[Vector Money Management, Inc. Letterhead]
1 May 1996
Dear Fellow Shareholders,
As the investment advisor to The Mississippi Opportunity Fund, Vector Money
Management is pleased to provide you with the first annual report for the fund.
Due to a February 29 1996 fiscal year end for our fund family, the annual report
covers only the 10.5 months in which the fund was operational.
For this period ending February 29, 1996 the raw performance numbers of 13.77%
for Class A shares and 13.07% for Class C Shares compare with the S&P Index
returns of 23.43%. Our primary concern during the start up phase of the fund was
to identify companies we felt were undervalued by the markets and deploy funds
as investment opportunities presented themselves. As a consequence, the fund was
not fully invested until the fall of 1995.
The groundwork laid during the initial investment process has begun to bear
fruit during the first four months of 1996. The fund, on a year to date basis,
was up 13.23% versus the S&P Index performance of 6.98% through April 30, 1996.
The companies which provided the largest gains during our first year were Delta
& Pine Land, Gulf South Medical Supply, WorldCom, Microtek Medical, First
Mississippi and Belmont Homes.
Additionally, in an effort to improve shareholder services, the Trustees of the
fund have elected to change fund administrators to MGF Services Corp. You will
notice a new statement format at the end of the June quarter.
Thanks for your continued support.
Sincerely,
/s/ ASHBY M. FOOTE III
Ashby M. Foote III
President
Vector Money Management
Portfolio Manager - The Mississippi Opportunity Fund
MISSISSIPPI OPPORTUNITY FUND
CLASS C SHARES
Performance Update - $10,000 Investment
For the period from April 4, 1995 (commencement of
operations) to February 29, 1996
[GRAPH APPEARS HERE]
MISSISSIPPI OPPORTUNITY FUND
Class C S&P 500
04-Apr-95 10000 10000
31-May-95 9898 10557
31-Aug-95 11046 11121
30-Nov-95 10775 11982
29-Feb-96 11186 12676
THIS GRAPH DEPICTS THE PERFORMANCE OF THE CLASS C SHARES OF THE MISSISSIPPI
OPPORTUNITY FUND VERSUS THE S&P 500 INDEX. IT IS IMPORTANT TO NOTE THAT THE
MISSISSIPPI OPPORTUNITY FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND WHILE
THE INDEXES ARE NOT AVAILABLE FOR INVESTMENT AND ARE UNMANAGED. THE
COMPARISON IS SHOWN FOR ILLUSTRATIVE PURPOSES ONLY.
ANNUALIZED TOTAL RETURN
Commencement of operations through 2/29/96 13.15%
(bullet) The graph assumes an initial $10,000 investment at April 4, 1995.
All dividends and distributions are reinvested.
(bullet) At February 29, 1996, the Class C Shares of the Fund would have
grown to $11,186 - total investment return of 11.86% since
April 4, 1995.
(bullet) At February 29, 1995, a similar investment in the S&P 500 Index
would have grown to $12,676 - total investment return of 26.76%
since April 4, 1995.
(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.
MISSISSIPPI OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
<TABLE>
<CAPTION>
Number of Value
Shares (note 1)
----------- -----------------
<S> <C> <C>
COMMON STOCKS - 91.51%
Agriculture - 6.38%
Delta & Pine Land Company 2,666 $125,302
-----------------
Building Materials - 0.87%
Masco Corporation 600 17,100
-----------------
Chemicals - 9.91%
First Mississippi Corporation 4,500 117,562
Mississippi Chemical Corporation 3,500 77,000
-----------------
194,562
-----------------
Electrical Equipment - 0.36%
(a) MagneTek, Inc. 1,000 7,000
-----------------
Entertainment - 1.15%
(a) Boyd Gaming Corporation 2,000 22,500
-----------------
Financial Services - 2.99%
(a) MS Financial, Inc. 10,000 58,750
-----------------
Financial-Banks, Commercial - 7.95%
BancorpSouth, Inc. 1,400 33,075
Deposit Guaranty Corporation 500 23,625
Hancock Holding Company 1,000 37,250
Trustmark Corporation 1,500 31,125
Union Planters Corporation 1,000 30,875
-----------------
155,950
-----------------
Financial- Savings/Loans/Thrift - 2.22%
Magna Bancorp, Inc. 1,500 43,500
-----------------
Food-Processing - 2.42%
Sanderson Farms, Inc. 2,000 21,500
Sara Lee Corporation 800 25,900
-----------------
47,400
-----------------
Forest Products & Paper - 2.26%
Georgia Pacific Corporation 250 15,781
International Paper Company 800 28,600
-----------------
44,381
-----------------
Furniture & Home Appliances - 2.99%
(a) Chromcraft Revington, Inc. 1,000 23,000
National Presto Industries, Inc. 500 20,625
(a) River Oaks Furniture, Inc. 3,000 15,000
-----------------
58,625
-----------------
</TABLE>
(Continued)
MISSISSIPPI OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
<TABLE>
<CAPTION>
Number of Value
Shares (note 1)
----------- -----------------
COMMON STOCKS (Continued)
<S> <C> <C>
Household Products & Housewares - 1.82%
(a) National Picture & Frame Company 2,000 $19,625
Sunbeam Company, Inc. 1,000 16,125
-----------------
35,750
-----------------
Computer Software & Services - 0.52%
(a) Netscape Communications Corporation 200 10,200
-----------------
Manufactured Housing - 4.46%
(a) Belmont Homes, Inc. 5,000 87,500
-----------------
Medical Supplies - 12.37%
(a) American Medical Response, Inc. 1,500 50,625
Baxter International, Inc. 500 22,875
(a) Gulf South Medical Supply, Inc. 3,500 118,125
(a) Microtek Medical, Inc. 5,000 51,250
-----------------
242,875
-----------------
Miscellaneous - Manufacturing - 0.86%
Standex International Corporation 600 16,950
-----------------
Oil & Gas - Domestic - 3.48%
(a) Callon Petroleum Company 7,000 68,250
-----------------
Real Estate - 1.64%
Parkway Company 1,500 32,250
-----------------
Real Estate Investment Trust - 1.15%
Eastgroup Properties 1,000 22,500
-----------------
Retail - Department Stores - 6.14%
(a) Proffitt's, Inc. 3,000 78,750
Fred's, Inc. 4,000 29,500
(a) Stein Mart, Inc. 1,000 12,250
-----------------
120,500
-----------------
Iron & Steel - 1.52%
Birmingham Steel Corporation 2,000 29,750
-----------------
Telecommunications - 5.86%
(a) Mobile Telecommunication Technologies Corp. 8,000 115,000
-----------------
Tire & Rubber - 1.30%
Cooper Tire and Rubber Company 1,000 25,500
-----------------
</TABLE>
(Continued)
MISSISSIPPI OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
February 29, 1996
<TABLE>
<CAPTION>
Number of Value
Shares (note 1)
----------- -----------------
<S> <C> <C> <C>
COMMON STOCKS (Continued)
Transportation - Air - 1.77%
(a) ValuJet, Inc. 1,500 $34,688
-----------------
Trucking & Leasing - 0.78%
(a) KLLM Transport Services, Inc. 1,500 15,375
-----------------
Utilities - Telecommunications - 6.02%
(a) WorldCom, Inc. 3,000 118,125
-----------------
Transportation - Marine - 2.32%
(a) Kirby Corporation 2,500 45,625
-----------------
Total Common Stocks (Cost $1,674,204) 1,795,908
-----------------
PREFERRED STOCK - 1.40%
Oil & Gas - Domestic
Callon Petroleum Company 1,000 27,500
-----------------
(Cost $25,000)
INVESTMENT COMPANY - 3.77%
Performance Funds Trust Money Market Fund "B" 73,986 73,986
-----------------
(Cost $73,986)
Total Value of Investments (Cost $1,773,190 (b)) 96.68% 1,897,394
Other Assets Less Liabilities 3.32% 65,223
------------- -----------------
Net Assets 100.00% $1,962,617
============= =================
(a) Non-income producing investment.
(b) 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 $304,876
Unrealized depreciation (180,672)
-----------------
Net unrealized appreciation $124,204
=================
</TABLE>
See accompanying notes to financial statements
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES
February 29, 1996
<TABLE>
<S> <C>
ASSETS
Investments at value (cost $1,773,190) $1,897,394
Dividends receivable 2,137
Receivable for fund shares sold 7,140
Due from advisor (note 2) 37,460
Deferred organization expenses, net (note 4) 37,117
Other asset 51
-------------
Total assets 1,981,299
-------------
LIABILITIES
Accrued professional fees 8,500
Accrued expenses 8,847
Disbursements in excess of cash on demand deposit 1,335
-------------
Total liabilities 18,682
-------------
NET ASSETS $1,962,617
=============
NET ASSETS CONSIST OF
Paid-in capital $1,816,678
Undistributed net realized gain on investments 21,735
Net unrealized appreciation on investments 124,204
-------------
$1,962,617
=============
CLASS A
Net asset value ($1,448,527 / 129,131 shares outstanding) $11.22
=============
Maximum offering price per share (100 / 96.5 of $11.22) $11.63
=============
CLASS C
Net asset value and offering price per
share ($514,090 / 46,039 shares outstanding) $11.17
=============
</TABLE>
See accompanying notes to financial statements
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF OPERATIONS
For the period from April 4, 1995
(commencement of operations)
to February 29, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividends $22,916
------------
Expenses
Fund accounting fees (note 2) 27,250
Professional fees 13,137
Investment advisory fees (note 2) 11,633
Distribution and service fees - Class A (note 3) 4,891
Distribution and service fees - Class C (note 3) 3,437
Fund administration fees (note 2) 3,892
Securities pricing fees 2,561
Custody fees 1,476
Registration and filing administration fees 952
Shareholder recordkeeping fees 906
Amortization of deferred organization expenses (note 4) 8,333
Trustee fees and meeting expenses 4,454
Shareholder servicing expenses 3,593
Registration and filing expenses 2,938
Printing expenses 897
Other operating expenses 2,867
------------
Total expenses 93,217
------------
Less:
Expense reimbursements (note 2) (50,193)
Investment advisory fees waived (note 2) (11,633)
Distribution and service fees waived (note 3) (1,958)
------------
Net expenses 29,433
------------
Net investment loss (6,517)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions 30,359
Increase in unrealized appreciation on investments 124,204
------------
Net realized and unrealized gain on investments 154,563
------------
Net increase in net assets resulting from operations $148,046
============
</TABLE>
See accompanying notes to financial statements
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the period from April 4, 1995
(commencement of operations)
to February 29, 1996
<TABLE>
<S> <C>
INCREASE IN NET ASSETS
Operations
Net investment loss $ (6,517)
Net realized gain from investment transactions 30,359
Increase in unrealized appreciation on investments 124,204
------------
Net increase in net assets resulting from operations 148,046
------------
Distributions to shareholders from
Net realized gain from investment transactions - Class A (1,707)
Net realized gain from investment transactions - Class C (400)
------------
Decrease in net assets resulting from distributions (2,107)
------------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) 1,816,678
------------
Total increase in net assets 1,962,617
NET ASSETS
Beginning of period 0
------------
End of period $ 1,962,617
============
</TABLE>
(a) A summary of capital share activity follows:
<TABLE>
<CAPTION>
CLASS A CLASS C
---------------------------------- ---------------------------------
Forthe period from April 4, 1995 For the period from April 4, 1995
(commencement of operations) (commencement of operations)
to February 29, 1996 to February 29, 1996
Shares Value Shares Value
-------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Shares sold 132,050 $1,369,689 47,103 $490,650
Shares issued for reinvestment
of distributions 162 1,707 38 400
------------- -------------- ------------ ------------
132,212 1,371,396 47,141 491,050
Shares redeemed (3,081) (33,640) (1,102) (12,128)
------------- -------------- ------------ ------------
Net increase 129,131 $1,337,756 46,039 $478,922
============= ============== ============ ============
</TABLE>
See accompanying notes to financial statements
MISSISSIPPI OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
<TABLE>
<CAPTION>
CLASS A CLASS C
------------- --------------
For the For the
period from period from
April 4, 1995 April 4, 1995
(commencement (commencement
of operations) to of operations) to
February 29, February 29,
1996 1996
------------- --------------
<S> <C> <C>
Net asset value, beginning of period (initial offering price) $10.00 $10.00
Income (loss) from investment operations
Net investment loss (0.03) (0.05)
Net realized and unrealized gain on investments 1.27 1.24
------------- --------------
Total from investment operations 1.24 1.19
------------- --------------
Distributions to shareholders from
Net realized gain from investment transactions (0.02) (0.02)
------------- --------------
Net asset value, end of period $11.22 $11.17
============= ==============
Total return 12.41%(a) 11.86%(b)
============= ==============
Ratios/supplemental data
Net assets, end of period $1,448,527 $514,090
============== ==============
Ratio of expenses to average net assets
Before expense reimbursements and waived fees 6.00% (c) 7.40% (c)
After expense reimbursements and waived fees 2.12% (c) 2.49% (c)
Ratio of net investment loss to average net assets
Before expense reimbursements and waived fees (5.20%) (c) (5.60%) (c)
After expense reimbursements and waived fees (0.42%) (c) (0.69%) (c)
Portfolio turnover rate 7.11% 7.11%
</TABLE>
(a) Total return does not reflect payment of a sales charge. Annualized
total return is 13.77%.
(b) Annualized total return is 13.15%.
(c) Annualized.
See accompanying notes to financial statements
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Mississippi Opportunity Fund (the "Fund") is a non-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 April 4, 1995. The Fund has an unlimited number of
authorized shares, which are divided into two classes - Class A shares
and Class C shares.
Each class of shares has equal rights as to assets of the Fund, and the
classes are identical except for differences in their sales charge
structures and ongoing distribution and service fees. Income, expenses
(other than distribution and service fees, which are attributable to
each class based upon a set percentage of its net assets), and realized
and unrealized gains or losses on investments are allocated to each
class of shares based upon its relative net assets. Class A shares
purchased are subject to a maximum sales charge of 3.50 percent. Both
classes have equal voting privileges, except where otherwise required
by law or when the Board of Trustees determines that the matter to be
voted on affects only the interests of the shareholders of a particular
class. 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 using 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 the Fund's ability to offset short-term capital
gains with its operating net investment loss for income tax
purposes, a reclassification adjustment has been made to
decrease accumulated net investment loss, bringing it to zero,
and to decrease undistributed net realized gain on investments
by $6,517.
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 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.
(Continued)
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
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 these estimates.
NOTE 2- INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Vector Money Management,
Inc. (the "Advisor") provides the Fund with a continuous program of
supervision of the Fund's assets, including the composition of its
investment 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 0.875% of the Fund's average daily net
assets.
The Advisor has voluntarily agreed to reimburse expenses of the Fund to
limit total Fund operating expenses, exclusive of interest, taxes,
brokerage commissions, sales charges and extraordinary expenses, to a
maximum of 2.125% of the Class A shares' average daily net assets and
2.625% of the Class C shares' 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. Currently, the Fund does not
offer its shares for sale in states which require limitations to be
placed on its expenses. The Advisor has voluntarily waived its fee
amounting to $11,633 ($0.11 per share) and agreed to reimburse $50,193
of the Fund's operating expenses for the period from April 4, 1995 to
February 29, 1996.
The Fund's administrator, 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% of the next $50 million of average
daily net assets, and 0.15% of average daily net assets over $100
million. The Administrator also receives a monthly fee of $2,750 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 period from April 4, 1995 to February 29, 1996, the Distributor
retained sales charges in the amount of $7,050.
Certain Trustees and officers of the Trust are also officers or
directors of the Advisor or the Administrator.
(Continued)
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
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 separate distribution plans with
respect to Class A and Class C shares of the Fund pursuant to Rule
12b-1 of the Act. 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. Under
both distribution plans, the Fund may incur certain costs for payment
to the Distributor and others for items such as advertising expenses,
selling expenses or other expenses reasonably intended to result in
sales of Class A and Class C shares of the Fund or support servicing of
shareholder accounts.
Expenditures of the Fund pursuant to the distribution plans are accrued
based upon the Class A and Class C shares' average daily net assets and
may not exceed 0.50% per annum of the Class A shares' average daily net
assets and 1.00% per annum of the Class C shares' average daily net
assets, for each year elapsed subsequent to adoption of the plans.
Expenditures paid as service fees to any person who sells Fund shares
may not exceed 0.25% per annum of the Class A and Class C shares'
average daily net assets. Expenditures incurred for distribution
activities as an asset-based sales charge may not exceed 0.75% per
annum of the Class C shares' average daily net assets. Pursuant to the
Class A and Class C distribution plans, the Fund incurred $4,891 and
$3,437, respectively, for the period from April 4, 1995 to February 29,
1996, of which $1,958 ($0.02 per share) has been voluntarily waived by
the Distributor.
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.
Included in deferred organization expenses is a $45,000 organization
fee paid to the Administrator. The organization expenses are being
amortized over a period of sixty months. Investors purchasing Class A
and Class C 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 $1,758,827 and $89,982, respectively, for the period from
April 4, 1995 to February 29, 1996.
NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS
All distributions from net realized gain from investment transactions
for the period from April 4, 1995 to February 29, 1996 represent
short-term capital gain distributions, and are taxable as ordinary
income to shareholders for federal income tax purposes. Shareholders
should consult a tax advisor on how to report distributions for state
and local income tax purposes.
