(AMELIA EARHART CAPITAL MANAGEMENT, INC. LOGO)
Dear Shareholder:
The stock and bond markets turned in an extremely strong performance in
1995 after a relatively flat year for stocks and the worst performance in 30
years for bonds in 1994. The Amelia Earhart: Eagle Equity Fund's performance
exceeded the overall market into November 1995 when profit taking and sector
rotation resulted in share price declines for most technology issues. Short-term
volatility in the technology sector is common and should be expected. Technology
will continue to grow exponentially as we enter the next millennium.
The Fund returned 30.59% to shareholders for the fiscal year March 1,
1995 to February 29, 1996. The Fund's comparative indices, the Pacific Stock
Exchange Technology Index (PSE Tech Index) and the Dow Jones Industrial Average
(DJIA), rose 47.65% and 36.76%, respectively, for the same time period. The Tech
Index's strong performance was due to substantial gains by many stocks which
lagged the market in 1994 and were not expected to outperform the market in
1995. The Fund's investment philosophy is to identify stocks which have the
strongest potential to outperform the market over a 12 month period. The
selection process excluded many of 1995's surprise performers on the PSE Tech
Index.
The Fund outperformed the PSE Tech Index and the DJIA in 1994 and was
the #2 growth fund out of 564 growth funds in the USA according to Lipper
Analytical Services, with a return to shareholders of 17.72% The Fund's
annualized rate of return to shareholders since inception (3/93) was 21.31%
through 2/29/96. Net of the maximum 4.50% sales load, the Fund's average annual
return since inception was 19.46% through 2/29/96. The Fund has achieved a
4-star Morningstar rating for the 3-year period ended 2/29/96, out of 879 growth
funds 1.
The Fund consists of a diversified, professionally managed portfolio of
primarily large capitalization growth stocks. The stocks are selected from the
top 100 technology companies in the USA (PSE Tech Index) and the 30 DJIA blue
chips, which are considered leaders in their industries. The economic climate
for 1996 is favorable to large capitalization growth stocks. The economy is
sending mixed signals, and volatility in the markets will continue throughout
the year. The equity market lacks leadership, and sector rotation is common.
Portfolio managers counting on weakness in the economy will be hurt by strength
and vice versa. Investors should have at least a five year time horizon for
equity investments and a well-diversified portfolio.
It is highly unlikely that 1995's outstanding overall equity and bond
market performances will be repeated in 1996. However, it is an election year,
and moderate economic growth combined with low interest rates and low inflation
will be favorable for equities. Interest rate increases, unlikely in the near
term, would be detrimental to the markets. Unless the economy slips into a
recession, the majority of rate cuts are probably behind us as well.
We are pleased to report another strong year for the Fund. Please
contact us at 1-800-326-6580 if we may provide additional investment
information.
Sincerely,
Amelia Earhart Capital Management, Inc.
Jill Travis, MBA, CFP
President and CEO
1 Morningstar proprietary ratings reflect historical risk-adjusted performance
as of February 29, 1996. The ratings are subject to change every month. Past
performance is no guarantee of future performance. Morningstar ratings are
calculated from the funds' 3, 5, and 10-year average annual returns (if
available) in excess of 90-day Treasury bill returns with appropriate fee and
sales load adjustments, and a risk factor that reflects fund performance below
90-day T-bill returns. 10% of the funds in an investment category receive 5
stars, and 22.5% receive 4 stars. During the period covered by the performance
information, the Fund's advisor waived its fee and reimbursed a portion of
the Fund's expenses, which increased the total return of the Fund.
AMELIA EARHART CAPITAL MANAGEMENT, INC.
ONE TOWNE SQUARE (Bullet) 26100 NORTHWESTERN HIGHWAY (Bullet) SUITE 1913
(Bullet) SOUTHFIELD MICHIGAN 48076
(810) 351-4856 (Bullet) FAX (810) 827-4278
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
Performance Update - $10,000 Investment
For the period from March 5, 1993 (commencement of
operations) to February 29, 1996
[GRAPH APPEARS HERE]
AMELIA EARHART:
EAGLE EQUITY PACIFIC DOW JONES
05-Mar-93 9550 9550 9550
31-May-93 10037 10227 9893
31-Aug-93 10604 10490 10241
30-Nov-93 10613 10900 10332
28-Feb-94 11880 12268 10748
31-May-94 11524 11794 10541
31-Aug-94 12282 12866 10976
30-Nov-94 12294 13279 10487
28-Feb-95 13028 14465 11250
31-May-95 14015 16412 12523
31-Aug-95 16668 19942 12931
30-Nov-95 16823 20886 14232
29-Feb-96 17013 21358 15386
THIS GRAPH DEPICTS THE PERFORMANCE OF THE AMELIA EARHART: EAGLE EQUITY FUND
VERSUS THE DOW JONES INDUSTRIAL AVERAGE INDEX AND THE PACIFIC TECHNOLOGY
INDEX. IT IS IMPORTANT TO NOTE THAT THE AMELIA EARHART: EAGLE EQUITY FUND
IS A PROFESSIONALLY MANAGED MUTUAL FUND WHILE THE INDEX IS NOT AVAILABLE
FOR INVESTMENT AND IS UNMANAGED. THE COMPARISON IS SHOWN FOR ILLUSTRATIVE
PURPOSES ONLY.
ANNUALIZED TOTAL RETURN
Commencement One Year ended
of operations 2/29/96
through 2/29/96
Maximum 4.5% Sales Load 19.46% 24.64%
No Sales Load 21.31% 30.59%
(bullet) The graph assumes an initial $10,000 investment at March 5, 1993
($9,550 after maximum sales load of 4.5%). All dividends and
distributions are reinvested.
(bullet) At February 29, 1996, the Fund would have grown to $17,013 - total
investment return of 70.13% since March 5, 1993. Without the deduction
of the 4.5% maximum sales load, the Fund would have grown to $17,815 -
total investment return of 78.15% since March 5, 1993. The sales
load is reduced or eliminated for larger purchases.
(bullet) At February 29, 1996, a similar investment in the Dow Jones Industrial
Average Index (after the maximum sales load of 4.5%) would have grown
to $15,386 - total investment return of 53.86%; while a similar
investment in the Pacific Technology Index (after maximum sales load
of 4.5%) would have grown to $21,358 - total investment return of
113.58% since March 5, 1993.
(bullet) Past performance is not a guarantee of future results. A mutual fund's
share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or
less than the original cost. Average annual returns are historical
in nature and measure net investment income and capital gain or loss
from portfolio investments assuming reinvestments of dividends.
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
<TABLE>
<CAPTION>
Number of Value
Shares (note 1)
<S> <C> <C>
COMMON STOCKS - 77.94%
Beverages - 1.81%
The Coca-Cola Company 400 $32,300
Biopharmaceuticals - 3.77%
(a) Amgen, Inc. 940 56,165
(a) Genentech, Inc. 200 10,925
67,090
Chemicals - 1.26%
Union Carbide Corporation 500 22,500
Commercial Services - 1.12%
(a) CUC International, Inc. 618 20,008
Computers - 10.19%
(a) 3Com Corporation 500 24,438
(a) Cabletron Systems Inc. 300 22,538
(a) Compaq Computer Corporation 500 25,312
(a) Data General Corporation 1,000 16,875
(a) Komag, Inc. 600 18,825
(a) Sun Microsystems, Inc. 1,400 73,500
181,488
Computer Software & Services - 22.21%
(a) America Online, Inc. 600 29,475
Automatic Data Processing, Inc. 482 18,678
(a) BMC Software, Inc. 478 26,649
(a) Cisco Systems, Inc. 2,060 97,850
Computer Associates International, Inc. 600 41,250
(a) Computer Sciences Corporation 183 13,359
(a) Informix Corporation 1,000 35,250
(a) Microsoft Corporation 518 51,120
(a) Oracle Corporation 974 50,648
System Software Associates, Inc. 1,500 31,500
395,779
</TABLE>
(Continued)
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
<TABLE>
<CAPTION>
Number of Value
Shares (note 1)
<S> <C> <C>
COMMON STOCKS - continued
Electronics - 6.37%
General Electric Company 200 $15,100
Hewlett-Packard Company 400 40,300
(a) Mentor Graphics Corporation 700 9,975
Perkin-Elmer Corporation 452 20,792
Tektronix, Inc. 300 13,612
(a) Thermo Instrument Systems, Inc. 500 13,688
113,467
Electronics- Semiconductor - 7.72%
(a) Adaptec, Inc. 500 28,031
(a) Analog Devices, Inc. 1,200 32,250
(a) Applied Materials, Inc. 604 21,593
Intel Corporation 702 41,286
(a) KLA Instruments Corporation 600 14,400
137,560
Financial- Securities Brokers - 0.02%
Lehman Brothers Holdings, Inc. 14 346
Financial Services - 1.21%
American Express Company 470 21,620
Machine- Diversified - 0.82%
(a) Kulicke & Soffa Industries, Inc. 700 14,525
Medical Supplies - 5.71%
(a) Benson Eyecare Corporation 230 2,041
(a) Biomet, Inc. 1,300 24,700
(a) Boston Scientific Corporation 500 24,000
(a) Coherent, Inc. 500 22,750
(a) St. Jude Medical, Inc. 750 28,312
101,803
Medical- Biotechnology - 1.29%
Medtronic, Inc. 400 22,950
</TABLE>
(Continued)
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
<TABLE>
<CAPTION>
Number of Value
Shares (note 1)
<S> <C> <C>
COMMON STOCKS - continued
Misc- Manufacturing - 2.94%
Eastman Kodak Company 236 $16,874
Millipore Corporation 800 35,500
52,374
Office & Business Equipment - 0.73%
Xerox Corporation 100 13,025
Pharmaceuticals - 1.86%
Merck & Company, Inc . 500 33,125
Restaurants & Food Service - 1.12%
McDonald's Corporation 400 20,000
Telecommunications - 3.79%
(a) Tellabs, Inc. 1,430 67,568
Telecommunications Equipment - 3.88%
(a) ADC Telecommunications 752 29,892
(a) Digital Equipment Corporation 500 36,000
(a) Octel Communications Corporation 81 3,230
69,122
Utilities- Telecommunications - 0.12%
A T & T Corporation 33 2,100
Total Common Stocks (Cost $1,037,763) $1,388,750
Principal
Amount
REPURCHASE AGREEMENT (b) - 7.05%
Wachovia Bank $125,574
5.32%, due March 1, 1996
(Cost $125,574)
Total Value of Investments (Cost $1,163,337 (c)) 84.99% $1,514,324
Other Assets Less Liabilities 15.01% 267,410
Net Assets 100.00% $1,781,734
</TABLE>
(Continued)
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
(a) Non-income producing investment.
(b) Joint repurchase agreement entered into February 29, 1996, with a
maturity value of $68,302,116 collateralized by $71,660,000 U.S.
Treasury Bills, due September 19, 1996. The aggregate market value
of the collateral at February 29, 1996 was $69,697,130. The Fund's
pro rata interest in the market value of the collateral at February
29, 1996 was $128,173. The Fund's pro rata interest in the joint
repurchase agreement collateral is taken into possession by the
Fund's custodian upon entering into the repurchase agreement. The
collateral is marked to market daily to ensure its market value is
at least 102 percent of the sales price of the repurchase agreement.
(c) Aggregate cost for federal income tax purposes is the same as for
financial reporting purposes. Unrealized appreciation (depreciation)
of investments for financial reporting and federal income tax
purposes is as follows:
Unrealized appreciation $379,048
Unrealized depreciation (28,061)
Net unrealized appreciation $350,987
See accompanying notes to financial statements
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments at value (cost $1,163,337) $1,514,324
Interest receivable 500
Dividends receivable 419
Receivable for investments sold 332,040
Due from advisor (note 2) 26,357
Deferred organization expenses, net (note 4) 15,977
Other assets 1,004
Total assets 1,890,621
LIABILITIES
Accrued professional fees 7,000
Accrued expenses 9,885
Payable for investment purchases 92,002
Total liabilities 108,887
NET ASSETS
(applicable to 104,238 Class A shares outstanding; unlimited
shares of no par value beneficial interest authorized) $1,781,734
NET ASSETS CONSIST OF
Paid-in capital $1,396,996
Undistributed net realized gain on investments 33,751
Net unrealized appreciation on investments 350,987
$1,781,734
NET ASSET VALUE AND REPURCHASE PRICE PER CLASS A SHARE
($1,781,734 (division sign) 104,238 shares) $17.09
OFFERING PRICE PER CLASS A SHARE
(100 (division sign) 95.5 of $17.09 adjusted to nearest cent) $17.90
</TABLE>
See accompanying notes to financial statements
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
STATEMENT OF OPERATIONS
Year Ended February 29, 1996
INVESTMENT INCOME
Income
Interest $10,943
Dividends 4,211
Total income 15,154
Expenses
Fund accounting fees (note 2) 24,000
Investment advisory fees (note 2) 14,327
Professional fees 20,495
Fund administration fees (note 2) 5,924
Custody fees 5,526
Registration and filing administration fees 5,173
Distribution and service fees (note 3) 3,556
Securities pricing fees 3,433
Shareholder recordkeeping fees 903
Registration and filing expenses 14,218
Amortization of deferred organization expenses (note 4) 8,023
Trustee fees and meeting expenses 6,836
Shareholder servicing expenses 4,835
Printing expenses 460
Other operating expenses 4,176
Total expenses 121,885
Less:
Expense reimbursements (note 2) (80,085)
Investment advisory fees waived (note 2) (14,327)
Net expenses 27,473
Net investment loss (12,319)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions 76,272
Increase in unrealized appreciation on investments 258,233
Net realized and unrealized gain on investments 334,505
Net increase in net assets resulting from operations $322,186
See accompanying notes to financial statements
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended Year ended
February 29, February 28,
1996 1995
INCREASE IN NET ASSETS
<S> <C> <C>
Operations
Net investment loss $ (12,319) $ (655)
Net realized gain from investment transactions 76,272 253
Increase in unrealized appreciation on investments 258,233 49,416
Net increase in net assets resulting from operations 322,186 49,014
Distributions to shareholders from
Net realized gain from investment transactions (42,598) 0
Capital share transactions
Increase in net assets resulting from capital share transactions (a) 682,007 526,740
Total increase in net assets 961,595 575,754
NET ASSETS
Beginning of year 820,139 244,385
End of year $ 1,781,734 820,139
</TABLE>
(a) A summary of capital share activity follows:
Year ended Year ended
February 29, 1996 February 28, 1995
Shares Value Shares Value
Shares sold 44,893 $714,005 41,096 $526,740
Shares issued for reinvestment
of distributions 2,641 42,528 0 0
47,534 756,533 41,096 526,740
Shares redeemed (4,338) (74,526) 0 0
Net increase 43,196 $682,007 41,096 $526,740
See accompanying notes to financial statements
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Year)
<TABLE>
<CAPTION>
Year ended Year ended Year ended
February 29, February 28, February 28,
1996 1995 1994
<S> <C> <C> <C>
Net asset value, beginning of year $13.44 $12.25 $10.00
Income (loss) from investment operations (a)
Net investment loss (0.12) (0.02) (0.07)
Net realized and unrealized gain on investments 4.20 1.21 2.49
Total from investment operations 4.08 1.19 2.42
Distributions to shareholders from
Net investment income 0.00 0.00 (0.12)
Net realized gain from investment transactions (0.43) 0.00 (0.05)
Total distributions (0.43) 0.00 (0.17)
Net asset value, end of year $17.09 $13.44 $12.25
Total return 30.59% (b) 9.66% (b) 24.39% (b)
Ratios/supplemental data
Net assets, end of year $1,781,734 $820,139 $244,385
Ratio of expenses to average net assets
Before expense reimbursements and waived fees 8.53% 21.00% 24.60%
After expense reimbursements and waived fees 1.90% 1.86% 1.85%
Ratio of net investment loss to average net assets
Before expense reimbursements and waived fees (7.47)% (19.32)% (23.39)%
After expense reimbursements and waived fees (0.86)% (0.17)% (0.72)%
Portfolio turnover rate 63.90% 2.24% 48.39%
</TABLE>
(a) Based on weighted average shares outstanding for the period.
(b) Total return does not reflect payment of sales charge.
See accompanying notes to financial statements
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
Amelia Earhart: Eagle Equity Fund (the "Fund") is a diversified series of shares
of beneficial interest of The Nottingham Investment Trust (the "Trust"). The
Trust, an open-end investment company, was organized on August 12, 1992 as a
Massachusetts Business Trust and is registered under the Investment Company Act
of 1940. The Fund began operations on March 1, 1993. Pursuant to a plan approved
by the Board of Trustees of the Trust, the existing single class of shares of
the Fund was redesignated as the Class A Shares of the Fund on April 10, 1995,
and an additional class of shares, Class B, was authorized. To date, only Class
A shares have been issued by the Fund. The Class B shares will be subject to a
maximum 5.0% contingent deferred sales charge, which will be reduced or
eliminated depending on the length of time the shares are held. The Class A
shares are sold with a sales charge and bear distribution fees. The following is
a summary of significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at value. Securities listed on an exchange or quoted
on a national market system are valued at the last sales price
as of 4:00 p.m. New York time. Other securities traded in the
over-the-counter market and listed securities for which no
sale was reported on that date are valued at the most recent
bid price. Securities for which market quotations are not
readily available, if any, are valued by an independent
pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost
which approximates value.
B. Federal Income Taxes - No provision has been made for federal
income taxes since it is the policy of the Fund to comply with
the provisions of the Internal Revenue Code applicable to
regulated investment companies and to make sufficient
distributions of taxable income to relieve it from all federal
income taxes.
As a result of a permanent book-to-tax difference relating to
an operating net investment loss for the year ended February
29, 1996, paid-in-capital has been decreased by $12,319.
C. Investment Transactions - Investment transactions are recorded
on the trade date. Realized gains and losses are determined
using the specific identification cost method. Interest income
is recorded daily on the accrual basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend
date.
D. Distributions to Shareholders - The Fund may declare dividends
quarterly, payable in March, June, September and December, on
a date selected by the Trust's Trustees. In addition,
distributions may be made annually in December out of net
realized gains through October 31 of that year. The Fund may
make a supplemental distribution subsequent to the end of its
fiscal year ended February 29, 1996.
E. Use of Estimates - Management makes a number of estimates in
the preparation of the Fund's financial statements. Actual
results could differ significantly from those estimates.
(Continued)
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
NOTE 2 - INVESTMENT ADVISORY FEE AND RELATED PARTY AND OTHER TRANSACTIONS
Pursuant to an investment advisory agreement, Amelia Earhart Capital Management,
Inc. (the "Advisor") provides the Fund with a continuous program of supervision
of the 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. As compensation for its services, the
Advisor receives a fee at the annual rate of 1.00% of the Fund's average daily
net assets. The Agreement provides for an expense reimbursement from the Advisor
if the Fund's total expenses exclusive of interest, taxes, brokerage
commissions, sales charges, distribution fees and extraordinary expenses, exceed
1.90% of the Fund's average daily net assets for any fiscal year, or the limits
set by applicable state securities laws or other applicable laws if such limits
are lower.
The Advisor has voluntarily waived its fee amounting to $14,327 ($0.16 per
share) and reimbursed a portion of the Fund's operating expenses for the year
ended February 29, 1996. The total fees waived and expenses to be reimbursed
amounted to $94,412.
The Nottingham Company (the "Administrator") provides administrative services to
and is generally responsible for the overall management and day-to-day
operations of the Fund pursuant to an accounting and administrative agreement
with the Trust. As compensation for its services, the Administrator receives a
fee at the annual rate of 0.20% of the Fund's first $50 million of average daily
net assets, 0.175% on the next $50 million of average daily net assets, and
0.15% on average daily net assets over $100 million. The Administrator also
receives a monthly fee of $2,000 for accounting and recordkeeping services.
Additionally, the Administrator charges the Fund for servicing of shareholder
accounts and registration of the Fund's shares. The contract with the
Administrator provides that the aggregate fees for the aforementioned
administration, accounting, and recordkeeping services shall not be less than
$3,000 per month. The Administrator also charges the Fund for certain expenses
involved with the daily valuation of portfolio securities.
Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any sales
charges imposed on purchases of shares and re-allocates a portion of such
charges to dealers through whom the sale was made, if any. For the year ended
February 29, 1996, the Distributor retained sales charges in the amount of
$4,922.
Certain Trustees and officers of the Trust are also officers and directors of
the Advisor or the Administrator.
At February 29, 1996, the Advisor held 10,424 shares or 10% of the Fund shares
outstanding.
NOTE 3 - DISTRIBUTION AND SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "Act"), adopted a distribution plan pursuant to Rule 12b-1 of the Act
(the "Plan") applicable to the Class A shares. Rule 12b-1 regulates the manner
in which a regulated investment company may assume costs of distributing and
promoting the sales of its shares and servicing of its shareholder accounts.
(Continued)
<PAGE>
AMELIA EARHART: EAGLE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
The Plan provides that the Fund may incur certain costs, which may not exceed
0.25% per annum of the Fund's average daily net assets for each year elapsed
subsequent to the adoption of the plan, for payment to the Distributor and
others for items such as advertising expenses, selling expenses, commissions,
travel, or other expenses reasonably intended to result in sales of Class A
shares in the Fund or support servicing of Class A shareholder accounts. The
Fund incurred $3,556 in distribution and service fees for the year ended
February 29, 1996.
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization and the
registration of its shares have been assumed by the Fund. The organization
expenses are being amortized over a period of sixty months. Investors purchasing
shares of the Fund bear such expenses only as they are amortized against the
Fund's investment income.
In the event any of the initial shares of the Fund are redeemed during the
amortization period, the redemption proceeds will be reduced by a pro rata
portion of any unamortized organization expenses in the same proportion as the
number of initial shares being redeemed bears to the number of initial shares of
the Fund outstanding at the time of the redemption.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments other than short-term investments aggregated
$1,320,954 and $569,891, respectively, for the year ended February 29, 1996.
NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS
For Federal income tax purposes, the Fund must report distributions from net
realized gains from investment transactions that represent long-term capital
gain to its shareholders. All such distributions for the year ended February 29,
1996 represent long-term capital gain. Shareholders should consult a tax advisor
on how to report distributions for state and local income tax purposes.
<PAGE>
(KPMG Peat Marwick LLP Logo)
Independent Auditors' Report
To the Board of Trustees and Shareholders
The Nottingham Investment Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Amelia Earhart: Eagle Equity Fund (the
"Fund"), a series of The Nottingham Investment Trust, as of February 29, 1996,
and the related statement 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
financial highlights for each of the three years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights 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
February 29, 1996 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
Amelia Earhart: Eagle Equity Fund as of February 29, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and financial highlights for each of the
three years in the period then ended in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
Richmond, Virginia
April 5, 1996
