investor hereby ratifies any
instructions given pursuant to this Application and for himself and his successors and assigns does hereby release Ultimus Fund
Solutions, LLC, Williamsburg Investment Trust, Lowe, Brockenbrough & Company, Inc., and their respective officers, employees,
agents and affil-iates from any and all liability in the performance of the acts instructed herein provided that such entities
have exercised due care to determine that the instructions are genuine. I certify under the penalties of perjury that (1) the
Social Security Number or Tax Identification Number shown is correct and (2) I am not subject to backup withholding. The
certifications in this paragraph are required from all non-exempt persons to prevent backup withholding of 31% of all taxable
distributions and gross redemption proceeds under the federal income tax law. The Internal Revenue Service does not require my
consent to any provision of this document other than the certifications required to avoid backup withholding. (Check here if you
are subject to backup withholding) / /.
_____________________________________________________________ ______________________________________________________________
APPLICANT DATE JOINT APPLICANT DATE
_____________________________________________________________ ______________________________________________________________
OTHER AUTHORIZED SIGNATORY DATE OTHER AUTHORIZED SIGNATORY DATE
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE
GOVERNMENT STREET
FUNDS
THE GOVERNMENT STREET EQUITY FUND
THE GOVERNMENT STREET BOND FUND
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
SERIES OF
WILLIAMSBURG INVESTMENT TRUST
135 MERCHANT STREET, SUITE 230
CINCINNATI, OHIO 45246
TELEPHONE 1-866-738-1125
TABLE OF CONTENTS
-----------------
INVESTMENT OBJECTIVES AND POLICIES........................................... 2
DESCRIPTION OF BOND RATINGS.................................................. 5
INVESTMENT LIMITATIONS....................................................... 8
TRUSTEES AND OFFICERS........................................................ 10
INVESTMENT ADVISER........................................................... 14
ADMINISTRATOR................................................................ 15
OTHER SERVICES............................................................... 15
BROKERAGE.................................................................... 16
SPECIAL SHAREHOLDER SERVICES................................................. 17
PURCHASE OF SHARES........................................................... 18
REDEMPTION OF SHARES......................................................... 19
NET ASSET VALUE DETERMINATION................................................ 20
ALLOCATION OF TRUST EXPENSES................................................. 20
ADDITIONAL TAX INFORMATION................................................... 20
CAPITAL SHARES AND VOTING.................................................... 21
CALCULATION OF PERFORMANCE DATA.............................................. 23
FINANCIAL STATEMENTS AND REPORTS............................................. 25
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of The Government Street Equity Fund and
The Government Street Bond Fund (the "Funds") dated August 1, 2000. The
Prospectus may be obtained from the Funds, at the address and phone number shown
above, at no charge.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Government Street Equity
Fund (the "Equity Fund") and The Government Street Bond Fund (the "Bond Fund")
unless otherwise noted.
The investment objectives and policies of the Funds are described in the Funds'
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
WRITING COVERED CALL OPTIONS. When the Adviser believes that individual
portfolio securities within the Equity Fund are approaching the top of the
Adviser's growth and price expectations, covered call options ("calls") may be
written (sold) against such securities. When the Fund writes a call, it receives
a premium and agrees to sell the underlying security to a purchaser of a
corresponding call at a specified price ("strike price") by a future date
("exercise price"). To terminate its obligation on a call the Fund has written,
it may purchase a corresponding call in a "closing purchase transaction." A
profit or loss will be realized, depending upon whether the price of the closing
purchase transaction is more or less than the premium (net of transaction costs)
previously received on the call written. The Fund may realize a profit if the
call it has written lapses unexercised, in which case the Fund keeps the premium
and retains the underlying security as well. If a call written by the Fund is
exercised, the Fund forgoes any possible profit from an increase in the market
price of the underlying security over an amount equal to the exercise price plus
the premium received. The Fund writes options only for hedging purposes and not
for speculation. If the Adviser is incorrect in its expectations and the market
price of a stock subject to a call option rises above the exercise price of an
option, the Fund will lose the opportunity for further appreciation of that
security.
The Equity Fund will only write options which are issued by the Options Clearing
Corporation and listed on a national securities exchange. Call writing affects
the Fund's portfolio turnover rate and the brokerage commissions paid.
Commissions for options, which are normally higher than for general securities
transactions, are payable when writing calls and when purchasing closing
purchase transactions. The writing of call options by the Fund is subject to
limitations established by each of the exchanges governing the maximum number of
options which may be written or held by a single investor or group of investors
acting in concert, regardless of whether the options were written or purchased
on the same or different exchanges or are held in one or more accounts or
through one or more different exchanges or through one or more brokers.
Therefore the number of calls the Fund may write (or purchase in closing
transactions) may be affected by options written or held by other entities,
including other clients of the Adviser. An exchange may order the liquidation of
positions found to be in violation of these limits and may impose certain other
sanctions.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts (ADRs). ADRs are foreign
securities denominated in U.S. Dollars and traded on U.S. securities markets.
The Fund will invest only in sponsored ADRs on foreign equities. The Funds may
invest in foreign securities if the Adviser believes such investment
2
<PAGE>
would be consistent with the Funds' investment objectives. The same factors
would be considered in selecting foreign securities as with domestic securities,
as discussed in the Prospectus. Foreign securities investment presents special
considerations not typically associated with investments in domestic securities.
Foreign taxes may reduce income. Currency exchange rates and regulations may
cause fluctuation in the value of foreign securities. Foreign securities are
subject to different regulatory environments than in the United States and,
compared to the United States, there may be a lack of uniform accounting,
auditing and financial reporting standards, less volume and liquidity and more
volatility, less public information, and less regulation of foreign issuers.
Countries have been known to expropriate or nationalize assets, and foreign
investments may be subject to political, financial or social instability or
adverse diplomatic developments. There may be difficulties in obtaining service
of process on foreign issuers and difficulties in enforcing judgments with
respect to claims under the U.S. securities laws against such issuers. Favorable
or unfavorable differences between U.S. and foreign economies could affect
foreign securities values. The U.S. Government has, in the past, discouraged
certain foreign investments by U.S. investors through taxation or other
restrictions and it is possible that such restrictions could be imposed again.
SHARES OF OTHER INVESTMENT COMPANIES. The Equity Fund may invest up to 5% of its
net assets in shares of other investment companies, including Standard & Poor's
Depository Receipts ("SPDRs") and shares of the DIAMONDS Trust ("DIAMONDs").
SPDRs are exchange-traded securities that represent ownership in the SPDR Trust,
a long-term unit investment trust which has been established to accumulate and
hold a portfolio of common stocks that is intended to track the price
performance and dividend yield of the Standard & Poor's Composite Stock Price
Index. Holders of SPDRs are entitled to receive proportionate quarterly
distributions corresponding to the dividends which accrue on the S&P 500 stocks
in the underlying portfolio, less accumulated expenses of the SPDR Trust.
DIAMONDs operate similarly to SPDRs, except that the DIAMONDS Trust is intended
to track the price performance and dividend yield of the Dow Jones Industrial
Average. SPDRs and DIAMONDs are unlike traditional mutual funds in that they are
available for purchase or sale during the trading day like a share of stock,
rather than at closing net asset value per share. This characteristic of SPDRs
and DIAMONDs is a risk separate and distinct from the risk that its net asset
value will decrease.
To the extent the Equity Fund invests in securities of other investment
companies, Fund shareholders would indirectly pay a portion of the operating
costs of such companies. These costs include management, brokerage, shareholder
servicing and other operational expenses. Indirectly, then, shareholders may pay
higher operational costs than if they owned the underlying investment companies
directly.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time a
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the
3
<PAGE>
period of time during which the repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Funds hold a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Adviser will carefully consider the creditworthiness during the
term of the repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times as least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Funds' custodian either directly or through a securities depository.
MONEY MARKET INSTRUMENTS. Money market instruments may include U.S. Government
Securities or corporate debt obligations (including those subject to repurchase
agreements) as described herein, provided that they mature in thirteen months or
less from the date of acquisition and are otherwise eligible for purchase by the
Funds. Money market instruments also may include Bankers' Acceptances and
Certificates of Deposit of domestic branches of U.S. banks, Commercial Paper and
Variable Amount Demand Master Notes ("Master Notes"). BANKERS' ACCEPTANCES are
time drafts drawn on and "accepted" by a bank, are the customary means of
effecting payment for merchandise sold in import-export transactions and are a
source of financing used extensively in international trade. When a bank
"accepts" such a time draft, it assumes liability for its payment. When the
Funds acquire a Bankers' Acceptance, the bank which "accepted" the time draft is
liable for payment of interest and principal when due. The Bankers' Acceptance,
therefore, carries the full faith and credit of such bank. A CERTIFICATE OF
DEPOSIT ("CD") is an unsecured interest-bearing debt obligation of a bank. CDs
acquired by the Funds would generally be in amounts of $100,000 or more.
COMMERCIAL PAPER is an unsecured, short term debt obligation of a bank,
corporation or other borrower. Commercial Paper maturity generally ranges from
two to 270 days and is usually sold on a discounted basis rather than as an
interest-bearing instrument. Commercial Paper may include Master Notes of the
same quality. MASTER NOTES are unsecured obligations which are redeemable upon
demand of the holder and which permit the investment of fluctuating amounts at
varying rates of interest. Master Notes are acquired by the Funds only through
the Master Note program of the Funds' custodian, acting as administrator
thereof. The Adviser will monitor, on a continuous basis, the earnings power,
cash flow and other liquidity ratios of the issuer of a Master Note held by the
Funds. At the time of purchase, money market instruments will have a short-term
rating in the highest category from any nationally recognized statistical rating
organization ("NRSRO") or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated in the three highest categories of any
NRSRO or, if not so rated, of equivalent quality in the Adviser's opinion.
4
<PAGE>
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Bond Fund may purchase
securities on a when-issued basis or for settlement at a future date if the Fund
holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date, the
Bond Fund will accrue the interest until the settlement of the sale. When-issued
security purchases and forward commitments have a higher degree of risk of price
movement before settlement due to the extended time period between the execution
and settlement of the purchase or sale. As a result, the exposure to the
counterparty of the purchase or sale is increased. Although the Bond Fund would
generally purchase securities on a forward commitment or when-issued basis with
the intention of taking delivery, the Fund may sell such a security prior to the
settlement date if the Adviser felt such action was appropriate. In such a case
the Fund could incur a short-term gain or loss.
BORROWING. Each Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase the limit to 33.3% of its total assets
to meet redemption requests, which might otherwise require untimely disposition
of portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If, while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities when
it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. Neither Fund will not make
any additional investments while its outstanding borrowings exceed 5% of the
current value of its total assets.
UNSEASONED ISSUERS. Each Fund may invest in the securities of unseasoned
issuers, that is, companies having an operating history of less than three years
(including predecessors and, in the case of fixed income securities,
guarantors). The management of such companies frequently does not have
substantial business experience. Furthermore, they may be competing with other
companies who are well established, more experienced and better financed. The
securities of unseasoned companies may have a limited trading market, which may
adversely affect disposition. If other investors attempt to dispose of such
holdings when a Fund desires to do so, the Fund could receive lower prices than
might otherwise be obtained. Because of these and other risks, investment in
unseasoned issuers is restricted by each Fund to no more than 5% of its net
assets.
DESCRIPTION OF BOND RATINGS
In order to achieve its objectives, the Bond Fund invests in fixed income
securities in the four highest classifications (often called "investment grade")
by any of the nationally recognized statistical rating organizations ("NRSROs")
- Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Group
("S&P"), Fitch Investors Service, Inc. ("Fitch") or Duff & Phelps ("D&P"). For
S&P, Fitch and D&P those ratings are AAA, AA, A and BBB. For Moody's those
ratings are Aaa, Aa, A and Baa.
The various ratings used by the NRSROs are described below. A rating by an NRSRO
represents the organization's opinion as to the credit quality of the security
being traded. However, the ratings are general and are not absolute standards of
quality or guarantees as to the
5
<PAGE>
creditworthiness of an issuer. Consequently, the Adviser believes that the
quality of fixed-income securities in which the Bond Fund may invest should be
continuously reviewed and that individual analysts give different weightings to
the various factors involved in credit analysis. A rating is not a
recommendation to purchase, sell or hold a security because it does not take
into account market value or suitability for a particular investor. When a
security has received a rating from more than one NRSRO, each rating is
evaluated independently. Ratings are based on current information furnished by
the issuer or obtained by the NRSROs from other sources that they consider
reliable. Ratings may be changed, suspended or withdrawn as a result of changes
in or unavailability of such information, or for other reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
Aaa: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large in Aa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements that make the long term
risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered upper medium grade obligations. Factors giving security to principal
and interest are considered adequate but elements may be present that suggest a
susceptibility to impairment sometime in the future.
Baa: Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated Aa,
A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower end of
its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity
to pay
6
<PAGE>
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore,
impair timely payment.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within a rating category.
DESCRIPTION OF DUFF & PHELPS' CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk factors are
negligible, being only slightly more than for risk-free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
7
<PAGE>
A: Bonds rated A have average protection factors. However risk factors are
more variable and greater in periods of economic stress.
BBB: Bonds rated BBB have below average protection factors, but are
considered sufficient for prudent investment. There is considerable variability
in risk during economic cycles.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, which cannot be
changed without approval by holders of a majority of the outstanding voting
shares of the Funds. A "majority" for this purpose, means the lesser of (i) 67%
of a Fund's outstanding shares represented in person or by proxy at a meeting at
which more than 50% of its outstanding shares are represented, or (ii) more than
50% of its outstanding shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities of
any one issuer or purchase more than 10% of the outstanding voting
securities or of any class of securities of any one issuer;
(2) Invest 25% or more of the value of its total assets in any one industry or
group of industries (except that securities of the U.S. Government, its
agencies and instrumentalities are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or trustees
of the Trust or its Adviser who own beneficially more than 1/2 of 1% of the
outstanding securities of such issuer together own more than 5% of the
outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management of another
issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Funds
may invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things.
(6) Underwrite securities issued by others, except to the extent a Fund may be
deemed to be an underwriter under the federal securities laws in connection
with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such short-term
credits as may be necessary for the clearance of transactions);
8
<PAGE>
(8) Make short sales of securities or maintain a short position, except short
sales "against the box." (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short);
(9) Participate on a joint or joint and several basis in any trading account in
securities;
(10) Make loans of money or securities, except that the Funds may invest in
repurchase agreements (but repurchase agreements having a maturity of
longer than seven days, together with other securities which are not
readily marketable, are limited to 10% of the Fund's net assets);
(11) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors), if more than 5% of its total assets would be invested
in such securities;
(12) Write, purchase or sell puts, calls or combinations thereof, or purchase or
sell commodities, commodities contracts, futures contracts or related
options, except that The Government Street Equity Fund may write (sell)
covered call options against its portfolio securities, and purchase
corresponding call options in a closing purchase transaction;
(13) Invest in restricted securities; or
(14) Invest more than 5% of its total assets in the securities of any one issuer
or hold more than 10% of the voting securities of any one issuer.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation. However, in the case of the
borrowing limitation (the first restriction in the Prospectus) each Fund will,
to the extent necessary, reduce its existing borrowings to comply with the
limitation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Adviser has no present intention of engaging
in such transactions at this time or during the coming year.
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<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the activities of the Williamsburg Investment
Trust (the "Trust"). Following are the Trustees and executive officers of the
Trust, their present position with the Trust or Funds, age, principal occupation
during the past 5 years and their aggregate compensation from the Trust for the
fiscal year ended March 31, 2000:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
Age and Address During Past 5 Years From the Trust
--------------- -------------------- --------------
<S> <C> <C>
Austin Brockenbrough III (age 63) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 46) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 63) Physician $12,500
Trustee** Dermatology Associates of
931 Broad Street Road Virginia, P.C.,
Manakin Sabot, Virginia 23103 Richmond, Virginia
J. Finley Lee (age 60) Julian Price Professor Emeritus of $12,500
Trustee Business Administration
105 Gristmill Lane University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
Richard Mitchell (age 51) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
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<PAGE>
Richard L. Morrill (age 61) Chancellor of $12,500
Trustee University of Richmond,
University of Richmond Richmond, Virginia;
G19 Boatright Library Director of Tredegar
Richmond, Virginia 23173 Industries, Inc. (plastics manufacturer)
Harris V. Morrissette (age 40) President of $12,500
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling)
Erwin H. Will, Jr. (age 67) Chief Investment Officer of $12,500
Trustee Virginia Retirement System,
1200 East Main Street Richmond, Virginia
Richmond, Virginia 23219
Samuel B. Witt III (age 64) Senior Vice President and $13,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 37) Portfolio Manager of None
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia.
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Joseph L. Antrim III (age 55) Executive Vice President of None
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 34) Assistant Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
The Jamestown International Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Robert G. Dorsey (age 43) Managing Director of Ultimus Fund None
Vice President Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March, 1999, President of
Countrywide Fund Services, Inc.
11
<PAGE>
John M. Flippin (age 58) Principal of None
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 47) Principal of None
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
600 Luckie Drive
Luckie Building, Suite 305
Birmingham, Alabama 35223
J. Lee Keiger III (age 45) First Vice President and Chief Financial None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter III (age 59) Principal of None
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 38) Managing Director of Ultimus Fund None
Treasurer Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
of Countrywide Fund Services, Inc.
Henry C. Spalding, Jr. (age 62) Executive Vice President of None
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street, Suite 300
Richmond, Virginia 23230
John F. Splain (age 44) Managing Director of Ultimus Fund None
Secretary Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
and Secretary of Countrywide Fund
Services, Inc. and affiliated companies
12
<PAGE>
Connie R. Taylor (age 49) Administrator of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 41) Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 54) President and Chief Executive None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
</TABLE>
-----------------------------
** Indicates that Trustee is an Interested Person for purposes of the
Investment Company Act of 1940. Charles M. Caravati, Jr. is the father of
Charles M. Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee and Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their findings
and recommendations as to accounting and financial matters, including the
adequacy of internal controls. On the basis of this review the Audit Committee
makes recommendations to the Trustees as to the appointment of independent
accountants for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 7, 2000, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) less than 1% of the then-outstanding shares of both the Equity
Fund and the Bond Fund. On that same date, Charles Schwab & Co., Inc., 101
Montgomery Street, San Francisco, California 94104, owned of record 47.4% of the
then-outstanding shares of the Equity Fund and 38.8% of the then-outstanding
shares of the Bond Fund. As a result, Charles Schwab & Co., Inc. may be deemed
to control the Bond Fund and the Equity Fund. As of July 7, 2000, First Alabama
Bank, Successor Trustee of the Mobile Paint Manufacturing Co., Mobile, Alabama
36622, owned of record 7.5% of the then-outstanding shares of the Bond Fund;
Saltco, P.O. Box 469, Brewton, Alabama 36427, owned of record 16.7% of the
then-outstanding shares of the Equity Fund and 10.5% of the then-outstanding
shares of the Bond Fund; and Sterne Agee & Leach, Inc., CMT Plaza, Suite 100 B,
813 Shades Creek Parkway, Birmingham, Alabama 35209, owned of record 5.2% of the
then-outstanding shares of the Bond Fund.
13
<PAGE>
INVESTMENT ADVISER
T. Leavell & Associates, Inc. (the "Adviser") supervises each Fund's investments
pursuant to an Investment Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until April 1,
2001 and will be renewed thereafter for one year periods only so long as such
renewal and continuance is specifically approved at least annually by the Board
of Trustees or by vote of a majority of the Funds' outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Adviser by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by the
Board of Trustees of the Trust or by the Adviser. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Adviser with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$100 million, 0.60%; and on assets over $100 million, 0.50%. For the fiscal
years ended March 31, 2000, 1999 and 1998, the Equity Fund paid the Adviser
Advisory fees of $606,159, $478,172 and $375,712, respectively.
Compensation of the Adviser with respect to the Bond Fund, based upon the Fund's
average daily net assets, is at the following annual rates: On the first $100
million, 0.50%; and on assets over $100 million, 0.40%. For the fiscal years
ended March 31, 2000, 1999 and 1998, the Bond Fund paid the Adviser Advisory
fees of $221,781, $197,590 and $164,236, respectively.
The Adviser, organized as an Alabama corporation in 1979, is controlled by its
shareholders, Thomas W. Leavell, Richard Mitchell, Dorothy G. Gambill and
Timothy S. Healey. In addition to acting as Adviser to the Funds, the Adviser
also provides investment advice to corporations, trusts, pension and profit
sharing plans, other business and institutional accounts and individuals.
The Adviser provides a continuous investment program for the Funds, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Funds. The Adviser determines what securities
and other investments will be purchased, retained or sold by the Funds, and does
so in accordance with the investment objectives and policies of the Funds as
described herein and in the Prospectus. The Adviser places all securities orders
for the Funds, determining with which broker, dealer, or issuer to place the
orders. The Adviser must adhere to the brokerage policies of the Funds in
placing all orders, the substance of which policies are that the Adviser must
seek at all times the most favorable price and execution for all securities
brokerage transactions. The Adviser also provides, at its own expense, certain
Executive Officers to the Trust, and pays the entire cost of distributing Fund
shares.
The Adviser may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
14
<PAGE>
ADMINISTRATOR
The Fund has retained Ultimus Fund Solutions, LLC (the "Administrator") , 135
Merchant Street, Suite 230, Cincinnati, Ohio 45246, to provide administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. The Administrator maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of each Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
The Administrator also provides accounting and pricing services to the Funds and
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services. The
Administrator supervises the preparation of tax returns, reports to shareholders
of the Funds, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees.
For the performance of these administrative services, the Bond Fund pays the
Administrator a fee at the annual rate of 0.075% of the average value of its
daily net assets up to $200,000,000 and 0.05% of such assets in excess of
$200,000,000 and the Equity Fund pays the Administrator a fee at the annual rate
of 0.15% of the average value of its daily net assets up to $25,000,000, 0.125%
of such assets from $25,000,000 to $50,000,000 and 0.10% of such assets in
excess of $50,000,000. In addition, the Funds pay out-of-pocket expenses,
including but not limited to, postage, envelopes, checks, drafts, forms,
reports, record storage and communication lines.
Prior to November 6, 2000, Integrated Fund Services, Inc. ("Integrated"), P.O.
Box 5354, Cincinnati, Ohio 45201, provided the Funds with administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. Integrated is a wholly-owned indirect subsidiary of The Western
and Southern Life Insurance Company. For the fiscal years ended March 31, 2000,
1999 and 1998, Integrated received fees of $170,044, $138,379 and $112,821,
respectively, from the Equity Fund and $33,179, $29,702 and $25,069,
respectively, from the Bond Fund.
OTHER SERVICES
The firm of Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800,
Philadelphia, Pennsylvania 19103 has been retained by the Board of Trustees to
perform an independent audit of the books and records of the Trust, to review
the Funds' federal and state tax returns and to consult with the Trust as to
matters of accounting and federal and state income taxation.
The Custodian of the Funds' assets is Firstar Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Funds
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Funds.
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BROKERAGE
It is the Funds' practice to seek the best price and execution for all portfolio
securities transactions. The Adviser (subject to the general supervision of the
Board of Trustees) directs the execution of the Funds' portfolio transactions.
Subject to the requirements of the 1940 Act and procedures adopted by the Board
of Trustees, the Fund may execute portfolio transactions through any broker or
dealer and pay brokerage commissions to a broker (i) which is an affiliated
person of the Trust, or (ii) which is an affiliated person of such person, or
(iii) an affiliated person of which is an affiliated person of the Trust or the
Adviser.
The Bond Fund's fixed income portfolio transactions will normally be principal
transactions executed in over-the-counter markets and will be executed on a
"net" basis, which may include a dealer markup. The Equity Fund's common stock
portfolio transactions will normally be exchange traded and will be effected
through broker-dealers who will charge brokerage commissions. With respect to
securities traded only in the over-the-counter market, orders will be executed
on a principal basis with primary market makers in such securities except where
better prices or executions may be obtained on an agency basis or by dealing
with other than a primary market maker.
For the fiscal years ended March 31, 2000, 1999 and 1998, the total amount of
brokerage commissions paid by the Equity Fund was $32,348, $40,921 and $20,136,
respectively. No brokerage commissions were paid by the Bond Fund for the last
three fiscal years.
While there is no formula, agreement or undertaking to do so, the Fund has
adopted brokerage policies which allow the Adviser to allocate a portion of
either Fund's brokerage commissions to persons or firms providing the Adviser
with research services, which may typically include, but are not limited to,
investment recommendations, financial, economic, political, fundamental and
technical market and interest rate data, and other statistical or research
services. Much of the information so obtained may also be used by the Adviser
for the benefit of the other clients it may have. Conversely, the Funds may
benefit from such transactions effected for the benefit of other clients. In all
cases, the Adviser is obligated to effect transactions for the Funds based upon
obtaining the most favorable price and execution. Factors considered by the
Adviser in determining whether the Funds will receive the most favorable price
and execution include, among other things: the size of the order, the broker's
ability to effect and settle the transaction promptly and efficiently and the
Adviser's perception of the broker's reliability, integrity and financial
condition.
As of March 31, 2000, the Bond Fund held securities issued by the following of
the Trust's "regular broker-dealers" (as defined in the 1940 Act) or their
parents:
1. Merrill Lynch, Pierce, Fenner & Smith, Inc. (the market value of which was
$1,700,488);
2. Salomon, Inc. (the market value of which was $506,893);
3. Bear Stearns & Company (the market value of which was $173,348); and
4. J.P. Morgan & Co. (the market value of which was $943,146).
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<PAGE>
As of March 31, 2000, the Equity Fund held securities issued by the following of
the Trust's "regular broker-dealers" (as defined in the 1940 Act) or their
parents:
1. Charles Schwab & Co. (the market value of which was $1,074,000)
CODE OF ETHICS. The Trust and the Adviser have adopted Codes of Ethics under
Rule 17j-1 of the 1940 Act which permit personnel subject to the Codes to invest
in securities, including securities that may be purchased or held by the Funds.
The Codes of Ethics adopted by the Trust and the Adviser are on public file
with, and are available from, the SEC.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed within three
business days of the valuation date. If the designated recipient is other than
the registered shareholder, the signature of each shareholder must be guaranteed
on the application (see the Prospectus under the heading "Signature
Guarantees"). A corporation (or partnership) must also submit a "Corporate
Resolution" (or "Certification of Partnership") indicating the names, titles and
required number of signatures authorized to act on its behalf. The application
must be signed by a duly authorized officer(s) and the corporate seal affixed.
No redemption fees are charged to shareholders under this plan. Costs in
conjunction with the administration of the plan are borne by the Funds.
Shareholders should be aware that such systematic withdrawals may deplete or use
up entirely their initial investment and may result in realized long-term or
short-term capital gains or losses. The Systematic Withdrawal Plan may be
terminated at any time by the Funds upon sixty days' written notice or by a
shareholder upon written notice to the Funds. Applications and further details
may be obtained by calling the Funds at 1-866-738-1125, or by writing to:
The Government Street Funds
Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
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<PAGE>
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is at
the sole discretion of the Adviser based upon the suitability of the securities
accepted for inclusion as a long term investment of the Funds, the marketability
of such securities, and other factors which the Adviser may deem appropriate. If
accepted, the securities will be valued using the same criteria and methods as
described in "How Net Asset Value is Determined" in the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Funds to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Funds. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Funds who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on
the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature Guarantees"); and (5) any additional documents which are
required for transfer by corporations, administrators, executors, trustees,
guardians, etc. If you have any questions about transferring shares, call or
write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each of the Funds is the net asset value next
determined after the order is received. An order received prior to the close of
the regular session of trading on the New York Stock Exchange (the "Exchange"),
generally 4:00 p.m., Eastern time, will be executed at the price computed on the
date of receipt; and an order received after that time will be executed at the
price computed on the next Business Day. An order to purchase shares is not
binding on the particular Fund until confirmed in writing (or unless other
arrangements have been made with the Fund, for example in the case of orders
utilizing wire transfer of funds) and payment has been received.
Due to Internal Revenue Service ("IRS") regulations, the Fund will not accept
applications without social security or tax identification numbers. If, however,
you have already applied for a social security or tax identification number at
the time of completing your account application, you should indicate this on the
application. The Fund is required to, and will, withhold taxes on all
distributions and redemption proceeds if the number is not delivered to the Fund
within 60 days.
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<PAGE>
An order to purchase shares is not binding on the Funds until confirmed in
writing (or unless other arrangements have been made with the Funds, for example
in the case of orders utilizing wire transfer of funds) and payment has been
received.
Each Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial investment
minimums for the purpose of reducing the cost to the Funds (and consequently to
the shareholders) of communicating with and servicing their shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Funds, the Adviser and certain parties
related thereto, including clients of the Adviser or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the
"Commission"), (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Fund to dispose of securities owned by it, or to fairly determine the
value of its assets, and (iii) for such other periods as the Commission may
permit.
No charge is made by the Fund for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities held
by the Fund.
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
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<PAGE>
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of the regular session of trading on the Exchange
(currently 4:00 p.m. Eastern time) on each "Business Day." A Business Day means
any day, Monday through Friday, except for the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day and Christmas. Net asset value per
share is determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Adviser
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of shares (including
registration and qualification fees and expenses); costs and expenses of
membership and attendance at meetings of certain associations which may be
deemed by the Trustees to be of overall benefit to the Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Funds. General Trust expenses are allocated among
the series, or funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In addition
to this distribution requirement, each Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities' loans, gains from the disposition of stock or securities, and
certain other income.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter M,
they will not be subject to federal income tax to the extent they distribute
their taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on each Fund to the extent
it does not distribute at least 98% of its ordinary taxable income for a
calendar year, plus 98% of its capital gain net taxable income for the one year
period ending each October 31, plus certain undistributed amounts from prior
years. While each Fund intends to distribute its taxable income and capital
gains in a manner so as to avoid imposition of the federal excise and income
taxes, there can be no assurance that the Funds indeed will make sufficient
distributions to avoid entirely imposition of federal excise or income taxes.
20
<PAGE>
As of March 31, 2000, the Bond Fund had capital loss carryforwards for federal
income tax purposes of $760,308 which expire through the year 2008. In addition,
the 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.
Should additional series, or funds, be created by the Trustees, each Fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "Purchase of
Shares" above.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from the Equity Fund. Each Fund will send shareholders
information each year on the tax status of dividends and disbursements. A
dividend or capital gains distribution paid shortly after shares have been
purchased, although in effect a return of investment, is subject to federal
income taxation. Dividends from net investment income, along with capital gains,
will be taxable to shareholders, whether received in cash or shares and no
matter how long you have held Fund shares, even if they reduce the net asset
value of shares below your cost and thus in effect result in a return of a part
of your investment.
Shareholders should be aware that dividends from the Fund which are derived in
whole or in part from interest on U.S. Government Securities may not be taxable
for state income tax purposes. Other state income and federal income tax
implications may apply. You should consult your tax Adviser for further
information.
CAPITAL SHARES AND VOTING
The Bond Fund and the Equity Fund are each no-load, diversified, open-ended
series of the Williamsburg Investment Trust (the "Trust"), an investment company
organized as a Massachusetts business trust in July 1988. The Board of Trustees
has overall responsibility for management of the Funds under the laws of
Massachusetts governing the responsibilities of Trustees of business trusts.
Shares of the Funds, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or
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retire and (2) any Trustee may be removed with or without cause at any time (a)
by a written instrument, signed by at lease two-thirds of the number of Trustees
prior to such removal; or (b) by vote of shareholders holding not less than
two-thirds of the outstanding shares of the Trust, cast in person or by proxy at
a meeting called for that purpose; or (c) by a written declaration signed by
shareholders holding not less than two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian. Shareholders have certain rights, as
set forth in the Declaration of Trust, including the right to call a meeting of
the shareholders for the purpose of voting on the removal of one or more
Trustees. Shareholders holding not less than ten percent (10%) of the shares
then outstanding may require the Trustees to call such a meeting and the
Trustees are obligated to provide certain assistance to shareholders desiring to
communicate with other shareholders in such regard (e.g., providing access to
shareholder lists, etc.). In case a vacancy or an anticipated vacancy shall for
any reason exist, the vacancy shall be filled by the affirmative vote of a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act. The Trust does not expect to have an annual meeting of
shareholders.
The Declaration of Trust currently provides for the shares of ten funds, or
series, to be issued. Shares of all ten series have currently been issued, in
addition to the Funds: shares of the FBP Contrarian Equity Fund and the FBP
Contrarian Balanced Fund, which are managed by Flippin, Bruce & Porter, Inc. of
Lynchburg, Virginia; shares of The Jamestown Balanced Fund, The Jamestown Equity
Fund, The Jamestown International Equity Fund and The Jamestown Tax Exempt
Virginia Fund, which are managed by Lowe, Brockenbrough & Company, Inc. of
Richmond, Virginia; shares of The Davenport Equity Fund, which is managed by
Davenport & Company LLC of Richmond, Virginia; and shares of The Alabama Tax
Free Bond Fund, which is managed by T. Leavell & Associates, Inc. The Trustees
are permitted to create additional series, or funds, at any time.
Upon liquidation of the Trust or a particular Fund of the Trust, holders of the
outstanding shares of the Fund being liquidated shall be entitled to receive, in
proportion to the number of shares of the Fund held by them, the excess of that
Fund's assets over its liabilities. Each outstanding share is entitled to one
vote for each full share and a fractional vote for each fractional share, on all
matters which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory agreement
for a particular Fund. The shares of the Fund will have noncumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect all of the Trustees if they so choose.
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<PAGE>
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability.
Stock Certificates will not be issued for your shares. Evidence of ownership
will be given by issuance of periodic account statements which will show the
number of shares owned.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
Each Fund may, from time to time, advertise certain total return and yield
information. The average annual total return of a Fund for a period is computed
by subtracting the net asset value per share at the beginning of the period from
the net asset value per share at the end of the period (after adjusting for the
reinvestment of any income dividends and capital gain distributions), and
dividing the result by the net asset value per share at the beginning of the
period. In particular, the average annual total return of a Fund ("T") is
computed by using the redeemable value at the end of a specified period of time
("ERV") of a hypothetical initial investment of $1,000 ("P") over a period of
time ("n") according to the formula P(l+T)n=ERV. The average annual total return
for the Equity Fund for the one and five year periods ended March 31, 2000, and
for the period since inception (June 3, 1991) to March 31, 2000 are 19.93%,
23.09% and 15.59%, respectively. The average annual total return for the Bond
Fund for the one and five year periods ended March 31, 2000, and for the period
since inception (June 3, 1991) to March 31, 2000 are 0.67%, 5.89% and 6.28%,
respectively.
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a Fund
owns the security. Generally, interest
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earned (for the purpose of "a" above) on debt obligations is computed by
reference to the yield to maturity of each obligation held based on the market
value of the obligation (including actual accrued interest) at the close of
business on the last business day prior to the start of the 30-day (or one
month) period for which yield is being calculated, or, with respect to
obligations purchased during the month, the purchase price (plus actual accrued
interest). The yields of the Equity Fund and the Bond Fund for the 30 days ended
March 31, 2000 were 0.22% and 6.67%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Equity Fund may compare its performance to the
S&P 500 Index, which is generally considered to be representative of the
performance of unmanaged common stocks that are publicly traded in the United
States securities markets, and the Bond Fund may compare its performance to the
Merrill Lynch 1-5 Year Government Corporate Index and the Lehman
Government/Corporate Intermediate Bond Index, which are generally considered to
be representative of the performance of a portfolio of domestic, taxable fixed
income securities of intermediate maturities. Comparative performance may also
be expressed by reference to a ranking prepared by a mutual fund monitoring
service, such as Lipper Analytical Services, Inc. or Morningstar, Inc. or by one
or more newspapers, newsletters or financial periodicals. Performance
comparisons may be useful to investors who wish to compare the Funds' past
performance to that of other mutual funds and investment products. Of course,
past performance is not a guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain a
more complete view of the Funds' performance before investing. Of course, when
comparing the Funds' performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Funds may quote total returns that are calculated
on nonstandardized base periods. The total returns represent the historic change
in the value of an investment in the Funds based on monthly reinvestment of
dividends over a specified period of time.
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From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Funds may also disclose from time to
time information about their portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Funds may also depict the historical performance
of the securities in which the Funds may invest over periods reflecting a
variety of market or economic conditions either alone or in comparison with
alternative investments, performance indices of those investments, or economic
indicators. The Funds may also include in advertisements and in materials
furnished to present and prospective shareholders statements or illustrations
relating to the appropriateness of types of securities and/or mutual funds that
may be employed to meet specific financial goals, such as saving for retirement,
children's education, or other future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Funds as of March 31, 2000, together with the report of the independent
accountants thereon, are included on the following pages.
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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>
STATEMENT OF ADDITIONAL INFORMATION
THE ALABAMA
TAX FREE BOND FUND
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
A SERIES OF
WILLIAMSBURG INVESTMENT TRUST
135 MERCHANT STREET, SUITE 230
CINCINNATI, OHIO 45246
TELEPHONE 1-866-738-1125
TABLE OF CONTENTS
-----------------
INVESTMENT OBJECTIVES AND POLICIES........................................... 2
INVESTMENT LIMITATIONS....................................................... 10
TRUSTEES AND OFFICERS........................................................ 12
INVESTMENT ADVISER........................................................... 15
ADMINISTRATOR................................................................ 16
OTHER SERVICES............................................................... 17
BROKERAGE.................................................................... 17
SPECIAL SHAREHOLDER SERVICES................................................. 18
PURCHASE OF SHARES........................................................... 19
REDEMPTION OF SHARES......................................................... 20
NET ASSET VALUE DETERMINATION................................................ 20
ALLOCATION OF TRUST EXPENSES................................................. 21
ADDITIONAL TAX INFORMATION................................................... 21
CAPITAL SHARES AND VOTING.................................................... 22
CALCULATION OF PERFORMANCE DATA.............................................. 24
FINANCIAL STATEMENTS AND REPORTS............................................. 26
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of The Alabama Tax Free Bond Fund (the
"Fund") dated August 1, 2000. The Prospectus may be obtained from the Fund, at
the address and phone number shown above, at no charge.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Fund are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
MUNICIPAL OBLIGATIONS. Municipal Obligations include bonds, notes and commercial
paper issued by or on behalf of states, territories and possessions of the
United States and the District of Columbia and their political subdivisions,
agencies or instrumentalities, the interest on which is exempt from federal
income taxes (without regard to whether the interest thereon is also exempt from
the personal income taxes of any state). Municipal Obligation bonds are issued
to obtain funds for various public purposes, including the construction of a
wide range of public facilities such as bridges, highways, housing, hospitals,
mass transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligation bonds may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses, and
obtaining funds to loan to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide privately-operated
housing facilities, airport, mass transit or port facilities, sewage disposal,
solid waste disposal or hazardous waste treatment or disposal facilities and
certain local facilities for water supply, gas or electricity. Such obligations
are included within the term Municipal Obligations if the interest paid thereon
qualifies as exempt from federal income tax. Other types of industrial
development bonds, the proceeds of which are used for the construction,
equipment, repair or improvement of privately operated industrial or commercial
facilities, may constitute Municipal Obligations, although the current federal
tax laws place substantial limitations on the size of such issues.
The two principal classifications of Municipal Obligation bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its good faith, credit and taxing power for the payment of
principal and interest. The payment of the principal of and interest on such
bonds may be dependent upon an appropriation by the issuer's legislative body.
The characteristics and enforcement of general obligation bonds vary according
to the law applicable to the particular issuer. Revenue bonds are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise or other specific revenue
source. Industrial development bonds which are Municipal Obligations are in most
cases revenue bonds and do not generally constitute the pledge of the credit of
the issuer of such bonds.
Municipal Obligations also include participations in municipal leases. These are
undivided interests in a portion of an obligation in the form of a lease or
installment purchase which is issued by state and local governments to acquire
equipment and facilities. Municipal leases frequently have special risks not
normally associated with general obligation or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide for
title to the leased asset to pass eventually to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of debt. The debt-issuance limitations are deemed to be inapplicable because of
the inclusion in many leases or contracts of "non-appropriation" clauses
2
<PAGE>
that provide that the governmental issuer has no obligation to make future
payments under the lease or contract unless money is appropriated for such
purpose by the appropriate legislative body on a yearly or other periodic basis.
Accordingly, a risk peculiar to these municipal lease obligations is the
possibility that a governmental issuer will not appropriate funds for lease
payments. Although the obligations will be secured by the leased equipment or
facilities, the disposition of the property in the event of non-appropriation or
foreclosure might, in some cases, prove difficult. There are, of course,
variations in the security of Municipal Obligations, both within a particular
classification and between classifications, depending on numerous factors.
Municipal Obligation notes generally are used to provide for short-term capital
needs and generally have maturities of one year or less. Municipal Obligation
notes include:
1. Tax Anticipation Notes. Tax Anticipation Notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various tax revenues, such as income, sales, use and business
taxes, and are payable from these specific future taxes.
2. Revenue Anticipation Notes. Revenue Anticipation Notes are issued in
expectation of receipt of other kinds of revenue, such as federal revenues
available under Federal Revenue Sharing Programs.
3. Bond Anticipation Notes. Bond Anticipation Notes are issued to provide
interim financing until long-term bond financing can be arranged. In most cases,
the long-term bonds then provide the money for the repayment of the Notes.
Issues of commercial paper typically represent short-term, unsecured, negotiable
promissory notes. These obligations are issued by agencies of state and local
governments to finance seasonal working capital needs of municipalities or to
provide interim construction financing and are paid from general revenues of
municipalities or are refinanced with long-term debt. In most cases, Municipal
Obligation commercial paper is backed by letters of credit, lending agreements,
note repurchase agreements or other credit facility agreements offered by banks
or other institutions.
The yields on Municipal Obligations are dependent on a variety of factors,
including general market conditions, supply and demand and general conditions of
the Municipal Obligation market, size of a particular offering, the maturity of
the obligation and rating (if any) of the issue.
MUNICIPAL BOND RATINGS. The ratings of the nationally recognized statistical
rating organizations (Moody's Investors Service, Inc., Standard & Poor's Ratings
Group, Fitch Investors Service and Duff & Phelps) represent each firm's opinion
as to the quality of various Municipal Obligations. It should be emphasized,
however, that ratings are not absolute standards of quality. Consequently,
Municipal Obligations with the same maturity, coupon and rating may have
different yields while Municipal Obligations of the same maturity and coupon
with different ratings may have the same yield. The descriptions offered by each
individual rating firm may differ slightly, but the following offers a
description by Moody's Investors Service, Inc. of each rating category:
3
<PAGE>
Aaa or AAA: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa or AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat greater than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
FACTORS AFFECTING ALABAMA MUNICIPAL OBLIGATIONS. The following information
regarding certain economic, financial and legal matters pertaining to Alabama is
drawn primarily from official statements relating to securities offerings of
Alabama and other publicly available documents, dated as of various dates prior
to the date of this Statement of Additional Information and do not purport to be
complete descriptions. Data regarding the financial condition of Alabama State
government may not be relevant to Municipal Obligations issued by political
subdivisions of Alabama. Moreover, the general economic conditions discussed may
or may not affect issuers of the obligations.
REVIEW OF 1999. Consumer spending and a strong demand for both commercial and
residential construction drove the state's economic growth in 1999. The effects
of short term interest rate cuts by the Federal Reserve Bank in 1998 were very
evident in 1999 by providing a strong incentive for consumers to spend.
EMPLOYMENT. In contrast to a fairly steady increase in new jobs for the U.S.
economy, Alabama job growth declined sharply in 1999 compared to the previous
year. About 39,700 nonagricultural jobs were created in 1998; job growth was
about 22,000 for 1999. The primary reason behind this decline was a significant
loss of manufacturing jobs in the state. Job losses in manufacturing amounted to
about 7,000 jobs with most of the losses in non-durable goods producing
industries.
Several other reasons also accounted for the job losses in manufacturing. A
decline in the global demand for exports, intense competition among
manufacturing firms, the strong value of the U.S. dollar, and over-capacity kept
manufacturing industries from adding many new workers. Despite job losses in
manufacturing industries and a slowing economy during the latter half of the
year, the state's unemployment rate averaged 4.4 percent.
4
<PAGE>
Four major sectors-services, retail trade, construction, and state and local
government-accounted for most of the statewide job growth. These sectors
together created almost 29,500 new jobs, mostly in metropolitan areas. However,
due largely to job losses in nonmetro area counties, the state's net job growth
was 22,000.
GROSS STATE PRODUCT (GSP). Alabama's GSP, the total value of goods and services
produced in the state, has not kept pace with other southeastern states. In
fact, Alabama has the slowest growing GSP among all southeastern states
including Mississippi. Real GSP grew by approximately 3.5 percent in 1999 to a
level in excess of $100 billion. The primary drivers for this growth were
consumer spending and strong demand for both commercial and residential
construction.
INCOME. During the last three years, income growth in the United States has been
faster than in Alabama. In 1997, 1998, and 1999, total personal income in
Alabama has increased by 5.0, 4.7, and 3.9 percent, respectively. Income growth
in the same years for the United States was 6.1, 5.9, and 5.7 percent,
respectively. Primary reasons for the slower income growth rate are the lack of
employment opportunities in nonmetropolitan area counties and the concentration
of jobs in the retailing sector of metropolitan areas. The fastest growing
sector has been retail trade. Average retail trade wages are significantly lower
than average manufacturing wages.
STATE TAX REVENUES. For fiscal year 1998-99 (ended September 30), tax revenues
increased by 4.5 percent over the previous year to $5,684 million. Total sales
tax revenues increased by 5.3 percent, reaching $1,482 million, an improvement
over the 4.6 percent increase in the previous fiscal year. Enthusiastic consumer
spending accounted for the growth in sales tax revenues. Income tax revenues did
not increase correspondingly.
EXPORTS. Exports from Alabama account for approximately 7 percent of GSP.
Exports rose slightly in the second half of 1999, after a decline of 1.4 percent
in the first half of the year. For the year, exports were estimated at $7.1
billion, an increase of about 1.5 percent over 1998. During the first half of
1999, Alabama exports to Japan declined by 12.9 percent, and exports to Mexico
declined by 21.1 percent.
Alabama's five largest trading partners in 1999 were Canada, Japan, Germany,
Mexico, and the United Kingdom. Exports to these five countries accounted for
almost 57 percent of total state exports. Transportation equipment (which
includes Mercedes and related suppliers) was the leading export commodity and
increased by almost 40 percent in the first half of 1999.
FORECAST 2000. Economic growth in Alabama is expected to be slower in 2000. GSP
will grow by 3.1 percent and the state will add about 18,000 new jobs. Most job
growth will be in retailing, services, and construction. Employment in
manufacturing and mining will decline slightly or remain unchanged, with
variations in industry growth rates. Income growth will be modest, around 3.7
percent, constrained by an increase in unemployment in rural areas, pressures on
manufacturing industries to cut costs, and intense competition in both
manufacturing and retail sectors.
5
<PAGE>
INDUSTRIAL REVENUE BONDS. The Fund may invest from time to time a portion of the
Fund's assets in industrial revenue bonds (referred to under current tax law as
private activity bonds), and also may invest a portion of the Fund's assets in
revenue bonds issued for housing, including multi-family housing, health care
facilities or electric utilities, at times when the relative value of issues of
such a type is considered, in the judgment of the Adviser, to be more favorable
than that of other available types of issues, taking into consideration the
particular restrictions on investment flexibility arising from the investment
objective of the Fund of providing current income exempt from personal income
taxes of Alabama (as well as federal income taxes). Therefore, investors should
also be aware of the risks which these investments may entail. Industrial
revenue bonds are issued by various state and local agencies to finance various
projects.
Housing revenue bonds typically are issued by a state, county or local housing
authority and are secured only by the revenues of mortgages originated by the
authority using the proceeds of the bond issue. Because of the impossibility of
precisely predicting demand for mortgages from the proceeds of such an issue,
there is a risk that the proceeds of the issue will be in excess of demand,
which would result in early retirement of the bonds by the issuer. Moreover,
such housing revenue bonds depend for their repayment upon the cash flow from
the underlying mortgages, which cannot be precisely predicted when the bonds are
issued. Any difference in the actual cash flow from such mortgages from the
assumed cash flow could have an adverse impact upon the ability of the issuer to
make scheduled payments of principal and interest on the bonds, or could result
in early retirement of the bonds. Additionally, such bonds depend in part for
scheduled payments of principal and interest upon reserve funds established from
the proceeds of the bonds, assuming certain rates of return on investment of
such reserve funds. If the assumed rates of return are not realized because of
changes in interest rate levels or for other reasons, the actual cash flow for
scheduled payments of principal and interest on the bonds may be inadequate. The
financing of multi-family housing projects is affected by a variety of factors,
including satisfactory completion of construction within cost constraints, the
achievement and maintenance of a sufficient level of occupancy, sound management
of the developments, timely and adequate increases in rents to cover increases
in operating expenses, including taxes, utility rates and maintenance costs,
changes in applicable laws and governmental regulations and social and economic
trends.
Electric utilities face problems in financing large construction programs in an
inflationary period, cost increases and delay occasioned by environmental
considerations (particularly with respect to nuclear facilities), difficulty in
obtaining fuel at reasonable prices, the cost of competing fuel sources,
difficulty in obtaining sufficient rate increases and other regulatory problems,
the effect of energy conservation and difficulty of the capital market to absorb
utility debt.
Health care facilities include life care facilities, nursing homes and
hospitals. Life care facilities are alternative forms of long-term housing for
the elderly which offer residents the independence of condominium life style
and, if needed, the comprehensive care of nursing home services. Bonds to
finance these facilities have been issued by various state industrial
development authorities. Because the bonds are secured only by the revenues of
each facility, and not by state or local government tax payments, they are
subject to a wide variety of risks. Primarily, the projects must maintain
adequate occupancy levels to be able to provide revenues adequate to
6
<PAGE>
maintain debt service payments. Moreover, in the case of life care facilities,
because a portion of housing, medical care and other services may be financed by
an initial deposit, there may be risk if the facility does not maintain adequate
financial reserves to secure estimated actuarial liabilities. The ability of
management to accurately forecast inflationary cost pressures weighs importantly
in this process. The facilities may also be affected by regulatory cost
restrictions applied to health care delivery in general, particularly state
regulations or changes in Medicare and Medicaid payments or qualifications, or
restrictions imposed by medical insurance companies. They may also face
competition from alternative health care or conventional housing facilities in
the private or public sector. Hospital bond ratings are often based on
feasibility studies which contain projections of expenses, revenues and
occupancy levels. A hospital's gross receipts and net income available to
service its debt are influenced by demand for hospital services, the ability of
the hospital to provide the services required, management capabilities, economic
developments in the service area, efforts by insurers and government agencies to
limit rates and expenses, confidence in the hospital, service area economic
developments, competition, availability and expense of malpractice insurance,
Medicaid and Medicare funding, and possible federal legislation limiting the
rates of increase of hospital charges.
The Fund may also invest in bonds for industrial and other projects, such as
sewage or solid waste disposal or hazardous waste treatment facilities.
Financing for such projects will be subject to inflation and other general
economic factors as well as construction risks including labor problems,
difficulties with construction sites and the ability of contractors to meet
specifications in a timely manner. Because some of the materials, processes and
wastes involved in these projects may include hazardous components, there are
risks associated with their production, handling and disposal.
VARIABLE RATE SECURITIES. The Fund may invest in tax-exempt securities that bear
interest at rates which are adjusted periodically to market rates. The market
value of fixed coupon securities fluctuates with changes in prevailing interest
rates, increasing in value when interest rates decline and decreasing in value
when interest rates rise. The value of variable rate securities, however, is
less affected by changes in prevailing interest rates because of the periodic
adjustment of their coupons to a market rate. The shorter the period between
adjustments, the smaller the impact of interest rate fluctuations on the value
of these securities. The market value of tax exempt variable rate securities
usually tends toward par (100% of face value) at interest rate adjustment time.
PUT BONDS. The Fund may invest in tax-exempt securities (including securities
with variable interest rates) which may be redeemed or sold back (put) to the
issuer of the security or a third party at face value prior to stated maturity.
This type of security will normally trade as if maturity is the earlier put
date, even though stated maturity is longer.
ZERO COUPON BONDS. Municipal Obligations in which the Fund may invest also
include zero coupon bonds and deferred interest bonds. Zero coupon bonds and
deferred interest bonds are debt obligations which are issued at a significant
discount from face value. While zero coupon bonds do not require the periodic
payment of interest, deferred interest bonds provide for a period of delay
before the regular payment of interest begins. The discount approximates the
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<PAGE>
total amount of interest the bonds will accrue and compound over the period
until maturity or the first interest payment date at a rate of interest
reflecting the market rate of the security at the time of issuance. Zero coupon
bonds and deferred interest bonds benefit the issuer by mitigating its need for
cash to meet debt service, but they also require a higher rate of return to
attract investors who are willing to defer receipt of such cash. Such
investments may experience greater volatility in market value than debt
obligations which make regular payments of interest. The Fund will accrue income
on such investments for tax and accounting purposes, which is distributable to
shareholders.
MUNICIPAL LEASE OBLIGATIONS. The Fund may also invest in municipal lease
obligations, installment purchase contract obligations, and certificates of
participation in such obligations (collectively, "lease obligations"). A lease
obligation does not constitute a general obligation of the municipality for
which the municipality's taxing power is pledged, although the lease obligation
is ordinarily backed by the municipality's covenant to budget for the payments
due under the lease obligation. Certain lease obligations contain
"non-appropriation" clauses which provide that the municipality has no
obligation to make lease obligation payments in future years unless money is
appropriated for such purpose on a yearly basis. A risk peculiar to these
municipal lease obligations is the possibility that a municipality will not
appropriate funds for lease payments. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. The Adviser will seek to
minimize these risks by not investing more than 10% of the total assets of the
Fund in lease obligations that contain "non-appropriation" clauses. In
evaluating a potential investment in such a lease obligation, the Adviser will
consider: (1) the credit quality of the obligor, (2) whether the underlying
property is essential to a government function, and (3) whether the lease
obligation contains covenants prohibiting the obligor from substituting similar
property if the obligor fails to make appropriations for the lease obligation.
Municipal lease obligations may be determined to be liquid in accordance with
the guidelines established by the Board of Trustees and other factors the
Adviser may determine to be relevant to such determination. In determining the
liquidity of municipal lease obligations, the Adviser will consider a variety of
factors including: (1) the willingness of dealers to bid for the security; (2)
the number of dealers willing to purchase or sell the obligation and the number
of other potential buyers; (3) the frequency of trades and quotes for the
obligation; and (4) the nature of the marketplace trades. In addition, the
Adviser will consider factors unique to particular lease obligations affecting
their marketability. These include the general creditworthiness of the
municipality, the importance of the property covered by the lease to the
municipality, and the likelihood that the marketability of the obligation will
be maintained throughout the time the obligation is held by the Fund.
The Board of Trustees is responsible for determining the credit quality of
unrated municipal lease obligations on an ongoing basis, including an assessment
of the likelihood that the lease will not be cancelled.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time the
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must
8
<PAGE>
deliver the security (and/or securities substituted for them under the
repurchase agreement) to the vendor on an agreed upon date in the future. Such
securities, including any securities so substituted, are referred to as the
"Repurchase Securities." The repurchase price exceeds the purchase price by an
amount which reflects an agreed upon market interest rate effective for the
period of time during which the repurchase agreement is in effect. The majority
of these transactions run day to day and the delivery pursuant to the resale
typically will occur within one to five days of the purchase. The Fund's risk is
limited to the ability of the vendor to pay the agreed upon sum upon the
delivery date; in the event of bankruptcy or other default by the vendor, there
may be possible delays and expenses in liquidating the instrument purchased,
decline in its value and loss of interest. These risks are minimized when the
Fund holds a perfected security interest in the Repurchase Securities and can
therefore sell the instrument promptly. Under guidelines issued by the Trustees,
the Adviser will carefully consider the creditworthiness during the term of the
repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times as least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Fund's custodian either directly or through a securities depository.
MONEY MARKET INSTRUMENTS. Money market instruments may include U.S. Government
Securities or corporate debt obligations (including those subject to repurchase
agreements) as described herein, provided that they mature in thirteen months or
less from the date of acquisition and are otherwise eligible for purchase by the
Fund. Money market instruments also may include Bankers' Acceptances and
Certificates of Deposit of domestic branches of U.S. banks, Commercial Paper and
Variable Amount Demand Master Notes ("Master Notes"). BANKERS' ACCEPTANCES are
time drafts drawn on and "accepted" by a bank, are the customary means of
effecting payment for merchandise sold in import-export transactions and are a
source of financing used extensively in international trade. When a bank
"accepts" such a time draft, it assumes liability for its payment. When the Fund
acquires a Bankers' Acceptance, the bank which "accepted" the time draft is
liable for payment of interest and principal when due. The Bankers' Acceptance,
therefore, carries the full faith and credit of such bank. A CERTIFICATE OF
DEPOSIT ("CD") is an unsecured interest-bearing debt obligation of a bank. CDs
acquired by the Fund would generally be in amounts of $100,000 or more.
Commercial Paper is an unsecured, short term debt obligation of a bank,
corporation or other borrower. COMMERCIAL PAPER maturity generally ranges from
two to 270 days and is usually sold on a discounted basis rather than as an
interest-bearing instrument. The Fund will invest in Commercial Paper only if it
is rated in the highest rating category by any nationally recognized statistical
rating organization ("NRSRO") or, if not rated, the issuer must have an
outstanding unsecured debt issue rated in the three highest categories by any
NRSRO or, if not so rated, be of equivalent quality in the Adviser's assessment.
Commercial Paper may include Master Notes of the same quality. MASTER NOTES are
unsecured obligations which are redeemable upon demand of the holder and which
permit the investment of fluctuating amounts at varying rates of interest.
Master Notes are acquired by the Fund only through the Master Note program of
the Fund's custodian, acting as administrator thereof. The Adviser will monitor,
on a continuous basis, the earnings power, cash flow and other liquidity ratios
of the issuer of a Master Note held by the Fund.
9
<PAGE>
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Fund may purchase securities
on a when-issued basis or for settlement at a future date if the Fund holds
sufficient assets to meet the purchase price. In such purchase transactions the
Fund will not accrue interest on the purchased security until the actual
settlement. Similarly, if a security is sold for a forward date, the Fund will
accrue the interest until the settlement of the sale. When-issued security
purchases and forward commitments have a higher degree of risk of price movement
before settlement due to the extended time period between the execution and
settlement of the purchase or sale. As a result, the exposure to the
counterparty of the purchase or sale is increased. Although the Fund would
generally purchase securities on a forward commitment or when-issued basis with
the intention of taking delivery, the Fund may sell such a security prior to the
settlement date if the Adviser felt such action was appropriate. In such a case
the Fund could incur a short-term gain or loss.
BORROWING. The Fund may borrow, temporarily, up to 5% of its total assets for
extraordinary purposes and may increase this limit to 15% of its total assets to
meet redemption requests which might otherwise require untimely disposition of
portfolio holdings. To the extent the Fund borrows for these purposes, the
effects of market price fluctuations on portfolio net asset value will be
exaggerated. If while such borrowing is in effect, the value of the Fund's
assets declines, the Fund would be forced to liquidate portfolio securities when
it is disadvantageous to do so. The Fund would incur interest and other
transaction costs in connection with such borrowing. The Fund will not make any
additional investments while its outstanding borrowings exceed 5% of the current
value of its total assets.
INVESTMENT COMPANIES. The Fund will not invest more than 10% of its total assets
in securities of other investment companies nor (with affiliates) hold more than
3% of securities of one investment company. Any such investment would involve
duplication of expenses, particularly investment advisory fees.
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations which cannot be
changed without approval by holders of a majority of the outstanding voting
shares of the Fund. A "majority" for this purpose, means the lesser of (i) 67%
of the Fund's outstanding shares represented in person or by proxy at a meeting
at which more than 50% of its outstanding shares are represented, or (ii) more
than 50% of its outstanding shares.
Under these limitations, the Fund MAY NOT:
(1) Invest for the purpose of exercising control or management of another
issuer;
(2) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Fund may
invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things;
10
<PAGE>
(3) Underwrite securities issued by others, except to the extent the Fund may
be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(4) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions);
(5) Make short sales of securities or maintain a short position, except short
sales "against the box" (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short.);
(6) Participate on a joint or joint and several basis in any trading account in
securities;
(7) Make loans of money or securities, except that the Fund may invest in
repurchase agreements;
(8) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors), if more than 5% of its total assets would be invested
in such securities;
(9) Write, purchase or sell commodities, commodities contracts, futures
contracts or related options;
(10) Invest, with respect to at least 50% of its total assets, more than 5% in
the securities of any one issuer (other than the U.S. Government, its
agencies or instrumentalities) or acquire more than 25% of the outstanding
voting securities of any issuer;
(11) Invest more than an aggregate of 15% of the net assets of the Fund in
securities subject to legal or contractual restrictions on resale or for
which there are no readily available market quotations or in other illiquid
securities; or
(12) Issue senior securities, borrow money or pledge its assets, except that it
may borrow from banks as a temporary measure (a) for extraordinary or
emergency purposes, in amounts not exceeding 5% of the Fund's total assets,
or (b) in order to meet redemption requests which might otherwise require
untimely disposition of portfolio securities, in amounts not exceeding 15%
of its total assets, and may pledge its assets to secure all such
borrowings
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation.
While the Fund has reserved the right to make short sales "against the box"
(limitation number 5, above), the Adviser has no present intention of engaging
in such transactions at this time or during the coming year.
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<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the activities of the Williamsburg Investment
Trust (the "Trust"). Following are the Trustees and executive officers of the
Trust, their present position with the Trust or Funds, age, principal occupation
during the past 5 years and their aggregate compensation from the Trust for the
fiscal year ended March 31, 2000:
<TABLE>
<CAPTION>
Name, Position, Principal Occupation Compensation
Age and Address During Past 5 Years From the Trust
--------------- -------------------- --------------
<S> <C> <C>
Austin Brockenbrough III (age 63) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 46) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 63) Physician $12,500
Trustee** Dermatology Associates of
931 Broad Street Road Virginia, P.C.,
Manakin Sabot, Virginia 23103 Richmond, Virginia
J. Finley Lee (age 60) Julian Price Professor Emeritus of $12,500
Trustee Business Administration
105 Gristmill Lane University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
Richard Mitchell (age 51) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
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<PAGE>
Richard L. Morrill (age 61) Chancellor of $12,500
Trustee University of Richmond,
University of Richmond Richmond, Virginia;
G19 Boatright Library Director of Tredegar
Richmond, Virginia 23173 Industries, Inc. (plastics manufacturer)
Harris V. Morrissette (age 40) President of $12,500
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling)
Erwin H. Will, Jr. (age 67) Chief Investment Officer of $12,500
Trustee Virginia Retirement System,
1200 East Main Street Richmond, Virginia
Richmond, Virginia 23219
Samuel B. Witt III (age 64) Senior Vice President and $13,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 37) Portfolio Manager of None
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia.
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Joseph L. Antrim III (age 55) Executive Vice President of None
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 34) Assistant Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
The Jamestown International Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Robert G. Dorsey (age 43) Managing Director of Ultimus Fund None
Vice President Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March, 1999, President of
Countrywide Fund Services, Inc.
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<PAGE>
John M. Flippin (age 58) Principal of None
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 47) Principal of None
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
600 Luckie Drive
Luckie Building, Suite 305
Birmingham, Alabama 35223
J. Lee Keiger III (age 45) First Vice President and Chief Financial None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter III (age 59) Principal of None
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 38) Managing Director of Ultimus Fund None
Treasurer Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
of Countrywide Fund Services, Inc.
Henry C. Spalding, Jr. (age 62) Executive Vice President of None
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street, Suite 300
Richmond, Virginia 23230
John F. Splain (age 44) Managing Director of Ultimus Fund None
Secretary Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
and Secretary of Countrywide Fund
Services, Inc. and affiliated companies
Connie R. Taylor (age 49) Administrator of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
14
<PAGE>
Beth Ann Walk (age 41) Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 54) President and Chief Executive None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
</TABLE>
** Indicates that Trustee is an Interested Person for purposes of the Investment
Company Act of 1940. Charles M. Caravati, Jr. is the father of Charles M.
Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee and Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their findings
and recommendations as to accounting and financial matters, including the
adequacy of internal controls. On the basis of this review the Audit Committee
makes recommendations to the Trustees as to the appointment of independent
accountants for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 7, 2000, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) less than 1% of the then-outstanding shares of the Fund. As of
that same date, Mr. John R. Miller, Jr., P.O. Box 469, Brewton, Alabama 36427,
beneficially owned 17.7% of the then-outstanding shares of the Fund and Charles
Schwab & Co., Inc., 101 Montgomery Street, San Francisco, California 94104,
owned of record 39.9% of the then-outstanding shares of the Fund. As a result,
Charles Schwab & Co., Inc. may be deemed to control the Fund.
INVESTMENT ADVISER
T. Leavell & Associates, Inc. (the "Adviser") supervises the Fund's investments
pursuant to an Investment Advisory Agreement (the "Advisory Agreement"). The
Advisory Agreement is effective until April 1, 2001 and will be renewed
thereafter for one year periods only so long as such renewal and continuance is
specifically approved at least annually by the Board of Trustees or by vote of a
majority of the Fund's outstanding voting securities, provided the continuance
is also approved by a majority of the Trustees who are not "interested persons"
of the Trust or the Adviser by vote cast in person at a meeting called for the
purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by the
Board of Trustees of the Trust or by the Adviser. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Adviser is at the annual rate of 0.35% of the Fund's average
daily net assets up to $100 million and 0.25% of such net assets in excess of
$100 million. For the fiscal years ended March 31, 2000, 1999 and 1998, the Fund
paid the Adviser advisory fees of $62,822
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<PAGE>
(which was net of voluntary fee waivers of $15,400), $48,813 (which was net of
voluntary fee waivers of $21,089), and $46,538 (which was net of voluntary fee
waivers of $18,821), respectively.
The Adviser, organized as an Alabama corporation in 1979, is controlled by its
shareholders, Thomas W. Leavell, Richard Mitchell, Dorothy G. Gambill and
Timothy S. Healey. In addition to acting as Adviser to the Fund, the Adviser
serves as investment Adviser to two additional investment companies, the
subjects of separate prospectuses, and also provides investment advice to
corporations, trusts, pension and profit sharing plans, other business and
institutional accounts and individuals.
The Adviser provides a continuous investment program for the Fund, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Fund. The Adviser determines what securities
and other investments will be purchased, retained or sold by the Fund, and does
so in accordance with the investment objectives and policies of the Fund as
described herein and in the Prospectus. The Adviser places all securities orders
for the Fund, determining with which broker, dealer, or issuer to place the
orders. The Adviser must adhere to the brokerage policies of the Fund in placing
all orders, the substance of which policies are that the Adviser must seek at
all times the most favorable price and execution for all securities brokerage
transactions. The Adviser also provides, at its own expense, certain Executive
Officers to the Trust, and pays the entire cost of distributing Fund shares.
The Adviser may compensate dealers or others based on sales of shares of the
Fund to clients of such dealers or others or based on the average balance of all
accounts in the Fund for which such dealers or others are designated as the
person responsible for the account.
ADMINISTRATOR
The Fund has retained Ultimus Fund Solutions, LLC (the "Administrator"), 135
Merchant Street, Suite 230, Cincinnati, Ohio 45246, to provide administrative,
pricing, accounting, dividend, disbursing, shareholder servicing and transfer
agent services. The Administrator maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
The Administrator also provides accounting and pricing services to the Fund and
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services. The
Administrator supervises the preparation of tax returns, reports to shareholders
of the Fund, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees.
For the performance of these administrative services, the Fund pays the
Administrator a fee at the annual rate of 0.15% of the average value of its
daily net assets up to $25,000,000, 0.125% of such assets from $25,000,000 to
$50,000,000 and 0.10% of such assets in excess of $50,000,000. In addition, the
Fund pays out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
16
<PAGE>
Prior to November 6, 2000, Integrated Fund Services, Inc. ("Integrated"), P.O.
Box 5354, Cincinnati, Ohio 45201, provided the Fund with administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. Integrated is a wholly-owned indirect subsidiary of The Western
and Southern Life Insurance Company. For the fiscal years ended March 31, 2000,
1999, and 1998, Integrated received from the Fund fees of $33,491, $29,975 and
$28,029, respectively.
OTHER SERVICES
The firm of Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800,
Philadelphia, Pennsylvania 19103 has been retained by the Board of Trustees to
perform an independent audit of the books and records of the Trust, to review
the Fund's federal and state tax returns and to consult with the Trust as to
matters of accounting and federal and state income taxation.
The Custodian of the Fund's assets is Firstar Bank, N.A. (the "Custodian"), 425
Walnut Street, Cincinnati, Ohio 45202. The Custodian holds all cash and
securities of the Fund (either in its possession or in its favor through "book
entry systems" authorized by the Trustees in accordance with the 1940 Act),
collects all income and effects all securities transactions on behalf of the
Fund.
BROKERAGE
It is the Fund's practice to seek the best price and execution for all portfolio
securities transactions. The Adviser (subject to the general supervision of the
Board of Trustees) directs the execution of the Fund's portfolio transactions.
Subject to the requirements of the 1940 Act and procedures adopted by the Board
of Trustees, the Fund may execute portfolio transactions through any broker or
dealer and pay brokerage commissions to a broker (i) which is an affiliated
person of the Trust, or (ii) which is an affiliated person of such person, or
(iii) an affiliated person of which is an affiliated person of the Trust or the
Adviser.
The Fund's portfolio transactions will normally be principal transactions
executed in over-the-counter markets and will be executed on a "net" basis,
which may include a dealer markup. No brokerage commissions were paid by the
Fund for the last three fiscal years.
While there is no formula, agreement or undertaking to do so, the Fund has
adopted policies which allow the Adviser to allocate a portion of the Fund's
brokerage commissions to persons or firms providing the Adviser with research
services, which may typically include, but are not limited to, investment
recommendations, financial, economic, political, fundamental and technical
market and interest rate data, and other statistical or research services. Much
of the information so obtained may also be used by the Adviser for the benefit
of the other clients it may have. Conversely, the Fund may benefit from such
transactions effected for the benefit of other clients. In all cases, the
Adviser is obligated to effect transactions for the Fund based upon obtaining
the most favorable price and execution. Factors considered by the Adviser in
determining whether the Fund will receive the most favorable price and execution
include, among other things: the size of the order, the broker's ability to
effect and settle the transaction promptly and efficiently and the Adviser's
perception of the broker's reliability, integrity and financial condition.
17
<PAGE>
CODE OF ETHICS. The Trust and the Adviser have adopted Codes of Ethics under
Rule 17j-1 of the 1940 Act which permit personnel subject to the Codes to invest
in securities, including securities that may be purchased or held by the Fund.
The Codes of Ethics adopted by the Trust and the Adviser are on public file
with, and are available from, the SEC.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts, estates
and others, investors are free to make additions and withdrawals to or from
their account as often as they wish. When an investor makes an initial
investment in the Fund, a shareholder account is opened in accordance with the
investor's registration instructions. Each time there is a transaction in a
shareholder account, such as an additional investment or the reinvestment of a
dividend or distribution, the shareholder will receive a statement showing the
current transaction and all prior transactions in the shareholder account during
the calendar year to date.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Fund to redeem the necessary number of shares periodically (each
month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed within three
business days of the valuation date. If the designated recipient is other than
the registered shareholder, the signature of each shareholder must be guaranteed
on the application (see the Prospectus under the heading "Signature
Guarantees"). A corporation (or partnership) must also submit a "Corporate
Resolution" (or "Certification of Partnership") indicating the names, titles and
required number of signatures authorized to act on its behalf. The application
must be signed by a duly authorized officer(s) and the corporate seal affixed.
No redemption fees are charged to shareholders under this plan. Costs in
conjunction with the administration of the plan are borne by the Fund.
Shareholders should be aware that such systematic withdrawals may deplete or use
up entirely their initial investment and may result in realized long-term or
short-term capital gains or losses. The Systematic Withdrawal Plan may be
terminated at any time by the Fund upon sixty days' written notice or by a
shareholder upon written notice to the Fund. Applications and further details
may be obtained by calling the Fund at 1-866-738-1125, or by writing to:
The Alabama Tax Free Bond Fund
Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
PURCHASES IN KIND. The Fund may accept securities in lieu of cash in payment for
the purchase of shares of the Fund. The acceptance of such securities is at the
sole discretion of the Adviser based upon the suitability of the securities
accepted for inclusion as a long term investment of the Fund, the marketability
of such securities, and other factors which the Adviser may deem appropriate. If
accepted, the securities will be valued using the same criteria and methods as
18
<PAGE>
described in "How Net Asset Value is Determined" in the Prospectus.
REDEMPTIONS IN KIND. The Fund does not intend, under normal circumstances, to
redeem its securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Fund to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Fund. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein the Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Fund who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of the Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Fund at the address shown herein. Your request should include the
following: (1) the existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the account
registration; (3) the new account registration, address, social security or
taxpayer identification number and how dividends and capital gains are to be
distributed; (4) signature guarantees (see the Prospectus under the heading
"Signature Guarantees"); and (5) any additional documents which are required for
transfer by corporations, administrators, executors, trustees, guardians, etc.
If you have any questions about transferring shares, call or write the Fund.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next determined
after the order is received. An order received prior to the close of the regular
session of trading on the New York Stock Exchange (the "Exchange"), generally
4:00 p.m., Eastern time, will be executed at the price computed on the date of
receipt; and an order received after that time will be executed at the price
computed on the next Business Day. An order to purchase shares is not binding on
the Fund until confirmed in writing (or unless other arrangements have been made
with the Fund, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Fund is required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Fund within 60 days.
An order to purchase shares is not binding on the Fund until confirmed in
writing (or unless other arrangements have been made with the Fund, for example
in the case of orders utilizing wire transfer of funds) and payment has been
received.
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<PAGE>
The Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUND. The Fund has adopted initial investment
minimums for the purpose of reducing the cost to the Fund (and consequently to
the shareholders) of communicating with and servicing its shareholders. However,
a reduced minimum initial investment requirement of $1,000 applies to Trustees,
officers and employees of the Fund, the Adviser and certain parties related
thereto, including clients of the Adviser or any sponsor, officer, committee
member thereof, or the immediate family of any of them. In addition, accounts
having the same mailing address may be aggregated for purposes of the minimum
investment if they consent in writing to share a single mailing of shareholder
reports, proxy statements (but each such shareholder would receive his/her own
proxy) and other Fund literature.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the
"Commission"), (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Fund to dispose of securities owned by it, or to fairly determine the
value of its assets, and (iii) for such other periods as the Commission may
permit.
No charge is made by the Fund for redemptions, although the Trustees could
impose a redemption charge in the future. Any redemption may be more or less
than the shareholder's cost depending on the market value of the securities held
by the Fund.
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Fund, and they have
adopted procedures to do so, as follows. The net asset value of the Fund is
determined as of the close of the regular session of trading on the Exchange
(currently 4:00 p.m. Eastern time) on each "Business Day." A Business Day means
any day, Monday through Friday, except for the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day and Christmas. Net asset value per
share is determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number
20
<PAGE>
of shares then outstanding. Net asset value includes interest on fixed income
securities, which is accrued daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Adviser
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of shares (including
registration and qualification fees and expenses); costs and expenses of
membership and attendance at meetings of certain associations which may be
deemed by the Trustees to be of overall benefit to the Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Fund. General Trust expenses are allocated among
the series, or funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUND. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, the Fund
must distribute annually at least 90% of its net taxable income plus 90% of its
net tax-exempt interest income. In addition to this distribution requirement,
the Fund must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities' loans, gains from the
disposition of stock or securities, and certain other income.
While the above requirements are aimed at qualification of the Fund as a
regulated investment company under Subchapter M of the Code, the Fund also
intends to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Fund remains qualified under Subchapter M,
it will not be subject to federal income tax to the extent it distributes its
taxable net investment income and net realized capital gains. A nondeductible 4%
federal excise tax will be imposed on the Fund to the extent it does not
distribute at least 98% of its ordinary taxable income for a calendar year, plus
98% of its capital gain net taxable income for the one year period ending each
October 31, plus certain undistributed amounts from prior years. Such required
distributions are based only on the Fund's taxable income, however, so the
excise tax generally would not apply to tax-exempt income earned by the Fund.
While the Fund intends to distribute its taxable income and capital gains in a
manner so as to avoid imposition of the federal excise and income taxes, there
can be no assurance that the Fund indeed will make sufficient distributions to
avoid entirely imposition of federal excise or income taxes.
As of March 31, 2000, the Fund had capital loss carryforwards for federal income
tax purposes of $176,717, which expire through the year 2008. These capital loss
carryforwards may be utilized in future years to offset net realized capital
gains prior to distributing such gains to shareholders.
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<PAGE>
Should additional series, or funds, be created by the Trustees, each fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUND'S DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the Fund
derived from net investment income or net short-term capital gains are taxable
to shareholders as ordinary income, whether received in cash or reinvested in
additional shares. Since federal and Alabama tax laws exempt income from
qualifying municipal bond obligations, income dividends attributable to such
obligations are exempt from such taxes. A report will be distributed to each
shareholder as of December 31st of each year outlining the percentage of income
dividends which qualify for such tax exemptions. Distributions, if any, of
long-term capital gains are taxable to shareholders as long-term capital gains,
whether received in cash or reinvested in additional shares, regardless of how
long Fund shares have been held. Such capital gain distributions are also
subject to Alabama income tax, except to the extent attributable to gains from
certain obligations of the State of Alabama and its political subdivisions. For
information on "backup" withholding, see "Purchase of Shares" above.
For federal income tax purposes, any loss upon the sale of shares of the Fund
held for six months or less will be treated as long-term capital loss to the
extent of any long-term capital gain distributions received by the shareholder.
In addition, any loss of Fund shares held for six months or less will be
disallowed for both federal and Alabama income tax purposes to the extent of any
dividends received by the shareholder exempt from federal income tax, even
though, in the case of Alabama, some portion of such dividends actually may have
been subject to Alabama income tax.
Shareholders should be aware that dividends from the Fund which are derived in
whole or in part from interest on U.S. Government Securities may not be taxable
for state income tax purposes. Other state income and federal income tax
implications may apply. You should consult your tax Adviser for further
information.
CAPITAL SHARES AND VOTING
The Fund is a non-diversified series of the Williamsburg Investment Trust (the
"Trust"), an investment company organized as a Massachusetts business trust in
July 1988. The Board of Trustees has overall responsibility for management of
the Fund under the laws of Massachusetts governing the responsibilities of
trustees of business trusts.
Shares of the Fund, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at lease
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust,
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<PAGE>
cast in person or by proxy at a meeting called for that purpose; or (c) by a
written declaration signed by shareholders holding not less than two-thirds of
the outstanding shares of the Trust and filed with the Trust's custodian.
Shareholders have certain rights, as set forth in the Declaration of Trust,
including the right to call a meeting of the shareholders for the purpose of
voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
The Declaration of Trust currently provides for the shares of ten funds, or
series, to be issued. Shares of all ten series have currently been issued, in
addition to the Fund: shares of the FBP Contrarian Equity Fund and the FBP
Contrarian Balanced Fund, which are managed by Flippin, Bruce & Porter, Inc. of
Lynchburg, Virginia; shares of The Jamestown Balanced Fund, The Jamestown Equity
Fund, The Jamestown International Equity Fund and The Jamestown Tax Exempt
Virginia Fund, which are managed by Lowe, Brockenbrough & Company, Inc. of
Richmond, Virginia; shares of The Davenport Equity Fund, which is managed by
Davenport & Company LLC of Richmond, Virginia; and shares of The Government
Street Equity Fund and The Government Street Bond Fund, which are managed by T.
Leavell & Associates, Inc. The Trustees are permitted to create additional
series, or funds, at any time.
Upon liquidation of the Trust or a particular Fund of the Trust, holders of the
outstanding shares of the Fund being liquidated shall be entitled to receive, in
proportion to the number of shares of the Fund held by them, the excess of that
Fund's assets over its liabilities. Each outstanding share is entitled to one
vote for each full share and a fractional vote for each fractional share, on all
matters which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory agreement
for a particular Fund. The shares of the Fund will have noncumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect all of the Trustees if they so choose.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability.
Stock Certificates will not be issued for your shares. Evidence of ownership
will be given by issuance of periodic account statements which will show the
number of shares owned.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
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<PAGE>
CALCULATION OF PERFORMANCE DATA
The Fund may, from time to time, advertise certain total return and yield
information. The average annual total return of the Fund for a period is
computed by subtracting the net asset value per share at the beginning of the
period from the net asset value per share at the end of the period (after
adjusting for the reinvestment of any income dividends and capital gain
distributions), and dividing the result by the net asset value per share at the
beginning of the period. In particular, the average annual total return of the
Fund ("T") is computed by using the redeemable value at the end of a specified
period of time ("ERV") of a hypothetical initial investment of $1,000 ("P") over
a period of time ("n") according to the formula P(l+T)n=ERV. The average annual
total return quotations for the Fund for the one year period ended March 31,
2000, for the five year period ended March 31, 2000 and for the period since
inception (January 15, 1993) to March 31, 2000 are 0.34%, 4.64% and 4.47%,
respectively.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, the Fund may advertise its yield and tax-equivalent yield. A
yield quotation is based on a 30-day (or one month) period and is computed by
dividing the net investment income per share earned during the period by the
maximum offering price per share on the last day of the period, according to the
following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Generally, interest earned (for the purpose of "a" above) on debt obligations is
computed by reference to the yield to maturity of each obligation held based on
the market value of the obligation (including actual accrued interest) at the
close of business on the last business day prior to the start of the 30-day (or
one month) period for which yield is being calculated, or, with respect to
obligations purchased during the month, the purchase price (plus actual accrued
interest). The Fund's yield for the 30 days ended March 31, 2000 was 4.34%.
The tax-equivalent yield of the Fund is computed by using the tax-exempt yield
figure and dividing by one minus the applicable tax rate. The Fund's
tax-equivalent yield for the 30 days ended March 31, 2000, based on the highest
marginal combined federal and Alabama income tax rate, was 6.31%.
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<PAGE>
The Fund's performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Fund may compare its performance to the Lehman
7-Year G.O. Municipal Bond Index or the Lehman 3-Year Municipal Bond Index,
which are generally considered to be representative of the performance of
intermediate term municipal bonds. Comparative performance may also be expressed
by reference to a ranking prepared by a mutual fund monitoring service, such as
Lipper Analytical Services, Inc. or Morningstar, Inc., or by one or more
newspapers, newsletters or financial periodicals. Performance comparisons may be
useful to investors who wish to compare the Fund's past performance to that of
other mutual funds and investment products. Of course, past performance is not a
guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Fund's Prospectus to obtain a
more complete view of the Fund's performance before investing. Of course, when
comparing the Fund's performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Fund may quote total returns that are calculated
on non-standardized base periods. The total returns represent the historic
change in the value of an investment in the Fund based on monthly reinvestment
of dividends over a specified period of time.
From time to time the Fund may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Fund may also disclose from time to
time information about its portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Fund may also depict the historical performance of
the securities in which the Fund may invest over periods reflecting a variety of
market or economic conditions either alone or in comparison with alternative
investments, performance indices of those investments, or economic indicators.
The Fund may also include in advertisements and in materials furnished to
present and prospective shareholders statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be employed
to meet specific financial goals, such as saving for retirement, children's
education, or other future needs.
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<PAGE>
FINANCIAL STATEMENTS AND REPORTS
Pursuant to an Agreement and Plan of Reorganization, the Fund, on April 1, 1994,
succeeded to the assets and liabilities of another mutual fund of the same name
(the "Predecessor Fund"), which was an investment series of Albemarle Investment
Trust. The investment objectives, policies and restrictions of the Fund and the
Predecessor Fund are practically identical and the financial data and
performance information in this Statement of Additional Information for periods
prior to April 1, 1994 relates to the Predecessor Fund.
The books of the Fund will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Fund as of March 31, 2000, together with the report of the independent
accountants thereon, are included on the following pages.
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<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.
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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>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
SERIES OF
WILLIAMSBURG INVESTMENT TRUST
135 MERCHANT STREET, SUITE 230
CINCINNATI, OHIO 45246
TELEPHONE 1-866-738-1126
TABLE OF CONTENTS
INVESTMENT OBJECTIVES AND POLICIES........................................... 2
DESCRIPTION OF BOND RATINGS.................................................. 6
INVESTMENT LIMITATIONS....................................................... 8
TRUSTEES AND OFFICERS........................................................ 10
INVESTMENT ADVISER........................................................... 14
ADMINISTRATOR................................................................ 15
DISTRIBUTOR.................................................................. 15
OTHER SERVICES............................................................... 16
BROKERAGE.................................................................... 16
SPECIAL SHAREHOLDER SERVICES................................................. 17
PURCHASE OF SHARES........................................................... 19
REDEMPTION OF SHARES......................................................... 19
NET ASSET VALUE DETERMINATION................................................ 20
ALLOCATION OF TRUST EXPENSES................................................. 20
ADDITIONAL TAX INFORMATION................................................... 20
CAPITAL SHARES AND VOTING.................................................... 21
CALCULATION OF PERFORMANCE DATA.............................................. 22
FINANCIAL STATEMENTS AND REPORTS............................................. 24
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of both The Jamestown Balanced Fund and
The Jamestown Equity Fund (the "Funds") dated August 1, 2000. The Prospectus may
be obtained from the Funds, at the address and phone number shown above, at no
charge.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
All information contained herein applies to both The Jamestown Balanced Fund
(the "Balanced Fund") and The Jamestown Equity Fund (the "Equity Fund") unless
otherwise noted.
The investment objectives and policies of the Funds are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
WARRANTS AND RIGHTS. Warrants are essentially options to purchase equity
securities at specific prices and are valid for a specific period of time.
Prices of warrants do not necessarily move in concert with the prices of the
underlying securities. Rights are similar to warrants but generally have a short
duration and are distributed directly by the issuer to its shareholders. Rights
and warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
FOREIGN SECURITIES. Because of the inherent risk of foreign securities over
domestic issues, the Funds will not invest in foreign investments except those
traded domestically as American Depository Receipts ("ADRs"). The Funds may
invest in foreign securities if the Adviser believes such investment would be
consistent with the Funds' investment objectives. The same factors would be
considered in selecting foreign securities as with domestic securities, as
discussed in the Prospectus. Foreign securities investment presents special
considerations not typically associated with investments in domestic securities.
Foreign taxes may reduce income. Currency exchange rates and regulations may
cause fluctuation in the value of foreign securities. Foreign securities are
subject to different regulatory environments than in the United States and,
compared to the United States, there may be a lack of uniform accounting,
auditing and financial reporting standards, less volume and liquidity and more
volatility, less public information, and less regulation of foreign issuers.
Countries have been known to expropriate or nationalize assets, and foreign
investments may be subject to political, financial or social instability or
adverse diplomatic developments. There may be difficulties in obtaining service
of process on foreign issuers and difficulties in enforcing judgments with
respect to claims under the U.S. securities laws against such issuers. Favorable
or unfavorable differences between U.S. and foreign economies could affect
foreign securities values. The U.S. Government has, in the past, discouraged
certain foreign investments by U.S. investors through taxation or other
restrictions and it is possible that such restrictions could be imposed again.
REPURCHASE AGREEMENTS. The Funds may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time a
Fund purchases a security normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during which the
repurchase agreement is in effect.
2
<PAGE>
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Funds' risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Funds hold a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Adviser will carefully consider the creditworthiness during the
term of the repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times as least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Funds' custodian either directly or through a securities depository.
U.S. GOVERNMENT SECURITIES. The Balanced Fund may invest in debt obligations
which are issued or guaranteed by the U.S. Government, its agencies and
instrumentalities ("U.S. Government Securities") as described herein. U.S.
Government Securities include the following securities: (1) U.S. Treasury
obligations of various interest rates, maturities and issue dates, such as U.S.
Treasury bills (mature in one year or less), U.S. Treasury notes (mature in one
to seven years), and U.S. Treasury bonds (mature in more than seven years), the
payments of principal and interest of which are all backed by the full faith and
credit of the U.S. Government; (2) obligations issued or guaranteed by U.S.
Government agencies or instrumentalities, some of which are backed by the full
faith and credit of the U.S. Government, e.g., obligations of the Government
National Mortgage Association ("GNMA"), the Farmers Home Administration and the
Export Import Bank; some of which do not carry the full faith and credit of the
U.S. Government but which are supported by the right of the issuer to borrow
from the U.S. Government, e.g., obligations of the Tennessee Valley Authority,
the U.S. Postal Service, the Federal National Mortgage Association ("FNMA"), and
the Federal Home Loan Mortgage Corporation ("FHLMC"); and some of which are
backed only by the credit of the issuer itself, e.g., obligations of the Student
Loan Marketing Association, the Federal Home Loan Banks and the Federal Farm
Credit Bank; and (3) any of the foregoing purchased subject to repurchase
agreements as described herein. The Balanced Fund does not intend to invest in
"zero coupon" Treasury securities. The guarantee of the U.S. Government does not
extend to the yield or value of the Fund's shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have lower
yields. To the extent such securities were purchased at a premium, such
prepayments could result in capital losses. The U.S. Government does not
guarantee premiums and market value of U.S. Government Securities.
3
<PAGE>
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they mature
in thirteen months or less from the date of acquisition and are otherwise
eligible for purchase by the Funds. Money market instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks, Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and "accepted" by a bank,
are the customary means of effecting payment for merchandise sold in
import-export transactions and are a source of financing used extensively in
international trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Funds acquire a Bankers' Acceptance, the
bank which "accepted" the time draft is liable for payment of interest and
principal when due. The Bankers' Acceptance, therefore, carries the full faith
and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured
interest- bearing debt obligation of a bank. CDs acquired by the Funds would
generally be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured,
short term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity generally ranges from two to 270 days and is usually sold on a
discounted basis rather than as an interest-bearing instrument. The Funds will
invest in Commercial Paper only if it is rated in the highest rating category by
any nationally recognized statistical rating organization (NRSRO) or, if not
rated, the issuer must have an outstanding unsecured debt issue rated in the
three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Adviser's assessment. Commercial Paper may include Master Notes
of the same quality. MASTER NOTES are unsecured obligations which are redeemable
upon demand of the holder and which permit the investment of fluctuating amounts
at varying rates of interest. Master Notes are acquired by the Funds only
through the Master Note program of the Funds' custodian, acting as administrator
thereof. The Adviser will monitor, on a continuous basis, the earnings power,
cash flow and other liquidity ratios of the issuer of a Master Note held by the
Funds.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Balanced Fund may purchase
securities on a when-issued basis or for settlement at a future date if the Fund
holds sufficient assets to meet the purchase price. In such purchase
transactions the Fund will not accrue interest on the purchased security until
the actual settlement. Similarly, if a security is sold for a forward date, the
Balanced Fund will accrue the interest until the settlement of the sale.
When-issued security purchases and forward commitments have a higher degree of
risk of price movement before settlement due to the extended time period between
the execution and settlement of the purchase or sale. As a result, the exposure
to the counterparty of the purchase or sale is increased. Although the Balanced
Fund would generally purchase securities on a forward commitment or when-issued
basis with the intention of taking delivery, the Fund may sell such a security
prior to the settlement date if the Adviser felt such action was appropriate. In
such a case, the Fund could incur a short-term gain or loss.
HEDGING TECHNIQUES
------------------
Unless otherwise indicated, each Fund may invest in the following derivative
securities to seek to hedge all or a portion of its assets against market value
changes resulting from changes in securities prices. Hedging is a means of
attempting to offset, or neutralize, the price movement of an investment by
making another investment, the price of which should tend to move in the
4
<PAGE>
opposite direction from the original investment. The imperfect correlation in
price movement between an option and the underlying financial instrument and/or
the costs of implementing such an option may limit the effectiveness of the
hedging strategy.
WRITING COVERED CALL OPTIONS. The Funds may write covered call options on equity
securities to earn premium income, to assure a definite price for a security it
has considered selling, or to close out options previously purchased. A call
option gives the holder (buyer) the right to purchase a security at a specified
price (the exercise price) at any time until a certain date (the expiration
date). A call option is "covered" if the Fund owns the underlying security
subject to the call option at all times during the option period. A covered call
writer is required to deposit in escrow the underlying security in accordance
with the rules of the exchanges on which the option is traded and the
appropriate clearing agency.
The writing of covered call options is a conservative investment technique which
the Adviser believes involves relatively little risk. However, there is no
assurance that a closing transaction can be effected at a favorable price.
During the option period, the covered call writer has, in return for the premium
received, given up the opportunity for capital appreciation above the exercise
price should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security decline.
Each Fund may write covered call options if, immediately thereafter, not more
than 30% of its net assets would be committed to such transactions. As long as
the Securities and Exchange Commission continues to take the position that
unlisted options are illiquid securities, the Fund will not commit more than 15%
of its net assets to unlisted covered call transactions and other illiquid
securities.
WRITING COVERED PUT OPTIONS. Each Fund may write covered put options on equity
securities to assure a definite price for a security if it is considering
acquiring the security at a lower price than the current market price or to
close out options previously purchased. A put option gives the holder of the
option the right to sell, and the writer has the obligation to buy, the
underlying security at the exercise price at any time during the option period.
The operation of put options in other respects is substantially identical to
that of call options. When a Fund writes a covered put option, it maintains in a
segregated account with its Custodian cash or liquid securities in an amount not
less than the exercise price at all times while the put option is outstanding.
The risks involved in writing put options include the risk that a closing
transaction cannot be effected at a favorable price and the possibility that the
price of the underlying security may fall below the exercise price, in which
case a Fund may be required to purchase the underlying security at a higher
price than the market price of the security at the time the option is exercised.
Each Fund may not write a put option if, immediately thereafter, more than 25%
of its net assets would be committed to such transactions.
OPTIONS TRANSACTIONS GENERALLY. Option transactions in which the Funds may
engage involve the specific risks described above as well as the following
risks: the writer of an option may be
5
<PAGE>
assigned an exercise at any time during the option period; disruptions in the
markets for underlying instruments could result in losses for options investors;
imperfect or no correlation between the option and the securities being hedged;
the insolvency of a broker could present risks for the broker's customers; and
market imposed restrictions may prohibit the exercise of certain options. In
addition, the option activities of a Fund may affect its portfolio turnover rate
and the amount of brokerage commissions paid by the Fund. The success of the
Funds in using the option strategies described above depends, among other
things, on the Adviser's ability to predict the direction and volatility of
price movements in the options and securities markets and the Adviser's ability
to select the proper time, type and duration of the options.
The Funds' ability to establish and close out positions in options will be
subject to the existence of a liquid secondary market. Although the Funds
generally will purchase or sell only those options for which there appears to be
an active secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option or at any particular time.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an NRSRO
represents the organization's opinion as to the credit quality of the security
being traded. However, the ratings are general and are not absolute standards of
quality or guarantees as to the creditworthiness of an issuer. Consequently, the
Adviser believes that the quality of fixed-income securities in which the
Balanced Fund may invest should be continuously reviewed and that individual
analysts give different weightings to the various factors involved in credit
analysis. A rating is not a recommendation to purchase, sell or hold a security
because it does not take into account market value or suitability for a
particular investor. When a security has received a rating from more than one
NRSRO, each rating is evaluated independently. Ratings are based on current
information furnished by the issuer or obtained by the NRSROs from other sources
that they consider reliable. Ratings may be changed, suspended or withdrawn as a
result of changes in or unavailability of such information, or for other
reasons.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
Aaa: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large in Aa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements that make the long term
risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to
be considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present that
suggest a susceptibility to impairment sometime in the future.
6
<PAGE>
Baa: Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated Aa,
A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower end of
its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.
7
<PAGE>
A: Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore,
impair timely payment.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within a rating category.
DESCRIPTION OF DUFF & PHELPS CREDIT RATING CO.'S BOND RATINGS:
AAA:This is the highest rating credit quality. The risk factors are
negligible, being only slightly more than for risk-free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
A: Bonds rated A have average protection factors. However risk factors
are more variable and greater in periods of economic stress.
BBB: Bonds rated BBB have below average protection factors, but are
considered sufficient for prudent investment. There is considerable variability
in risk during economic cycles.
INVESTMENT LIMITATIONS
The Funds have adopted the following investment limitations, in addition to
those described in the Prospectus, which cannot be changed without approval by
holders of a majority of the outstanding voting shares of the Funds. A
"majority" for this purpose, means the lesser of (i) 67% of a Fund's outstanding
shares represented in person or by proxy at a meeting at which more than 50% of
its outstanding shares are represented, or (ii) more than 50% of its outstanding
shares.
Under these limitations, each Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities of
any one corporate issuer or purchase more than 10% of the outstanding
voting securities or of any class of securities of any one corporate
issuer;
(2) Invest 25% or more of the value of its total assets in any one industry or
group of industries (except that securities of the U.S. Government, its
agencies and instrumentalities are not subject to these limitations);
8
<PAGE>
(3) Invest in the securities of any issuer if any of the officers or trustees
of the Trust or its Adviser who own beneficially more than 1/2 of 1% of the
outstanding securities of such issuer together own more than 5% of the
outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management of another
issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Funds
may invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things, and the Funds may
invest in certain mortgage backed securities as described in the Prospectus
under "Investment Objectives, Investment Policies and Risk Considerations";
(6) Underwrite securities issued by others, except to the extent a Fund may be
deemed to be an underwriter under the federal securities laws in connection
with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Funds may obtain such short-term
credits as may be necessary for the clearance of transactions);
(8) Make short sales of securities or maintain a short position, except short
sales "against the box." (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short.);
(9) Participate on a joint or joint and several basis in any trading account in
securities;
(10) Make loans of money or securities, except that the Funds may invest in
repurchase agreements;
(11) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors); or
(12) Write, purchase or sell commodities, commodities contracts, commodities
futures contracts, warrants on commodities or related options.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation. However, in the case of the
borrowing limitation (the first restriction in the Prospectus) each Fund will,
to the extent necessary, reduce its existing borrowings to comply with the
limitation.
While the Funds have reserved the right to make short sales "against the box"
(limitation number 8, above), the Adviser has no present intention of engaging
in such transactions at this time or during the coming year.
9
<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the activities of the Williamsburg Investment
Trust (the "Trust"). Following are the Trustees and executive officers of the
Trust, their present position with the Trust or Funds, age, principal occupation
during the past 5 years and their aggregate compensation from the Trust for the
fiscal year ended March 31, 2000:
<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (age 63) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 46) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 63) Physician $12,500
Trustee** Dermatology Associates of
931 Broad Street Road Virginia, P.C.,
Manakin Sabot, Virginia 23103 Richmond, Virginia
J. Finley Lee (age 60) Julian Price Professor Emeritus of $12,500
Trustee Business Administration
105 Gristmill Lane University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
10
<PAGE>
Richard Mitchell (age 51) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 61) Chancellor of $12,500
Trustee University of Richmond,
University of Richmond Richmond, Virginia;
G19 Boatright Library Director of Tredegar
Richmond, Virginia 23173 Industries, Inc. (plastics manufacturer)
Harris V. Morrissette (age 40) President of $12,500
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling)
Erwin H. Will, Jr. (age 67) Chief Investment Officer of $12,500
Trustee Virginia Retirement System,
1200 East Main Street Richmond, Virginia
Richmond, Virginia 23219
Samuel B. Witt III (age 64) Senior Vice President and $13,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 37) Portfolio Manager of None
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Joseph L. Antrim III (age 55) Executive Vice President of None
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 34) Assistant Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
The Jamestown International Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
11
<PAGE>
Robert G. Dorsey (age 43) Managing Director of Ultimus Fund None
Vice President Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, President
Of Countrywide Fund Services, Inc.
John M. Flippin (age 58) Principal of None
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 47) Principal of None
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
600 Luckie Drive
Luckie Building, Suite 305
Birmingham, Alabama 35223
J Lee Keiger III (age 45) First Vice President and Chief Financial None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter III (age 59) Principal of None
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 38) Managing Director of Ultimus Fund None
Treasurer Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
of Countrywide Fund Services, Inc.
Henry C. Spalding, Jr. (age 62) Executive Vice President of None
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 44) Managing Director of Ultimus Fund None
Secretary Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
and Secretary of Countrywide Fund
Services, Inc. and affiliated companies
12
<PAGE>
Connie R. Taylor (age 49) Administrator of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 41) Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 54) President and Chief Executive None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
</TABLE>
---------------------------------------
** Indicates that Trustee is an Interested Person for purposes of the Investment
Company Act of 1940. Charles M. Caravati, Jr. is the father of Charles M.
Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee and Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their findings
and recommendations as to accounting and financial matters, including the
adequacy of internal controls. On the basis of this review the Audit Committee
makes recommendations to the Trustees as to the appointment of independent
accountants for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 7, 2000, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) 1.26% of the then-outstanding shares of the Balanced Fund and
less than 1% of the then-outstanding shares of the Equity Fund. As of that same
date, Charles Schwab & Co., Inc., 101 Montgomery Street, San Francisco,
California 94104, owned of record 10.08% of the then-outstanding shares of the
Balanced Fund and 11.51% of the then-outstanding shares of the Equity Fund; and
John M. Street and Joanne N. Street, 315 Cheswick Lane, Richmond, Virginia
23229, owned of record 6.06% of the then-outstanding shares of the Equity Fund.
INVESTMENT ADVISER
Lowe, Brockenbrough & Company, Inc. (the "Adviser") supervises each Fund's
investments pursuant to an Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until February
28, 2001 and will be renewed thereafter for
13
<PAGE>
one year periods only so long as such renewal and continuance is specifically
approved at least annually by the Board of Trustees or by vote of a majority of
the Funds' outstanding voting securities, provided the continuance is also
approved by a majority of the Trustees who are not "interested persons" of the
Trust or the Adviser by vote cast in person at a meeting called for the purpose
of voting on such approval. The Advisory Agreement is terminable without penalty
on sixty days notice by the Board of Trustees of the Trust or by the Adviser.
The Advisory Agreement provides that it will terminate automatically in the
event of its assignment.
Compensation of the Adviser with respect to the Balanced Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$250 million, 0.65%; on the next $250 million, 0.60%; and on assets over $500
million, 0.55%. For the fiscal years ended March 31, 2000, 1999 and 1998, the
Balanced Fund paid the Adviser advisory fees of $759,276, $680,064 and $561,887,
respectively.
Compensation of the Adviser with respect to the Equity Fund, based upon the
Fund's average daily net assets, is at the following annual rates: On the first
$500 million, 0.65%; and on assets over $500 million, 0.55%. For the fiscal
years ended March 31, 2000, 1999 and 1998, the Equity Fund paid the Adviser
advisory fees of $436,091, $361,874 and $259,757, respectively.
The Adviser, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough III. In addition to acting as Adviser to
the Funds, the Adviser serves as investment Adviser to two additional investment
companies, the subjects of separate prospectuses, and also provides investment
advice to corporations, trusts, pension and profit sharing plans, other business
and institutional accounts and individuals.
The Adviser provides a continuous investment program for the Funds, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Funds. The Adviser determines what securities
and other investments will be purchased, retained or sold by the Funds, and does
so in accordance with the investment objectives and policies of the Funds as
described herein and in the Prospectus. The Adviser places all securities orders
for the Funds, determining with which broker, dealer, or issuer to place the
orders. The Adviser must adhere to the brokerage policies of the Funds in
placing all orders, the substance of which policies are that the Adviser must
seek at all times the most favorable price and execution for all securities
brokerage transactions. The Adviser also provides, at its own expense, certain
Executive Officers to the Trust, and pays the entire cost of distributing Fund
shares.
The Adviser may compensate dealers or others based on sales of shares of the
Funds to clients of such dealers or others or based on the average balance of
all accounts in the Funds for which such dealers or others are designated as the
person responsible for the account.
Prior to December 1, 1998, Tattersall Advisory Group, Inc. (the "Sub-Adviser")
was responsible for supervising the Balanced Fund's fixed income investments
pursuant to a Sub-Advisory Agreement among the Sub-Adviser, the Adviser and the
Trust. Compensation of the Sub-Adviser was paid by the Adviser (not the Balanced
Fund) in the amount of $5,000 per year.
14
<PAGE>
ADMINISTRATOR
The Fund has retained Ultimus Fund Solutions, LLC (the "Administrator"), 135
Merchant Street, Suite 230, Cincinnati, Ohio 45246, to provide administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. The Administrator maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of each Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
The Administrator also provides accounting and pricing services to the Funds and
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services. The
Administrator supervises the preparation of tax returns, reports to shareholders
of the Funds, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees.
For the performance of these administrative services, each Fund pays the
Administrator a fee at the annual rate of 0.15% of the average value of its
daily net assets up to $25,000,000, 0.125% of such assets from $25,000,000 to
$50,000,000 and 0.10% of such assets in excess of $50,000,000. In addition, the
Funds pay out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
Prior to November 13, 2000, Integrated Fund Services, Inc. ("Integrated"), P.O.
Box 5354, Cincinnati, Ohio 45201, provided the Fund with administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. Integrated is a wholly-owned indirect subsidiary of The Western
and Southern Life Insurance Company. For the fiscal years ended March 31, 2000,
1999 and 1998, Integrated received fees of $193,587, $175,782 and $148,539,
respectively, from the Balanced Fund and $119,167, $102,461 and $76,276,
respectively, from the Equity Fund.
DISTRIBUTOR
Ultimus Fund Distributors, LLC (the "Distributor"), 135 Merchant Street, Suite
230, Cincinnati, Ohio 45246, serves as principal underwriter for the Funds
pursuant to an Underwriting Agreement. Shares are sold on a continuous basis by
the Distributor. The Distributor has agreed to use its best efforts to solicit
orders for the sale of Fund shares, but it is not obliged to sell any particular
amount of shares. The Underwriting Agreement provides that, unless sooner
terminated, it will continue in effect for two years from the date of its
execution, and for continuous one-year periods thereafter if such continuance is
approved at least annually (i) by the Board of Trustees or a vote of a majority
of the outstanding shares, and (ii) by a majority of the Trustees who are not
"interested persons" of the Trust or of the Distributor by vote cast in person
at a meeting called for the purpose of voting on such approval. The Underwriting
Agreement may be terminated by the Funds at any time, without the payment of any
penalty, by vote of a majority of the Board of Trustees of the Trust or by vote
of a majority of the outstanding shares of the Funds on sixty days written
notice to the Distributor, or by the Distributor at any time, without the
payment of any penalty, on sixty days written notice to the Trust. The
Underwriting Agreement will automatically terminate in the event of its
assignment. The Distributor is an affiliate of the Administrator, and Robert G.
Dorsey, Mark J. Seger and John F. Splain are each Managing Directors of the
Distributor and officers of the Trust.
15
<PAGE>
OTHER SERVICES
The firm of Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800,
Philadelphia, Pennsylvania 19103 has been retained by the Board of Trustees to
perform an independent audit of the books and records of the Trust, to review
the Funds' federal and state tax returns and to consult with the Trust as to
matters of accounting and federal and state income taxation.
The Custodian of the Funds' assets is Firstar Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Funds
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Funds.
BROKERAGE
It is the Funds' practice to seek the best price and execution for all portfolio
securities transactions. The Adviser (subject to the general supervision of the
Board of Trustees) directs the execution of the Funds' portfolio transactions.
The Trust has adopted a policy which prohibits the Adviser from effecting Fund
portfolio transactions with broker-dealers which may be interested persons of
either Fund, the Trust, any Trustee, officer or director of the Trust or its
investment Advisers or any interested person of such persons.
The Balanced Fund's fixed income portfolio transactions will normally be
principal transactions executed in over-the-counter markets and will be executed
on a "net" basis, which may include a dealer markup. The Funds' common stock
portfolio transactions will normally be exchange traded and will be effected
through broker-dealers who will charge brokerage commissions. With respect to
securities traded only in the over-the-counter market, orders will be executed
on a principal basis with primary market makers in such securities except where
better prices or executions may be obtained on an agency basis or by dealing
with other than a primary market maker.
For the fiscal years ended March 31, 2000, 1999 and 1998, the total amount of
brokerage commissions paid by the Balanced Fund was $101,739, $150,621 and
$91,394, respectively. For the fiscal years ended March 31, 2000, 1999 and 1998,
the total amount of brokerage commissions paid by the Equity Fund was $93,495,
$129,714 and $66,628, respectively.
While there is no formula, agreement or undertaking to do so, the Adviser may
allocate a portion of either Fund's brokerage commissions to persons or firms
providing the Adviser with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic, political,
fundamental and technical market and interest rate data, and other statistical
or research services. Much of the information so obtained may also be used by
the Adviser for the benefit of the other clients it may have. Conversely, the
Funds may benefit from such transactions effected for the benefit of other
clients. In all cases, the Adviser is obligated to effect transactions for the
Funds based upon obtaining the most favorable price and execution. Factors
considered by the Adviser in determining whether the Funds will receive the most
16
<PAGE>
favorable price and execution include, among other things: the size of the
order, the broker's ability to effect and settle the transaction promptly and
efficiently and the Adviser's perception of the broker's reliability, integrity
and financial condition.
In order to reduce the total operating expenses of the Funds, each Fund's
custodian fees and a portion of other operating expenses have been paid through
an arrangement with a third party broker-dealer who is compensated through
commission trades. Expenses reimbursed through the directed brokerage
arrangement for the fiscal year ended March 31, 2000 were $24,000 for the
Balanced Fund and $18,000 for the Equity Fund.
As of March 31, 2000, the Balanced Fund held securities issued by Merrill Lynch,
Pierce, Fenner & Smith, Inc. (the market value of which was $261,687) and
Goldman, Sachs & Co. (the market value of which was $889,675). Merrill Lynch,
Pierce, Fenner & Smith, Inc. and Goldman, Sachs & Co. are two of the Trust's
"regular broker-dealers" (as defined in the 1940 Act).
CODE OF ETHICS. The Trust, the Adviser and the Distributor have adopted Codes of
Ethics under Rule 17j-1 of the 1940 Act which permit personnel subject to the
Codes to invest in securities, including securities that may be purchased or
held by the Funds. The Codes of Ethics adopted by the Trust, the Adviser and the
Distributor are on public file with, and are available from, the SEC.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Funds offer the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Funds, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or distribution, the shareholder
will receive a statement showing the current transaction and all prior
transactions in the shareholder account during the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly or quarterly investment in shares through automatic charges
to their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
public offering price on or about the last business day of the month or quarter.
The shareholder may change the amount of the investment or discontinue the plan
at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Funds to redeem the necessary number of shares periodically
(each month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed
17
<PAGE>
within three business days of the valuation date. If the designated recipient is
other than the registered shareholder, the signature of each shareholder must be
guaranteed on the application (see the Prospectus under the heading "Signature
Guarantees"). A corporation (or partnership) must also submit a "Corporate
Resolution" (or "Certification of Partnership") indicating the names, titles and
required number of signatures authorized to act on its behalf. The application
must be signed by a duly authorized officer(s) and the corporate seal affixed.
No redemption fees are charged to shareholders under this plan. Costs in
conjunction with the administration of the plan are borne by the Funds.
Shareholders should be aware that such systematic withdrawals may deplete or use
up entirely their initial investment and may result in realized long-term or
short-term capital gains or losses. The Systematic Withdrawal Plan may be
terminated at any time by the Funds upon sixty days' written notice or by a
shareholder upon written notice to the Funds. Applications and further details
may be obtained by calling the Funds at 1-866-738-1126, or by writing to:
The Jamestown Balanced Fund
or
The Jamestown Equity Fund
Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
PURCHASES IN KIND. The Funds may accept securities in lieu of cash in payment
for the purchase of shares of the Funds. The acceptance of such securities is at
the sole discretion of the Adviser based upon the suitability of the securities
accepted for inclusion as a long term investment of the Funds, the marketability
of such securities, and other factors which the Adviser may deem appropriate. If
accepted, the securities will be valued using the same criteria and methods as
described in "How Net Asset Value is Determined" in the Prospectus.
REDEMPTIONS IN KIND. The Funds do not intend, under normal circumstances, to
redeem their securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Funds to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Funds. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein each Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Funds who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of a Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Funds at the address shown herein. Your request should include
the following: (1) the Fund name and existing account registration; (2)
signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on
the account registration; (3) the new account registration, address, social
security or taxpayer identification number and how dividends and capital gains
are to be distributed; (4) signature guarantees (see the Prospectus under the
heading "Signature
18
<PAGE>
Guarantees"); and (5) any additional documents which are required for transfer
by corporations, administrators, executors, trustees, guardians, etc. If you
have any questions about transferring shares, call or write the Funds.
PURCHASE OF SHARES
The purchase price of shares of each Fund is the net asset value next determined
after the order is received. An order received prior to the close of the regular
session of trading on the New York Stock Exchange (the "Exchange"), generally
4:00 p.m. Eastern time, will be executed at the price computed on the date of
receipt; and an order received after that time will be executed at the price
computed on the next Business Day. An order to purchase shares is not binding on
the Funds until confirmed in writing (or unless other arrangements have been
made with the Funds, for example in the case of orders utilizing wire transfer
of funds) and payment has been received.
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Funds are required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Funds within 60 days.
Each Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUNDS. The Funds have adopted initial investment
minimums for the purpose of reducing the cost to the Funds (and consequently to
the shareholders) of communicating with and servicing their shareholders.
However, a reduced minimum initial investment requirement of $1,000 applies to
Trustees, officers and employees of the Funds, the Adviser and certain parties
related thereto, including clients of the Adviser or any sponsor, officer,
committee member thereof, or the immediate family of any of them. In addition,
accounts having the same mailing address may be aggregated for purposes of the
minimum investment if they consent in writing to share a single mailing of
shareholder reports, proxy statements (but each such shareholder would receive
his/her own proxy) and other Fund literature.
REDEMPTION OF SHARES
Each Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the
"Commission"), (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Fund to dispose of securities owned by it, or to fairly determine the
value of its assets, and (iii) for such other periods as the Commission may
permit. There is currently no charge by the Administrator for wire redemptions.
However, the Administrator reserves the right, upon thirty days' written notice,
to make reasonable charges for
19
<PAGE>
wire redemptions. All charges will be deducted from your account by redemption
of shares in your account. Your bank or brokerage firm may also impose a charge
for processing the wire. In the event that wire transfer of funds is impossible
or impractical, the redemption proceeds will be sent by mail to the designated
account.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Funds, and they have
adopted procedures to do so, as follows. The net asset value of each Fund is
determined as of the close of the regular session of trading on the Exchange
(currently 4:00 p.m. Eastern time) on each "Business Day." A Business Day means
any day, Monday through Friday, except for the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day and Christmas. Net asset value per
share is determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Adviser
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of shares (including
registration and qualification fees and expenses); costs and expenses of
membership and attendance at meetings of certain associations which may be
deemed by the Trustees to be of overall benefit to each Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Funds. General Trust expenses are allocated among
the series, or funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUNDS. Each Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, each Fund
must distribute annually at least 90% of its net investment income. In addition
to this distribution requirement, each Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities' loans, gains from the disposition of stock or securities, and
certain other income.
While the above requirements are aimed at qualification of the Funds as
regulated investment companies under Subchapter M of the Code, the Funds also
intend to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Funds remain qualified under Subchapter M,
they will not be subject to federal income tax to the extent they distribute
their taxable net investment income and net realized capital gains. A
nondeductible 4% federal excise tax will be imposed on each Fund to the extent
it does not distribute at least 98% of
20
<PAGE>
its ordinary taxable income for a calendar year, plus 98% of its capital gain
net taxable income for the one year period ending each October 31, plus certain
undistributed amounts from prior years. While each Fund intends to distribute
its taxable income and capital gains in a manner so as to avoid imposition of
the federal excise and income taxes, there can be no assurance that the Funds
indeed will make sufficient distributions to avoid entirely imposition of
federal excise or income taxes.
Should additional series, or funds, be created by the Trustees, each fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUNDS' DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the
Funds derived from net investment income or net short-term capital gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. Distributions, if any, of long-term capital
gains are taxable to shareholders as long-term capital gains, whether received
in cash or reinvested in additional shares, regardless of how long Fund shares
have been held. For information on "backup" withholding, see "Purchase of
Shares" above.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from each Fund. Each Fund will send shareholders
information each year on the tax status of dividends and disbursements. A
dividend or capital gains distribution paid shortly after shares have been
purchased, although in effect a return of investment, is subject to federal
income taxation. Dividends from net investment income, along with capital gains,
will be taxable to shareholders, whether received in cash or shares and no
matter how long you have held Fund shares, even if they reduce the net asset
value of shares below your cost and thus in effect result in a return of a part
of your investment.
CAPITAL SHARES AND VOTING
The Funds are series of the Williamsburg Investment Trust (the "Trust"), an
investment company organized as a Massachusetts business trust in July 1988. The
Board of Trustees has overall responsibility for management of the Funds under
the laws of Massachusetts governing the responsibilities of trustees of business
trusts.
Shares of the Funds, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at lease
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust, cast in person or by proxy at a meeting called for that purpose; or (c)
by a written declaration signed by shareholders holding not less than two-thirds
of the outstanding shares of the Trust and filed with the Trust's custodian.
Shareholders have certain rights, as set forth in the Declaration of Trust,
including the right to call a meeting of the shareholders for the purpose of
voting on the
21
<PAGE>
removal of one or more Trustees. Shareholders holding not less than ten percent
(10%) of the shares then outstanding may require the Trustees to call such a
meeting and the Trustees are obligated to provide certain assistance to
shareholders desiring to communicate with other shareholders in such regard
(e.g., providing access to shareholder lists, etc.). In case a vacancy or an
anticipated vacancy shall for any reason exist, the vacancy shall be filled by
the affirmative vote of a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act. The Trust does not expect to have
an annual meeting of shareholders.
Upon liquidation of the Trust or a particular Fund of the Trust, holders of the
outstanding shares of the Fund being liquidated shall be entitled to receive, in
proportion to the number of shares of the Fund held by them, the excess of that
Fund's assets over its liabilities. Each outstanding share is entitled to one
vote for each full share and a fractional vote for each fractional share, on all
matters which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory agreement
for a particular Fund. The shares of the Fund will have noncumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect all of the Trustees if they so choose.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, each Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Funds for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of a Fund ("T") is computed by using the redeemable value at the end of a
specified period of time ("ERV") of a hypothetical initial investment of $1,000
("P") over a period of time ("n") according to the formula P(l+T)^n=ERV. The
average annual total return quotations for the Balanced Fund for the one year
period ended March 31, 2000, for the five year period ended March 31, 2000, for
the ten year period ended March 31, 2000 and for the period since inception
(July 3, 1989) to March 31, 2000 are 15.90%, 17.88%, 13.12% and 12.50%,
respectively. The average annual total return quotations for the Equity Fund for
the one year period ended March 31, 2000, for the five year period ended March
31, 2000, and for the period since inception (December 1, 1992) to March 31,
2000 are 24.04%, 23.30% and 17.64%, respectively.
22
<PAGE>
In addition, each Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, each Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a Fund
owns the security. Generally, interest earned (for the purpose of "a" above) on
debt obligations is computed by reference to the yield to maturity of each
obligation held based on the market value of the obligation (including actual
accrued interest) at the close of business on the last business day prior to the
start of the 30-day (or one month) period for which yield is being calculated,
or, with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest). The yields of the Balanced Fund and the Equity
Fund for the 30 days ended March 31, 2000 were 1.92% and 0.08%, respectively.
The Funds' performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, each Fund may compare its performance to the S&P 500
Index, which is generally considered to be representative of the performance of
unmanaged common stocks that are publicly traded in the United States securities
markets. Comparative performance may also be expressed by reference to a ranking
prepared by a mutual fund monitoring service, such as Lipper Analytical
Services, Inc. or Morningstar, Inc., or by one or more newspapers, newsletters
or financial periodicals. Performance comparisons may be useful to investors who
wish to compare the Funds' past performance to that of other mutual funds and
investment products. Of course, past performance is not a guarantee of future
results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all
23
<PAGE>
capital gains distributions and income dividends and takes into account any
change in net asset value over a specific period of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Funds' Prospectus to obtain a
more complete view of the Funds' performance before investing. Of course, when
comparing the Funds' performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Funds may quote total returns that are calculated
on non-standardized base periods. The total returns represent the historic
change in the value of an investment in the Funds based on monthly reinvestment
of dividends over a specified period of time.
From time to time the Funds may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Funds may also disclose from time to
time information about their portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Funds may also depict the historical performance
of the securities in which the Funds may invest over periods reflecting a
variety of market or economic conditions either alone or in comparison with
alternative investments, performance indices of those investments, or economic
indicators. The Funds may also include in advertisements and in materials
furnished to present and prospective shareholders statements or illustrations
relating to the appropriateness of types of securities and/or mutual funds that
may be employed to meet specific financial goals, such as saving for retirement,
children's education, or other future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Funds will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published, and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Funds as of March 31, 2000, together with the report of the independent
accountants thereon, are included on the following pages.
24
<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
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (each a series of The
Williamsburg Investment Trust), including the portfolios of investments, as of
March 31, 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
32
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN
INTERNATIONAL EQUITY FUND
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
A SERIES OF
WILLIAMSBURG INVESTMENT TRUST
135 MERCHANT STREET, SUITE 230
CINCINNATI, OHIO 45246
TELEPHONE 1-866-738-1126
TABLE OF CONTENTS
-----------------
INVESTMENT OBJECTIVE AND POLICIES............................................ 2
DESCRIPTION OF BOND RATINGS.................................................. 8
INVESTMENT LIMITATIONS....................................................... 11
TRUSTEES AND OFFICERS........................................................ 13
INVESTMENT ADVISER........................................................... 16
SUB-ADVISOR.................................................................. 17
ADMINISTRATOR................................................................ 18
DISTRIBUTOR.................................................................. 19
OTHER SERVICES............................................................... 19
BROKERAGE.................................................................... 20
SPECIAL SHAREHOLDER SERVICES................................................. 20
PURCHASE OF SHARES........................................................... 22
REDEMPTION OF SHARES......................................................... 23
NET ASSET VALUE DETERMINATION................................................ 23
ALLOCATION OF TRUST EXPENSES................................................. 24
ADDITIONAL TAX INFORMATION................................................... 24
CAPITAL SHARES AND VOTING.................................................... 26
CALCULATION OF PERFORMANCE DATA.............................................. 27
FINANCIAL STATEMENTS AND REPORTS............................................. 29
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of The Jamestown International Equity
Fund (the "Fund") dated August 1, 2000. The Prospectus may be obtained from the
Fund, at the address and phone number shown above, at no charge.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
FOREIGN SECURITIES. The Fund will invest primarily in foreign securities,
including those traded domestically as American Depository Receipts ("ADRs").
Foreign securities investment presents special considerations not typically
associated with investments in domestic securities. Foreign taxes may reduce
income. Currency exchange rates and regulations may cause fluctuation in the
value of foreign securities. Foreign securities are subject to different
regulatory environments than in the United States and, compared to the United
States, there may be a lack of uniform accounting, auditing and financial
reporting standards, less volume and liquidity and more volatility, less public
information, and less regulation of foreign issuers. Countries have been known
to expropriate or nationalize assets, and foreign investments may be subject to
political, financial or social instability or adverse diplomatic developments.
There may be difficulties in obtaining service of process on foreign issuers and
difficulties in enforcing judgments with respect to claims under the U.S.
securities laws against such issuers. Favorable or unfavorable differences
between U.S. and foreign economies could affect foreign securities values. The
U.S. Government has, in the past, discouraged certain foreign investments by
U.S. investors through taxation or other restrictions and it is possible that
such restrictions could be imposed again.
WARRANTS AND RIGHTS. Warrants are essentially options to purchase equity
securities at specific prices and are valid for a specific period of time.
Prices of warrants do not necessarily move in concert with the prices of the
underlying securities. Rights are similar to warrants but generally have a short
duration and are distributed directly by the issuer to its shareholders. Rights
and warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer.
LOANS OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities;
however, the aggregate of portfolio securities loaned will not exceed 25% of the
value of the Fund's net assets, measured at the time any such loan is made.
Under applicable regulatory requirements (which are subject to change), the loan
collateral must, on each business day, at least equal the value of the loaned
securities. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund. The
Fund receives amounts equal to the interest on loaned securities and also
receives one or more of (a) negotiated loan fees, (b) interest on securities
used as collateral, or (c) interest on short-term debt securities purchased with
such collateral; either type of interest may be shared with the borrower. The
Fund may also pay fees to placing brokers as well as custodian and
administrative fees in connection with loans. Fees may only be paid to a placing
broker provided that the Trustees determine that the fee paid to the placing
broker is reasonable and based solely upon services rendered, that the Trustees
separately consider the propriety of any fee shared by the placing broker with
the borrower, and that the fees are not used to compensate the Adviser, the
Sub-Advisor or any affiliated person of the Trust or an affiliated person of the
Adviser, the Sub-Advisor or other affiliated person. The terms of the Fund's
loans must meet applicable tests under the Internal Revenue Code and permit the
Fund to reacquire loaned securities on five days' notice or in time to vote on
any important matter.
2
<PAGE>
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time the
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during which the
repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Fund's risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Fund holds a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Sub-Advisor will carefully consider the creditworthiness during
the term of the repurchase agreement. Repurchase agreements are considered as
loans collateralized by the Repurchase Securities, such agreements being defined
as "loans" under the Investment Company Act of 1940 (the "1940 Act"). The return
on such "collateral" may be more or less than that from the repurchase
agreement. The market value of the resold securities will be monitored so that
the value of the "collateral" is at all times as least equal to the value of the
loan, including the accrued interest earned thereon. All Repurchase Securities
will be held by the Fund's custodian either directly or through a securities
depository.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they mature
in thirteen months or less from the date of acquisition and are otherwise
eligible for purchase by the Fund. Money market instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks, Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and "accepted" by a bank,
are the customary means of effecting payment for merchandise sold in
import-export transactions and are a source of financing used extensively in
international trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Fund acquires a Bankers' Acceptance, the
bank which "accepted" the time draft is liable for payment of interest and
principal when due. The Bankers' Acceptance, therefore, carries the full faith
and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured
interest- bearing debt obligation of a bank. CDs acquired by the Fund would
generally be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured,
short term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity generally ranges from two to 270 days and is usually sold on a
discounted basis rather than as an interest-bearing instrument. The Fund will
invest in Commercial Paper only if it is rated in the highest rating category by
any nationally recognized statistical rating organization ("NRSRO") or,
3
<PAGE>
if not rated, the issuer must have an outstanding unsecured debt issue rated in
the three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Sub-Advisor's assessment. Commercial Paper may include Master
Notes of the same quality. MASTER NOTES are unsecured obligations which are
redeemable upon demand of the holder and which permit the investment of
fluctuating amounts at varying rates of interest. Master Notes are acquired by
the Fund only through the Master Note program of the Fund's custodian, acting as
administrator thereof. The Sub-Advisor will monitor, on a continuous basis, the
earnings power, cash flow and other liquidity ratios of the issuer of a Master
Note held by the Fund.
U.S. GOVERNMENT SECURITIES. The Fund may invest in debt obligations which are
issued or guaranteed by the U.S. Government, its agencies and instrumentalities
("U.S. Government Securities") as described herein. U.S. Government Securities
include the following securities: (1) U.S. Treasury obligations of various
interest rates, maturities and issue dates, such as U.S. Treasury bills (mature
in one year or less), U.S. Treasury notes (mature in one to seven years), and
U.S. Treasury bonds (mature in more than seven years), the payments of principal
and interest of which are all backed by the full faith and credit of the U.S.
Government; (2) obligations issued or guaranteed by U.S. Government agencies or
instrumentalities, some of which are backed by the full faith and credit of the
U.S. Government, e.g., obligations of the Government National Mortgage
Association ("GNMA"), the Farmers Home Administration and the Export Import
Bank; some of which do not carry the full faith and credit of the U.S.
Government but which are supported by the right of the issuer to borrow from the
U.S. Government, e.g., obligations of the Tennessee Valley Authority, the U.S.
Postal Service, the Federal National Mortgage Association ("FNMA"), and the
Federal Home Loan Mortgage Corporation ("FHLMC"); and some of which are backed
only by the credit of the issuer itself, e.g., obligations of the Student Loan
Marketing Association, the Federal Home Loan Banks and the Federal Farm Credit
Bank; and (3) any of the foregoing purchased subject to repurchase agreements as
described herein. The Fund does not intend to invest in "zero coupon" Treasury
securities. The guarantee of the U.S. Government does not extend to the yield or
value of the Fund's shares.
Obligations of GNMA, FNMA and FHLMC may include direct pass-through
"Certificates," representing undivided ownership interests in pools of
mortgages. Such Certificates are guaranteed as to payment of principal and
interest (but not as to price and yield) by the U.S. Government or the issuing
agency. Mortgage Certificates are subject to more rapid prepayment than their
stated maturity date would indicate; their rate of prepayment tends to
accelerate during periods of declining interest rates and, as a result, the
proceeds from such prepayments may be reinvested in instruments which have lower
yields. To the extent such securities were purchased at a premium, such
prepayments could result in capital losses. The U.S. Government does not
guarantee premiums and market value of U.S. Government Securities.
DEBT SECURITIES. While the Fund intends to invest primarily in equity
securities, up to 20% of the Fund's assets may be invested in convertible bonds
and other debt securities. These debt obligations consist of U.S. and foreign
government securities and corporate debt securities. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest categories
by Moody's Investors Service, Inc. or Standard & Poor's Ratings Group. While
securities in these categories are generally accepted as being of investment
grade, the fourth highest grade is considered to be a
4
<PAGE>
medium grade and has speculative characteristics even though it is regarded as
having adequate capacity to pay interest and repay principal.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Fund may purchase securities
on a when-issued basis or for settlement at a future date if the Fund holds
sufficient assets to meet the purchase price. In such purchase transactions the
Fund will not accrue interest on the purchased security until the actual
settlement. Similarly, if a security is sold for a forward date, the Fund will
accrue the interest until the settlement of the sale. When-issued security
purchases and forward commitments have a higher degree of risk of price movement
before settlement due to the extended time period between the execution and
settlement of the purchase or sale. As a result, the exposure to the
counterparty of the purchase or sale is increased. Although the Fund would
generally purchase securities on a forward commitment or when-issued basis with
the intention of taking delivery, the Fund may sell such a security prior to the
settlement date if the Sub-Advisor felt such action was appropriate. In such a
case, the Fund could incur a short-term gain or loss.
HEDGING TECHNIQUES
------------------
Unless otherwise indicated, the Fund may invest in the following derivative
securities to seek to hedge all or a portion of its assets against market value
changes resulting from changes in securities prices and currency fluctuations.
Hedging is a means of attempting to offset, or neutralize, the price movement of
an investment by making another investment, the price of which should tend to
move in the opposite direction from the original investment. The imperfect
correlation in price movement between an option and the underlying financial
instrument and/or the costs of implementing such an option may limit the
effectiveness of the hedging strategy.
WRITING COVERED CALL OPTIONS. The Fund may write covered call options on equity
securities or futures contracts to earn premium income, to assure a definite
price for a security it has considered selling, or to close out options
previously purchased. A call option gives the holder (buyer) the right to
purchase a security or futures contract at a specified price (the exercise
price) at any time until a certain date (the expiration date). A call option is
"covered" if the Fund owns the underlying security subject to the call option at
all times during the option period. A covered call writer is required to deposit
in escrow the underlying security in accordance with the rules of the exchanges
on which the option is traded and the appropriate clearing agency.
The writing of covered call options is a conservative investment technique which
the Sub-Advisor believes involves relatively little risk. However, there is no
assurance that a closing transaction can be effected at a favorable price.
During the option period, the covered call writer has, in return for the premium
received, given up the opportunity for capital appreciation above the exercise
price should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security decline.
The Fund may write covered call options if, immediately thereafter, not more
than 30% of its net assets would be committed to such transactions. As long as
the Securities and Exchange Commission continues to take the position that
unlisted options are illiquid securities, the Fund will not commit more than 15%
of its net assets to unlisted covered call transactions and other illiquid
securities.
5
<PAGE>
WRITING COVERED PUT OPTIONS. The Fund may write covered put options on equity
securities and futures contracts to assure a definite price for a security if it
is considering acquiring the security at a lower price than the current market
price or to close out options previously purchased. A put option gives the
holder of the option the right to sell, and the writer has the obligation to
buy, the underlying security at the exercise price at any time during the option
period. The operation of put options in other respects is substantially
identical to that of call options. When the Fund writes a covered put option, it
maintains in a segregated account with its Custodian cash or liquid securities
in an amount not less than the exercise price at all times while the put option
is outstanding.
The risks involved in writing put options include the risk that a closing
transaction cannot be effected at a favorable price and the possibility that the
price of the underlying security may fall below the exercise price, in which
case the Fund may be required to purchase the underlying security at a higher
price than the market price of the security at the time the option is exercised.
The Fund may not write a put option if, immediately thereafter, more than 25% of
its net assets would be committed to such transactions.
FUTURES CONTRACTS. The Fund may buy and sell futures contracts as a hedge to
protect the value of the Fund's portfolio against anticipated changes in
securities prices and foreign currencies. There are several risks in using
futures contracts. One risk is that futures prices could correlate imperfectly
with the behavior of cash market prices of the financial instrument being hedged
so that even a correct forecast of general price trends may not result in a
successful transaction. Another risk is that the Sub-Advisor may be incorrect in
its expectation of future prices of the underlying financial instrument. There
is also a risk that a secondary market in the obligations that the Fund holds
may not exist or may not be adequately liquid to permit the Fund to close out
positions when it desires to do so. When buying or selling futures contracts the
Fund will be required to segregate cash and/or liquid high-grade debt
obligations to meet its obligations under these types of financial instruments.
By so doing, the Fund's ability to meet current obligations, to honor
redemptions or to operate in a manner consistent with its investment objective
may be impaired.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The value of the Fund's portfolio
securities which are invested in non-U.S. dollar denominated instruments as
measured in U.S. dollars may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations, and the Fund
may incur costs in connection with conversions between various currencies. The
Fund will conduct its foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through forward contracts to purchase or sell foreign currencies. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded directly between currency
traders (usually large commercial banks) and their customers. The Fund will not,
however, hold foreign currency except in connection with purchase and sale of
foreign portfolio securities.
The Fund will enter into forward foreign currency exchange contracts as
described hereafter.
6
<PAGE>
When the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may desire to establish the cost or
proceeds relative to another currency. The forward contract may be denominated
in U.S. dollars or may be a "cross-currency" contract where the forward contract
is denominated in a currency other than U.S. dollars. However, this tends to
limit potential gains which might result from a positive change in such currency
relationships.
The forecasting of a short-term currency market movement is extremely difficult
and the successful execution of a short-term hedging strategy is highly
uncertain. The Fund may enter into such forward contracts if, as a result, not
more than 50% of the value of its total assets would be committed to such
contracts. Under normal circumstances, consideration of the prospect for
currency parities will be incorporated into the longer term investment decisions
made with regard to overall diversification strategies. However, the Trustees
believe that it is important to have the flexibility to enter into forward
contracts when the Sub-Advisor determines it to be in the best interests of the
Fund. The Custodian will segregate cash, U.S. Government obligations or other
liquid securities in an amount not less than the value of the Fund's total
assets committed to foreign currency exchange contracts entered into under this
type of transaction. If the value of the segregated securities declines,
additional cash or securities will be added on a daily basis, i.e., "marked to
market," so that the segregated amount will not be less than the amount of the
Fund's commitments with respect to such contracts.
Generally, the Fund will not enter into a forward foreign currency exchange
contract with a term of greater than 90 days. At the maturity of the contract,
the Fund may either sell the portfolio security and make delivery of the foreign
currency, or may retain the security and terminate the obligation to deliver the
foreign currency by purchasing an "offsetting" forward contract with the same
currency trader obligating the Fund to purchase, on the same maturity date, the
same amount of the foreign currency.
It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the contract. Accordingly, it may be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency the Fund is obligated to
deliver.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between entering into a forward contract for the sale of a
foreign currency and the date the Fund enters into an offsetting contract for
the purchase of the foreign currency, the Fund will realize a gain to the extent
the price of the currency the Fund has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent the price of the currency the Fund has agreed
to purchase exceeds the price of the currency the Fund has agreed to sell.
7
<PAGE>
The Fund's dealings in forward foreign currency exchange contracts will be
limited to the transactions described above. The Fund is not required to enter
into such transactions with regard to its foreign currency-denominated
securities and will not do so unless deemed appropriate by the Sub-Advisor. It
should also be realized that this method of protecting the value of the Fund's
portfolio securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities held by the
Fund. It simply establishes a rate of exchange which one can achieve at some
future point in time. Additionally, although such contracts tend to minimize the
risk of loss due to a decline in the value of the hedged currency, at the same
time, they tend to limit any potential gain which might result should the value
of such currency increase.
OPTIONS AND FUTURES TRANSACTIONS GENERALLY. Option transactions in which the
Fund may engage involve the specific risks described above as well as the
following risks: the writer of an option may be assigned an exercise at any time
during the option period; disruptions in the markets for underlying instruments
could result in losses for options investors; imperfect or no correlation
between the option and the securities being hedged; the insolvency of a broker
could present risks for the broker's customers; and market imposed restrictions
may prohibit the exercise of certain options. In addition, the option activities
of the Fund may affect its portfolio turnover rate and the amount of brokerage
commissions paid by the Fund. The success of the Fund in using the option
strategies described above depends, among other things, on the Sub-Advisor's
ability to predict the direction and volatility of price movements in the
options, futures contracts and securities markets and the Sub-Advisor's ability
to select the proper time, type and duration of the options.
The Fund's ability to establish and close out positions in futures contracts and
options will be subject to the existence of a liquid secondary market. Although
the Fund generally will purchase or sell only those futures contracts and
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular futures contract or option or at any particular time.
DESCRIPTION OF BOND RATINGS
The various ratings used by the NRSROs are described below. A rating by an NRSRO
represents the organization's opinion as to the credit quality of the security
being traded. However, the ratings are general and are not absolute standards of
quality or guarantees as to the creditworthiness of an issuer. Consequently, the
Sub-Advisor believes that the quality of fixed-income securities in which the
Fund may invest should be continuously reviewed and that individual analysts
give different weightings to the various factors involved in credit analysis. A
rating is not a recommendation to purchase, sell or hold a security because it
does not take into account market value or suitability for a particular
investor. When a security has received a rating from more than one NRSRO, each
rating is evaluated independently. Ratings are based on current information
furnished by the issuer or obtained by the NRSROs from other sources that they
consider reliable. Ratings may be changed, suspended or withdrawn as a result of
changes in or unavailability of such information, or for other reasons.
8
<PAGE>
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S BOND RATINGS:
Aaa: Bonds rated Aaa are judged to be of the best quality. These bonds
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large in Aa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements that make the long term
risks appear somewhat larger than in Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to
be considered upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present that
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds rated Baa are considered as medium grade obligations, i.e., they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's applies numerical modifiers (1,2 and 3) with respect to bonds rated Aa,
A and Baa. The modifier 1 indicates that the bond being rated ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the bond ranks in the lower end of
its generic rating category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S BOND RATINGS:
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA: Bonds rated AA also qualify as high quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
9
<PAGE>
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within these major rating categories.
DESCRIPTION OF FITCH INVESTORS SERVICE INC.'S BOND RATINGS:
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.
A: Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore,
impair timely payment.
To provide more detailed indications of credit quality, the AA, A and BBB
ratings may be modified by the addition of a plus or minus sign to show relative
standing within a rating category.
DESCRIPTION OF DUFF & PHELPS CREDIT RATING CO.'S BOND RATINGS:
AAA: This is the highest rating credit quality. The risk factors are
negligible, being only slightly more than for risk-free U.S. Treasury debt.
AA: Bonds rated AA are considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
A: Bonds rated A have average protection factors. However risk factors
are more variable and greater in periods of economic stress.
BBB: Bonds rated BBB have below average protection factors, but are
considered sufficient for prudent investment. There is considerable variability
in risk during economic cycles.
10
<PAGE>
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations which cannot be
changed without approval by holders of a majority of the outstanding voting
shares of the Fund. A "majority" for this purpose, means the lesser of (i) 67%
of the Fund's outstanding shares represented in person or by proxy at a meeting
at which more than 50% of its outstanding shares are represented, or (ii) more
than 50% of its outstanding shares.
Under these limitations, the Fund MAY NOT:
(1) Invest more than 5% of the value of its total assets in the securities of
any one corporate issuer or purchase more than 10% of the outstanding
voting securities or of any class of securities of any one corporate
issuer;
(2) Invest 25% or more of the value of its total assets in any one industry or
group of industries (except that securities of the U.S. Government, its
agencies and instrumentalities are not subject to these limitations);
(3) Invest in the securities of any issuer if any of the officers or trustees
of the Trust or its Adviser or Sub-Advisor who own beneficially more than
1/2 of 1% of the outstanding securities of such issuer together own more
than 5% of the outstanding securities of such issuer;
(4) Invest for the purpose of exercising control or management of another
issuer;
(5) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Fund may
invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things, and the Fund may
invest in certain mortgage backed securities as described in the Prospectus
under "Investment Objective, Investment Policies and Risk Considerations";
(6) Underwrite securities issued by others, except to the extent the Fund may
be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(7) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions);
(8) Make short sales of securities or maintain a short position, except short
sales "against the box." (A short sale is made by selling a security the
Fund does not own. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short.);
(9) Make loans of money or securities, except that the Fund may (a) make loans
of its portfolio securities in amounts not in excess of 25% of its net
assets, and (b) invest in repurchase agreements;
11
<PAGE>
(10) Issue senior securities, borrow money or pledge its assets, except that it
may borrow from banks as a temporary measure (a) for extraordinary or
emergency purposes, in amounts not exceeding 5% of the Fund's total assets,
or (b) in order to meet redemption requests which might otherwise require
untimely disposition of portfolio securities if, immediately after such
borrowing, the value of the Fund's assets, including all borrowings then
outstanding, less its liabilities (excluding all borrowings), is equal to
at least 300% of the aggregate amount of borrowings then outstanding, and
may pledge its assets to secure all such borrowings;
(11) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors);
(12) Invest more than 15% of its net assets in illiquid securities, including
repurchase agreements maturing in over seven days, and other securities for
which there is no established market or for which market quotations are not
readily available; or
(13) Purchase or sell puts, calls options, futures, straddles, commodities,
commodities contracts or commodities futures contracts, except as described
in the Prospectus and this Statement of Additional Information.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation. However, in the case of the
borrowing limitation (limitation number 10, above) the Fund will, to the extent
necessary, reduce its existing borrowings to comply with the limitation.
While the Fund has reserved the right to make short sales "against the box"
(limitation number 8, above), the Sub-Advisor has no present intention of
engaging in such transactions at this time or during the coming year.
12
<PAGE>
TRUSTEES AND OFFICERS
The Board of Trustees supervises the activities of Williamsburg Investment Trust
(the "Trust"). Following are the Trustees and executive officers of the Trust,
their present position with the Trust or Fund, age, principal occupation during
the past 5 years and their aggregate compensation from the Trust for the fiscal
year ended March 31, 2000:
<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (age 63) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 46) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 63) Physician $12,500
Trustee** Dermatology Associates of
931 Broad Street Road Virginia, P.C.,
Manakin Sabot, Virginia 23103 Richmond, Virginia
J. Finley Lee (age 60) Julian Price Professor Emeritus of $12,500
Trustee Business Administration
105 Gristmill Lane University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
13
<PAGE>
Richard Mitchell (age 51) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 61) Chancellor of $12,500
Trustee University of Richmond,
University of Richmond Richmond, Virginia;
G19 Boatright Library Director of Tredegar
Richmond, Virginia 23173 Industries, Inc. (plastics manufacturer)
Harris V. Morrissette (age 40) President of $12,500
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling)
Erwin H. Will, Jr. (age 67) Chief Investment Officer of $12,500
Trustee Virginia Retirement System,
1200 East Main Street Richmond, Virginia
Richmond, Virginia 23219
Samuel B. Witt III (age 64) Senior Vice President and $13,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 37) Portfolio Manager of None
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Joseph L. Antrim III (age 55) Executive Vice President of None
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
14
<PAGE>
Charles M. Caravati III (age 34) Assistant Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
The Jamestown International Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Robert G. Dorsey (age 43) Managing Director of Ultimus Fund None
Vice President Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, President
of Countrywide Fund Services, Inc.
John M. Flippin (age 58) Principal of None
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 47) Principal of None
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
600 Luckie Drive
Luckie Building, Suite 305
Birmingham, Alabama 35223
J. Lee Keiger III (age 45) First Vice President and Chief Financial None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter III (age 59) Principal of None
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 38) Managing Director of Ultimus Fund None
Treasurer Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
of Countrywide Fund Services, Inc.
15
<PAGE>
Henry C. Spalding, Jr. (age 62) Executive Vice President of None
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 44) Managing Director of Ultimus Fund None
Secretary Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
and Secretary of Countrywide Fund
Services, Inc. and affiliated companies
Connie R. Taylor (age 49) Administrator of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 41) Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 54) President and Chief Executive None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
</TABLE>
--------------------------------------------
** Indicates that Trustee is an Interested Person for purposes of the Investment
Company Act of 1940. Charles M. Caravati, Jr. is the father of Charles M.
Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee and Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their findings
and recommendations as to accounting and financial matters, including the
adequacy of internal controls. On the basis of this review the Audit Committee
makes recommendations to the Trustees as to the appointment of independent
accountants for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 7, 2000, the Trustees and
Officers of the Trust as a group owned beneficially (i.e., had voting and/or
investment power) less than 1% of the then-outstanding shares of the Fund. As of
that same date, Charles Schwab & Co., Inc., 101 Montgomery Street, San
Francisco, California 94104, owned of record 16.68% of the then-outstanding
shares of the Fund.
INVESTMENT ADVISER
Lowe, Brockenbrough & Company, Inc. (the "Adviser") performs management,
statistical, portfolio Adviser selection and general investment supervisory
services for the Fund pursuant to an Investment Advisory Agreement (the
"Advisory Agreement"). The Advisory Agreement is effective until February 28,
2001 and will be renewed thereafter for one year periods only so long as such
renewal and continuance is specifically approved at least annually by the Board
of Trustees or by vote of a majority of the Fund's outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Adviser by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by the
16
<PAGE>
Board of Trustees of the Trust or by the Adviser. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Adviser is at the annual rate of 1.00% of the Fund's average
daily net assets. For the fiscal years ended March 31, 2000, 1999 and 1998, the
Fund paid the Adviser advisory fees of $660,974, $464,912 and $355,460,
respectively.
The Adviser, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough III. In addition to acting as Adviser to
the Fund, the Adviser serves as investment adviser to three additional
investment companies, the subjects of separate prospectuses, and also provides
investment advice to corporations, trusts, pension and profit sharing plans,
other business and institutional accounts and individuals.
The Adviser provides a continuous investment program for the Funds, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Funds. The Adviser determines what securities
and other investments will be purchased, retained or sold by the Funds, and does
so in accordance with the investment objectives and policies of the Funds as
described herein and in the Prospectus. The Adviser places all securities orders
for the Funds, determining with which broker, dealer, or issuer to place the
orders. The Adviser must adhere to the brokerage policies of the Funds in
placing all orders, the substance of which policies are that the Adviser must
seek at all times the most favorable price and execution for all securities
brokerage transactions. The Adviser also provides, at its own expense, certain
Executive Officers to the Trust, and pays the entire cost of distributing Fund
shares.
The Adviser may compensate dealers or others based on sales of shares of the
Fund to clients of such dealers or others or based on the average balance of all
accounts in the Fund for which such dealers or others are designated as the
person responsible for the account.
SUB-ADVISOR
Oechsle International Advisors, LLC (the "Sub-Advisor") supervises the Fund's
investments pursuant to a Sub-Advisory Agreement (the "Sub-Advisory Agreement")
between the Sub-Advisor, the Adviser and the Trust. The Sub-Advisory Agreement
is effective until February 28, 2001 and will be renewed thereafter for one year
periods only so long as such renewal and continuance is specifically approved at
least annually by the Board of Trustees or by vote of a majority of the Fund's
outstanding voting securities, provided the continuance is also approved by a
majority of the Trustees who are not "interested persons" of the Trust, the
Adviser or the Sub-Advisor by vote cast in person at a meeting called for the
purpose of voting on such approval. The Sub-Advisory Agreement is terminable
without penalty on sixty days notice by the Board of Trustees of the Trust, by
the Adviser or by the Sub-Advisor. The Sub-Advisory Agreement provides that it
will terminate automatically in the event of its assignment.
Oechsle Group, LLC is the Member Manager of the Sub-Advisor and owns
approximately a 44% interest (on a fully diluted basis) in the Sub-Advisor. The
following individuals own approximately an 89% interest in Oechsle Group, LLC:
Walter Oechsle, S. Dewey Keesler, Jr., L. Sean Roche, Stephen P. Langer, Steven
H. Schaefer, and Warren Walker. The management,
17
<PAGE>
policies and control of the Sub-Advisor is, subject to certain limitations,
invested exclusively in Oechsle Group, LLC. Day-to-day management of the
Sub-Advisor is exercised by the Management Committee of Oechsle Group, LLC,
which consists of Messrs. Keesler, Roche, Langer, and Walker. Fleet Financial
Group, Inc. of Boston, Massachusetts holds approximately a 35% non-voting
interest (on a fully diluted basis) in the Sub-Advisor.
Compensation of the Sub-Advisor is paid by the Adviser (not the Fund) in the
amount of one-half of the advisory fee (net of any waivers) received by the
Adviser. Compensation payable to the Sub-Advisor for the fiscal years ended
March 31, 2000, 1999 and 1998 was $330,487, $232,456 and $177,730, respectively.
The Sub-Advisor provides a continuous investment program for the Fund, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Fund. The Sub-Advisor determines what
securities and other investments will be purchased, retained or sold by the
Fund, and does so in accordance with the investment objective and policies of
the Fund as described herein and in the Prospectus. The Sub-Advisor places all
securities orders for the Fund, determining with which broker, dealer, or issuer
to place the orders.
The Sub-Advisor may determine from time to time that some investment
opportunities are appropriate for certain of its clients and not others,
including the Fund, as the Fund has an investment objective that may vary from
that of other clients. For these and other reasons, such as differing time
horizons, liquidity needs, tax consequences and assessments of general market
conditions and of individual securities (including options), Fund investment
transactions may or may not vary from decisions made for others by the
Sub-Advisor. It may also occasionally be necessary to allocate limited
investment opportunities among the Fund and other clients of the Sub-Advisor, on
a fair and equitable basis deemed appropriate by the Sub-Advisor.
The Sub-Advisor must adhere to the brokerage policies of the Fund in placing all
orders, the substance of which policies are that the Sub-Advisor must seek at
all times the most favorable price and execution for all securities brokerage
transactions.
ADMINISTRATOR
The Fund has retained Ultimus Fund Solutions, LLC (the "Administrator"), 135
Merchant Street, Suite 230, Cincinnati, Ohio 45246, to provide administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. The Administrator maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
The Administrator also provides accounting and pricing services to the Fund and
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services. The
Administrator supervises the preparation of tax returns, reports to shareholders
of the Fund, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees.
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<PAGE>
For the performance of these administrative services, the Fund pays the
Administrator a fee at the annual rate of 0.20% of the average value of its
daily net assets up to $25,000,000, 0.175% of such assets from $25,000,000 to
$50,000,000 and 0.15% of such assets in excess of $50,000,000. In addition, the
Fund pays out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
Prior to November 13, 2000, Integrated Fund Services ("Integrated"), P.O. Box
5354, Cincinnati, Ohio 45201, provided the Fund with administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services. Integrated is a wholly-owned indirect subsidiary of The Western and
Southern Life Insurance Company. For the fiscal years ended March 31, 2000, 1999
and 1998, Integrated received from the Fund fees of $147,384, $110,789 and
$86,293, respectively.
DISTRIBUTOR
Ultimus Fund Distributors, LLC (the "Distributor"), 135 Merchant Street, Suite
230, Cincinnati, Ohio 45246, serves as principal underwriter for the Fund
pursuant to an Underwriting Agreement. Shares are sold on a continuous basis by
the Distributor. The Distributor has agreed to use its best efforts to solicit
orders for the sale of Fund shares, but it is not obliged to sell any particular
amount of shares. The Underwriting Agreement provides that, unless sooner
terminated, it will continue in effect for two years from the date of its
execution, and for continuous one-year periods thereafter if such continuance is
approved at least annually (i) by the Board of Trustees or a vote of a majority
of the outstanding shares, and (ii) by a majority of the Trustees who are not
"interested persons" of the Trust or of the Distributor by vote cast in person
at a meeting called for the purpose of voting on such approval. The Underwriting
Agreement may be terminated by the Fund at any time, without the payment of any
penalty, by vote of a majority of the Board of Trustees of the Trust or by vote
of a majority of the outstanding shares of the Fund on sixty days written notice
to the Distributor, or by the Distributor at any time, without the payment of
any penalty, on sixty days written notice to the Trust. The Underwriting
Agreement will automatically terminate in the event of its assignment. The
Distributor is an affiliate of the Administrator, and Robert G. Dorsey, Mark J.
Seger and John F. Splain are each Managing Directors of the Distributor and
officers of the Trust.
OTHER SERVICES
The firm of Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800,
Philadelphia, Pennsylvania 19103 has been retained by the Board of Trustees to
perform an independent audit of the books and records of the Trust, to prepare
the Fund's federal and state tax returns and to consult with the Trust as to
matters of accounting and federal and state income taxation.
The Custodian of the Fund's assets is Northern Trust Company, 50 South LaSalle
Street, Chicago, Illinois 60675. The Custodian holds all cash and securities of
the Fund (either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Fund.
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BROKERAGE
It is the Fund's practice to seek the best price and execution for all portfolio
securities transactions. The Sub-Advisor (subject to the general supervision of
the Board of Trustees and the Adviser) directs the execution of the Fund's
portfolio transactions. The Sub-Advisor may effect Fund portfolio transactions
with broker-dealers which may be interested persons of the Fund, the Trust, any
Trustee, officer or director of the Trust or its investment advisers or any
interested person of such persons.
The Fund's common stock portfolio transactions will normally be exchange traded
and will be effected through broker-dealers who will charge brokerage
commissions. With respect to securities traded only in the over-the-counter
market, orders will be executed on a principal basis with primary market makers
in such securities except where better prices or executions may be obtained on
an agency basis or by dealing with other than a primary market maker.
For the fiscal years ended March 31, 1999, 1998 and 1997, the total amount of
brokerage commissions paid by the Fund was $158,247, $95,588 and $100,229,
respectively.
While there is no formula, agreement or undertaking to do so, the Sub-Advisor
may allocate a portion of the Fund's brokerage commissions to persons or firms
providing the Sub-Advisor with research services, which may typically include,
but are not limited to, investment recommendations, financial, economic,
political, fundamental and technical market and interest rate data, and other
statistical or research services. Much of the information so obtained may also
be used by the Sub-Advisor for the benefit of the other clients it may have.
Conversely, the Fund may benefit from such transactions effected for the benefit
of other clients. In all cases, the Sub-Advisor is obligated to effect
transactions for the Fund based upon obtaining the most favorable price and
execution. Factors considered by the Adviser in determining whether the Fund
will receive the most favorable price and execution include, among other things:
the size of the order, the broker's ability to effect and settle the transaction
promptly and efficiently and the Sub-Advisor's perception of the broker's
reliability, integrity and financial condition.
CODE OF ETHICS. The Trust, the Adviser, the Sub-Advisor and the Distributor have
adopted Codes of Ethics under Rule 17j-1 of the 1940 Act which permit personnel
subject to the Codes to invest in securities, including securities that may be
purchased or held by the Fund. The Codes of Ethics adopted by the Trust, the
Adviser, the Sub-Advisor and the Distributor are on public file with, and are
available from, the SEC.
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts,
estates, corporate retirement plans and others, investors are free to make
additions and withdrawals to or from their account as often as they wish. When
an investor makes an initial investment in the Fund, a shareholder account is
opened in accordance with the investor's registration instructions. Each time
there is a transaction in a shareholder account, such as an additional
investment or the reinvestment of a dividend or
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distribution, the shareholder will receive a statement showing the current
transaction and all prior transactions in the shareholder account during the
calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly or quarterly investment in shares through automatic charges
to their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
public offering price on or about the last business day of the month or quarter.
The shareholder may change the amount of the investment or discontinue the plan
at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Fund to redeem the necessary number of shares periodically (each
month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed within 7 days
of the valuation date. If the designated recipient is other than the registered
shareholder, the signature of each shareholder must be guaranteed on the
application (see the Prospectus under the heading "Signature Guarantees"). A
corporation (or partnership) must also submit a "Corporate Resolution" (or
"Certification of Partnership") indicating the names, titles and required number
of signatures authorized to act on its behalf. The application must be signed by
a duly authorized officer(s) and the corporate seal affixed. No redemption fees
are charged to shareholders under this plan. Costs in conjunction with the
administration of the plan are borne by the Fund. Shareholders should be aware
that such systematic withdrawals may deplete or use up entirely their initial
investment and may result in realized long-term or short-term capital gains or
losses. The Systematic Withdrawal Plan may be terminated at any time by the Fund
upon sixty days' written notice or by a shareholder upon written notice to the
Fund. Applications and further details may be obtained by calling the Fund at
1-866-738-1126, or by writing to:
The Jamestown International Equity Fund
Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
PURCHASES IN KIND. The Fund may accept securities in lieu of cash in payment for
the purchase of shares of the Fund. The acceptance of such securities is at the
sole discretion of the Sub-Advisor based upon the suitability of the securities
accepted for inclusion as a long term investment of the Fund, the marketability
of such securities, and other factors which the Sub-Advisor may deem
appropriate. If accepted, the securities will be valued using the same criteria
and methods as described in "How Net Asset Value is Determined" in the
Prospectus.
REDEMPTIONS IN KIND. The Fund does not intend, under normal circumstances, to
redeem its securities by payment in kind. It is possible, however, that
conditions may arise in the future
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which would, in the opinion of the Trustees, make it undesirable for the Fund to
pay for all redemptions in cash. In such case, the Board of Trustees may
authorize payment to be made in portfolio securities or other property of the
Fund. Securities delivered in payment of redemptions would be valued at the same
value assigned to them in computing the net asset value per share. Shareholders
receiving them would incur brokerage costs when these securities are sold. An
irrevocable election may be filed under Rule 18f-1 of the 1940 Act, wherein the
Fund commits itself to pay redemptions in cash, rather than in kind, to any
shareholder of record of the Fund who redeems during any ninety day period, the
lesser of (a) $250,000 or (b) one percent (1%) of the Fund's net assets at the
beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Fund at the address shown herein. Your request should include the
following: (1) the existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the account
registration; (3) the new account registration, address, social security or
taxpayer identification number and how dividends and capital gains are to be
distributed; (4) signature guarantees (see the Prospectus under the heading
"Signature Guarantees"); and (5) any additional documents which are required for
transfer by corporations, administrators, executors, trustees, guardians, etc.
If you have any questions about transferring shares, call or write the Fund.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next determined
after the order is received. An order received prior to the close of the regular
session of trading on the New York Stock Exchange (the "Exchange"), generally
4:00 p.m., Eastern time, will be executed at the price computed on the date of
receipt; and an order received after that time will be executed at the price
computed on the next Business Day. An order to purchase shares is not binding on
the Fund until confirmed in writing (or unless other arrangements have been made
with the Fund, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Fund is required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Fund within 60 days.
The Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
EMPLOYEES AND AFFILIATES OF THE FUND. The Fund has adopted initial investment
minimums for the purpose of reducing the cost to the Fund (and consequently to
the shareholders) of communicating with and servicing its shareholders. However,
a reduced minimum initial investment requirement of $1,000 applies to Trustees,
officers and employees of the Fund, the Adviser, the Sub-Advisor and certain
parties related thereto, including clients of the Adviser and
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the Sub-Advisor or any sponsor, officer, committee member thereof, or the
immediate family of any of them. In addition, accounts having the same mailing
address may be aggregated for purposes of the minimum investment if they consent
in writing to share a single mailing of shareholder reports, proxy statements
(but each such shareholder would receive his/her own proxy) and other Fund
literature.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the
"Commission"), (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Fund to dispose of securities owned by it, or to fairly determine the
value of its assets, and (iii) for such other periods as the Commission may
permit.
There is currently no charge by the Administrator for redemptions, including
wire redemptions, although the Trustees could impose a redemption charge in the
future. Any redemption may be more or less than the shareholder's cost depending
on the market value of the securities held by the Funds. The Administrator
reserves the right, upon thirty days' written notice, to make reasonable charges
for wire redemptions. All charges will be deducted from your account by
redemption of shares in your account. Your bank or brokerage firm may also
impose a charge for processing wire transfers. In the event that wire transfer
of funds is impossible or impractical, the redemption proceeds will be sent by
mail to the designated account.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Fund, and they have
adopted procedures to do so, as follows. The net asset value of the Fund is
determined as of the close of the regular session of trading on the Exchange
(currently 4:00 p.m., Eastern time) on each "Business Day." A Business Day means
any day, Monday through Friday, except for the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day and Christmas. Net asset value per
share is determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
The value of non-dollar denominated portfolio instruments held by the Fund will
be determined by converting all assets and liabilities initially expressed in
foreign currency values into U.S. dollar values at the mean between the bid and
offered quotations of such currencies against U.S. dollars as last quoted by any
recognized dealer. If such quotations are not available, the rate of exchange
will be determined in accordance with policies established in good faith by the
Board of Trustees. Gains or losses between trade and settlement dates resulting
from changes in exchange rates between the U.S. dollar and a foreign currency
are borne by the Fund. To protect against such losses, the Fund may enter into
forward foreign currency exchange contracts, which will also have the effect of
limiting any such gains.
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ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Adviser,
Sub-Advisor or the Administrator, including, but not limited to, the following:
custodian, shareholder servicing, stock transfer and dividend disbursing
expenses; clerical employees and junior level officers of the Trust as and if
approved by the Board of Trustees; taxes; expenses of the issuance and
redemption of shares (including registration and qualification fees and
expenses); costs and expenses of membership and attendance at meetings of
certain associations which may be deemed by the Trustees to be of overall
benefit to the Fund and its shareholders; legal and auditing expenses; and the
cost of stationery and forms prepared exclusively for the Fund. General Trust
expenses are allocated among the series, or funds, on a fair and equitable basis
by the Board of Trustees, which may be based on relative net assets of each fund
(on the date the expense is paid) or the nature of the services performed and
the relative applicability to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUND. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, the Fund
must distribute annually at least 90% of its net investment income. In addition
to this distribution requirement, the Fund must derive at least 90% of its gross
income each taxable year from dividends, interest, payments with respect to
securities' loans, gains from the disposition of stock or securities, and
certain other income.
While the above requirements are aimed at qualification of the Fund as regulated
investment companies under Subchapter M of the Code, the Fund also intends to
comply with certain requirements of the Code to avoid liability for federal
income and excise tax. If the Fund remains qualified under Subchapter M, it will
not be subject to federal income tax to the extent it distributes its taxable
net investment income and net realized capital gains. A nondeductible 4% federal
excise tax will be imposed on the Fund to the extent it does not distribute at
least 98% of its ordinary taxable income for a calendar year, plus 98% of its
capital gain net taxable income for the one year period ending each October 31,
plus certain undistributed amounts from prior years. While the Fund intends to
distribute its taxable income and capital gains in a manner so as to avoid
imposition of the federal excise and income taxes, there can be no assurance
that the Fund indeed will make sufficient distributions to avoid entirely
imposition of federal excise or income taxes. Should additional series, or
funds, be created by the Trustees, each fund would be treated as a separate tax
entity for federal income tax purposes.
TAX STATUS OF THE FUND'S DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the Fund
derived from net investment income or net short-term capital gains are taxable
to shareholders as ordinary income, whether received in cash or reinvested in
additional shares. Distributions, if any, of long-term capital gains are taxable
to shareholders as long-term capital gains, whether received in cash or
reinvested in additional shares, regardless of how long Fund shares have been
held. For information on "backup" withholding, see "Purchase of Shares" above.
For corporate shareholders, the dividends received deduction, if applicable,
should apply to dividends from the Fund. The Fund will send shareholders
information each year on the tax status of dividends
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<PAGE>
and disbursements. A dividend or capital gains distribution paid shortly after
shares have been purchased, although in effect a return of investment, is
subject to federal income taxation. Dividends from net investment income, along
with capital gains, will be taxable to shareholders, whether received in cash or
shares and no matter how long you have held Fund shares, even if they reduce the
net asset value of shares below your cost and thus in effect result in a return
of a part of your investment.
Investments by the Fund in certain options, futures contracts and options on
futures contracts are "section 1256 contracts." Any gains or losses on section
1256 contracts are generally considered 60% long-term and 40% short-term capital
gains or losses ("60/40"). Section 1256 contracts held by the Fund at the end of
each taxable year are treated for federal income tax purposes as being sold on
such date for their fair market value. The resultant paper gains or losses are
also treated as 60/40 gains or losses. When the section 1256 contract is
subsequently disposed of, the actual gain or loss will be adjusted by the amount
of any preceding year-end gain or loss. The use of section 1256 contracts may
force the Fund to distribute to shareholders paper gains that have not yet been
realized in order to avoid federal income tax liability.
Foreign currency gains or losses on non-U.S. dollar denominated bonds and other
similar debt instruments and on any non-U.S. dollar denominated futures
contracts, options and forward contracts that are not section 1256 contracts
generally will be treated as ordinary income or loss.
Certain hedging transactions undertaken by the Fund may result in "straddles"
for federal income tax purposes. The straddle rules may affect the character of
gains (or losses) realized by the Fund. In addition, losses realized by the Fund
on positions that are part of a straddle may be deferred, rather than being
taken into account in calculating taxable income for the taxable year in which
such losses are realized. Because only a few regulations implementing the
straddle rules have been promulgated, the tax consequences of hedging
transactions to the Fund are not entirely clear. The hedging transactions may
increase the amount of short-term capital gain realized by the Fund which is
taxed as ordinary income when distributed to shareholders. The Fund may make one
or more of the elections available under the Internal Revenue Code of 1986, as
amended, which are applicable to straddles. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected straddle positions will be determined under rules that
vary according to the elections made. The rules applicable under certain of the
elections operate to accelerate the recognition of gains or losses from the
affected straddle positions. Because application of the straddle rules may
affect the character of gains or losses, defer losses and/or accelerate the
recognition of gains or losses from the affected straddle positions, the amount
which must be distributed to shareholders, and which will be taxed to
shareholders as ordinary income or long-term capital gain in any year, may be
increased or decreased substantially as compared to a fund that did not engage
in such hedging transactions.
The diversification requirements applicable to the Fund's assets may limit the
extent to which the Fund will be able to engage in transactions in options,
futures contracts or options on futures contracts.
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CAPITAL SHARES AND VOTING
The Fund is a series of the Williamsburg Investment Trust (the "Trust"), an
investment company organized as a Massachusetts business trust in July 1988. The
Board of Trustees has overall responsibility for management of the Fund under
the laws of Massachusetts governing the responsibilities of trustees of business
trusts.
Shares of the Fund, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust, cast in person or by proxy at a meeting called for that purpose; or (c)
by a written declaration signed by shareholders holding not less than two-thirds
of the outstanding shares of the Trust and filed with the Trust's custodian.
Shareholders have certain rights, as set forth in the Declaration of Trust,
including the right to call a meeting of the shareholders for the purpose of
voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
Upon liquidation of the Trust or a particular Fund of the Trust, holders of the
outstanding shares of the Fund being liquidated shall be entitled to receive, in
proportion to the number of shares of the Fund held by them, the excess of that
Fund's assets over its liabilities. Each outstanding share is entitled to one
vote for each full share and a fractional vote for each fractional share, on all
matters which concern the Trust as a whole. On any matter submitted to a vote of
shareholders, all shares of the Trust then issued and outstanding and entitled
to vote, irrespective of the Fund, shall be voted in the aggregate and not by
Fund, except (i) when required by the 1940 Act, shares shall be voted by
individual Fund; and (ii) when the matter does not affect any interest of a
particular Fund, then only shareholders of the affected Fund or Funds shall be
entitled to vote thereon. Examples of matters which affect only a particular
Fund could be a proposed change in the fundamental investment objectives or
policies of that Fund or a proposed change in the investment advisory agreement
for a particular Fund. The shares of the Fund will have noncumulative voting
rights, which means that the holders of more than 50% of the shares voting for
the election of Trustees can elect all of the Trustees if they so choose.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
26
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CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, the Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Fund for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of the Fund ("T") is computed by using the redeemable value at the end of
a specified period of time ("ERV") of a hypothetical initial investment of
$1,000 ("P") over a period of time ("n") according to the formula P(l+T)^n=ERV.
The average annual total return quotations for the Fund for the one year period
ended March 31, 2000, and for the period since inception (April 16, 1996) to
March 31, 2000 are 39.35% and 18.12%, respectively.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, the Fund may advertise its yield. A yield quotation is based
on a 30-day (or one month) period and is computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period, according to the following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Solely for the purpose of computing yield, dividend income is recognized by
accruing 1/360 of the stated dividend rate of the security each day that a Fund
owns the security. Generally, interest earned (for the purpose of "a" above) on
debt obligations is computed by reference to the yield to maturity of each
obligation held based on the market value of the obligation (including actual
accrued interest) at the close of business on the last business day prior to the
start of the 30-day (or one month) period for which yield is being calculated,
or, with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest). The Fund's performance may be compared in
advertisements, sales literature and other communications to the performance of
other mutual funds having similar objectives or to standardized indices or other
measures of investment performance. In particular, the Fund may compare its
performance to the Europe, Australia and Far East Index (the "EAFE Index"),
which is generally considered to be representative of the performance of
unmanaged common stocks that
27
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are publicly traded in the securities markets located outside the United States.
Comparative performance may also be expressed by reference to a ranking prepared
by a mutual fund monitoring service, such as Lipper Analytical Services, Inc. or
Morningstar, Inc., or by one or more newspapers, newsletters or financial
periodicals. Performance comparisons may be useful to investors who wish to
compare the Fund's past performance to that of other mutual funds and investment
products. Of course, past performance is not a guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Fund's Prospectus to obtain a
more complete view of the Fund's performance before investing. Of course, when
comparing the Fund's performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price. Advertisements and
other sales literature for the Fund may quote total returns that are calculated
on non-standardized base periods. The total returns represent the historic
change in the value of an investment in the Fund based on monthly reinvestment
of dividends over a specified period of time.
From time to time the Fund may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Fund may also disclose from time to
time information about its portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Fund may also depict the historical performance of
the securities in which the Fund may invest over periods reflecting a variety of
market or economic conditions either alone or in comparison with alternative
investments, performance indices of those investments, or economic indicators.
The Fund may also include in advertisements and in materials furnished to
present and prospective shareholders statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be employed
to meet specific financial goals, such as saving for retirement, children's
education, or other future needs.
28
<PAGE>
FINANCIAL STATEMENTS AND REPORTS
The books of the Fund will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published and will receive written confirmation of all
confirmable transactions in their account. A copy of the
Annual Report will accompany the Statement of Additional Information ("SAI")
whenever the SAI is requested by a shareholder or prospective investor. The
Financial Statements of the Fund as of March 31, 2000, together with the report
of the independent accountants thereon, are included on the following pages.
29
<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
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (each a series of The
Williamsburg Investment Trust), including the portfolios of investments, as of
March 31, 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
32
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE JAMESTOWN
TAX EXEMPT VIRGINIA FUND
AUGUST 1, 2000
REVISED NOVEMBER 13, 2000
A SERIES OF
WILLIAMSBURG INVESTMENT TRUST
135 MERCHANT STREET, SUITE 230
CINCINNATI, OHIO 45246
TELEPHONE 1-866-738-1126
TABLE OF CONTENTS
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INVESTMENT OBJECTIVES AND POLICIES........................................... 2
DESCRIPTION OF MUNICIPAL BOND RATINGS........................................ 7
INVESTMENT LIMITATIONS....................................................... 7
TRUSTEES AND OFFICERS........................................................ 9
INVESTMENT ADVISER........................................................... 13
ADMINISTRATOR................................................................ 13
DISTRIBUTOR.................................................................. 14
OTHER SERVICES............................................................... 15
BROKERAGE.................................................................... 15
SPECIAL SHAREHOLDER SERVICES................................................. 16
PURCHASE OF SHARES........................................................... 17
REDEMPTION OF SHARES......................................................... 18
NET ASSET VALUE DETERMINATION................................................ 18
ALLOCATION OF TRUST EXPENSES................................................. 18
ADDITIONAL TAX INFORMATION................................................... 19
CAPITAL SHARES AND VOTING.................................................... 20
CALCULATION OF PERFORMANCE DATA.............................................. 21
FINANCIAL STATEMENTS AND REPORTS............................................. 23
This Statement of Additional Information is not a prospectus and should only be
read in conjunction with the Prospectus of The Jamestown Tax Exempt Virginia
Fund (the "Fund") dated August 1, 2000. The Prospectus may be obtained from the
Fund, at the address and phone number shown above, at no charge.
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INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Fund are described in the
Prospectus. Supplemental information about these policies is set forth below.
Certain capitalized terms used herein are defined in the Prospectus.
DESCRIPTION OF MUNICIPAL OBLIGATIONS. Municipal Obligations include bonds, notes
and commercial paper issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies or instrumentalities, the interest on which is
exempt from federal income taxes (without regard to whether the interest thereon
is also exempt from the personal income taxes of any state). Municipal
Obligation bonds are issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities such as bridges,
highways, housing, hospitals, mass transportation, schools, streets and water
and sewer works. Other public purposes for which Municipal Obligation bonds may
be issued include refunding outstanding obligations, obtaining funds for general
operating expenses, and obtaining funds to loan to other public institutions and
facilities. In addition, certain types of industrial development bonds are
issued by or on behalf of public authorities to obtain funds to provide
privately-operated housing facilities, airport, mass transit or port facilities,
sewage disposal, solid waste disposal or hazardous waste treatment or disposal
facilities and certain local facilities for water supply, gas or electricity.
Such obligations are included within the term Municipal Obligations if the
interest paid thereon qualifies as exempt from federal income tax. Other types
of industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial
or commercial facilities, may constitute Municipal Obligations, although the
current federal tax laws place substantial limitations on the size of such
issues.
The two principal classifications of Municipal Obligation bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its good faith, credit and taxing power for the payment of
principal and interest. The payment of the principal of and interest on such
bonds may be dependent upon an appropriation by the issuer's legislative body.
The characteristics and enforcement of general obligation bonds vary according
to the law applicable to the particular issuer. Revenue bonds are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise or other specific revenue
source. Industrial development bonds which are Municipal Obligations are in most
cases revenue bonds and do not generally constitute the pledge of the credit of
the issuer of such bonds.
Municipal Obligations also include participations in municipal leases. These are
undivided interests in a portion of an obligation in the form of a lease or
installment purchase which is issued by state and local governments to acquire
equipment and facilities. Municipal leases frequently have special risks not
normally associated with general obligation or revenue bonds. Leases and
installment purchase or conditional sale contracts (which normally provide for
title to the leased asset to pass eventually to the governmental issuer) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of debt. The debt-issuance limitations are deemed to be inapplicable because of
the inclusion in many leases or contracts of "non-appropriation" clauses that
provide
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that the governmental issuer has no obligation to make future payments under the
lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis. Accordingly, a
risk peculiar to these municipal lease obligations is the possibility that a
governmental issuer will not appropriate funds for lease payments. Although the
obligations will be secured by the leased equipment or facilities, the
disposition of the property in the event of non-appropriation or foreclosure
might, in some cases, prove difficult. There are, of course, variations in the
security of Municipal Obligations, both within a particular classification and
between classifications, depending on numerous factors.
Municipal Obligation notes generally are used to provide for short-term capital
needs and generally have maturities of one year or less. Municipal Obligation
notes include:
1. TAX ANTICIPATION NOTES. Tax Anticipation Notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various tax revenues, such as income, sales, use and business
taxes, and are payable from these specific future taxes.
2. REVENUE ANTICIPATION NOTES. Revenue Anticipation Notes are issued in
expectation of receipt of other kinds of revenue, such as federal revenues
available under Federal Revenue Sharing Programs.
3. BOND ANTICIPATION NOTES. Bond Anticipation Notes are issued to provide
interim financing until long-term bond financing can be arranged. In most cases,
the long-term bonds then provide the money for the repayment of the Notes.
Issues of commercial paper typically represent short-term, unsecured, negotiable
promissory notes. These obligations are issued by agencies of state and local
governments to finance seasonal working capital needs of municipalities or to
provide interim construction financing and are paid from general revenues of
municipalities or are refinanced with long-term debt. In most cases, Municipal
Obligation commercial paper is backed by letters of credit, lending agreements,
note repurchase agreements or other credit facility agreements offered by banks
or other institutions.
The yields on Municipal Obligations are dependent on a variety of factors,
including general market conditions, supply and demand and general conditions of
the Municipal Obligation market, size of a particular offering, the maturity of
the obligation and rating (if any) of the issue.
FACTORS AFFECTING VIRGINIA MUNICIPAL OBLIGATIONS. The Commonwealth, its
officials and employees are named as defendants in legal proceedings which occur
in the normal course of governmental operations, some involving substantial
amounts. It is not possible at the present time to estimate the ultimate outcome
or liability, if any, of the Commonwealth with respect to these lawsuits.
However, the ultimate liability resulting from these suits is not expected to
have a material, adverse effect on the financial condition of the Commonwealth.
In Davis v. Michigan (decided March 28, 1989), the United States Supreme Court
ruled unconstitutional states' exempting from state income tax the retirement
benefits paid by the state or local governments without exempting retirement
benefits paid by the federal government. At that time, Virginia exempted state
and local retirement benefits but not federal retirement benefits.
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At a Special Session held in April 1989, the General Assembly repealed the
exemption of state and local retirement benefits. Following Davis, at least five
suits, some with multiple plaintiffs, for refunds of Virginia income taxes, were
filed by federal retirees. These suits were consolidated under the name of
Harper v. Virginia Department of Taxation.
In a Special Session in 1994, the General Assembly passed emergency legislation
to provide payments in five annual installments to federal retirees in
settlement of their claims as a result of Davis. In 1995 and 1996, the General
Assembly passed legislation allowing more retirees to participate in the
settlement. As of April 15, 1996, the estimated total cost to the Commonwealth
for the settlement was approximately $316.2 million.
On September 15, 1995 the Supreme Court of Virginia rendered its decision in
Harper. The Court reversed the judgment of the trial court and entered final
judgment in favor of the taxpayers, directing that the amounts unlawfully
collected be refunded with statutory interest. The Commonwealth issued refund
checks on November 9, 1995, and interest stopped accruing as of November 3,
1995. The cost of refunding all Virginia income taxes paid on federal government
pensions for taxable years 1985, 1986, 1987 and 1988 to federal government
pensioners who opted out of the settlement was approximately $78.7 million,
including interest earnings.
The total cost of refunding all Virginia income taxes paid on federal pensions
on account of the settlement (approximately $316.2 million) and the judgment
($78.7 million) is approximately $394.9 million, of which $203.2 million ($124.5
million in respect of the settlement and the entire $78.7 million in respect of
the judgment) has been paid, leaving $191.7 million payable in respect of the
settlement - approximately $63.2 million in fiscal year 1997, $62.5 million on
March 31, 1998, and (subject to appropriation) $66 million on March 31, 1999.
REPURCHASE AGREEMENTS. The Fund may acquire U.S. Government Securities subject
to repurchase agreements. A repurchase transaction occurs when, at the time the
Fund purchases a security (normally a U.S. Treasury obligation), it also resells
it to the vendor (normally a member bank of the Federal Reserve System or a
registered Government Securities dealer) and must deliver the security (and/or
securities substituted for them under the repurchase agreement) to the vendor on
an agreed upon date in the future. Such securities, including any securities so
substituted, are referred to as the "Repurchase Securities." The repurchase
price exceeds the purchase price by an amount which reflects an agreed upon
market interest rate effective for the period of time during which the
repurchase agreement is in effect.
The majority of these transactions run day to day and the delivery pursuant to
the resale typically will occur within one to five days of the purchase. The
Fund's risk is limited to the ability of the vendor to pay the agreed upon sum
upon the delivery date; in the event of bankruptcy or other default by the
vendor, there may be possible delays and expenses in liquidating the instrument
purchased, decline in its value and loss of interest. These risks are minimized
when the Fund holds a perfected security interest in the Repurchase Securities
and can therefore sell the instrument promptly. Under guidelines issued by the
Trustees, the Adviser will carefully consider the creditworthiness during the
term of the repurchase agreement. Repurchase agreements are considered as loans
collateralized by the Repurchase Securities, such agreements being defined as
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"loans" under the Investment Company Act of 1940 (the "1940 Act"). The return on
such "collateral" may be more or less than that from the repurchase agreement.
The market value of the resold securities will be monitored so that the value of
the "collateral" is at all times as least equal to the value of the loan,
including the accrued interest earned thereon. All Repurchase Securities will be
held by the Fund's custodian either directly or through a securities depository.
DESCRIPTION OF MONEY MARKET INSTRUMENTS. Money market instruments may include
U.S. Government Securities or corporate debt obligations (including those
subject to repurchase agreements) as described herein, provided that they mature
in thirteen months or less from the date of acquisition and are otherwise
eligible for purchase by the Fund. Money market instruments also may include
Bankers' Acceptances and Certificates of Deposit of domestic branches of U.S.
banks, Commercial Paper and Variable Amount Demand Master Notes ("Master
Notes"). BANKERS' ACCEPTANCES are time drafts drawn on and "accepted" by a bank,
are the customary means of effecting payment for merchandise sold in
import-export transactions and are a source of financing used extensively in
international trade. When a bank "accepts" such a time draft, it assumes
liability for its payment. When the Fund acquires a Bankers' Acceptance, the
bank which "accepted" the time draft is liable for payment of interest and
principal when due. The Bankers' Acceptance, therefore, carries the full faith
and credit of such bank. A CERTIFICATE OF DEPOSIT ("CD") is an unsecured
interest- bearing debt obligation of a bank. CDs acquired by the Fund would
generally be in amounts of $100,000 or more. COMMERCIAL PAPER is an unsecured,
short-term debt obligation of a bank, corporation or other borrower. Commercial
Paper maturity generally ranges from two to 270 days and is usually sold on a
discounted basis rather than as an interest-bearing instrument. The Fund will
invest in Commercial Paper only if it is rated in the highest rating category by
any nationally recognized statistical rating organization ("NRSRO") or, if not
rated, the issuer must have an outstanding unsecured debt issue rated in the
three highest categories by any NRSRO or, if not so rated, be of equivalent
quality in the Adviser's assessment. Commercial Paper may include Master Notes
of the same quality. MASTER NOTES are unsecured obligations which are redeemable
upon demand of the holder and which permit the investment of fluctuating amounts
at varying rates of interest. Master Notes are acquired by the Fund only through
the Master Note program of the Fund's custodian, acting as administrator
thereof. The Adviser will monitor, on a continuous basis, the earnings power,
cash flow and other liquidity ratios of the issuer of a Master Note held by the
Fund.
FORWARD COMMITMENT AND WHEN-ISSUED SECURITIES. The Fund may purchase securities
on a when-issued basis or for settlement at a future date if the Fund holds
sufficient assets to meet the purchase price. In such purchase transactions the
Fund will not accrue interest on the purchased security until the actual
settlement. Similarly, if a security is sold for a forward date, the Fund will
accrue the interest until the settlement of the sale. When-issued security
purchases and forward commitments have a higher degree of risk of price movement
before settlement due to the extended time period between the execution and
settlement of the purchase or sale. As a result, the exposure to the
counterparty of the purchase or sale is increased. Although the Fund would
generally purchase securities on a forward commitment or when-issued basis with
the intention of taking delivery, the Fund may sell such a security prior to the
settlement date if the Adviser felt such action was appropriate. In such a case
the Fund could incur a short-term gain or loss.
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VARIABLE RATE SECURITIES. The Fund may invest in tax exempt securities that bear
interest at rates which are adjusted periodically to market rates. The market
value of fixed coupon securities fluctuates with changes in prevailing interest
rates, increasing in value when interest rates decline and decreasing in value
when interest rates rise. The value of variable rate securities, however, is
less affected by changes in prevailing interest rates because of the periodic
adjustment of their coupons to a market rate. The shorter the period between
adjustments, the smaller the impact of interest rate fluctuations on the value
of these securities. The market value of tax exempt variable rate securities
usually tends toward par (100% of face value) at interest rate adjustment time.
PUT BONDS. The Fund may invest in tax exempt securities (including securities
with variable interest rates) which may be redeemed or sold back (put) to the
issuer of the security or a third party at face value prior to stated maturity.
This type of security will normally trade as if maturity is the earlier put
date, even though stated maturity is longer.
MUNICIPAL LEASE OBLIGATIONS. The Fund may also invest in municipal lease
obligations, installment purchase contract obligations, and certificates of
participation in such obligations (collectively, "lease obligations"). A lease
obligation does not constitute a general obligation of the municipality for
which the municipality's taxing power is pledged, although the lease obligation
is ordinarily backed by the municipality's covenant to budget for the payments
due under the lease obligation. Certain lease obligations contain
"non-appropriation" clauses which provide that the municipality has no
obligation to make lease obligation payments in future years unless money is
appropriated for such purpose on a yearly basis. A risk peculiar to these
municipal lease obligations is the possibility that a municipality will not
appropriate funds for lease payments. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. The Adviser will seek to
minimize these risks by not investing more than 10% of the total assets of the
Fund in lease obligations that contain "non-appropriation" clauses. In
evaluating a potential investment in such a lease obligation, the Adviser will
consider: (1) the credit quality of the obligor, (2) whether the underlying
property is essential to a government function, and (3) whether the lease
obligation contains covenants prohibiting the obligor from substituting similar
property if the obligor fails to make appropriations for the lease obligation.
Municipal lease obligations may be determined to be liquid in accordance with
the guidelines established by the Board of Trustees and other factors the
Adviser may determine to be relevant to such determination. In determining the
liquidity of municipal lease obligations, the Adviser will consider a variety of
factors including: (1) the willingness of dealers to bid for the security; (2)
the number of dealers willing to purchase or sell the obligation and the number
of other potential buyers; (3) the frequency of trades and quotes for the
obligation; and (4) the nature of the marketplace trades. In addition, the
Adviser will consider factors unique to particular lease obligations affecting
their marketability. These include the general creditworthiness of the
municipality, the importance of the property covered by the lease to the
municipality, and the likelihood that the marketability of the obligation will
be maintained throughout the time the obligation is held by the Fund.
The Board of Trustees is responsible for determining the credit quality of
unrated municipal lease obligations on an ongoing basis, including an assessment
of the likelihood that the lease will not be cancelled.
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DESCRIPTION OF MUNICIPAL BOND RATINGS
The ratings of the nationally recognized statistical rating organizations
(Moody's Investors Service, Inc., Standard & Poor's Ratings Group, Fitch
Investors Service and Duff & Phelps) represent each firm's opinion as to the
quality of various Municipal Obligations. It should be emphasized, however, that
ratings are not absolute standards of quality. Consequently, Municipal
Obligations with the same maturity, coupon and rating may have different yields
while Municipal Obligations of the same maturity and coupon with different
ratings may have the same yield. The descriptions offered by each individual
rating firm may differ slightly, but the following offers a description by
Moody's Investors Service, Inc. of each rating category:
Aaa or AAA: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa or AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa or BBB: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations, in addition to those
described in the Prospectus, which cannot be changed without approval by holders
of a majority of the outstanding voting shares of the Fund. A "majority" for
this purpose, means the lesser of (i) 67% of the Fund's outstanding shares
represented in person or by proxy at a meeting at which more than 50% of its
outstanding shares are represented, or (ii) more than 50% of its outstanding
shares.
Under these limitations, the Fund MAY NOT:
(1) Invest for the purpose of exercising control or management of another
issuer;
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(2) Invest in interests in real estate, real estate mortgage loans, oil, gas or
other mineral exploration or development programs, except that the Fund may
invest in the securities of companies (other than those which are not
readily marketable) which own or deal in such things;
(3) Underwrite securities issued by others, except to the extent the Fund may
be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities;
(4) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions);
(5) Make short sales of securities or maintain a short position, except short
sales "against the box";
(6) Participate on a joint or joint and several basis in any trading account in
securities;
(7) Make loans of money or securities, except that the Fund may invest in
repurchase agreements;
(8) Invest in securities of issuers which have a record of less than three
years' continuous operation (including predecessors and, in the case of
bonds, guarantors);
(9) Write, purchase or sell commodities, commodities contracts, futures
contracts or related options; or
(10) Invest in restricted securities.
Percentage restrictions stated as an investment policy or investment limitation
apply at the time of investment; if a later increase or decrease in percentage
beyond the specified limits results from a change in securities values or total
assets, it will not be considered a violation.
While the Fund has reserved the right to make short sales "against the box"
(limitation number 5, above), the Adviser has no present intention of engaging
in such transactions at this time or during the coming year.
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TRUSTEES AND OFFICERS
The Board of Trustees has overall responsibilities for management of the Fund
under the laws of Massachusetts governing the responsibilities of Trustees of
business trusts. The Board of Trustees supervises the activities of the
Williamsburg Investment Trust (the "Trust"). Following are the Trustees and
executive officers of the Trust, their present position with the Trust or Fund,
age, principal occupation during the past 5 years and their aggregate
compensation from the Trust for the fiscal year ended March 31, 2000:
<TABLE>
<CAPTION>
NAME, POSITION, PRINCIPAL OCCUPATION COMPENSATION
AGE AND ADDRESS DURING PAST 5 YEARS FROM THE TRUST
------------------ -------------------- ---------------
<S> <C> <C>
Austin Brockenbrough III (age 63) President and Managing None
Trustee** Director of Lowe, Brockenbrough
President & Company, Inc.,
The Jamestown International Equity Fund Richmond, Virginia;
The Jamestown Tax Exempt Virginia Fund Director of Tredegar Industries,
6620 West Broad Street Inc. (plastics manufacturer) and
Suite 300 Wilkinson O'Grady & Co. Inc.
Richmond, Virginia 23230 (global asset manager); Trustee
of University of Richmond
John T. Bruce (age 46) Principal of None
Trustee and Chairman** Flippin, Bruce & Porter, Inc.,
Vice President Lynchburg, Virginia
FBP Contrarian Balanced Fund
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Charles M. Caravati, Jr. (age 63) Physician $12,500
Trustee** Dermatology Associates of
931 Broad Street Road Virginia, P.C.,
Manakin Sabot, Virginia 23103 Richmond, Virginia
J. Finley Lee (age 60) Julian Price Professor Emeritus of $12,500
Trustee Business Administration
105 Gristmill Lane University of North Carolina,
Chapel Hill, North Carolina 27514 Chapel Hill, North Carolina;
Director of Montgomery Indemnity
Insurance Co.; Trustee of Albemarle
Investment Trust (registered
investment company)
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Richard Mitchell (age 51) Principal of None
Trustee** T. Leavell & Associates, Inc.,
President Mobile, Alabama
The Government Street Bond Fund
The Government Street Equity Fund
The Alabama Tax Free Bond Fund
150 Government Street
Mobile, Alabama 36602
Richard L. Morrill (age 61) Chancellor of $12,500
Trustee University of Richmond,
University of Richmond Richmond, Virginia;
G19 Boatright Library Director of Tredegar
Richmond, Virginia 23173 Industries, Inc. (plastics manufacturer)
Harris V. Morrissette (age 40) President of $12,500
Trustee Marshall Biscuit Co. Inc.,
1500 S. Beltline Hwy. Mobile, Alabama;
Mobile, Alabama 36693 Chairman of Azalea Aviation, Inc.
(airplane fueling)
Erwin H. Will, Jr. (age 67) Chief Investment Officer of $12,500
Trustee Virginia Retirement System,
1200 East Main Street Richmond, Virginia
Richmond, Virginia 23219
Samuel B. Witt III (age 64) Senior Vice President and $13,500
Trustee General Counsel of Stateside
2300 Clarendon Blvd. Associates, Inc., Arlington,
Suite 407 Virginia; Director of The Swiss
Arlington, Virginia 22201 Helvetia Fund, Inc. (closed-end
investment company)
John P. Ackerly IV (age 37) Portfolio Manager of None
Vice President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Joseph L. Antrim III (age 55) Executive Vice President of None
President Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
Charles M. Caravati III (age 34) Assistant Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
The Jamestown International Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
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Robert G. Dorsey (age 43) Managing Director of Ultimus Fund None
Vice President Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, President
of Countrywide Fund Services, Inc.
John M. Flippin (age 58) Principal of None
President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Timothy S. Healey (age 47) Principal of None
Vice President T. Leavell & Associates, Inc.,
The Alabama Tax Free Bond Fund Mobile, Alabama
600 Luckie Drive
Luckie Building, Suite 305
Birmingham, Alabama 35223
J. Lee Keiger III (age 45) First Vice President and Chief Financial None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
R. Gregory Porter III (age 59) Principal of None
Vice President Flippin, Bruce & Porter, Inc.,
FBP Contrarian Balanced Fund Lynchburg, Virginia
FBP Contrarian Equity Fund
800 Main Street
Lynchburg, Virginia 24504
Mark J. Seger (age 38) Managing Director of Ultimus Fund None
Treasurer Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
of Countrywide Fund Services, Inc.
Henry C. Spalding, Jr. (age 62) Executive Vice President of None
President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
John F. Splain (age 44) Managing Director of Ultimus Fund None
Secretary Solutions, LLC and Ultimus Fund
135 Merchant Street, Suite 230 Distributors, LLC, Cincinnati, Ohio.
Cincinnati, Ohio 45246 Prior to March 1999, First Vice President
and Secretary of Countrywide Fund
Services, Inc. and affiliated companies
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Connie R. Taylor (age 49) Administrator of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Balanced Fund Richmond, Virginia
The Jamestown Equity Fund
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Beth Ann Walk (age 41) Portfolio Manager of None
Vice President Lowe, Brockenbrough & Company, Inc.,
The Jamestown Tax Exempt Virginia Fund Richmond, Virginia
6620 West Broad Street
Suite 300
Richmond, Virginia 23230
Coleman Wortham III (age 54) President and Chief Executive None
Vice President Officer of Davenport & Company LLC,
The Davenport Equity Fund Richmond, Virginia
One James Center, 901 E. Cary St.
Richmond, Virginia 23219
</TABLE>
--------------------------------------------
** Indicates that Trustee is an Interested Person for purposes of the Investment
Company Act of 1940. Charles M. Caravati, Jr. is the father of Charles M.
Caravati III.
Messrs. Lee, Morrill, Morrissette, Will and Witt constitute the Trust's
Nominating Committee and Audit Committee. The Audit Committee reviews annually
the nature and cost of the professional services rendered by the Trust's
independent accountants, the results of their year-end audit and their findings
and recommendations as to accounting and financial matters, including the
adequacy of internal controls. On the basis of this review the Audit Committee
makes recommendations to the Trustees as to the appointment of independent
accountants for the following year.
PRINCIPAL HOLDERS OF VOTING SECURITIES. As of July 7, 2000, the trustees as a
group owned beneficially (i.e., had voting and/or investment power) 1.69% of the
then-outstanding shares of the Fund. Charles Schwab & Co., Inc., 101 Montgomery
Street, San Francisco, California 94104 owned of record 35.59% of the
then-outstanding shares of the Fund. As a result, Charles Schwab & Co., Inc. may
be deemed to control the Fund.
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INVESTMENT ADVISER
Lowe, Brockenbrough & Company, Inc. (the "Adviser") supervises the Fund's
investments pursuant to an Advisory Agreement (the "Advisory Agreement")
described in the Prospectus. The Advisory Agreement is effective until February
28, 2001 and will be renewed thereafter for one year periods only so long as
such renewal and continuance is specifically approved at least annually by the
Board of Trustees or by vote of a majority of the Fund's outstanding voting
securities, provided the continuance is also approved by a majority of the
Trustees who are not "interested persons" of the Trust or the Adviser by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement is terminable without penalty on sixty days notice by the
Board of Trustees of the Trust or by the Adviser. The Advisory Agreement
provides that it will terminate automatically in the event of its assignment.
Compensation of the Adviser, based upon the Fund's average daily net assets, is
at the following annual rates: On the first $250 million, 0.40%; on the next
$250 million, 0.35%; and on assets over $500 million, 0.30%. For the fiscal
years ended March 31, 2000, 1999 and 1998, the Fund paid the Adviser advisory
fees of $110,838, $85,055 and $56,311 (net of voluntary fee waivers of $4,939),
respectively.
The Adviser, organized as a Virginia corporation in 1970, is controlled by its
sole shareholder, Austin Brockenbrough III. In addition to acting as Adviser to
the Fund, the Adviser serves as investment Adviser to three additional
investment companies, the subjects of separate prospectuses, and also provides
investment advice to corporations, trusts, pension and profit sharing plans,
other business and institutional accounts and individuals.
The Adviser provides a continuous investment program for the Fund, including
investment research and management with respect to all securities, investments,
cash and cash equivalents of the Fund. The Adviser determines what securities
and other investments will be purchased, retained or sold by the Fund, and does
so in accordance with the investment objectives and policies of the Fund as
described herein and in the Prospectus. The Adviser places all securities orders
for the Fund, determining with which broker, dealer, or issuer to place the
orders. The Adviser must adhere to the brokerage policies of the Fund in placing
all orders, the substance of which policies are that the Adviser must seek at
all times the most favorable price and execution for all securities brokerage
transactions. The Adviser also provides, at its own expense, certain Executive
Officers to the Trust, and pays the entire cost of distributing Fund shares.
The Adviser may compensate dealers or others based on sales of shares of the
Fund to clients of such dealers or others or based on the average balance of all
accounts in the Fund for which such dealers or others are designated as the
person responsible for the account.
ADMINISTRATOR
The Fund has retained Ultimus Fund Solutions, LLC (the "Administrator"), 135
Merchant Street, Suite 230, Cincinnati, Ohio 45246, to provide administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. The Administrator maintains the
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records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Fund's
shares, acts as dividend and distribution disbursing agent and performs other
shareholder service functions. The Administrator also provides accounting and
pricing services to the Fund and supplies non-investment related statistical and
research data, internal regulatory compliance services and executive and
administrative services. The Administrator supervises the preparation of tax
returns, reports to shareholders of the Fund, reports to and filings with the
Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees.
For the performance of these administrative services, the Fund pays the
Administrator a fee at the annual rate of 0.15% of the average value of its
daily net assets up to $25,000,000, 0.125% of such assets from $25,000,000 to
$50,000,000 and 0.10% of such assets in excess of $50,000,000. In addition, the
Fund pays out-of-pocket expenses, including but not limited to, postage,
envelopes, checks, drafts, forms, reports, record storage and communication
lines.
Prior to November 13, 2000, Integrated Fund Services, Inc, ("Integrated"), P.O.
Box 5354, Cincinnati, Ohio 45201, provided the Fund with administrative,
pricing, accounting, dividend disbursing, shareholder servicing and transfer
agent services. Integrated is a wholly-owned indirect subsidiary of The Western
and Southern Life Insurance Company. For the fiscal years ended March 31, 2000,
1999 and 1998, Integrated received from the Fund fees of $41,496, $31,931 and
$25,157, respectively.
DISTRIBUTOR
Ultimus Fund Distributors, LLC (the "Distributor"), 135 Merchant Street, Suite
230, Cincinnati, Ohio 45246, serves as principal underwriter for the Fund
pursuant to an Underwriting Agreement. Shares are sold on a continuous basis by
the Distributor. The Distributor has agreed to use its best efforts to solicit
orders for the sale of Fund shares, but it is not obliged to sell any particular
amount of shares. The Underwriting Agreement provides that, unless sooner
terminated, it will continue in effect for two years from the date of its
execution, and for continuous one-year periods thereafter if such continuance is
approved at least annually (i) by the Board of Trustees or a vote of a majority
of the outstanding shares, and (ii) by a majority of the Trustees who are not
"interested persons" of the Trust or of the Distributor by vote cast in person
at a meeting called for the purpose of voting on such approval. The Underwriting
Agreement may be terminated by the Fund at any time, without the payment of any
penalty, by vote of a majority of the Board of Trustees of the Trust or by vote
of a majority of the outstanding shares of the Fund on sixty days written notice
to the Distributor, or by the Distributor at any time, without the payment of
any penalty, on sixty days written notice to the Trust. The Underwriting
Agreement will automatically terminate in the event of its assignment. The
Distributor is an affiliate of the Administrator, and Robert G. Dorsey, Mark J.
Seger and John F. Splain are each Managing Directors of the Distributor and
officers of the Trust.
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OTHER SERVICES
The firm of Tait, Weller & Baker, Eight Penn Center Plaza, Suite 800,
Philadelphia, Pennsylvania 19103 has been retained by the Board of Trustees to
perform an independent audit of the books and records of the Trust, to review
the Fund's federal and state tax returns and to consult with the Trust as to
matters of accounting and federal and state income taxation.
The Custodian of the Fund's assets is Firstar Bank, N.A., 425 Walnut Street,
Cincinnati, Ohio 45202. The Custodian holds all cash and securities of the Fund
(either in its possession or in its favor through "book entry systems"
authorized by the Trustees in accordance with the 1940 Act), collects all income
and effects all securities transactions on behalf of the Fund.
BROKERAGE
It is the Fund's practice to seek the best price and execution for all portfolio
securities transactions. The Adviser (subject to the general supervision of the
Board of Trustees) directs the execution of the Fund's portfolio transactions.
The Trust has adopted a policy which prohibits the Adviser from effecting Fund
portfolio transactions with broker-dealers which may be interested persons of
the Fund, the Trust, any Trustee, officer or director of the Trust or its
investment Advisers or any interested person of such persons.
The Fund's portfolio transactions will normally be principal transactions
executed in over-the-counter markets and will be executed on a "net" basis,
which may include a dealer markup.
No brokerage commissions were paid by the Fund for the last three fiscal years.
While there is no formula, agreement or undertaking to do so, the Adviser may
allocate a portion of the Fund's brokerage commissions to persons or firms
providing the Adviser with research services, which may typically include, but
are not limited to, investment recommendations, financial, economic, political,
fundamental and technical market and interest rate data, and other statistical
or research services. Much of the information so obtained may also be used by
the Adviser for the benefit of the other clients it may have. Conversely, the
Fund may benefit from such transactions effected for the benefit of other
clients. In all cases, the Adviser is obligated to effect transactions for the
Fund based upon obtaining the most favorable price and execution. Factors
considered by the Adviser in determining whether the Fund will receive the most
favorable price and execution include, among other things: the size of the
order, the broker's ability to effect and settle the transaction promptly and
efficiently and the Adviser's perception of the broker's reliability, integrity
and financial condition.
CODE OF ETHICS. The Trust, the Adviser and the Distributor have adopted Codes of
Ethics under Rule 17j-1 of the 1940 Act which permit personnel subject to the
Codes to invest in securities, including securities that may be purchased or
held by the Fund. The Codes of Ethics adopted by the Trust, the Adviser and the
Distributor are on public file with, and are available from, the SEC.
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<PAGE>
SPECIAL SHAREHOLDER SERVICES
As noted in the Prospectus, the Fund offers the following shareholder services:
REGULAR ACCOUNT. The regular account allows for voluntary investments to be made
at any time. Available to individuals, custodians, corporations, trusts, estates
and others, investors are free to make additions and withdrawals to or from
their account as often as they wish. When an investor makes an initial
investment in the Fund, a shareholder account is opened in accordance with the
investor's registration instructions. Each time there is a transaction in a
shareholder account, such as an additional investment or the reinvestment of a
dividend or distribution, the shareholder will receive a statement showing the
current transaction and all prior transactions in the shareholder account during
the calendar year to date.
AUTOMATIC INVESTMENT PLAN. The automatic investment plan enables shareholders to
make regular monthly or quarterly investment in shares through automatic charges
to their checking account. With shareholder authorization and bank approval, the
Administrator will automatically charge the checking account for the amount
specified ($100 minimum) which will be automatically invested in shares at the
public offering price on or about the last business day of the month or quarter.
The shareholder may change the amount of the investment or discontinue the plan
at any time by writing to the Administrator.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may establish a Systematic Withdrawal Plan. A shareholder may receive
monthly or quarterly payments, in amounts of not less than $100 per payment, by
authorizing the Fund to redeem the necessary number of shares periodically (each
month, or quarterly in the months of March, June, September and December).
Checks will be made payable to the designated recipient and mailed within three
business days of the valuation date. If the designated recipient is other than
the registered shareholder, the signature of each shareholder must be guaranteed
on the application (see "Signature Guarantees"). A corporation (or partnership)
must also submit a "Corporate Resolution" (or "Certification of Partnership")
indicating the names, titles and required number of signatures authorized to act
on its behalf. The application must be signed by a duly authorized officer(s)
and the corporate seal affixed. No redemption fees are charged to shareholders
under this plan. Costs in conjunction with the administration of the plan are
borne by the Fund. Shareholders should be aware that such systematic withdrawals
may deplete or use up entirely their initial investment and may result in
realized long-term or short-term capital gains or losses. The Systematic
Withdrawal Plan may be terminated at any time by the Fund upon sixty days'
written notice or by a shareholder upon written notice to the Fund. Applications
and further details may be obtained by calling the Fund at 1-866-738-1126, or by
writing to:
The Jamestown Tax Exempt Virginia Fund
Shareholder Services
P.O. Box 46707
Cincinnati, Ohio 45246-0707
PURCHASES IN KIND. The Fund may accept securities in lieu of cash in payment for
the purchase of shares of the Fund. The acceptance of such securities is at the
sole discretion of the Adviser
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based upon the suitability of the securities accepted for inclusion as a long
term investment of the Fund, the marketability of such securities, and other
factors which the Adviser may deem appropriate. If accepted, the securities will
be valued using the same criteria and methods as described in "How Net Asset
Value is Determined" in the Prospectus.
REDEMPTIONS IN KIND. The Fund does not intend, under normal circumstances, to
redeem its securities by payment in kind. It is possible, however, that
conditions may arise in the future which would, in the opinion of the Trustees,
make it undesirable for the Fund to pay for all redemptions in cash. In such
case, the Board of Trustees may authorize payment to be made in portfolio
securities or other property of the Fund. Securities delivered in payment of
redemptions would be valued at the same value assigned to them in computing the
net asset value per share. Shareholders receiving them would incur brokerage
costs when these securities are sold. An irrevocable election may be filed under
Rule 18f-1 of the 1940 Act, wherein the Fund commits itself to pay redemptions
in cash, rather than in kind, to any shareholder of record of the Fund who
redeems during any ninety day period, the lesser of (a) $250,000 or (b) one
percent (1%) of the Fund's net assets at the beginning of such period.
TRANSFER OF REGISTRATION. To transfer shares to another owner, send a written
request to the Fund at the address shown herein. Your request should include the
following: (1) the existing account registration; (2) signature(s) of the
registered owner(s) exactly as the signature(s) appear(s) on the account
registration; (3) the new account registration, address, social security or
taxpayer identification number and how dividends and capital gains are to be
distributed; (4) signature guarantees (see the Prospectus under the heading
"Signature Guarantees"); and (5) any additional documents which are required for
transfer by corporations, administrators, executors, trustees, guardians, etc.
If you have any questions about transferring shares, call or write the Fund.
PURCHASE OF SHARES
The purchase price of shares of the Fund is the net asset value next determined
after the order is received. An order received prior to the close of the regular
session of trading on the New York Stock Exchange (the "Exchange"), generally
4:00 p.m., Eastern time, will be executed at the price computed on the date of
receipt; and an order received after that time will be executed at the price
computed on the next Business Day. An order to purchase shares is not binding on
the Fund until confirmed in writing (or unless other arrangements have been made
with the Fund, for example in the case of orders utilizing wire transfer of
funds) and payment has been received.
Due to Internal Revenue Service ("IRS") regulations, applications without social
security or tax identification numbers will not be accepted. If, however, you
have already applied for a social security or tax identification number at the
time of completing your account application, the application should so indicate.
The Fund is required to, and will, withhold taxes on all distributions and
redemption proceeds if the number is not delivered to the Fund within 60 days.
The Fund reserves the right in its sole discretion (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund and its shareholders, and
(iii) to reduce or waive the minimum for initial and subsequent investments
under circumstances where certain economies can be achieved in sales of Fund
shares.
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EMPLOYEES AND AFFILIATES OF THE FUND. The Fund has adopted initial investment
minimums for the purpose of reducing the cost to the Fund (and consequently to
the shareholders) of communicating with and servicing its shareholders. However,
a reduced minimum initial investment requirement of $1,000 applies to Trustees,
officers and employees of the Fund, the Adviser and certain parties related
thereto, including clients of the Adviser or any sponsor, officer, committee
member thereof, or the immediate family of any of them. In addition, accounts
having the same mailing address may be aggregated for purposes of the minimum
investment if they consent in writing to share a single mailing of shareholder
reports, proxy statements (but each such shareholder would receive his/her own
proxy) and other Fund literature.
REDEMPTION OF SHARES
The Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the
"Commission"), (ii) during any period when an emergency exists as defined by the
rules of the Commission as a result of which it is not reasonably practicable
for the Fund to dispose of securities owned by it, or to fairly determine the
value of its assets, and (iii) for such other periods as the Commission may
permit.
There is currently no charge by the Administrator for wire redemptions. However,
the Administrator reserves the right, upon thirty days' written notice, to make
reasonable charges for wire redemptions. All charges will be deducted from your
account by redemption of shares in your account. Your bank or brokerage firm may
also impose a charge for processing the wire. In the event that wire transfer of
funds is impossible or impractical, the redemption proceeds will be sent by mail
to the designated account.
NET ASSET VALUE DETERMINATION
Under the 1940 Act, the Trustees are responsible for determining in good faith
the fair value of the securities and other assets of the Fund, and they have
adopted procedures to do so, as follows. The net asset value of the Fund is
determined as of the close of the regular session of trading on the Exchange
(currently 4:00 p.m. Eastern time) on each "Business Day." A Business Day means
any day, Monday through Friday, except for the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day and Christmas. Net asset value per
share is determined by dividing the total value of all Fund securities and other
assets, less liabilities, by the total number of shares then outstanding. Net
asset value includes interest on fixed income securities, which is accrued
daily.
ALLOCATION OF TRUST EXPENSES
Each Fund of the Trust pays all of its own expenses not assumed by the Adviser
or the Administrator, including, but not limited to, the following: custodian,
shareholder servicing, stock transfer and dividend disbursing expenses; clerical
employees and junior level officers of the Trust as and if approved by the Board
of Trustees; taxes; expenses of the issuance and redemption of
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<PAGE>
shares (including registration and qualification fees and expenses); costs and
expenses of membership and attendance at meetings of certain associations which
may be deemed by the Trustees to be of overall benefit to the Fund and its
shareholders; legal and auditing expenses; and the cost of stationery and forms
prepared exclusively for the Fund. General Trust expenses are allocated among
the series, or funds, on a fair and equitable basis by the Board of Trustees,
which may be based on relative net assets of each fund (on the date the expense
is paid) or the nature of the services performed and the relative applicability
to each fund.
ADDITIONAL TAX INFORMATION
TAXATION OF THE FUND. The Fund intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). Among its requirements to qualify under Subchapter M, the Fund
must distribute annually at least 90% of its net taxable income plus 90% of its
net tax-exempt interest income. In addition to this distribution requirement,
the Fund must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities' loans, gains from the
disposition of stock or securities, and certain other income.
While the above requirements are aimed at qualification of the Fund as a
regulated investment company under Subchapter M of the Code, the Fund also
intends to comply with certain requirements of the Code to avoid liability for
federal income and excise tax. If the Fund remains qualified under Subchapter M,
it will not be subject to federal income tax to the extent it distributes its
taxable net investment income and net realized capital gains. A nondeductible 4%
federal excise tax will be imposed on the Fund to the extent it does not
distribute at least 98% of its ordinary taxable income for a calendar year, plus
98% of its capital gain net taxable income for the one year period ending each
October 31, plus certain undistributed amounts from prior years. Such required
distributions are based only on the Fund's taxable income, however, so the
excise tax generally would not apply to tax-exempt income earned by the Fund.
While the Fund intends to distribute its taxable income and capital gains in a
manner so as to avoid imposition of the federal excise and income taxes, there
can be no assurance that the Fund indeed will make sufficient distributions to
avoid entirely imposition of federal excise or income taxes.
As of March 31, 2000, The 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.
Should additional series, or funds, be created by the Trustees, each fund would
be treated as a separate tax entity for federal income tax purposes.
TAX STATUS OF THE FUND'S DIVIDENDS AND DISTRIBUTIONS. Dividends paid by the Fund
derived from net investment income or net short- term capital gains are taxable
to shareholders as
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ordinary income, whether received in cash or reinvested in additional shares.
Since federal and Virginia tax laws exempt income from qualifying municipal bond
obligations, income dividends attributable to such obligations are exempt from
such taxes. A report will be distributed to each shareholder as of December 31st
of each year outlining the percentage of income dividends which qualify for such
tax exemptions. Distributions, if any, of long-term capital gains are taxable to
shareholders as long-term capital gains, whether received in cash or reinvested
in additional shares, regardless of how long Fund shares have been held. Such
capital gain distributions are also subject to Virginia income tax, except to
the extent attributable to gains from certain obligations of the Commonwealth of
Virginia and its political subdivisions. For information on "backup"
withholding, see "How to Purchase Shares" in the Prospectus.
For federal income tax purposes, any loss upon the sale of shares of the Fund
held for six months or less will be treated as long-term capital loss to the
extent of any long-term capital gain distributions received by the shareholder.
In addition, any loss of Fund shares held for six months or less will be
disallowed for both federal and Virginia income tax purposes to the extent of
any dividends received by the shareholder exempt from federal income tax, even
though, in the case of Virginia, some portion of such dividends actually may
have been subject to Virginia income tax.
CAPITAL SHARES AND VOTING
The Fund is a series of the Williamsburg Investment Trust (the "Trust"), an
investment company organized as a Massachusetts business trust in July 1988.
Shares of the Fund, when issued, are fully paid and non-assessable and have no
preemptive or conversion rights. Shareholders are entitled to one vote for each
full share and a fractional vote for each fractional share held. Shares have
noncumulative voting rights, which means that the holders of more than 50% of
the shares voting for the election of Trustees can elect 100% of the Trustees
and, in this event, the holders of the remaining shares voting will not be able
to elect any Trustees. The Trustees will hold office indefinitely, except that:
(1) any Trustee may resign or retire and (2) any Trustee may be removed with or
without cause at any time (a) by a written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal; or (b) by vote of
shareholders holding not less than two-thirds of the outstanding shares of the
Trust, cast in person or by proxy at a meeting called for that purpose; or (c)
by a written declaration signed by shareholders holding not less than two-thirds
of the outstanding shares of the Trust and filed with the Trust's custodian.
Shareholders have certain rights, as set forth in the Declaration of Trust,
including the right to call a meeting of the shareholders for the purpose of
voting on the removal of one or more Trustees. Shareholders holding not less
than ten percent (10%) of the shares then outstanding may require the Trustees
to call such a meeting and the Trustees are obligated to provide certain
assistance to shareholders desiring to communicate with other shareholders in
such regard (e.g., providing access to shareholder lists, etc.). In case a
vacancy or an anticipated vacancy shall for any reason exist, the vacancy shall
be filled by the affirmative vote of a majority of the remaining Trustees,
subject to the provisions of Section 16(a) of the 1940 Act. The Trust does not
expect to have an annual meeting of shareholders.
Upon liquidation of the Trust or a particular Fund of the Trust, holders of the
outstanding shares of the Fund being liquidated shall be entitled to receive, in
proportion to the number of shares of the Fund held by them, the excess of that
Fund's assets over its liabilities. Each outstanding share
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<PAGE>
is entitled to one vote for each full share and a fractional vote for each
fractional share, on all matters which concern the Trust as a whole. On any
matter submitted to a vote of shareholders, all shares of the Trust then issued
and outstanding and entitled to vote, irrespective of the Fund, shall be voted
in the aggregate and not by Fund, except (i) when required by the 1940 Act,
shares shall be voted by individual Fund; and (ii) when the matter does not
affect any interest of a particular Fund, then only shareholders of the affected
Fund or Funds shall be entitled to vote thereon. Examples of matters which
affect only a particular Fund could be a proposed change in the fundamental
investment objectives or policies of that Fund or a proposed change in the
investment advisory agreement for a particular Fund. The shares of the Fund will
have noncumulative voting rights, which means that the holders of more than 50%
of the shares voting for the election of Trustees can elect all of the Trustees
if they so choose.
Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The Declaration of Trust, therefore, contains provisions which are
intended to mitigate such liability.
Prior to January 24, 1994, the Trust was called The Nottingham Investment Trust.
CALCULATION OF PERFORMANCE DATA
As indicated in the Prospectus, the Fund may, from time to time, advertise
certain total return and yield information. The average annual total return of
the Fund for a period is computed by subtracting the net asset value per share
at the beginning of the period from the net asset value per share at the end of
the period (after adjusting for the reinvestment of any income dividends and
capital gain distributions), and dividing the result by the net asset value per
share at the beginning of the period. In particular, the average annual total
return of the Fund ("T") is computed by using the redeemable value at the end of
a specified period of time ("ERV") of a hypothetical initial investment of
$1,000 ("P") over a period of time ("n") according to the formula P(l+T)^n=ERV.
The average annual total return quotations for the Fund for the one year period
ended March 31, 2000, for the five year period ended March 31, 2000 and for the
period since inception (September 1, 1993) to March 31, 2000 are 0.04%, 4.74%
and 4.14% respectively.
In addition, the Fund may advertise other total return performance data
("Nonstandardized Return"). Nonstandardized Return shows as a percentage rate of
return encompassing all elements of return (i.e., income and capital
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain distributions. Nonstandardized Return may consist of a cumulative
percentage of return, actual year-by-year rates or any combination thereof.
From time to time, the Fund may advertise its yield and tax-equivalent yield. A
yield quotation is based on a 30-day (or one month) period and is computed by
dividing the net investment income per share earned during the period by the
maximum offering price per share on the last day of the period, according to the
following formula:
6
Yield = 2[(a-b/cd + 1) - 1]
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Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
Generally, interest earned (for the purpose of "a" above) on debt obligations is
computed by reference to the yield to maturity of each obligation held based on
the market value of the obligation (including actual accrued interest) at the
close of business on the last business day prior to the start of the 30-day (or
one month) period for which yield is being calculated, or, with respect to
obligations purchased during the month, the purchase price (plus actual accrued
interest). The Fund's yield for the 30 days ended March 31, 2000 was 4.43%.
The tax-equivalent yield of the Fund is computed by using the tax-exempt yield
figure and dividing by one minus the applicable tax rate. The Fund's
tax-equivalent yield for the 30 days ended March 31, 2000, based on the highest
marginal combined federal and Virginia income tax rate, was 7.98%.
The Fund's performance may be compared in advertisements, sales literature and
other communications to the performance of other mutual funds having similar
objectives or to standardized indices or other measures of investment
performance. In particular, the Fund may compare its performance to the Lehman
Municipal Bond Index, which is generally considered to be representative of the
performance of municipal bonds. Comparative performance may also be expressed by
reference to a ranking prepared by a mutual fund monitoring service, such as
Lipper Analytical Services, Inc. or Morningstar, Inc., or by one or more
newspapers, newsletters or financial periodicals. Performance comparisons may be
useful to investors who wish to compare the Fund's past performance to that of
other mutual funds and investment products. Of course, past performance is not a
guarantee of future results.
o LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time.
o MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Investors may use such indices in addition to the Fund's Prospectus to obtain a
more complete view of the Fund's performance before investing. Of course, when
comparing the Fund's performance to any index, factors such as composition of
the index and prevailing market conditions should be considered in assessing the
significance of such comparisons. When comparing funds using reporting services,
or total return, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to
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<PAGE>
value portfolio securities and compute offering price. Advertisements and other
sales literature for the Fund may quote total returns that are calculated on
non-standardized base periods. The total returns represent the historic change
in the value of an investment in the Fund based on monthly reinvestment of
dividends over a specified period of time.
From time to time the Fund may include in advertisements and other
communications information, charts, and illustrations relating to inflation and
the effects of inflation on the dollar, including the purchasing power of the
dollar at various rates of inflation. The Fund may also disclose from time to
time information about its portfolio allocation and holdings at a particular
date (including ratings of securities assigned by independent rating services
such as S&P and Moody's). The Fund may also depict the historical performance of
the securities in which the Fund may invest over periods reflecting a variety of
market or economic conditions either alone or in comparison with alternative
investments, performance indices of those investments, or economic indicators.
The Fund may also include in advertisements and in materials furnished to
present and prospective shareholders statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds that may be employed
to meet specific financial goals, such as saving for retirement, children's
education, or other future needs.
FINANCIAL STATEMENTS AND REPORTS
The books of the Fund will be audited at least once each year by independent
public accountants. Shareholders will receive annual audited and semiannual
(unaudited) reports when published and will receive written confirmation of all
confirmable transactions in their account. A copy of the Annual Report will
accompany the Statement of Additional Information ("SAI") whenever the SAI is
requested by a shareholder or prospective investor. The Financial Statements of
the Fund as of March 31, 2000, together with the report of the independent
accountants thereon, are included on the following pages.
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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
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (each a series of The
Williamsburg Investment Trust), including the portfolios of investments, as of
March 31, 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
32
