The CarolinasFund
Annual Report
February 28, 1998
Investment Adviser Administrator
Morehead Capital Advisors LLC Countrywide Fund Services, Inc.
1712 East Boulevard 312 Walnut Street
Charlotte, NC 28203 P.O. Box 5354
1.800.943.1012 Cincinnati, OH 45202-5354
1.800.543.8721
Shareholder Services
1.800.934.1012
<PAGE>
THE CAROLINASFUND 1712 East Boulevard
Charlotte, North Carolina
28203
704/344-1012
April 22, 1998 800/934-1012
Fax 704/333-9366
Dear CarolinasFund Shareholder,
1997 was a good year in terms of performance for both The CarolinasFund and many
of the companies within the region. Our fiscal year ended February 28, 1998 with
total returns as follows: Investor Shares: 30.84% and Institutional Shares
31.59%.
Throughout most of the calendar year, our performance closely tracked the major
indices such as: Standard & Poor's 500, the Dow Jones Industrial Average,
NASDAQ, and the Russell 2000. During the Dow's blue chip sell-off in August,
however, Carolinas stocks did not experience significant losses and finished the
year strong relative to those indices.
As our third year of operation closed on December 31, 1997, The CarolinasFund
trailed only the S&P 500 of those indices in terms of performance. Among the
stocks which outperformed the major indices were:
- --------------------------------------------------------------------------------
Family Dollar BB&T Lance Wachovia
Martin Marietta CCB Piedmont Natural Gas Guilford Mills
Policy Management Centura Bank
- --------------------------------------------------------------------------------
According to The Charlotte Observer and Bloomberg News, one of the world's
leading vendors of business news, stock data, and financial information, there
are 146 publicly held companies based in the Carolinas with a market
capitalization of $15 million or more.
The CarolinasFund focuses in on the 50 largest publicly traded companies in
North and South Carolina based on market capitalization (number of shares
outstanding times market price). The Fund's portfolio includes virtually all
sizes (market capitalization) of companies (i.e., Large Cap, Mid Cap, and Small
Cap).
In general, the smallest market capitalization within the portfolio has been in
excess of $250 million and the largest in excess of $50 billion. On balance, the
median market capitalization of all holdings within the Fund has been between $1
billion and $5 billion, which is generally regarded by investment professionals
as a small to mid-cap range.
<PAGE>
April 22, 1998
Page Two
The fifty largest companies within The CarolinasFund's portfolio will generally
account for more than eighty percent of the entire market capitalization of
publicly held companies within North and South Carolina. Hence, performance of
The CarolinasFund should be considered to be a rough proxy for overall stock
performance within the two-state region.
The economy in the region remains strong, which continues to help the stocks
within our portfolio. According to the Bureau of Economic Analysis (BEA) of the
U.S. Department of Commerce and the Federal Reserve, North and South Carolina
has experienced the following positive economic trends:
o Gross State Product continued to outpace Gross National
Product of the U.S. through 1996 and 1997
o State unemployment continued at below national levels in both
1996 and 1997
o Personal income rose above the national average in both 1996
and 1997
o Net population inflow outpaced the national rate in 1997
We believe that the demographic and economic characteristics of North and South
Carolina, including population, employment, retail sales, personal income, bank
loans, bank deposits, and residential construction are such that companies
headquartered in the two states have a greater than average potential for
capital appreciation.
Should you have questions about The CarolinasFund or the attached report, please
do not hesitate to contact us at 704-344-1012. Access to daily price information
(NAV, etc.) is provided via toll free number 800-934-1012 and NASDAQ listings
are now published in the major newspapers. The symbol for Investor Shares is
CARVX - for Institutional Shares CARTX.
Thank you very much for your continued interest in and support of The
CarolinasFund.
Sincerely,
/s/ Blucher Ehringhaus
J.C. Blucher Ehringhaus, III
Managing Director
<PAGE>
A Representation of the Graphic Material Contained in the February 28, 1998
Annual Report is set forth below:
Comparison of the Change in Value of a $10,000 Investment in
The CarolinasFund* and the S&P 500 Index
S&P 500 INDEX: (w/reinvested dividends)
QTRLY
DATE RETURN BALANCE
01/03/95 10,000
03/31/95 9.74% 10,974
06/30/95 9.55% 12,021
09/30/95 7.95% 12,977
12/31/95 6.02% 13,758
03/31/96 5.37% 14,496
06/30/96 4.49% 15,147
09/30/96 3.09% 15,615
12/31/96 8.34% 16,917
03/31/97 2.68% 17,370
06/30/97 17.46% 20,403
09/30/97 7.49% 21,931
12/31/97 2.87% 22,561
02/28/98 8.40% 24,456
THE CAROLINASFUND:
QTRLY
DATE RETURN BALANCE
01/03/95 9,650
03/31/95 5.12% 10,144
06/30/95 5.18% 10,669
09/30/95 10.48% 11,787
12/31/95 -1.17% 11,648
03/31/96 5.24% 12,258
06/30/96 0.96% 12,376
09/30/96 -1.80% 12,153
12/31/96 4.64% 12,717
03/31/97 -3.81% 12,232
06/30/97 12.53% 13,764
09/30/97 10.99% 15,277
12/31/97 4.38% 15,947
02/28/98 6.33% 16,956
Past performance is not predictive of future performance.
The CarolinasFund
Average Annual Total Returns
1 Year Since Inception*
Investor Class 26.26% 18.21%
Institutional Class 31.59% 20.21%
*The chart above represents performance of Investor Class shares only, which
will vary from the performance of Institutional Class shares based on the
differences in loads and fees paid by shareholders in the different classes.
Fund inception was January 3, 1995, and the initial public offering of
Institutional Class shares commenced on May 22, 1995.
<PAGE>
The CarolinasFund
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
<TABLE>
<S> <C> <C> <C>
ASSETS
Investments in securities, at market value (Cost $3,158,671) (Note 1) $ 4,802,343
Investments in repurchase agreements (Note 1) 450,000
Cash 291
Receivable for capital shares sold 35,397
Dividends and interest receivable 7,279
Receivable from Adviser (Note 3) 4,170
Organization expenses, net (Note 1) 17,072
Other assets 1,930
TOTAL ASSETS 5,318,482
---------
LIABILITIES
Other accrued expenses and liabilities 21,297
TOTAL LIABILITIES 21,297
NET ASSETS $ 5,297,185
==========
Net assets consist of:
Paid-in capital $ 3,703,005
Accumulated net realized losses from security transactions (49,492)
Net unrealized appreciation on investments 1,643,672
Net assets $ 5,297,185
==========
PRICING OF INVESTOR CLASS SHARES
Net assets applicable to Investor Class shares $ 4,125,111
==========
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 235,937
==========
Net asset value and redemption price per share (Note 1) $ 17.48
==========
Maximum offering price per share (Note 1) $ 18.11
==========
PRICING OF INSTITUTIONAL CLASS SHARES
Net assets applicable to Institutional Class shares $ 1,172,074
==========
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 65,753
===========
Net asset value, offering price and redemption price per share (Note 1) $ 17.83
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The CarolinasFund
STATEMENT OF OPERATIONS
For the Year Ended February 28, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 81,120
Interest 8,020
TOTAL INVESTMENT INCOME 89,140
EXPENSES
Investment advisory fees (Note 3) 42,295
Accounting services fees (Note 3) 24,000
Shareholder services and transfer agent fees (Note 3) 24,000
Distribution expenses, Investor Class (Note 3) 16,548
Professional fees 13,580
Administration fees (Note 3) 12,000
Amortization of organization expenses (Note 1) 9,312
Trustees' fees and expenses 7,269
Insurance expense 6,872
Postage and supplies 4,602
Custodian fees 3,880
Registration fees 3,184
Pricing expense 1,229
Printing of shareholder reports 880
TOTAL EXPENSES 169,651
Fees waived and expenses reimbursed by the Adviser (Note 3) (79,176)
NET EXPENSES 90,475
NET INVESTMENT LOSS (1,335)
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 3,640
Net change in unrealized appreciation on investments 1,186,197
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 1,189,837
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,188,502
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The CarolinasFund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended February 28, 1998 and 1997
<TABLE>
<C> <S> <S>
Year Year
Ended Ended
Feb. 28, 1998 Feb. 28, 1997
FROM OPERATIONS:
Net investment loss $ (1,335) $ (4,218)
Net realized gains (losses) from security transactions 3,640 (53,045)
Net change in unrealized appreciation on investments 1,186,197 256,182
Net increase in net assets from operations 1,188,502 198,919
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains, Investor Class -- (279)
From net realized gains, Institutional Class -- (73)
Decrease in net assets from distributions to shareholders -- (352)
FROM CAPITAL SHARES TRANSACTIONS (A):
INVESTOR CLASS
Proceeds from shares sold 977,120 1,380,508
Net asset value of shares issued in reinvestment
of distributions to shareholders -- 272
Payments for shares redeemed (492,447) (747,596)
Net increase in net assets from Investor Class share transactions 484,673 633,184
INSTITUTIONAL CLASS
Proceeds from shares sold 289,131 709,026
Net asset value of shares issued in reinvestment
of distributions to shareholders -- 73
Payments for shares redeemed (106,422) (21,939)
Net increase in net assets from Institutional Class share transactions 182,709 687,160
Net increase in net assets from capital share transactions 667,382 1,320,344
TOTAL INCREASE IN NET ASSETS 1,855,884 1,518,911
NET ASSETS:
Beginning of year 3,441,301 1,922,390
End of year $ 5,297,185 $ 3,441,301
(A) Summary of capital share activity:
Investor Class
Shares sold 67,713 107,377
Shares issued in reinvestment of distributions to shareholders -- 21
Shares redeemed (34,329) (57,358)
Net increase in shares outstanding 33,384 50,040
Shares outstanding, beginning of year 202,553 152,513
Shares outstanding, end of year 235,937 202,553
Institutional Class
Shares sold 18,697 53,938
Shares issued in reinvestment of distributions to shareholders -- 5
Shares redeemed (7,178) (1,664)
Net increase in shares outstanding 11,519 52,279
Shares outstanding, beginning of year 54,234 1,955
Shares outstanding, end of year 65,753 54,234
======== =======
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The CarolinasFund-Investor Class
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C> <C>
Year Year Year Period
Ended Ended Ended Ended
Feb. 28, 1998 Feb. 28, 1997 Feb. 29, 1996 Feb. 28, 1995(A)
Net asset value at beginning of period $ 13.36 12.44 10.54 10.00
Income from investment operations:
Net investment income (loss) (0.02) (0.02) 0.01 0.04
Net realized and unrealized gains
on investments 4.14 0.94 1.95 0.50
Total from investment operations 4.12 0.92 1.96 0.54
Less distributions:
Dividends from net investment income -- -- (0.03) --
Distributions from net realized gains -- -- (0.03) --
Total distributions -- -- (0.06) --
Net asset value at end of period 17.48 13.36 12.44 10.54
Total return (B) 30.84% 7.41% 18.59% 5.40%
Net assets at end of period $ 4,125,111 2,706,214 1,897,814 272,383
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 4.12% 5.33% 9.45% 37.10%(D)
After expense reimbursement and waived fees 2.25% 2.22% 2.17% 2.21%(D)
Ratio of net investment income (loss) to (0.14)% (0.20%) 0.06% 2.62%(D)
average net assets
Portfolio turnover rate 7% 5% 16% 0%
Average commission rate per share (C) $ 0.0619 $ 0.0600 -- --
(A) Represents the period from the commencement of operations (January 3, 1995) through February 28, 1995.
(B) The total returns shown do not include the effect of applicable sales loads.
(C) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
(D) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The CarolinasFund-Institutional Class
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C>
Year Year Period
Ended Ended Ended
Feb. 28, 1998 Feb. 28, 1997 Feb. 29, 1996(A)
Net asset value at beginning of period $ 13.55 12.57 10.72
Income from investment operations:
Net investment income 0.05 0.01 0.02
Net realized and unrealized gains
on investments 4.23 0.97 1.88
Total from investment operations 4.28 0.98 1.90
Less distributions:
Dividends from net investment income -- -- (0.02)
Distributions from net realized gains -- -- (0.03)
Total distributions -- -- (0.05)
Net asset value at end of period 17.83 13.55 12.57
Total return 31.59% 7.81% 17.68%
Net assets at end of period 1,172,074 735,087 24,576
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 3.61% 4.85% 8.40%(C)
After expense reimbursement and waived fees 1.75% 1.73% 1.69%(C)
Ratio of net investment income to average net assets 0.36% 0.22% 0.64%(C)
Portfolio turnover rate 7% 5% 16%
Average commission rate per share (B) 0.0619 0.0600 --
(A) Represents the period from the commencement of operations (May 22, 1995) through February 29, 1996.
(B) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
The CarolinasFund
PORTFOLIO OF INVESTMENTS
February 28, 1998
<TABLE>
<S> <C> <C>
Market
Shares Value
COMMON STOCKS - 99.2%
Financial Services - 30.3%
3,972 BB&T Corp. $ 246,512
1,300 CCB Financial Corp. 141,212
2,100 Centura Banks, Inc. 148,838
1,200 First Citizens BancShares, Inc. - Class A 139,200
3,600 First Union Corp. 189,675
800 HFNC Financial Corp. 10,900
1,400 Insignia Financial Group, Inc. - Class A (a) 32,725
2,250 Jefferson-Pilot Corp. 188,719
1,900 Liberty Corp. 97,969
3,000 NationsBank Corp. 205,500
945 Resource Bancshares Mortgage Group, Inc. 14,707
2,400 Wachovia Corp. 190,800
1,606,757
Industrial - 20.8%
4,000 AVX Corp. 90,250
3,700 Burlington Industries, Inc. (a) 61,281
4,100 Collins & Aikman Corp. (a) 32,287
5,000 Coltec Industries, Inc. (a) 130,313
1,600 Guilford Mills, Inc. 45,400
4,100 Martin Marietta Materials, Inc. 156,056
1,900 Nucor Corp. 97,850
4,000 Quintiles Transnational Corp. (a) 195,500
900 Springs Industries, Inc. - Class A 50,344
3,900 Unifi, Inc. 143,325
3,500 United Dominion Industries, Ltd. 100,625
1,103,231
Consumer, Cyclical - 14.4%
9,000 Family Dollar Stores, Inc. 320,625
3,000 Lowe's Companies, Inc. 175,313
4,100 Oakwood Homes Corp. 162,462
3,200 Ryan's Family Steak Houses, Inc. (a) 26,500
2,800 Speedway Motorsports, Inc. (a) 75,250
760,150
</TABLE>
<PAGE>
The CarolinasFund
PORTFOLIO OF INVESTMENTS
February 28, 1998
<TABLE>
<S> <C> <C>
Market
Shares Value
Utilities - 8.4%
3,100 Carolina Power & Light Co. $ 129,425
2,300 Duke Power Co. 127,794
1,800 Piedmont Natural Gas Company, Inc. 55,800
900 Public Service Company of North Carolina, Inc. 19,406
4,000 SCANA Corp. 115,000
447,425
Consumer, Non-Cyclical - 6.2%
600 Coca-Cola Bottling Co. 35,850
17,000 Food Lion, Inc. - Class A 171,594
1,800 Lance, Inc. 41,850
400 Personnel Group Of America, Inc. (a) 16,250
3,400 Ruddick Corp. 61,625
327,169
Basic Materials - 5.3%
2,600 Bowater, Inc. 128,700
3,935 Sonoco Products Co. 152,235
280,935
Technology - 3.1%
100 Applied Analytical Industries, Inc. (a) 1,450
825 Glenayre Technologies, Inc. (a) 9,539
2,100 Kemet Corp. (a) 44,625
800 Pharmaceutical Product Development, Inc. (a) 16,800
1,200 Policy Management Systems Corp. (a) 86,850
200 Vanguard Cellular Systems, Inc. - Class A (a) 2,600
161,864
Real Estate - 2.2%
2,600 Highwoods Properties, Inc. 90,512
1,200 Summit Properties, Inc. 24,300
114,812
Total Common Stocks (Cost $3,158,671) $ 4,802,343
</TABLE>
<PAGE>
The CarolinasFund
PORTFOLIO OF INVESTMENTS
February 28, 1998
<TABLE>
<S> <C>
Face Market
Amount Value
REPURCHASE AGREEMENTS (b) - 8.5%
450,000 Fifth Third Bank, 4.96%, dated 2/27/1998,
due 3/2/1998, repurchase proceeds $450,186
(Cost $450,000) $ 450,000
Total Investments and Repurchase Agreements
at Value - 99.2% $ 5,252,343
Other Assets in Excess of Liabilities - 0.8% 44,842
Net Assets - 100.0% $ 5,297,185
(a) Non-income producing security.
(b) Repurchase agreement is fully collateralized by $446,000 par value,
FHLMC Pool #G10657, 7.50%, due 2/1/2012.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
The CarolinasFund
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
<TABLE>
<S> <C>
1. SIGNIFICANT ACCOUNTING POLICIES
The CarolinasFund (the Fund) is a diversified, open-end series of the Maplewood Investment Trust (the Trust), a
registered management investment company under the Investment Company Act of 1940 (the 1940 Act). The Trust
was organized as a Massachusetts business trust on August 12, 1992. The Fund began operations on January 3,
1995.
The Fund's investment objective is to provide long-term capital growth by investing primarily in common stocks
of publicly-traded companies headquartered in North and South Carolina.
The Fund offers two classes of shares: Investor Class shares (sold subject to a maximum front-end sales load of
3.50% and a distribution fee of up to 0.50% of average daily net assets) and Institutional Class shares (offered to
institutional investors at net asset value without a sales charge and not subject to distribution fees). Each Investor
and Institutional share of the Fund represents identical interests in the Fund's investment portfolio and has the same
rights, except that (i) Investor shares bear the expenses of distribution fees, which is expected to cause Investor
shares to have a higher expense ratio and to pay lower dividends than Institutional shares; and (ii) each class has
exclusive voting rights with respect to matters relating to its own distribution arrangements.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the close of business of the regular session
of the New York Stock Exchange (currently 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 securities
exchange are valued based upon the closing price on the principal exchange where the security is traded.
Repurchase agreements -- The Fund generally invests its cash reserves by entering into repurchase agreements with
the custodian bank. The repurchase agreement, which is collateralized by U.S. Government obligations, is valued
at cost which, together with accrued interest, approximates market. At the time the Fund enters into the repurchase
agreement, the seller agrees that the value of the underlying securities, including accrued interest, will at all times
be equal to or exceed the face amount of the repurchase agreement. In addition, the Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each class of shares of the Fund is calculated daily by dividing
the total value of the Fund's assets attributable to that class, less liabilities attributable to that class, by the number
of shares of that class outstanding. The maximum offering price of Investor Class shares is equal to net asset value
per share plus a sales load equal to 3.63% of the net asset value (or 3.50% of the offering price). The offering price
of Institutional Class shares is equal to net asset value per share. The redemption price per share of Investor Class
shares and Institutional Class shares is equal to net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date.
<PAGE>
The CarolinasFund
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
Distributions to shareholders -- Dividends arising from net investment income, if any, are declared and paid annually
to shareholders of the Fund. Net realized short-term capital gains, if any, may be distributed throughout the year
and net realized long-term capital gains, if any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax regulations.
Organization expense -- Expenses of organization have been capitalized and are being amortized on a straight-line
basis over five years. 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.
Security transactions -- Security transactions are accounted for on trade date. Securities sold are valued on a specific
identification basis.
Allocation between classes -- Investment income earned, realized capital gains and losses and unrealized appreciation
and depreciation are allocated daily to each class of shares based upon its proportionate share of total net assets of
the Fund. Distribution expenses are charged directly to the Investor Class. Common expenses which are not
attributable to a specific class are allocated daily to each class of shares based upon its proportionate share of total
net assets of the Fund.
Estimates -- The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
Federal income tax -- It is the Fund's policy to comply with the special provisions of the Internal Revenue Code
applicable to regulated investment companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the shareholders) will be relieved of federal
income tax on the income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also the Fund's
intention to declare as dividends in each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the twelve months ended October 31) plus
undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio investments of $3,160,268 as of
February 28, 1998.
Gross unrealized appreciation . . . . . . . . . . . . . . . .$ 1,722,482
Gross unrealized depreciation. . . . . . . . . . . . . . . . . (80,407)
Net unrealized appreciation . . . . . . . . . . . . . . . . . $ 1,642,075
<PAGE>
The CarolinasFund
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
The difference between the federal income tax cost of portfolio investments and the financial statement cost is due
to timing differences in the recognition of capital losses under generally accepted accounting principles and income
tax regulations.
As of February 28, 1998, the Fund had $45,720 of capital loss carryforwards for federal income tax purposes, none
of which expire prior to February 28, 2005. In addition, the Fund elected to defer until its subsequent tax year
$2,176 of capital losses incurred after October 31, 1997. The Board of Trustees intends to utilize these capital loss
carryforwards and "post-October" losses in future years to offset net realized capital gains prior to distribution to
shareholders.
Reclassification of capital accounts -- For the year ended February 28, 1998, the Fund had a net investment loss
of $1,335 which was reclassified to paid-in capital 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 net assets or net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended February 28, 1998, purchases and proceeds from sales and maturities of investment securities,
other than short-term investments, amounted to $600,276 and $287,601, respectively.
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of Morehead Capital Advisors LLC (the Adviser) or Countrywide Fund
Services, Inc. (CFS), the administrator, transfer agent and accounting services agent for the Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Adviser under the terms of an Investment Advisory Agreement. Under
the Investment Advisory Agreement, the Fund pays the Adviser a fee, which is computed and accrued daily and
paid monthly at an annual rate of 1.00% on its average daily net assets. The Adviser currently intends to waive
its advisory fees and reimburse expenses of the Fund to the extent necessary to limit the total operating expenses
of the Fund to 2.25% and 1.75% of average daily net assets for Investor Class shares and Institutional Class shares,
respectively. Accordingly, for the year ended February 28, 1998, the Adviser waived its entire advisory fee of
$42,295 and reimbursed the Fund $36,881 for other operating expenses.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, CFS supplies non-investment related administrative and
compliance services for the Fund. CFS supervises the preparation of tax returns, reports to shareholders, reports
to and filings with the Securities and Exchange Commission and state securities commissions, and materials for
meetings of the Board of Trustees. For these services, CFS receives a monthly fee from the Fund at an annual rate
of 0.15% on its average daily net assets up to $50 million; 0.125% on the next $50 million of such net assets; and
0.10% on such net assets in excess of $100 million, subject to a $1,000 minimum monthly fee. For the year ended
February 28, 1998, CFS earned $12,000 of fees under the Agreement.
<PAGE>
The CarolinasFund
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
Under the terms of a Transfer Agent and Shareholder Servicing Agreement, CFS 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. For these services, CFS receives a monthly fee based on the number of shareholder accounts in
the Fund, subject to a $2,000 minimum monthly fee. In addition, the Fund pays out-of-pocket expenses including,
but not limited to, postage and supplies. For the year ended February 28, 1998, CFS earned $24,000 of fees under
the Agreement.
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement, CFS calculates the daily net asset value per share and
maintains the financial books and records of the Fund. For these services, CFS receives a monthly fee of $2,000
from the Fund. For the year ended February 28, 1998, CFS earned $24,000 of fees under the Agreement.
DISTRIBUTION PLAN
The Trust has adopted a Distribution Plan (the Plan) with respect to Investor Class shares pursuant to Rule 12b-1
under the 1940 Act. The Plan provides that the Fund may incur certain costs related to the distribution of Investor
Class shares, not to exceed 0.50% of average daily net assets applicable to Investor Class shares. For the year ended
February 28, 1998, Investor Class shares incurred $16,548 of distribution expenses under the Plan.
</TABLE>
<PAGE>
KPMG Peat Marwick LLP
1600 PNC Center
201 East Fifth Street
Cincinnati, OH 45202
Dayton, OH
Independent Auditors' Report
The Board of Trustees and Shareholders
The Maplewood Investment Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Carolinas Fund (the "Fund"), a series
of the Maplewood Investment Trust, as of February 28, 1998, and the
related statement of operations, statements of changes in net assets, and the
financial highlights for each of the periods indicated herein. 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 audit.
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 28, 1998 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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
Carolinas Fund as of February 28, 1998, and the results of its
operations, changes in its net assets and financial highlights for the periods
indicated herein, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
March 27, 1998
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
Annual Report
February 28, 1998
Investment Adviser Administrator
Vector Money Management, Inc. Countrywide Fund Services, Inc.
4266 I-55 North 312 Walnut Street
Suite 102 P.O. Box 5354
Jackson, MS 39211 Cincinnati, OH 45202-5354
1.601.981.1773 1.800.543.8721
Shareholder Services
1.800.580.4820
<PAGE>
VECTOR MONEY MANAGEMENT, INC.
April 27, 1998
Dear Fellow Shareholders,
As investment advisor for The Mississippi Opportunity Fund, Vector Money
Management is pleased to provide you with the Fund's 1998 annual report. For the
fiscal year ended February 28, 1998, The Mississippi Opportunity Fund finished
up 38.64%. For the same period, the S&P 500 Index was up 35.01% and the Fund's
benchmark, the Russell 2000 Index, was up 30.04%.
The Fund is operated with a philosophy of pursuing value. In our opinion, the
region is experiencing a lengthy period of strong economic growth. The fact that
many Mississippi companies, operating in what we believe to be one of the most
growth- oriented business environments in the country, are small or midsize
companies without widespread national following provides the Fund with an
opportunity to recognize and act on local opportunities with more agility than
national investment firms.
The companies which most significantly contributed to the Fund's performance
during fiscal 1998 were Deposit Guaranty, Freide Goldman, Fred's, Magna Bancorp,
Mobile Telecommunications and Proffitt's. These companies exemplify the breadth
and diversity of the regional economy. Deposit Guaranty and Magna Bancorp were
both acquired for significant premiums during the year by out of state financial
institutions seeking to establish a presence in a growing Southern business
environment. Freide Goldman, with their successful initial public offering in
July, has been a beneficiary of the increased oil and natural gas exploration
activity, both in the Gulf of Mexico and worldwide. Fred's and Proffitt's have
both turned in strong operating results by taking advantage of the positive
retail environment. And Mobile Telecommunications has overcome initial
difficulties implementing new technologies to post strong results in both
one-way and two-way paging communication systems.
Significantly, the Fund was able to generate strong performance while realizing,
for the second year in a row, no net long-term gains, which are required to be
distributed to shareholders. Effective management of tax liabilities is an
essential aspect of our management philosophy, which not only seeks performance
in returns but also allows investors' capital to continue to compound with
minimum erosion by tax liabilities.
For the Fund, 1997 was a watershed year. The Fund's activities during 1995 were
characterized by identifying value and deploying funds as investment
opportunities presented themselves. 1996 provided to be a challenging year for
small and mid-cap companies across the board. The Fund, which has a significant
weighting of small-cap and mid-cap stocks, reflected 1996's turbulent market.
However, the discounts which the markets assigned many good
<PAGE>
companies during that year presented investment opportunities which contributed
to the Fund's superior performance in 1997. We continue to seek value and
growth, and are excited about the Fund as we head into the new year.
Should you have any questions, please call us.
Sincerely,
/s/ Ashby M.Foote /s/ Allen C. Tye
Ashby M. Foote III Allen C. Tye
President Analyst
Vector Money Management The Mississippi Opportunity Fund
<PAGE>
A Representation of the Graphic Material Contained in the Annual Report is set
forth below:
Comparison of the Change in Value of a $10,000 Investment in the Mississippi
Opportunity Fund, S&P Index and the Russell 2000 Index
S&P 500 INDEX: (w/ reinvested divds)
QTRLY
DATE RETURN BALANCE
04/04/95 10,000
06/30/95 9.28% 10,928
09/30/95 7.95% 11,796
12/31/95 6.02% 12,506
03/31/96 5.37% 13,177
06/30/96 4.49% 13,769
09/30/96 3.09% 14,195
12/31/96 8.34% 15,378
03/31/97 2.68% 15,790
06/30/97 17.46% 18,547
09/30/97 7.49% 19,936
12/31/97 2.87% 20,508
02/28/98 8.40% 22,231
RUSSELL 2000 INDEX: (w/ reinvested divds)
QTRLY
DATE RETURN BALANCE
04/04/95 10,000
06/30/95 8.75% 10,875
09/30/95 9.81% 11,941
12/31/95 2.20% 12,204
03/31/96 5.09% 12,826
06/30/96 5.14% 13,485
09/30/96 0.34% 13,531
12/31/96 5.12% 14,224
03/31/97 -5.16% 13,489
06/30/97 16.17% 15,671
09/30/97 14.85% 17,997
12/31/97 -3.39% 17,387
02/28/98 5.86% 18,406
MISSISSIPPI OPPORTUNITY FUND:
QTRLY
DATE RETURN BALANCE
04/04/95 9,650
06/30/95 5.37% 10,168
09/30/95 5.72% 10,750
12/31/95 0.09% 10,760
03/31/96 7.75% 11,594
06/30/96 4.14% 12,074
09/30/96 -2.56% 11,765
12/31/96 -2.71% 11,446
03/31/97 -6.22% 10,734
06/30/97 21.98% 13,094
09/30/97 12.58% 14,742
12/31/97 4.76% 15,444
02/28/98 3.11% 15,924
Mississippi Opportunity Fund
Average Annual Total Returns
1 Year Since Inception*
33.79% 17.36%
Past performance is not predictive of future performance.
*Fund inception was April 4, 1995.
- -------------------------------------------------------------------------------
Non-Standardized Total Returns
- -------------------------------------------------------------------------------
For the Periods Ended February 28, 1998
-----------------------------------------
Since
Three Months Six Months One Year Inception
Mississippi Opportunity Fund(B) 8.23% 16.24% 38.64% 18.80%
Lipper Capital Appreciation Fund Index 9.30% 11.37% 28.03% 22.95%
S&P 500 Index 10.26% 17.62% 35.01% 31.63%
Russell 2000 Index 7.77% 9.74% 30.04% 23.35%
- --------------------------------------------------------------------------------
(A)Annualized total returns since Fund inception (April 4, 1995)
(B)The total returns shown do not include the effect of applicable sales loads.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
<TABLE>
<S> <C> <C>
ASSETS
Investments in securities, at market value (Cost $2,752,159) (Note 1) $ 3,977,203
Cash 6,534
Receivable for capital shares sold 10,376
Dividends receivable 1,983
Receivable for securities sold 20,819
Organization expenses, net (Note 1) 18,903
Receivable from Adviser (Note 3) 4,316
Other assets 891
TOTAL ASSETS 4,041,025
LIABILITIES
Covered call options, at market value
(premiums received $14,361) (Note 4) 21,500
Other accrued expenses and liabilities 19,035
TOTAL LIABILITIES 40,535
NET ASSETS $ 4,000,490
Net assets consist of:
Paid-in capital $ 2,780,259
Accumulated net realized gains from security transactions 2,326
Net unrealized appreciation on investments 1,217,905
Net assets $ 4,000,490
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 245,912
Net asset value and redemption price per share (Note 1) $ 16.27
Maximum offering price per share (Note 1) $ 16.86
See accompanying notes to financial statements.
</TABLE>
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
STATEMENT OF OPERATIONS
For the Year Ended February 28, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends 33,454
EXPENSES
Investment advisory fees (Note 3) 26,881
Accounting services fees (Note 3) 24,000
Shareholder services and transfer agent fees (Note 3) 24,000
Distribution expenses, Class A (Note 3) 11,081
Distribution expenses, Class C (Note 3) 8,518
Professional fees 13,051
Administration fees (Note 3) 12,000
Amortization of organization expenses (Note 1) 9,073
Trustees' fees and expenses 7,269
Insurance expense 4,957
Postage and supplies 3,842
Custodian fees 3,800
Printing of shareholder reports 2,662
Registration fees 1,890
Pricing expense 1,270
TOTAL EXPENSES 154,294
Fees waived and expenses reimbursed by the Adviser (Note 3) (84,840)
NET EXPENSES 69,454
NET INVESTMENT LOSS (36,000)
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions (10,559)
Net realized gains on option contracts written 12,869
Net change in unrealized appreciation on investments 1,012,122
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 1,014,432
NET INCREASE IN NET ASSETS FROM OPERATIONS 978,432
See accompanying notes to financial statements.
</TABLE>
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended February 28, 1998 and 1997
<TABLE>
<S> <C> <C>
Year Year
Ended Ended
Feb. 28, 1998 Feb. 28, 1997
FROM OPERATIONS:
Net investment loss (36,000) (25,145)
Net realized gains from security transactions 2,310 39,221
Net change in unrealized appreciation on investments 1,012,122 81,579
Net increase in net assets from operations 978,432 95,655
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains, Class A (10,117) (14,597)
From net realized gains, Class C (3,925) (7,156)
Decrease in net assets from distributions to shareholders (14,042) (21,753)
FROM CAPITAL SHARES TRANSACTIONS (A):
CLASS A
Proceeds from shares sold 589,562 386,710
Net asset value of shares issued in reinvestment
of distributions to shareholders 9,839 14,346
Net asset value of shares converted from Class C (Note 5) 1,077,120 --
Payments for shares redeemed (185,908) (90,783)
Net increase in net assets from Class A share transactions 1,490,613 310,273
CLASS C
Proceeds from shares sold 126,494 672,365
Net asset value of shares issued in reinvestment
of distributions to shareholders 3,477 6,416
Net asset value of shares converted to Class A (Note 5) (1,077,120) --
Payments for shares redeemed (6,352) (526,585)
Net increase (decrease) in net assets from Class C share transactions (953,501) 152,196
Net increase in net assets from capital share transactions 537,112 462,469
TOTAL INCREASE IN NET ASSETS 1,501,502 536,371
NET ASSETS:
Beginning of year 2,498,988 1,962,617
End of year 4,000,490 2,498,988
(A) Summary of capital share activity:
Class A
Shares sold 40,778 31,318
Shares issued in reinvestment of distributions to shareholders 624 1,224
Shares converted (Note 5) 66,203 --
Shares redeemed (15,679) (7,687)
Net increase in shares outstanding 91,926 24,855
Shares outstanding, beginning of year 153,986 129,131
Shares outstanding, end of year 245,912 153,986
Class C
Shares sold 8,656 55,923
Shares issued in reinvestment of distributions to shareholders 223 552
Shares converted (Note 5) (67,152) --
Shares redeemed (430) (43,811)
Net increase (decrease) in shares outstanding (58,703) 12,664
Shares outstanding, beginning of year 58,703 46,039
Shares outstanding, end of year -- 58,703
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C>
Class A
----------------------------------------------------------------
Year Year Period
Ended Ended Ended
Feb. 28, 1998 Feb. 28, 1997 Feb. 29, 199(A)
Net asset value at beginning of period $ 11.78 $ 11.22 $ 10.00
Income from investment operations:
Net investment loss (0.13) (0.10) (0.03)
Net realized and unrealized gains
on investments 4.68 0.76 1.27
Total from investment operations 4.55 0.66 1.24
Distributions from net realized gains (0.06) (0.10) (0.02)
Net asset value at end of period $ 16.27 $ 11.78 $ 11.22
Total return (B) 38.64% 5.92% 12.41%
Net assets at end of period $ 4,000,490 $ 1,813,797 $ 1,448,527
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 4.88% 5.29% 6.90%(D)
After expense reimbursement and waived fees 2.12% 2.11% 2.12%(D)
Ratio of net investment loss to average net assets (1.03)% (4.08)% (5.20)%(D)
Portfolio turnover rate 14% 15% 7%
Average commission rate per share (C) $ 0.0777 $ 0.0877 --
(A) Represents the period from the commencement of operations (April 4, 1995) through February 29, 1996.
(B) The total returns shown do not include the effect of applicable sales loads.
(C) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission
for purchases and sales of investment securities.
(D) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C>
Class C
-----------------------------------------------------------
Period Year Period
Ended Ended Ended
Feb. 27, 199(A) Feb. 28, 1997 Feb. 29, 199(B)
--------------- ------------- ---------------
Net asset value at beginning of period $ 11.67 $ 11.17 $ 10.00
Income from investment operations:
Net investment loss (0.19) (0.16) (0.05)
Net realized and unrealized gains
on investments 4.62 0.76 1.24
Total from investment operations 4.43 0.60 1.19
Distributions from net realized gains (0.06) (0.10) (0.02)
Net asset value at end of period $ 16.04 $ 11.67 $ 11.17
Total return 37.98% 5.37% 11.86%
Net assets at end of period $ 1,077,120 $ 685,191 $ 514,090
Ratio of expenses to average net assets
Before expense reimbursement and waived fees 5.38% 5.79% 7.40%(D)
After expense reimbursement and waived fees 2.62% 2.61% 2.49%(D)
Ratio of net investment loss to average net assets (1.53)% (1.40)% (0.69)%(D)
Portfolio turnover rate 14% 15% 7%
Average commission rate per share (C) $ 0.0777 $ 0.0877 --
(A) Represents the period from March 1, 1997 to the date of conversion to Class A shares (February 27, 1998) (Note 5).
(B) Represents the period from the commencement of operations (April 4, 1995) through February 29, 1996.
(C) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission rate paid per share
for purchases and sales of investment securities.
(D) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
February 28, 1998
<TABLE>
<S> <C> <C>
Market
Shares Value
COMMON STOCKS - 97.5%
Consumer, Cyclical - 17.8%
2,000 Boyd Gaming Corp. (a) $ 15,875
8,400 Cavalier Homes, Inc. 94,500
2,000 Chromcraft Revington, Inc. (a) 71,250
2,000 Cooper Tire and Rubber Co. 46,125
7,125 Fred's, Inc. 182,133
1,000 Hancock Fabrics, Inc. 16,313
4,000 Proffitt's, Inc. (a) 135,500
1,500 Southwest Airlines, Inc. 43,031
2,000 Stein Mart, Inc. (a) 64,625
1,000 Sunbeam Corp., Inc. 41,375
2,200 Wireless One, Inc. (a) 2,750
713,477
Industrial - 13.8%
700 Cooper Industries, Inc. 39,287
8,000 Delta & Pine Land Co. (b) 303,500
7,000 Halter & Marine Group, Inc. (a) 137,375
4,500 KLLM Transport Services, Inc. (a) 54,000
600 Standex International Corp. 18,638
552,800
Financial Services - 13.2%
1,400 BancorpSouth, Inc. 61,075
1,500 Community Federal Bancorp, Inc. 28,031
1,000 Deposit Guaranty Corp. 55,438
1,500 Eastgroup Properties, Inc. 30,375
1,150 Hancock Holding Co. 70,725
3,000 Parkway Properties, Inc. 97,875
3,163 Search Financial, Inc. (a) 494
2,000 Trustmark Corp. 87,750
1,549 Union Planters Corp. (b) 95,748
527,511
Technology - 12.7%
18,000 Mobile Telecommunication Technologies Corp. (a) 405,000
200 Netscape Communications Corp. (a) 3,875
750 Nichols Research Corp. (a) 19,969
1,000 Powertel, Inc. (a) 22,500
1,000 Texas Instruments, Inc. 57,875
509,219
<PAGE>
Market
Shares Value
Basic Materials - 10.6%
1,500 Birmingham Steel Corp. $ 26,344
6,000 ChemFirst, Inc. 158,625
250 Georgia Pacific Corp. 14,672
250 Georgia Pacific Corp. (Timber Group) 5,703
800 International Paper Co. 37,300
7,000 Mississippi Chemical Corp. 129,500
1,000 Quanex Corp. 33,125
1,500 Stone Container Corp. (a) 16,875
422,144
Energy - 10.1%
9,000 Callon Petroleum Co. (a) 141,750
7,000 Coho Energy, Inc. (a) 55,562
5,000 Friede Goldman International, Inc. (a) 151,875
2,000 Rowan Companies, Inc. (a) 56,375
405,562
Consumer, Non-Cyclical - 9.7%
1,000 Baxter International, Inc. 56,625
7,500 Cal-Maine Foods, Inc. (a) 47,813
4,500 Gulf South Medical Supply, Inc. (a) 162,562
1,000 PhyCor, Inc. (a) 25,718
1,000 Sanderson Farms, Inc. 10,875
1,500 Sara Lee Corp. 84,750
388,343
Utilities - 9.6%
10,050 WorldCom, Inc. (a) 383,785
Total Common Stocks (Cost $2,677,797) $ 3,902,841
Money Market Funds - 1.9%
74,362 Performance Trust Money Market Fund $ 74,362
(Cost $74,362)
Total Investments at Value - 99.4% $ 3,977,203
(Cost $2,752,159)
Other Assets in Excess of Liabilities - 0.6% 23,287
Net Assets - 100.0% $ 4,000,490
</TABLE>
(a)Non-income producing security.
(b)Security covers a call option.
See accompanying notes to financial statements.
<PAGE>
Mississippi Opportunity Fund
Schedule of Open Options Written
February 28, 1998
Market
Value of Premiums
Contracts Option Received
Covered Call Options
20 Delta & Pine Land Co., $ 14,250 $ 5,867
5/16/1998 at $35
10 Union Planters Corp., 7,250 8,494
5/16/1998 at $55
$ 21,500 14,361
See accompanying notes to financial statements.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The Mississippi Opportunity Fund is a non-diversified, open-end series of the
Maplewood Investment Trust (the Trust), a registered management investment
company under the Investment Company Act of 1940 (the 1940 Act). The Trust was
organized as a Massachusetts business trust on August 12, 1992. The Fund began
operations on April 4, 1995.
The Fund's investment objective is to provide long-term capital growth by
investing primarily in the common stocks and other equity securities of
publicly-traded companies headquartered in Mississippi, and those companies
having a significant presence in the state.
The Fund currently offers only Class A shares sold subject to a maximum
front-end sales load of 3.50% and a distribution fee of up to 0.50% of average
daily net assets.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 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 securities exchange are valued
based upon the closing price on the principal exchange where the security is
traded.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The maximum offering price per share is equal to
net asset value per share plus a sales load equal to 3.63% of the net asset
value (or 3.50% of the offering price). The redemption price per share 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.
Distributions to shareholders -- Dividends arising from net investment income,
if any, are declared and paid annually to shareholders of the Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations.
Organization expenses -- Expenses of organization have been capitalized and are
being amortized on a straight-line basis over five years. 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.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
Allocation between classes -- During the period in which both Class A shares and
Class C shares were offered, investment income earned, realized capital gains
and losses and unrealized appreciation and depreciation were allocated daily to
each class of shares based upon its proportionate share of total net assets of
the Fund. Distribution expenses were charged directly to the class incurring the
expense. Common expenses which were not attributable to a specific class were
allocated daily to each class of shares based upon its proportionate share of
total net assets of the Fund.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments of $2,752,159 and premiums received for covered call options of
$14,361 as of February 28, 1998:
Gross unrealized appreciation.....................$ 1,492,878
Gross unrealized depreciation..................... ( 274,973)
Net unrealized appreciation.........................$ 1,217,905
Reclassification of capital accounts -- For the year ended February 28, 1998,
the Fund had a net investment loss of $36,000 which was reclassified to paid-in
capital 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 net assets or net asset value per
share.
Option transactions -- The Fund may write covered call options for which
premiums are received and are recorded as liabilities, and subsequently valued
daily at the closing prices on their primary exchanges. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised increase the proceeds used to calculate
the realized gain or loss on the sale of the security. If a closing purchase
transaction is used to terminate the Fund's obligation on a call, a gain or loss
will be realized, depending upon whether the price of the closing purchase
transaction is more or less than the premium previously received on the call
written. If the market price of a stock subject to a call option rises above the
exercise price of the option, the Fund will lose the opportunity for further
appreciation on that security.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
2. INVESTMENT TRANSACTIONS
During the year ended February 28, 1998, purchases and proceeds from sales and
maturities of investment securities, other than short-term investments, amounted
to $849,187 and $417,059, respectively.
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of Vector Money Management, Inc.
(the Adviser) or Countrywide Fund Services, Inc. (CFS), the administrator,
transfer agent and accounting services agent for the Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Adviser under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement, the Fund
pays the Adviser a fee, which is computed and accrued daily and paid monthly at
an annual rate of 0.875% on its average daily net assets. The Adviser currently
intends to waive its advisory fees and reimburse expenses of the Fund to the
extent necessary to limit the total operating expenses of the Fund to 2.125% of
average daily net assets. For the year ended February 28, 1998, the Adviser
waived its entire advisory fee of $26,881 and reimbursed the Fund $57,959 for
other operating expenses.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, CFS supplies non-investment
related administrative and compliance services for the Fund. CFS supervises the
preparation of tax returns, reports to shareholders, reports to and filings with
the Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees. For these services, CFS
receives a monthly fee from the Fund at an annual rate of 0.15% on its average
daily net assets up to $50 million; 0.125% on the next $50 million of such net
assets; and 0.10% on such net assets in excess of $100 million, subject to a
$1,000 minimum monthly fee. For the year ended February 28, 1998, CFS earned
$12,000 of fees under the Agreement.
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
Under the terms of a Transfer Agent and Shareholder Servicing Agreement, CFS
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. For these services, CFS receives a monthly
fee based on the number of shareholder accounts in the Fund, subject to a $1,000
minimum monthly fee for the Fund, or for each class of shares of the Fund, as
applicable. In addition, the Fund pays out-of-pocket expenses, including but not
limited to, postage and supplies. For the year ended February 28, 1998, CFS
earned $24,000 of fees under the Agreement.
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement, CFS calculates the daily
net asset value per share and maintains the financial books and records of the
Fund. For these services, CFS receives a monthly fee of $2,000 from the Fund.
For the year ended February 28, 1998, CFS earned $24,000 of fees under the
Agreement.
<PAGE>
MISSISSIPPI OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
DISTRIBUTION PLAN
The Trust has adopted a Distribution Plan (the Plan) for the Fund pursuant to
Rule 12b-1 under the 1940 Act. The Plan provides that the Fund may incur certain
costs related to the distribution of Fund shares, not to exceed 0.50% and 1.00%
of average daily net assets for Class A shares and Class C shares, respectively.
For the year ended February 28, 1998, the Fund incurred $11,081 and $8,518 of
distribution expenses on Class A shares and Class C shares, respectively, under
the Plan.
4. Covered Call Options
A summary of covered call option contracts during the year ended February 28,
1998 is as follows:
Number of Option
Options Premiums
Options outstanding at beginning of year.............. -- --
Options written........................................ 238 75,786
Options cancelled in closing purchase transactions.... (93) (38,086)
Options expired......................................... (115) (23,339)
------- --------
Options outstanding at end of year..................... 30 $ 14,361
======= =========
5. Mandatory Redemption of Class C Shares
Prior to February 27, 1998, the Fund offered two classes of shares: Class A
shares (sold subject to a maximum front-end sales load of 3.50% and a
distribution fee of up to 0.50% of average daily net assets) and Class C shares
(sold subject to a distribution fee of up to 1% of average daily net assets). On
February 27, 1998, all outstanding Class C shares were redeemed pursuant to a
mandatory redemption program authorized by the Board of Trustees.
<PAGE>
KPMG Peat Marwick LLP
1600 PNC Center
201 East Fifth Street
Cincinnati, OH 45202
Dayton, OH
Independent Auditors' Report
The Board of Trustees and Shareholders
The Maplewood Investment Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Mississippi Opportunity Fund
(the "Fund"), a series of the Maplewood Investment Trust, as of
February 28, 1998, and the related statement of operations, statements of
changes in net assets, and the financial highlights for each of the periods
indicated herein. 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 audit.
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 28, 1998 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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
Mississippi Opportunity Fund as of February 28, 1998, and the results of its
operations, changes in its net assets and financial highlights for the periods
indicated herein, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
March 27, 1998
<PAGE>
REGIONAL OPPORTUNITY FUND:
Ohio, Indiana, Kentucky
Annual Report
February 28, 1998
Investment Adviser Administrator
CityFund Advisory, Inc. Countrywide Fund Services, Inc.
P.O. Box 54944 312 Walnut Street
Cincinnati, OH 45254-0944 P.O. Box 5354
1.513.624.5900 Cincinnati, OH 45202-5354
1.800.543.8721
Shareholder Services
1.513.629.2273
<PAGE>
REGIONAL
OPPORTUNITY
f u n d
- ------------------------------------------------------------------------------
series one: Ohio, Indiana, Kentucky
April 24, 1998
Fellow Shareholder:
It is once again my privilege to report to you on the annual progress of your
investment in the Regional Opportunity Fund: Ohio, Indiana, Kentucky. Over the
past year several changes were made to better enhance the performance and
shareholder services to the Fund. We continue to look for ways not only to
protect and grow your assets, but to be sure that you get the quality service
that, as a shareholder myself, I would expect from a fund company.
The stock market last year produced returns that overall were unmatched by any
other investment. The Standard & Poor's 500 Index (S&P 500) was up 35.01% for
the twelve months ended February 28, 1998. I am pleased to report that for the
Fund's fiscal year ended February 28, 1998, the Fund returned 36.01%, beating
the S&P 500.
So much emphasis and pressure is placed on funds and money managers to
outperform indices that I wanted to express that, although we monitor the many
different indices and benchmarks, we remain committed to our investment
philosophy.
In the past year, our research continued to generate buy and accumulate signals,
causing very little selling and more adding to positions. The Ohio, Indiana,
Kentucky region continues to give us investment opportunities and diversity. As
always, it is a pleasure to be of service. If you have any questions, please
feel free to contact me personally at 624-5901. Good fortune to all.
Very truly yours,
Jasen M. Snelling
President
Shareholder Services: Fund Advisor:
MGF Service Corp. CityFund Advisory, Inc.
P.O. Box 5354 P.O. Box 54944
Cincinnati, Ohio 45201-5354 Cincinnati, Ohio 45254-0944
888-289-6465
Shareholder Services, Fund Advisor and 24-hour NAV updates
<PAGE>
A Representation of the Graphic Material Contained in the Regional Opportunity
Fund Annual Report is set forth below:
Comparison of the Change in Value of a $10,000 Investment in the Regional
Opportunity Fund: Ohio, Indiana, Kentucky and the S&P 500 Index
S&P 500 INDEX: (w/ reinvested divds)
QTRLY
DATE RETURN BALANCE
01/03/95 10,000
03/31/95 9.74% 10,974
06/30/95 9.55% 12,021
09/30/95 7.95% 12,977
12/31/95 6.02% 13,758
03/31/96 5.37% 14,496
06/30/96 4.49% 15,147
09/30/96 3.09% 15,615
12/31/96 8.34% 16,917
03/31/97 2.68% 17,370
06/30/97 17.46% 20,403
09/30/97 7.49% 21,931
12/31/97 2.87% 22,561
02/28/98 8.40% 24,456
REGIONAL OPPORTUNITY FUND:
QTRLY
DATE RETURN BALANCE
01/03/95 10,000
03/31/95 2.83% 10,283
06/30/95 5.43% 10,841
09/30/95 3.15% 11,182
12/31/95 5.08% 11,750
03/31/96 4.08% 12,230
06/30/96 3.76% 12,690
09/30/96 0.67% 12,775
12/31/96 -2.69% 12,431
03/31/97 -4.10% 11,922
06/30/97 16.16% 13,848
09/30/97 12.31% 15,552
12/31/97 -1.35% 15,342
02/28/98 9.88% 16,858
Regional Opportunity Fund: Ohio, Indiana, Kentucky
Average Annual Total Returns
1 Year Since Inception*
Class B 32.01% 29.20%
Past performance is not predictive of future performance.
*The chart above represents performance of Class A shares from Fund inception
(January 3, 1995) to the commencement of the initial public offering of Class B
shares (July 24, 1996) and the performance of Class B shares subsequent to
July 24, 1996 (Note 1).
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value (Cost $3,632,065) (Note 1) $ 4,706,733
Investments in repurchase agreements (Note 1) 227,000
Cash 644
Receivable for capital shares sold 16,909
Dividends and interest receivable 2,388
Organization expenses, net (Note 1) 17,732
Other assets 3,665
TOTAL ASSETS 4,975,071
LIABILITIES
Payable for capital shares redeemed 1,967
Payable to Adviser (Note 3) 1,390
Other accrued expenses and liabilities 6,280
TOTAL LIABILITIES 9,637
NET ASSETS $ 4,965,434
Net assets consist of:
Paid-in capital $ 3,962,467
Accumulated net realized losses from security transactions (71,701)
Net unrealized appreciation on investments 1,074,668
Net assets $ 4,965,434
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) 322,214
Net asset value and offering price per share (Note 1) $ 15.41
See accompanying notes to financial statements.
</TABLE>
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
STATEMENT OF OPERATIONS
For the Year Ended February 28, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends 14,977
Interest 16,295
TOTAL INVESTMENT INCOME 31,272
EXPENSES
Investment advisory fees (Note 3) 34,737
Distribution expenses, Class A (Note 3) 919
Distribution expenses, Class B (Note 3) 24,010
Accounting services fees (Note 3) 24,000
Shareholder services and transfer agent fees (Note 3) 20,000
Administration fees (Note 3) 12,000
Amortization of organization expenses (Note 1) 9,672
Professional fees 9,550
Trustees' fees and expenses 7,269
Postage and supplies 3,747
Custodian fees 3,689
Printing of shareholder reports 3,506
Insurance expense 3,128
Registration fees 1,434
Pricing expense 1,080
TOTAL EXPENSES 158,741
Fees waived and expenses reimbursed by the Adviser (Note 3) (86,748)
NET EXPENSES 71,993
NET INVESTMENT LOSS (40,721)
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses from security transactions (20,541)
Net change in unrealized appreciation on investments 946,951
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 926,410
NET INCREASE IN NET ASSETS FROM OPERATIONS 885,689
</TABLE>
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended February 28, 1998 and 1997
<TABLE>
<S> <C> <C>
Year Year
Ended Ended
Feb. 28, 1998 Feb. 28, 1997
FROM OPERATIONS:
Net investment loss $ (40,721) (4,197)
Net realized losses from security transactions (20,541) (31,644)
Net change in unrealized appreciation on investments 946,951 93,881
Net increase in net assets from operations 885,689 58,040
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income, Class A -- (1,329)
From net investment income, Class B -- --
In excess of net realized gains, Class A -- (28,448)
In excess of net realized gains, Class B -- (5,508)
Decrease in net assets from distributions to shareholders -- (35,285)
FROM CAPITAL SHARE TRANSACTIONS (A):
CLASS A
Proceeds from shares sold 65,281 265,034
Net asset value of shares issued in reinvestment
of distributions to shareholders -- 29,310
Net asset value of shares converted to Class B (Note 4) (573,769) --
Payments for shares redeemed (81,615) (571,153)
Net decrease in net assets from Class A share transactions (590,103) (276,809)
CLASS B
Proceeds from shares sold 3,021,247 637,320
Net asset value of shares issued in reinvestment
of distributions to shareholders -- 5,508
Net asset value of shares converted from Class A (Note 4) 573,769 --
Payments for shares redeemed (73,351) (75)
Net increase in net assets from Class B share transactions 3,521,665 642,753
Net increase in net assets from capital shares transactions 2,931,562 365,944
TOTAL INCREASE IN NET ASSETS 3,817,251 388,699
NET ASSETS:
Beginning of year 1,148,183 759,484
End of year 4,965,434 1,148,183
(A) Summary of capital share activity:
Class A
Shares sold 4,966 22,449
Shares issued in reinvestment of distributions to shareholders) -- 2,617
Shares converted (Note 4) (42,470) --
Shares redeemed (6,607) (49,297)
Net decrease in shares outstanding (44,111) (24,231)
Shares outstanding, beginning of year 44,111 68,342
Shares outstanding, end of year -- 44,111
Class B
Shares sold 227,382 56,543
Shares issued in reinvestment of distributions to shareholders) -- 494
Shares converted (Note 4) 42,915 --
Shares redeemed (5,124) (7)
Net increase in shares outstanding 265,173 57,030
Shares outstanding, beginning of year 57,041 11
Shares outstanding, end of year 322,214 57,041
</TABLE>
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
Class A
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C> <C>
Period Year Year Period
Ended Ended Ended Ended
Oct. 31, 1997(A) Feb. 28, 1997 Feb. 29, 1996 Feb. 28, 1995(B)
Net asset value at end of period $ 11.38 11.11 10.00 10.00
Income from investment operations:
Net investment income (loss) (0.06) (0.06) 0.10 0.01
Net realized and unrealized gains (losses)
on investments 2.19 0.76 1.74 (0.01)
Total from investment operations 2.13 0.70 1.84 0.00
Less distributions:
From net realized gains -- -- (0.64) --
In excess of net realized gains -- (0.41) -- --
Total distributions -- (0.41) (0.64) --
Net asset value at end of period 13.51 11.40 11.11 10.00
Total return (C) 18.72% 6.32% 18.41% 0.00%
Net assets at end of period 573,769 502,116 759,366 232,998
Ratio of expenses to average net assets:
Before expense reimbursement and waived fees 6.43%(E) 11.50% 18.26% 80.88%(E)
After expense reimbursement and waived fees 1.94%(E) 2.02% 2.23% 2.05%(E)
Ratio of net investment income (loss) to average net (0.65)%(E) (0.37)% 0.96% 1.54%(E)
assets
Portfolio turnover rate 25%(E) 39% 108% 0%
Average commission rate per share (D) 0.0634 0.0630 -- --
(A) Represents the period from March 1, 1997 to the date of conversion to Class B shares (October 31, 1997) (Note 4).
(B) Represents the period from the commencement of operations (January 3, 1995) through February 28, 1995.
(C) The total returns shown do not include the effect of applicable sales loads.
(D) Beginning with the year ended February 28, 1997, the Fund is required to disclose its average commission rate paid per share for
purchases and sales of investment securities.
(E) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
Class B
FINANCIAL HIGHLIGHTS
<TABLE>
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C>
Year Period
Ended Ended
Feb. 28, 1998 Feb. 28, 1997 (A)
Net asset value at beginning of period $ 11.33 $ 10.46
Income from investment operations:
Net investment loss (0.13) (0.02)
Net realized and unrealized gains
on investments 4.21 1.30
Total from investment operations 4.08 1.28
Less distributions:
In excess of net realized gains -- (0.41)
Total distributions -- (0.41)
Net asset value at end of period $ 15.41 $ 11.33
Total return (B) 36.01% 12.25%
Net assets at end of period $ 4,965,434 $ 646,067
Ratio of expenses to average net assets:
Before expense reimbursement and waived fees 5.81% 12.14%(C)
After expense reimbursement and waived fees 2.69% 2.66%(C)
Ratio of net investment loss to average net assets (1.69)% (1.04)%(C)
Portfolio turnover rate 21% 39%(C)
Average commission rate per share $ 0.0596 $ 0.0630
(A) Represents the period from the first public offering to shareholders (July 24, 1996) through February 28, 1997.
Class B shares were initially purchased on April 10, 1995 by the Adviser, who subsequently redeemed the
initial shares on March 13, 1996.
(B) The total returns shown do not include the effect of applicable sales loads.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
PORTFOLIO OF INVESTMENTS
February 28, 1998
<TABLE>
<S> <C> <C>
Market
Shares Value
COMMON STOCKS - 94.8%
Airlines - 3.2%
3,855 Comair Holdings, Inc. $ 102,639
500 Delta Air Lines, Inc. 56,531
159,170
Automobile Parts - 1.6%
1,500 Dana Corp. 81,844
Building Materials - 0.7%
1,500 Thomas Industries, Inc. 35,438
Clothing and Fabrics - 0.6%
1,000 Fabric-Centers of America (a) 30,250
Communications - 3.0%
1,000 ADC Telecommunications, Inc. (a) 25,812
5,874 Brightpoint, Inc. (a) 120,417
146,229
Computers & Information - 13.3%
1,000 Computer Associates International, Inc. 47,125
6,500 Compaq Computer Corp. 208,406
2,000 Dell Computer Corp. (a) 279,750
2,000 EMC Corp. (a) 76,500
1,000 Sun Microsystems, Inc. (a) 47,625
659,406
Conglomerates - 2.3%
1,500 General Electric Co. 116,625
Consumer Services - 0.5%
500 Volt Information Sciences, Inc. (a) 26,281
Containers and Packaging - 1.5%
2,000 Owens Illinois, Inc. (a) 76,750
Cosmetics/Personal Care - 1.4%
1,000 Avon Products, Inc. 70,437
Electrical Components - 1.8%
1,750 Diebold, Inc. 89,906
<PAGE>
Market
Shares Value
Food - 0.4%
600 Papa John's International, Inc. (a) $ 22,275
Food Retailers - 0.9%
1,000 Kroger Company (a) 42,250
Health Care Providers - 2.4%
3,500 Res-Care, Inc. (a) 117,250
Heavy Machinery - 2.5%
3,500 Chart Industries, Inc. 86,625
1,000 Robbins & Myers, Inc. 39,625
126,250
Household Products, Nondurable - 1.5%
860 The Procter & Gamble Co. 73,046
Industrial and Commercial Services - 1.7%
1,500 Cintas Corp. 63,750
600 Omnicare, Inc. 22,200
85,950
Insurance, Life - 2.0%
2,000 Conseco, Inc. 93,875
Media Publishing - 2.2%
1,500 Central Newspapers, Inc. - Class A 107,156
Medical Supplies - 10.1%
4,000 Biomet, Inc. (a) 119,250
4,300 Guidant Corp. 313,631
1,225 Hillenbrand Industries, Inc. 68,830
501,711
Pharmaceuticals - 11.1%
3,200 Eli Lilly & Co. 210,600
2,800 Johnson & Johnson 211,400
900 Jones Medical Industries, Inc. 33,413
1,100 Pfizer, Inc. 97,350
552,763
<PAGE>
Market
Shares Regional Banks - 5.6% Value
1,100 Banc One Corp. $ 62,150
1,250 Fifth Third Bancorp 98,750
1,955 Star Banc Corp. 115,101
276,001
Retailers, Apparel - 1.6%
1,000 Gap, Inc. 44,688
2,000 Rocky Shoes & Boots, Inc. (a) 37,000
81,688
Retailers, Drug-Based - 2.5%
1,500 Cardinal Health, Inc. 122,813
Retailers, Specialty - 0.7%
2,000 OfficeMax, Inc. (a) 33,375
Securities Broker - 0.5%
1,000 McDonald & Co. Investments 25,000
Semiconductor & Related - 4.8%
2,000 Intel Corp. 179,375
2,000 Photronics, Inc. (a) 58,750
238,125
Software & Processing - 13.1%
1,000 America Online, Inc. (a) 121,125
2,350 Cisco Systems, Inc. (a) 154,806
4,000 Compuware Corp. (a) 168,500
2,000 Microsoft Corp. (a) 169,500
1,500 Oracle Corp. (a) 36,938
650,869
Telephone Systems - 1.3%
2,000 Cincinnati Bell, Inc. 64,000
Total Common Stocks (Cost $3,632,065) $ 4,706,733
<PAGE>
Face Market
Amount Value
REPURCHASE AGREEMENTS (b) - 4.6%
$ 227,000 Fifth Third Bank, 4.96%, dated 2/27/
due 3/2/1998, repurchase proceeds $227,094
(Cost $227,000) $ 227,000
Total Investments and Repurchase Agreements
at Value - 99.4% $ 4,933,733
Other Assets in Excess of Liabilities - 0.6% 31,701
Net Assets - 100.0% $ 4,965,434
(a) Non-income producing security.
(b) Repurchase agreement is fully collateralized by $225,000 par value
FHLMC Pool #G10657, 7.50%, due 2/1/2012.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
<TABLE>
<S> <C>
1. SIGNIFICANT ACCOUNTING POLICIES
The Regional Opportunity Fund: Ohio, Indiana, Kentucky (the Fund) is a non-diversified, open-end series of the
Maplewood Investment Trust (the Trust), a registered management investment company under the Investment
Company Act of 1940 (the 1940 Act). The Trust was organized as a Massachusetts business trust on August 12,
1992. The Fund began operations on January 3, 1995.
The Fund's investment objective is to provide long-term capital growth by investing primarily in common stocks
and other equity securities of publicly-traded companies headquartered in Greater Cincinnati and the Cincinnati
tri-state region, and those companies having a significant presence in the region.
The Fund currently offers only Class B shares sold subject to a contingent deferred sales load if redeemed within
five years from the date of purchase and a distribution fee of up to 1% of average daily net assets.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the close of business of the regular session
of the New York Stock Exchange (currently 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 securities
exchange are valued based upon the closing price on the principal exchange where the security is traded.
Repurchase agreements -- The Fund generally invests its cash reserves by entering into repurchase agreements with
its custodian bank. The repurchase agreement, which is collateralized by U.S. Government obligations, is valued
at cost which, together with accrued interest, approximates market. At the time the Fund enters into the repurchase
agreement, the seller agrees that the value of the underlying securities, including accrued interest, will at all times
be equal to or exceed the face amount of the repurchase agreement. In addition, the Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of the Fund is calculated daily by dividing the total value of the
Fund's assets, less liabilities, by the number of shares outstanding. The offering price per share of the Fund is
equal to the net asset value per share. The redemption price per share is equal to the net asset value per share,
subject to a contingent deferred sales load if redeemed within a five-year period from the date of initial purchase.
The charge declines from 5% to 0% over a five year period.
Investment income -- Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date.
Distributions to shareholders -- Dividends arising from net investment income, if any, are declared and paid annually
to shareholders of the Fund. Net realized short-term capital gains, if any, may be distributed throughout the year
and net realized long-term capital gains, if any, are distributed at least once each year. Income distributions and
capital gain distributions are determined in accordance with income tax regulations.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
Organization expenses -- Expenses of organization have been capitalized and are being amortized on a straight-line
basis over five years. 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.
Security transactions -- Security transactions are accounted for on trade date. Securities sold are valued on a specific
identification basis.
Allocation between classes -- During the period in which both Class A shares and Class B shares were offered,
investment income earned, realized capital gains and losses and unrealized appreciation and depreciation were
allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Distribution
expenses were charged directly to the class incurring the expense. Common expenses which were not attributable
to a specific class were allocated daily to each class of shares based upon its proportionate share of total net assets
of the Fund.
Estimates -- The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
Federal income tax -- It is the Fund's policy to comply with the special provisions of the Internal Revenue Code
applicable to regulated investment companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the shareholders) will be relieved of federal
income tax on the income distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also the Fund's
intention to declare as dividends in each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the twelve months ended October 31) plus
undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio investments of $3,632,065 as of
February 28, 1998:
Gross unrealized appreciation............................... $ 1,145,378
Gross unrealized depreciation.............................. ( 70,710)
Net unrealized appreciation................................. $ 1,074,668
As of February 28, 1998, the Fund had $61,821 of capital loss carryforwards for federal income tax purposes, none
of which expire prior to February 28, 2005. In addition, the Fund elected to defer until its subsequent tax year
$9,880 of capital losses incurred after October 31, 1997. The Board of Trustees intends to utilize these capital loss
carryforwards and "post-October" losses in future years to offset net realized capital gains prior to distribution to
shareholders.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
Reclassification of capital accounts -- For the year ended February 28, 1998, the Fund had a net investment loss
of $40,721 which was reclassified to paid-in capital 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 net assets or net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended February 28, 1998, purchases and proceeds from sales and maturities of investment securities,
other than short-term investments, amounted to $3,393,696 and $515,122, respectively.
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of CityFund Advisory, Inc. (the Adviser) or Countrywide Fund
Services, Inc. (CFS), the administrator, transfer agent and accounting services agent for the Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Adviser under the terms of an Investment Advisory Agreement. Under
the Investment Advisory Agreement, the Fund pays the Adviser a fee, which is computed and accrued daily and
paid monthly at an annual rate of 1.25% on its average daily net assets. The Adviser currently intends to waive
its advisory fees and reimburse expenses of the Fund to the extent necessary to limit the total operating expenses
of the Fund to 2.70% of average daily net assets. For the year ended February 28, 1998, the Adviser waived its
entire advisory fee of $34,737 and reimbursed the Fund $52,011 for other operating expenses.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, CFS supplies non-investment related administrative and
compliance services for the Fund. CFS supervises the preparation of tax returns, reports to shareholders, reports
to and filings with the Securities and Exchange Commission and state securities commissions, and materials for
meetings of the Board of Trustees. For these services, CFS receives a monthly fee from the Fund at an annual rate
of 0.15% on its average daily net assets up to $50 million; 0.125% on the next $50 million of such net assets; and
0.10% on such net assets in excess of $100 million, subject to a $1,000 minimum monthly fee. For the year ended
February 28, 1998, CFS earned $12,000 of fees under the Agreement.
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
Under the terms of a Transfer Agent and Shareholder Servicing Agreement, CFS 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. For these services, CFS receives a monthly fee based on the number of shareholder accounts in
the Fund, subject to a $1,000 minimum monthly fee for the Fund, or for each class of shares of the Fund, as
applicable. In addition, the Fund pays out-of-pocket expenses including, but not limited to, postage and supplies.
For the year ended February 28, 1998, CFS earned $20,000 of fees under the Agreement.
<PAGE>
REGIONAL OPPORTUNITY FUND: Ohio, Indiana, Kentucky
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement, CFS calculates the daily net asset value per share and
maintains the financial books and records of the Fund. For these services, CFS receives a monthly fee of $2,000
from the Fund. For the year ended February 28, 1998, CFS earned $24,000 of fees under the Agreement.
DISTRIBUTION PLAN
The Trust has adopted a Distribution Plan (the Plan) for the Fund pursuant to Rule 12b-1 under the 1940 Act. The
Plan provides that the Fund may incur certain costs related to the distribution of Fund shares, not to exceed 0.25%
and 1.00% of average daily net assets for Class A shares and Class B shares, respectively. For the year ended
February 28, 1998, the Fund incurred $919 and $24,010 of distribution expenses for Class A shares and Class B
shares, respectively, under the Plan.
4. MANDATORY REDEMPTION OF CLASS A SHARES
Prior to October 31, 1997, the Fund offered two classes of shares: Class A shares (sold subject to a maximum
front-end sales load of 4% and a distribution fee of up to 0.25% of average daily net assets of the class) and Class
B shares (sold subject to a contingent deferred sales load if redeemed within five years from the date of purchase
and a distribution fee of up to 1% of average daily net assets of the class). On October 31, 1997, all outstanding
Class A shares were redeemed pursuant to a mandatory redemption program authorized by the Board of Trustees.
</TABLE>
<PAGE>
KPMG Peat Marwick LLP
1600 PNC Center
201 East Fifth Street
Cincinnati, OH 45202
Dayton, OH
Independent Auditors' Report
The Board of Trustees and Shareholders
The Maplewood Investment Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Regional Opportunity Fund: Ohio, Indiana,
Kentucky (the "Fund"), a series of the Maplewood Investment Trust, as of
February 28, 1998, and the related statement of operations, statements of
changes in net assets, and the financial highlights for each of the periods
indicated herein. 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 audit.
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 28, 1998 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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
Regional Opportunity Fund: Ohio, Indiana, Kentucky as of February 28, 1998, and
the results of its operations, changes in its net assets and financial
highlights for the periods indicated herein, in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
March 27, 1998
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<ARTICLE> 6
<CIK> 0000891522
<NAME> Maplewood Investment Trust
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<NUMBER> 21
<NAME> The CarolinasFund Investor Shares
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 3,608,671
<INVESTMENTS-AT-VALUE> 5,252,343
<RECEIVABLES> 46,846
<ASSETS-OTHER> 291
<OTHER-ITEMS-ASSETS> 19,002
<TOTAL-ASSETS> 5,318,482
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,297
<TOTAL-LIABILITIES> 21,297
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<PAID-IN-CAPITAL-COMMON> 3,703,005
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<SHARES-COMMON-PRIOR> 202,553
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (49,492)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,643,672
<NET-ASSETS> 4,125,111
<DIVIDEND-INCOME> 81,120
<INTEREST-INCOME> 8,020
<OTHER-INCOME> 0
<EXPENSES-NET> 90,475
<NET-INVESTMENT-INCOME> (1,335)
<REALIZED-GAINS-CURRENT> 3,640
<APPREC-INCREASE-CURRENT> 1,186,197
<NET-CHANGE-FROM-OPS> 1,188,502
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 67,713
<NUMBER-OF-SHARES-REDEEMED> 34,329
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,418,897
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (53,132)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 42,295
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<GROSS-EXPENSE> 169,651
<AVERAGE-NET-ASSETS> 3,313,460
<PER-SHARE-NAV-BEGIN> 13.36
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 4.14
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<NUMBER> 22
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<S> <C>
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<SHARES-COMMON-PRIOR> 54,234
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 81,120
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<EXPENSES-NET> 90,475
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<REALIZED-GAINS-CURRENT> 3,640
<APPREC-INCREASE-CURRENT> 1,186,197
<NET-CHANGE-FROM-OPS> 1,188,502
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 18,697
<NUMBER-OF-SHARES-REDEEMED> 7,178
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 436,987
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 42,295
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 169,651
<AVERAGE-NET-ASSETS> 916,041
<PER-SHARE-NAV-BEGIN> 13.55
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 4.23
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 17.83
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000891522
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<SERIES>
<NUMBER> 51
<NAME> MISSISSIPPI OPPORTUNITY FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 2,752,159
<INVESTMENTS-AT-VALUE> 3,977,203
<RECEIVABLES> 37,494
<ASSETS-OTHER> 6,534
<OTHER-ITEMS-ASSETS> 19,794
<TOTAL-ASSETS> 4,041,025
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 40,535
<TOTAL-LIABILITIES> 40,535
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,780,259
<SHARES-COMMON-STOCK> 245,912
<SHARES-COMMON-PRIOR> 153,986
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,326
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,217,905
<NET-ASSETS> 4,000,490
<DIVIDEND-INCOME> 33,454
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<OTHER-INCOME> 0
<EXPENSES-NET> 69,454
<NET-INVESTMENT-INCOME> (36,000)
<REALIZED-GAINS-CURRENT> 2,310
<APPREC-INCREASE-CURRENT> 1,012,122
<NET-CHANGE-FROM-OPS> 978,432
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 10,117
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 106,981
<NUMBER-OF-SHARES-REDEEMED> 15,679
<SHARES-REINVESTED> 624
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<AVERAGE-NET-ASSETS> 2,222,192
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<PER-SHARE-NII> (.13)
<PER-SHARE-GAIN-APPREC> 4.68
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</TABLE>
<TABLE> <S> <C>
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<FISCAL-YEAR-END> FEB-28-1998
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<NET-INVESTMENT-INCOME> (36,000)
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<DISTRIBUTIONS-OF-GAINS> 3,925
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<PERIOD-END> FEB-28-1998
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<NET-INVESTMENT-INCOME> (40,721)
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<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (51,160)
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<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 158,741
<AVERAGE-NET-ASSETS> 2,412,837
<PER-SHARE-NAV-BEGIN> 11.33
<PER-SHARE-NII> (.13)
<PER-SHARE-GAIN-APPREC> 4.21
<PER-SHARE-DIVIDEND> 0
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</TABLE>
