UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-22356
Archer Investment Series Trust
(Exact name of registrant as specified in charter)
c/o Archer Investment Corporation
9000 Keystone Crossing, Suite 630, Indianapolis, IN 46240
(Address of principal executive offices) (Zip code)
c/o Archer Investment Corporation
9000 Keystone Crossing, Suite 630, Indianapolis, IN 46240
(Name and address of agent for service)
With copies to:
C. Richard Ropka, Esq.
Law Office of C. Richard Ropka
215 Fries Mill Road
Turnersville, NJ 08012
Registrant's telephone number, including area code: (800)238-7701
Date of fiscal year end: August 31
Date of reporting period: February 28, 2014
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
SEMI-ANNUAL REPORT
THE ARCHER FUNDS
BALANCED FUND (ARCHX)
INCOME FUND (ARINX)
STOCK FUND (ARSKX)
February 28, 2014
(Unaudited)
Archer Balanced Fund
Graphical Illustration
February 28, 2014 (Unaudited)
The following chart gives a visual breakdown of the Fund by the industry sectors. The underlying securities represent a percentage of the portfolio of investments.
Archer Income Fund
Graphical Illustration
February 28, 2014 (Unaudited)
The following chart gives a visual breakdown of the Fund by the industry sectors. The underlying securities represent a percentage of the portfolio of investments.
Archer Stock Fund
Graphical Illustration
February 28, 2014 (Unaudited)
The following chart gives a visual breakdown of the Fund by the industry sectors. The underlying securities represent a percentage of the portfolio of investments.
|
| Archer Balanced Fund |
|
|
| Schedule of Investments |
|
|
| February 28, 2014 (Unaudited) |
|
|
|
|
|
Shares/Principal | Fair Value | ||
|
|
|
|
COMMON STOCK - 71.77% |
| ||
|
|
|
|
Agriculture Chemicals - 2.18% |
| ||
1,600 |
| CF Industries Holdings, Inc. | $ 401,440 |
|
|
|
|
Air Courier Services - 2.89% |
| ||
4,000 |
| FedEx Corp. | 533,320 |
|
|
|
|
Air Transportation, Scheduled - 2.00% |
| ||
10,000 |
| American Airlines Group, Inc. * | 369,300 |
|
|
|
|
Aircraft - 5.33% |
| ||
4,000 |
| Boeing Co. | 515,680 |
4,000 |
| United Technologies Corp. | 468,080 |
|
|
| 983,760 |
Beverages - 3.13% |
| ||
3,500 |
| PepsiCo, Inc. | 280,245 |
7,800 |
| The Coca-Cola Co. | 297,960 |
|
|
| 578,205 |
Bituminous Coal & Lignite Surface Mining - 1.34% |
| ||
14,100 |
| Peabody Energy Corp. | 247,596 |
|
|
|
|
Cable & Other Pay Television Services - 3.07% |
| ||
7,000 |
| Walt Disney Co. | 565,670 |
|
|
|
|
Computer & Office Equipment - 1.71% |
| ||
1,700 |
| International Business Machines Corp. | 314,789 |
|
|
|
|
Computer Peripheral Equipment - 2.08% |
| ||
35,000 |
| Xerox Corp. | 384,650 |
|
|
|
|
Electric Services - 1.79% |
| ||
2,000 |
| NextEra Energy, Inc. | 182,780 |
4,000 |
| Public Service Enterprises Group, Inc. | 146,640 |
|
|
| 329,420 |
Electronic Computers - 2.28% |
| ||
800 |
| Apple, Inc. | 420,992 |
|
|
|
|
Farm Machinery & Equipment - 1.44% |
| ||
3,100 |
| Deere & Co. | 266,383 |
|
|
|
|
Financial Services - 2.23% |
| ||
4,500 |
| American Express Co. | 410,760 |
|
|
|
|
Food -Retail - 2.00% |
| ||
4,900 |
| Nestle S.A. ADR * | 369,656 |
|
|
|
|
Gold & Silver Ores - 1.29% |
| ||
11,700 |
| Barrick Gold Corp. | 238,446 |
|
|
|
|
Hospital & Medical Service Plans - 1.72% |
| ||
3,500 |
| WellPoint, Inc. | 317,065 |
|
|
|
|
Mining Machinery & Equipment (No Oil & Gas Field Machinery & Equipment) - 0.89% |
| ||
3,000 |
| Joy Global, Inc. | 165,000 |
|
|
|
|
National Commercial Banks - 5.83% |
| ||
7,500 |
| JPMorgan Chase & Co. | 426,150 |
9,000 |
| US Bancorp. | 370,260 |
6,000 |
| Wells Fargo & Co. | 278,520 |
|
|
| 1,074,930 |
Natural Gas Transmission - 1.73% |
| ||
10,000 |
| Kinder Morgan, Inc. | 318,500 |
|
|
|
|
Oil & Gas Filed Machinery & Equipment - 1.67% |
| ||
4,000 |
| National Oilwell Varco, Inc. | 308,160 |
|
|
|
|
Oil & Gas Filed Services, NBC - 1.41% |
| ||
2,800 |
| Schlumberger Ltd. | 260,400 |
|
|
|
|
Pharmaceutical Preparations - 3.41% |
| ||
2,200 |
| Celgene Corp. * | 353,650 |
3,000 |
| Johnson & Johnson, Inc. | 276,360 |
|
|
| 630,010 |
Railroads, Line-Haul Operating - 1.47% |
| ||
1,500 |
| Union Pacific Corp. | 270,570 |
|
|
|
|
Retail - Drug Stores - 3.17% |
| ||
8,000 |
| CVS Caremark Corp. | 585,120 |
|
|
|
|
Retail - Eating Places - 1.85% |
| ||
4,800 |
| Starbucks Corp. | 340,608 |
|
|
|
|
Retail - Variety Stores - 1.02% |
| ||
3,000 |
| Target Corp. | 187,620 |
|
|
|
|
Search, Detection, Navigation, Guidance - 2.12% |
| ||
4,000 |
| Raytheon Co. | 391,640 |
|
|
|
|
Services - Computer Programming & Data - 2.96% |
| ||
450 |
| Google, Inc. Class A * | 547,042 |
|
|
|
|
Services - General Medical & Surgical Hospitals, NEC - 2.41% |
| ||
8,700 |
| HCA Holdings, Inc. * | 445,440 |
|
|
|
|
Services - Prepackaged Software - 1.87% |
| ||
9,000 |
| Microsoft Corp. | 344,790 |
|
|
|
|
Soap, Detergent, Cleaning Preparations, Perfumes, Cosmetics - 1.71% |
| ||
4,000 |
| Procter & Gamble Co. | 314,640 |
|
|
|
|
Surgical & Medical Instruments - 1.77% |
| ||
4,700 |
| Baxter International, Inc. | 326,650 |
|
|
|
|
TOTAL FOR COMMON STOCK (Cost $10,475,874) - 71.77% | 13,242,572 | ||
|
|
|
|
CORPORATE BONDS - 5.95% |
| ||
|
|
|
|
Banks & Financial Institutions - 0.27% |
| ||
50,000 |
| Societe Generale, 1.3866%, 4/22/20 ** | 50,003 |
|
|
|
|
Bituminous Coal & Lignite Surface Mining - 0.28% |
| ||
50,000 |
| Peabody Energy Corp., 7.875%, 11/1/26 | 51,375 |
|
|
|
|
Computer & Office Equipment - 0.41% |
| ||
75,000 |
| Hewlett-Packard Co., 4.75%, 6/2/14 | 75,773 |
|
|
|
|
Distribution/Wholesale - 0.28% |
| ||
50,000 |
| Tech Data Corp., 3.75%, 9/21/17 | 51,976 |
|
|
|
|
Electric Services - 0.28% |
| ||
50,000 |
| Appalachian Power Co., 4.95%, 2/1/15 | 51,839 |
|
|
|
|
Finance Services - 0.56% |
| ||
100,000 |
| Block Financial Corp., 5.125%, 10/30/14 | 102,688 |
|
|
|
|
Integrated Oils - 0.80% |
| ||
150,000 |
| Murphy Oil Corp., 4.00%, 6/01/22 | 147,715 |
|
|
|
|
Miscellaneous Business Credit Institution - 0.54% |
| ||
100,000 |
| Ford Motor Credit Co. LLC., 1.48455%, 11/20/18 ** | 99,683 |
|
|
|
|
Printed Circuit Boards - 0.29% |
| ||
50,000 |
| Jabil Circuit, Inc., 5.625%, 12/15/20 | 52,750 |
|
|
|
|
Property & Casualty Insurance - 0.89% |
| ||
140,000 |
| Zurich Reinsurance Centre Holdings, Inc., 7.125%, 10/15/23 | 164,816 |
|
|
|
|
Retail - Grocery Stores - 0.27% |
| ||
50,000 |
| Safeway, Inc., 4.75%, 12/1/21 | 49,900 |
|
|
|
|
Security Broker Dealers - 0.28% |
| ||
50,000 |
| Morgan Stanley & Co., 3.00%, 8/31/15 ** | 50,984 |
|
|
|
|
Sugar & Confectionery Products - 0.57% |
| ||
100,000 |
| WM. Wrigley Jr. Co., 4.65%, 7/15/15 | 105,165 |
|
|
|
|
Telephone Communications (No Radio Telephone) - 0.23% |
| ||
2,000 |
| QWest Corp., 6.125%, 6/1/53 | 42,220 |
|
|
|
|
TOTAL FOR CORPORATE BONDS (Cost $1,088,083) - 5.95% | 1,096,887 | ||
|
|
|
|
EXCHANGE TRADED FUNDS - 5.81% |
| ||
1,500 |
| iShares Barclays 20+ Year Treas Bond Fund | 162,855 |
2,000 |
| iShares Floating Rate Bond Fund | 101,370 |
1,000 |
| iShares Intermediate Credit Bond | 109,460 |
900 |
| iShares JPMorgan USD Emerging Markets Bond Fund | 99,486 |
6,600 |
| JPMorgan Alerian MLP Index ETN | 302,544 |
500 |
| PIMCO Enhanced Short Maturity | 50,720 |
6,000 |
| PowerShares Senior Loan Port Fund | 149,220 |
1,200 |
| Vanguard Short-Term Corporate Bond Index | 96,408 |
TOTAL FOR EXCHANGE TRADED FUNDS (Cost $1,042,150) - 5.81% | 1,072,063 | ||
|
|
|
|
MUNICIPAL BONDS - 7.26% |
| ||
40,000 |
| Akron, OH Economic Dev., 5.50%, 12/1/15 | 41,916 |
25,000 |
| Belding, MI Area Schools, 6.15%, 5/01/2024 | 26,365 |
35,000 |
| Bryan County, OK Indpt School District, 6.554%, 12/01/29 | 36,967 |
45,000 |
| California St. University Revenue Bond Series B, 2.785%, 11/1/22 | 44,844 |
100,000 |
| Chicago, IL Build America Bonds - Series B, 4.564%, 12/1/20 (a) | 98,888 |
70,000 |
| Gary, IN Community School Bldg., 7.50%, 2/01/29 | 75,905 |
99,000 |
| Georgia Loc. Govt., 4.75%, 6/1/28 | 100,635 |
30,000 |
| Illinois St., 5.877%, 3/1/19 | 33,661 |
55,000 |
| Illinois St. Build America Bonds, 4.85%, 7/1/15 | 57,878 |
50,000 |
| Kalamazoo, MI Bldg Auth, 5.40%, 10/1/25 | 51,200 |
25,000 |
| Katy Texas Schools, 5.999%, 2/15/2030 | 27,931 |
100,000 |
| Kern Cnty, CA Pension Oblg., 0.00%, 8/15/19 | 77,264 |
55,000 |
| Moncks Corner, SC Regl Recreation Corp. Build America Bonds, 6.299%, 12/01/2030 | 56,329 |
50,000 |
| Reeves Cnty, TX Cops, 5.00%, 12/1/16 | 52,327 |
60,000 |
| Reeves Cnty, TX Cops, 6.375%, 12/1/21 (a) | 64,126 |
40,000 |
| Richland Bean Blossom, IN Sch. Bldg. Corp., 5.75%, 1/15/24 | 42,312 |
70,000 |
| Saint Clair Cnty, IL School District., 4.00%, 1/1/21 | 67,402 |
25,000 |
| Sangamon Cnty, IL School District, 4.00%, 2/01/15 | 25,760 |
25,000 |
| Scago, SC Public Facs Corp. for Georgetown Cnty, 6.75%, 12/01/2029 | 27,459 |
25,000 |
| Sedona, AZ Wastewater, 0.00%, 7/01/2021 | 19,059 |
252,000 |
| Tobacco Settlement Auth Iowa, 6.50%, 6/1/23 | 252,529 |
60,000 |
| University Enterprises Inc. CA, 5.25%, 10/1/20 (a) | 59,040 |
TOTAL FOR MUNICIPAL BONDS (Cost $1,344,447) - 7.26% | 1,339,797 | ||
|
|
|
|
SENIOR NOTE - 0.27% |
| ||
|
|
|
|
Cellular Telecommunications - 0.27% |
| ||
2,000 |
| US Cellular Corp., PFD 6.95%, 5/15/60 | 49,940 |
TOTAL FOR SENIOR NOTE (Cost $49,920) - 0.27% | 49,940 | ||
|
|
|
|
STRUCTURED NOTES - 3.56% |
| ||
93,000 |
| Citigroup, Inc., 3.00%, 12/23/19 (a) | 99,986 |
100,000 |
| JP Morgan Chase Bank, 10.50%, 1/23/29 ** | 96,910 |
50,000 |
| Morgan Stanley, 3.00%, 11/9/19 ** | 52,313 |
200,000 |
| Suntrust Bank, Atlanta, GA, 0.00%, 9/22/14 | 259,709 |
100,000 |
| Suntrust Bank, Atlanta, GA, 0.00%, 3/27/14 | 148,967 |
TOTAL FOR STRUCTURED NOTES (Cost $548,694) - 3.56% | 657,885 | ||
|
|
|
|
REAL ESTATE INVESTMENT TRUSTS - 3.08% |
| ||
10,000 |
| Duke Realty Corp. | 168,000 |
500 |
| PS Business Parks Inc. Series T, PFD 6.00% | 11,220 |
2,000 |
| Public Storage | 338,000 |
2,000 |
| Public Storage Series P, PFD 6.50% | 51,400 |
TOTAL FOR REAL ESTATE INVESTMENT TRUSTS (Cost $520,964) - 3.08% | 568,620 | ||
|
|
|
|
PREFERRED SECURITIES - 0.59% |
| ||
3,000 |
| PNC Financial Services Group, Inc. Series Q, 5.375%, 12/31/49 | 64,200 |
2,000 |
| Wells Fargo & Co. Series P, 5.25%, 12/31/49 | 44,540 |
TOTAL FOR PREFERRED SECURITIES (Cost $124,310) - 0.59% | 108,740 | ||
|
|
|
|
SHORT TERM INVESTMENTS - 1.16% |
| ||
214,110 |
| Fidelity Institutional Money Market Portfolio 0.08% ** (Cost $214,110) | 214,110 |
|
|
|
|
TOTAL INVESTMENTS (Cost $15,408,552) - 99.45% | 18,350,614 | ||
|
|
|
|
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.55% | 102,017 | ||
|
|
|
|
NET ASSETS - 100.00% | $ 18,452,631 | ||
|
|
|
|
(a) Categorized as Level 2 of the fair value hierarchy. Refer to Note 3 of the accompanying notes to the financial statements for additional information. |
| ||
| |||
* Non-income producing |
| ||
** Variable rate security; the coupon rate shown represents the yield at February 28, 2014. |
| ||
ADR - American Depository Receipt |
| ||
The accompanying notes are an integral part of these financial statements. |
|
|
| Archer Income Fund |
|
|
| Schedule of Investments |
|
|
| February 28, 2014 (Unaudited) |
|
|
|
|
|
Shares/Principal |
|
| Fair Value |
|
|
|
|
|
|
|
|
CORPORATE BONDS - 33.49% |
| ||
|
|
|
|
Aerospace/Defense - Major Diversified - 1.17% |
| ||
75,000 |
| Exelis, Inc. 5.55%, 10/01/21 | $ 77,810 |
|
|
|
|
Banks & Financial Institutions - 1.48% |
| ||
50,000 |
| JPMorgan Chase & Co., 10.50%, 1/23/29** | 48,455 |
50,000 |
| Societe Generale, 1.3866%, 4/22/20 (France) ** | 50,003 |
|
|
| 98,458 |
Bituminous Coal & Lignite Surface Mining - 0.77% |
| ||
50,000 |
| Peabody Energy Corp., 7.875%, 11/1/26 | 51,375 |
|
|
|
|
Brewery - 1.53% |
|
|
|
250,000 |
| Ambev Intl. Finance Co., 9.50%, 7/24/17 (Cayman Islands) (a) ** | 101,900 |
|
|
|
|
Commercial Banks - Western US - 0.75% |
| ||
50,000 |
| Zions Bancorp, 5.50%, 5/10/16 | 49,998 |
|
|
|
|
Commercial Service - Finance - 1.02% |
| ||
800,000 |
| GE Capital Corp., 8.87%, 6/02/18 | 68,400 |
|
|
|
|
Computer & Office Equipment - 2.35% |
| ||
100,000 |
| Hewlett-Packard, 4.375%, 9/15/21 | 104,198 |
50,000 |
| Lexmark, Int'l, Inc., 5.125%, 3/15/20 | 52,598 |
|
|
| 156,796 |
Container & Packaging - 0.77% |
| ||
50,000 |
| Ball Corp. 5.00%, 3/01/2022 | 51,625 |
|
|
|
|
Consumer Products - 0.82% |
| ||
50,000 |
| Avon Products, Inc., 5.75%, 3/01/18 | 54,481 |
|
|
|
|
Distribution/Wholesale - 2.30% |
| ||
100,000 |
| Ingram Micro, Inc., 5.00%, 8/10/22 | 101,566 |
50,000 |
| Tech Data Corp., 3.75%, 9/21/17 | 51,976 |
|
|
| 153,542 |
Electric & Other Services Combined - 2.39% |
| ||
50,000 |
| CMS Energy, Inc., 6.25%, 2/01/20 | 59,144 |
100,000 |
| PPL Energy Supply LLC., 4.6%, 12/15/21 | 100,252 |
|
|
| 159,396 |
Finance Services - 0.73% |
| ||
50,000 |
| Morgan Stanley, 4.90%, 2/23/17 | 48,691 |
|
|
|
|
Guided Missiles & Space Vehicles & Parts - 0.81% |
| ||
50,000 |
| Alliant Techsystems, Inc., 6.875%, 9/15/20 | 54,188 |
|
|
|
|
Medical - Generic Drugs - 1.31% |
| ||
75,000 |
| Watson Pharmaceuticals, Inc. 6.125%, 8/15/19 | 87,339 |
|
|
|
|
Metal Mining - 1.45% |
| ||
100,000 |
| Cliffs Natural Resources, Inc., 4.875%, 4/01/21 | 96,886 |
|
|
|
|
Miscellaneous Business Credit Institution - 1.47% |
| ||
50,000 |
| Ford Credit Canada Ltd., 7.50%, 8/18/15 (Canada) | 48,627 |
50,000 |
| Ford Motor Credit Co. LLC., 1.48455%, 11/20/18 ** | 49,841 |
|
|
| 98,468 |
Multimedia - 0.82% |
| ||
50,000 |
| Time Warner Inc., 4.75%, 3/29/21 | 54,998 |
|
|
|
|
Oil Company - Exploration & Production - 2.54% |
| ||
100,000 |
| Southwestern Energy Co., 7.125%, 10/10/17 | 116,467 |
50,000 |
| Whiting Petroleum Corp., 6.50%, 10/01/18 | 52,812 |
|
|
| 169,279 |
Petroleum Refining - 0.80% |
| ||
50,000 |
| Frontier Oil, 6.875%, 11/15/2018 | 53,750 |
|
|
|
|
Printed Circuit Boards - 0.79% |
| ||
50,000 |
| Jabil Circuit, 5.625%, 12/15/2020 | 52,750 |
|
|
|
|
Property & Casualty Insurance - 0.88% |
| ||
50,000 |
| Zurich Reinsurance Centre Holdings, 7.125%, 10/15/23 | 58,863 |
|
|
|
|
Retail - Department Stores - 0.56% |
| ||
35,000 |
| Dillards, Inc., 7.75%, 7/15/26 | 37,537 |
|
|
|
|
Retail - Discretionary - 1.47% |
| ||
100,000 |
| Staples, Inc., 4.375%, 1/12/23 | 98,444 |
|
|
|
|
Security Broker Dealers - 0.76% |
| ||
50,000 |
| Morgan Stanley & Co., 3.00%, 8/31/15 ** | 50,984 |
|
|
|
|
State Commercial Banks - 0.76% |
| ||
50,000 |
| United Comm BK Blairsvll, GA, 6.00%, 8/13/18 (a) | 50,500 |
|
|
|
|
Steel Works, Blast Furnaces, Rolling Mills (Coke Ovens) - 1.17% |
| ||
75,000 |
| Arcelormittal, 3.75%, 3/1/16 | 77,813 |
|
|
|
|
Telephone Communications (No Radio Telephone) - 0.88% |
| ||
50,000 |
| Indiana Bell Tel Co. Inc., 7.30%, 8/15/26 | 58,975 |
|
|
|
|
Television Broadcasting Stations - 0.94% |
| ||
54,000 |
| CBS Broadcasting, Inc. 7.125%, 11/01/23 | 62,430 |
|
|
|
|
TOTAL FOR CORPORATE BONDS (Cost $2,243,388) - 33.49% | 2,235,676 | ||
|
|
|
|
EXCHANGE TRADED FUNDS - 15.22% |
| ||
1,000 |
| iShares Barclays 20+ Year Treas Bond | 108,570 |
800 |
| iShares Barclays Intermediate Credit Bond | 87,568 |
500 |
| iShares Barclays MBS Bond | 53,375 |
2,000 |
| iShares Floating Rate Bond | 101,370 |
1,000 |
| iShares iBoxx $ Invest Grade Corp Bond | 117,320 |
500 |
| iShares JPMorgan USD Emerg Markets Bond | 55,270 |
1,000 |
| PIMCO Enhanced Short Maturity | 101,440 |
500 |
| PIMCO 0-5 Year High Yield Corp Bond Index | 53,435 |
3,000 |
| PowerShares Build America Bond | 85,815 |
6,000 |
| PowerShares Preferred | 84,300 |
4,000 |
| PowerShares Senior Loan Port | 99,480 |
800 |
| Vanguard Intermediate-Term Corp. Bond Idx ETF | 68,160 |
TOTAL FOR EXCHANGE TRADED FUNDS (Cost $991,044) - 15.22% | 1,016,103 | ||
|
|
|
|
MUNICIPAL BONDS - 31.15% |
| ||
25,000 |
| Brier Creek, IN School Bldg. Corp., 6.08%, 7/15/24 | 27,340 |
35,000 |
| Caddo County OK Gov't Bldg., 5.858%, 9/01/25 | 35,680 |
50,000 |
| Chicago, IL Build America Bonds - Series B, 4.564%, 12/1/20 (a) | 49,444 |
60,000 |
| City of Akron OH, 5.50%, 12/01/15 | 62,874 |
25,000 |
| City of Auburndale FL, 4.30%, 12/01/26 (a) | 25,414 |
30,000 |
| Cleveland, OH Income Tax Revenue Build America Bonds, 6.06%, 10/1/26 | 33,147 |
50,000 |
| Commonwealth of Puerto Rico, 5.50%, 7/01/14 | 50,113 |
50,000 |
| County of Clark NV, 6.36%, 11/1/24 | 57,727 |
50,000 |
| County of Reeves TX, 5.00%, 12/1/16 | 52,327 |
25,000 |
| County of Reeves TX, 6.75%, 12/01/19 | 25,924 |
40,000 |
| County of Reeves TX, 6.375%, 12/21/21 (a) | 42,750 |
50,000 |
| Dickinson County MI, 4.80%, 11/01/18 | 51,095 |
100,000 |
| Erie County NY Tobacco Asset Corp, 6.00%, 6/1/28 | 91,570 |
35,000 |
| Evansville, IN Redevelopment Authority, 6.15%, 2/01/24 | 38,959 |
60,000 |
| Evansville, IN Redevelopment BAB, 6.86%, 2/01/29 | 67,361 |
25,000 |
| Fresno County, CA Pension, Series A, 4.928%, 8/15/19 | 25,390 |
50,000 |
| Georgia Local Government, 4.75%, 6/1/28 | 50,826 |
40,000 |
| Hoboken NJ Services, 5.33%, 2/01/18 | 41,371 |
65,000 |
| Hudson County, NJ 6.89%, 3/01/26 | 72,577 |
50,000 |
| Illinois St. Build America Bonds, 4.85%, 7/1/15 | 52,616 |
103,000 |
| Iowa Tobacco Settlement Authority, 6.50%, 6/1/23 | 103,216 |
50,000 |
| Louisiana State Local Gov't Envt, 5.75%, 9/01/2019 | 49,960 |
50,000 |
| Macomb, MI Interceptor Drain Dist Build America Bonds, Series A, 4.95%, 5/1/25 | 51,443 |
25,000 |
| Missouri State Health & Educational Fac., 5.80%, 10/01/23 | 26,390 |
25,000 |
| Mountain Iron-Buhl, MN Indep Sch Dist, Series A, 6.30%, 2/1/19 | 29,259 |
75,000 |
| Nassau County, NY Series F, 6.80%, 10/01/27 | 83,694 |
25,000 |
| Oregon State Sch Brds Assn Pension, Series B, 5.45%, 6/30/24 | 27,624 |
75,000 |
| Public Finance Authority, WI 5.75%, 6/1/23 (a) | 73,610 |
30,000 |
| Saint Clair County, IL School District No. 189 East St. Louis, 4.00%, 1/1/21 | 28,887 |
50,000 |
| State of Illinois, 5.665%, 3/1/18 | 55,482 |
70,000 |
| State of Illinois, 5.877%, 3/1/19 | 78,542 |
50,000 |
| State of Illinois, 6.200%, 7/01/21 | 56,555 |
75,000 |
| State of Illinois, 4.95%, 6/1/23 | 77,314 |
120,000 |
| TSACS Inc., NY 4.75%, 6/1/22 | 118,384 |
100,000 |
| University of Central Florida, 5.125, 10/01/20 (a) | 98,204 |
35,000 |
| Van Buren MI Public Schools Build America Bonds, 6.43%, 5/1/29 | 37,789 |
15,000 |
| Virginia Commonwealth Build American Bonds, 5.750%, 5/15/28 | 16,300 |
75,000 |
| Westfield County IN Option Income Tax Revenue 3.50%, 11/01/16 | 75,310 |
35,000 |
| Worcester County, MD 2.50%, 12/01/18 | 36,497 |
TOTAL FOR MUNICIPAL BONDS (Cost $2,078,932) - 31.15% | 2,078,965 | ||
|
|
|
|
PREFERRED SECURITIES - 4.49% |
| ||
2,000 |
| Citigroup, Inc., PFD 5.80%, 12/31/49 Series C | 45,040 |
50,000 |
| Edison International, PFD 6.25%, 8/01/49 Series E ** | 53,000 |
2,500 |
| First Republic Bank, PFD 6.70%, 12/31/49 | 62,575 |
3,000 |
| PNC Financial Services Group, Inc., 5.375%, 12/31/49 | 64,200 |
1,000 |
| Wells Fargo & Co., PFD 5.25%, 12/31/49 Series P | 22,270 |
2,500 |
| QWest Corp., 6.125%, 6/1/53 | 52,775 |
TOTAL FOR PREFERRED SECURITIES (Cost $319,011) - 4.49% | 299,860 | ||
|
|
|
|
REAL ESTATE INVESTMENT TRUSTS - 4.49% |
| ||
|
|
|
|
REITS - Diversified - 4.49% |
| ||
2,500 |
| Digital Realty Trust, PFD 6.625%, Series F | 57,565 |
5,500 |
| Duke Realty Corp., PFD 6.50%, 9/06/2013 Series K | 131,615 |
3,000 |
| Public Storage, PFD 5.20%, 12/31/49 | 62,190 |
2,000 |
| Regency Centers Corp., PFD 6.625%, 12/03/49, Series 6 | 48,100 |
TOTAL FOR REAL ESTATE INVESTMENT TRUST (Cost $320,790) - 4.49% | 299,470 | ||
|
|
|
|
SENIOR NOTE - 1.50% |
| ||
|
|
|
|
Cellular Telecommunications - 1.50% |
| ||
4,000 |
| US Cellular Corp., PFD 6.95%, 5/15/60 | 99,880 |
TOTAL FOR SENIOR NOTE (Cost $99,840) - 1.50% | 99,880 | ||
|
|
|
|
STRUCTURED NOTES - 4.92% |
| ||
|
|
|
|
Diversified Banking Institution - 4.92% |
| ||
75,000 |
| Goldman Sachs Group, Inc., 10.00%, 9/5/28 ** | 74,062 |
100,000 |
| Goldman Sachs Group, Inc., 10.00%, 12/13/28** | 100,000 |
100,000 |
| Morgan Stanley, 3.00%, 8/30/15 ** | 102,236 |
50,000 |
| Morgan Stanley & Co., 3.00%, 11/9/19 ** | 52,313 |
TOTAL FOR STRUCTURED NOTES (Cost $324,669) - 4.92% | 328,611 | ||
|
|
|
|
SHORT TERM INVESTMENTS - 4.12% |
| ||
275,038 |
| Fidelity Institutional Money Market 0.08% ** (Cost $275,038) | 275,038 |
|
|
|
|
TOTAL INVESTMENTS (Cost $6,652,712) - 99.38% | 6,633,603 | ||
|
|
|
|
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.62% | 41,428 | ||
|
|
|
|
NET ASSETS - 100.00% | $ 6,675,031 | ||
|
|
|
|
|
|
|
|
(a) Categorized as Level 2 of the fair value hierarchy. Refer to Note 3 of the accompanying notes to the financial statements for additional information. |
| ||
| |||
** Variable rate security; the coupon rate shown represents the yield at February 28, 2014. |
| ||
The accompanying notes are an integral part of these financial statements. |
|
|
| Archer Stock Fund |
|
|
| Schedule of Investments |
|
|
| February 28, 2014 (Unaudited) |
|
|
|
|
|
Shares/Principal |
|
| Fair Value |
|
|
|
|
COMMON STOCK - 97.76% |
| ||
|
|
|
|
Accident & Health Insurance - 1.90% |
| ||
2,300 |
| Reinsurance Group of America, Inc. | $ 177,077 |
|
|
|
|
Agriculture Chemicals - 1.88% |
| ||
1,600 |
| Monsanto Co. | 176,032 |
|
|
|
|
Air Courier Services - 1.73% |
| ||
13,000 |
| Air T, Inc. * | 161,590 |
|
|
|
|
Air Transportation - 2.13% |
| ||
2,300 |
| Alaska Air Group, Inc. | 199,272 |
|
|
|
|
Asset Management - 4.02% |
| ||
2,000 |
| Cognizant Technology Solutions Corp. * | 208,120 |
550 |
| Blackrock, Inc. | 167,662 |
|
|
| 375,782 |
Biological Products (No Diagnostic Substances) - 1.86% |
| ||
1,400 |
| Amgen, Inc. | 173,628 |
|
|
|
|
Business Services - 1.93% |
| ||
800 |
| Visa, Inc. Class A | 180,752 |
|
|
|
|
Calculating & Accounting Machines - 1.90% |
| ||
5,200 |
| NCR Corp.* | 177,060 |
|
|
|
|
Commercial Banks, NEC - 1.43% |
| ||
27,000 |
| Banco Santander (Brasil) S.A. | 133,920 |
|
|
|
|
Communication Services, NEC - 2.08% |
| ||
2,500 |
| DIRECTV, Inc. * | 194,000 |
|
|
|
|
Computer Storage Devices - 1.89% |
| ||
6,700 |
| EMC Corp. | 176,679 |
|
|
|
|
Diversified Machinery - 1.87% |
| ||
1,900 |
| Lennox International, Inc. | 174,572 |
|
|
|
|
Electric & Other Services Combined - 2.07% |
| ||
5,500 |
| Quanta Services, Inc.* | 193,655 |
|
|
|
|
Electric Computers - 2.00% |
| ||
6,500 |
| Omnicell, Inc.* | 187,070 |
|
|
|
|
Farm Products - 1.87% |
| ||
2,200 |
| Bunge Ltd. | 175,142 |
|
|
|
|
Guided Missiles & Space Vehicles & Parts - 1.88% |
| ||
1,300 |
| Alliant Techsystems, Inc.* | 175,227 |
|
|
|
|
Industrial Trucks Tractors Trailers & Stackers - 2.05% |
| ||
4,300 |
| Terex Corp. | 191,479 |
|
|
|
|
Life Insurance - 1.79% |
| ||
3,300 |
| MetLife, Inc. | 167,211 |
|
|
|
|
Measuring & Controlling Devices - 2.13% |
| ||
1,600 |
| Thermo Fisher Scientific, Inc. | 199,264 |
|
|
|
|
Motor Vehicle Parts & Accessories - 2.11% |
| ||
6,300 |
| Gentex Corp. | 197,631 |
|
|
|
|
Motor Vehicle & Passenger Car Bodies - 1.77% |
| ||
4,400 |
| Navistar International Corp. * | 165,000 |
|
|
|
|
National Commercial Banks - 3.54% |
| ||
2,800 |
| JP Morgan Chase & Co. | 159,096 |
2,100 |
| PNC Financial Services Group Inc. | 171,738 |
|
|
| 330,834 |
Oil & Gas Equipment & Services - 2.20% |
| ||
3,600 |
| Halliburton Co. | 205,200 |
|
|
|
|
Oil & Gas Filed Machinery & Equipment - 1.90% |
| ||
2,300 |
| National Oilwell Varco, Inc. | 177,192 |
|
|
|
|
Oil & Gas Field Services - 3.91% |
| ||
2,500 |
| Oceaneering International, Inc. | 178,950 |
2,000 |
| Schlumberger Ltd. N.V. | 186,000 |
|
|
| 364,950 |
Orthopedic, Prosthetic & Surgical Appliances & Supplies - 1.90% |
| ||
7,620 |
| Exactech, Inc. * | 177,546 |
|
|
|
|
Personal Computers - 1.97% |
| ||
350 |
| Apple, Inc. | 184,184 |
|
|
|
|
Petroleum Refining - 1.73% |
| ||
4,900 |
| Suncor Energy, Inc. | 161,896 |
|
|
|
|
Pharmaceutical Preparations - 4.26% |
| ||
4,800 |
| Roche Holding, Ltd. ADR * | 184,224 |
4,500 |
| Novo Nordisk ADR * | 213,885 |
|
|
| 398,109 |
Public Building & Related Furniture - 2.07% |
| ||
2,300 |
| BE Aerospace, Inc. * | 193,775 |
|
|
|
|
Radio & TV Broadcasting & Communications - 2.01% |
| ||
2,500 |
| Qualcomm, Inc. | 188,225 |
|
|
|
|
Railroad Equipment - 2.59% |
| ||
3,500 |
| American Railcar Industries, Inc. | 242,375 |
|
|
|
|
Railroads, Line-Haul Operating - 1.87% |
| ||
1,900 |
| Norfolk Southern Corp. | 174,629 |
|
|
|
|
Retail - Drug Stores - 2.18% |
| ||
2,700 |
| Express Scripts Holdings * | 203,337 |
|
|
|
|
Retail - Variety Stores - 1.99% |
| ||
3,400 |
| Dollar Tree, Inc. * | 186,218 |
|
|
|
|
Semiconductors & Related Services - 2.28% |
| ||
6,000 |
| Skyworks Solutions Inc. * | 212,760 |
|
|
|
|
Services - Auto Rental & Leasing (No Drivers) - 2.10% |
| ||
2,600 |
| Ryder System, Inc. | 195,832 |
|
|
|
|
Services - Computer Programming - 4.46% |
| ||
3,600 |
| Synaptics, Inc. * | 234,144 |
150 |
| Google, Inc. Class A * | 182,348 |
|
|
| 416,492 |
Services - Educational Services - 2.03% |
| ||
4,000 |
| Grand Canyon Education, Inc. * | 189,600 |
|
|
|
|
Services - Equipment Rental & Leasing - 2.08% |
| ||
2,200 |
| United Rentals, Inc. * | 194,348 |
|
|
|
|
Services - Medical Laboratories - 1.62% |
| ||
6,000 |
| Bio-Reference Laboratories Inc. * | 151,560 |
|
|
|
|
Shipping - 1.79% |
|
|
|
5,000 |
| CA Technologies | 167,500 |
|
|
|
|
Textile - Apparel Clothing - 1.80% |
| ||
2,300 |
| Hanes Brands, Inc. | 168,544 |
|
|
|
|
Wholesale - Drugs Proprietaries & Druggist - 1.25% |
| ||
1,400 |
| Nu Skin Enterprises, Inc., Class A | 116,928 |
|
|
|
|
Wholesale - Motor Vehicles & Motor Vehicles Parts & Supplies - 1.94% |
| ||
6,500 |
| LKQ Corp. * | 181,285 |
|
|
|
|
TOTAL FOR COMMON STOCK (Cost $7,266,340) - 97.76% | 9,135,362 | ||
|
|
|
|
SHORT-TERM INVESTMENTS - 1.71% |
| ||
175,172 |
| Fidelity Institutional Money Market Portfolio 0.08%** (Cost $175,172) | 175,172 |
|
|
|
|
TOTAL INVESTMENTS (Cost $7,441,512) - 99.64% | 9,310,534 | ||
|
|
|
|
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.36% | 34,279 | ||
|
|
|
|
NET ASSETS - 100.00% | $ 9,344,813 | ||
|
|
|
|
* Non-income producing |
| ||
** Variable rate security; the coupon rate shown represents the yield at February 28, 2014. |
| ||
ADR - American Depository Receipt |
| ||
The accompanying notes are an integral part of these financial statements. |
|
The Archer Funds | ||||
Statement of Assets and Liabilities | ||||
February 28, 2014 (Unaudited) | ||||
|
|
|
|
|
|
|
|
|
|
Assets: |
| Balanced Fund | Income Fund | Stock Fund |
Investments in Securities, at Value (Cost $15,408,552, | $ 18,350,614 | $ 6,633,603 | $9,310,534 | |
$6,652,712, and $7,441,512, respectively) |
|
|
| |
Cash |
| 20,000 | 10,000 | 10,000 |
Receivables |
|
|
| |
Subscriptions | 22,778 | 15,392 | 21,949 | |
Advisor | 3,082 | 1,986 | - | |
Interest | 29,540 | 65,298 | 14 | |
Dividend | 24,431 | 2,536 | 14,382 | |
Prepaid Expenses | 23,008 | 9,193 | 11,528 | |
Total Assets | 18,473,453 | 6,738,008 | 9,368,407 | |
Liabilities: |
|
|
|
|
Payables: |
|
|
|
|
Redemptions | 473 | 254 | 301 | |
Investments Purchased | - | 53,554 | 13,998 | |
Due to Advisor | - | - | 166 | |
Due to Administrator | 6,914 | 2,523 | 3,407 | |
Due to Trustees | 241 | 82 | 82 | |
Accrued Expenses | 13,194 | 6,564 | 5,640 | |
Total Liabilities | 20,822 | 62,977 | 23,594 | |
Net Assets |
| $ 18,452,631 | $ 6,675,031 | $9,344,813 |
|
|
|
|
|
Net Assets Consist of: |
|
|
| |
Paid In Capital | $ 16,909,528 | $ 6,882,799 | $7,260,923 | |
Accumulated Undistributed Net Investment Income (Loss) | (36,882) | 3,475 | 165,870 | |
Accumulated Net Realized Gain (Loss) on Investments | (1,362,077) | (192,134) | 48,998 | |
Net Unrealized Appreciation (Depreciation) in Value of Investments | 2,942,062 | (19,109) | 1,869,022 | |
Net Assets (unlimited shares authorized; 1,759,060, 339,052, and |
|
|
| |
232,388 shares outstanding, respectively) | $ 18,452,631 | $ 6,675,031 | $9,344,813 | |
Net Asset Value and Offering Price Per Share | $ 10.49 | $ 19.69 | $ 40.21 | |
|
|
|
|
|
Redemption Price Per Share ($10.49 x 0.995), |
|
|
| |
($19.69 x 0.99), & ($40.21 x 0.99), respectively * | $ 10.44 | $ 19.49 | $ 39.81 | |
|
|
|
|
|
|
|
|
|
|
*The Balanced Fund will deduct a 0.50% redemption fee from redemption proceeds if purchased and redeemed within 30 days. |
| |||
The Income and Stock Funds will deduct a 1.00% redemption fee from redemption proceeds if purchased and redeemed within 90 days. |
| |||
The accompanying notes are an integral part of these financial statements. |
|
|
|
The Archer Funds | ||||
Statements of Operations | ||||
For the six months ended February 28, 2014 (Unaudited) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income: | Balanced Fund | Income Fund | Stock Fund | |
Dividends (net of foreign withholding taxes of $176, $0, and $258, respectively) | $ 148,042 | $ 37,498 | $ 225,711 | |
Interest |
| 65,025 | 108,925 | 66 |
Total Investment Income | 213,067 | 146,423 | 225,777 | |
|
|
|
|
|
Expenses: |
|
|
|
|
Advisory Fees (a) | 65,153 | 16,072 | 30,986 | |
Transfer Agent | 14,977 | 8,882 | 10,947 | |
Administrative (a) | 43,435 | 16,072 | 20,658 | |
Registration | 18,920 | 6,468 | 7,025 | |
Legal |
| 7,379 | 2,745 | 3,359 |
Audit |
| 9,246 | 2,872 | 3,801 |
Custody | 1,918 | 2,068 | 2,268 | |
Trustee |
| 3,426 | 1,104 | 1,643 |
Miscellaneous | 2,597 | 3,056 | 1,647 | |
Insurance | 2,250 | 784 | 771 | |
Printing and Mailing | 1,168 | 582 | 735 | |
Total Expenses | 170,469 | 60,705 | 83,840 | |
Fees Waived and Reimbursed by the Advisor (a) | (66,224) | (22,132) | (23,933) | |
Net Expenses | 104,245 | 38,573 | 59,907 | |
|
|
|
|
|
Net Investment Income | 108,822 | 107,850 | 165,870 | |
|
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments: |
|
|
| |
Net Realized Gain (Loss) on Investments | 198,057 | (28,318) | 318,883 | |
Capital Gain Distributions from Portfolio Companies | 5,474 | 1,329 | 42 | |
Net Change in Unrealized Appreciation on Investments | 1,728,675 | 171,622 | 1,055,315 | |
Net Realized and Unrealized Gain on Investments | 1,932,206 | 144,633 | 1,374,240 | |
|
|
|
|
|
Net Increase in Net Assets Resulting from Operations | $2,041,028 | $252,483 | $1,540,110 | |
|
|
|
|
|
|
|
|
|
|
(a) See Note 5 in the Notes to the Financial Statements. |
|
|
| |
The accompanying notes are an integral part of these financial statements. |
|
|
|
Archer Balanced Fund | |||
Statements of Changes in Net Assets | |||
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
| Six Months |
|
|
| Ended | Year Ended |
|
| 2/28/2014 | 8/31/2013 |
Increase in Net Assets From Operations: |
|
| |
Net Investment Income | $ 108,822 | $ 341,161 | |
Net Realized Gain on Investments and Call Options Written | 198,057 | 120,210 | |
Capital Gain Distributions from Portfolio Companies | 5,474 | 6,145 | |
Net Change in Unrealized Appreciation on Investments | 1,728,675 | 677,245 | |
Net Increase in Net Assets Resulting from Operations | 2,041,028 | 1,144,761 | |
|
|
|
|
Distributions to Shareholders: |
|
| |
Net Investment Income | (275,585) | (416,235) | |
Total Distributions | (275,585) | (416,235) | |
|
|
|
|
Capital Share Transactions: |
|
| |
Proceeds from Sale of Shares | 1,277,726 | 2,499,709 | |
Shares Issued on Reinvestment of Dividends | 267,420 | 411,019 | |
Early Redemption Fees * | 22 | - | |
Cost of Shares Redeemed | (1,248,746) | (2,681,269) | |
Net Increase from Capital Share Transactions | 296,422 | 229,459 | |
|
|
|
|
Net Assets: |
|
|
|
Net Increase in Net Assets | 2,061,865 | 957,985 | |
Beginning of Year | 16,390,766 | 15,432,781 | |
End of Year (Including Accumulated Undistributed Net |
|
| |
Investment Income (Loss) of $(36,882) and $129,881, respectively) | $18,452,631 | $16,390,766 | |
|
|
|
|
Share Transactions: |
|
| |
Shares Sold | 125,622 | 268,513 | |
Shares Issued on Reinvestment of Dividends | 25,963 | 46,920 | |
Shares Redeemed | (122,105) | (292,832) | |
Net Increase in Shares | 29,480 | 22,601 | |
Outstanding at Beginning of Year | 1,729,580 | 1,706,979 | |
Outstanding at End of Year | 1,759,060 | 1,729,580 | |
|
|
|
|
* The Fund charges a 0.50% redemption fee on shares redeemed within 30 calendar days of purchase. |
| ||
The accompanying notes are an integral part of these financial statements. |
|
|
Archer Income Fund | |||
Statement of Changes in Net Assets | |||
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
| Six Months |
|
|
| Ended | Year Ended |
|
| 2/28/2014 | 8/31/2013 |
Increase (Decrease) in Net Assets From Operations: |
|
| |
Net Investment Income | $ 107,850 | $ 185,783 | |
Net Realized Loss on Investments | (28,318) | (56,125) | |
Capital Gain Distributions from Portfolio Companies | 1,329 | 707 | |
Net Change in Unrealized Appreciation (Depreciation) on Investments | 171,622 | (354,874) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | 252,483 | (224,509) | |
|
|
|
|
Distributions to Shareholders: |
|
| |
Net Investment Income | (135,846) | (169,842) | |
Realized Gains | - | - | |
Total Distributions | (135,846) | (169,842) | |
|
|
|
|
Capital Share Transactions: |
|
| |
Proceeds from Sale of Shares | 659,251 | 2,427,956 | |
Shares Issued on Reinvestment of Dividends | 131,795 | 164,062 | |
Early Redemption Fees * | - | - | |
Cost of Shares Redeemed | (587,038) | (624,329) | |
Net Increase from Capital Share Transactions | 204,008 | 1,967,689 | |
|
|
|
|
Net Assets: |
|
|
|
Net Increase in Net Assets | 320,645 | 1,573,338 | |
Beginning of Year | 6,354,386 | 4,781,048 | |
End of Year (Including Accumulated Undistributed Net |
|
| |
Investment Income of $3,475 and $31,471, respectively) | $ 6,675,031 | $ 6,354,386 | |
|
|
|
|
Share Transactions: |
|
| |
Shares Sold | 33,825 | 118,739 | |
Shares Issued on Reinvestment of Dividends | 6,805 | 8,102 | |
Shares Redeemed | (30,176) | (30,506) | |
Net Increase in Shares | 10,454 | 96,335 | |
Outstanding at Beginning of Year | 328,598 | 232,263 | |
Outstanding at End of Year | 339,052 | 328,598 | |
|
|
|
|
|
|
|
|
* The Fund charges a 1.00% redemption fee on shares redeemed within 90 calendar days of purchase. |
| ||
The accompanying notes are an integral part of these financial statements. |
|
|
Archer Stock Fund | |||
Statement of Changes in Net Assets | |||
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
| Six Months |
|
|
| Ended | Year Ended |
|
| 2/28/2014 | 8/31/2013 |
Increase (Decrease) in Net Assets From Operations: |
|
| |
Net Investment Income (Loss) | $ 165,870 | $ (2,746) | |
Net Realized Gain on Investments | 318,883 | 323,220 | |
Capital Gain Distributions from Portfolio Companies | 42 | - | |
Net Change in Unrealized Appreciation on Investments | 1,055,315 | 568,608 | |
Net Increase in Net Assets Resulting from Operations | 1,540,110 | 889,082 | |
|
|
|
|
Distributions to Shareholders: |
|
| |
Net Investment Income | - | - | |
Realized Gains | (282,445) | - | |
Total Distributions | (282,445) | - | |
|
|
|
|
Capital Share Transactions: |
|
| |
Proceeds from Sale of Shares | 863,702 | 1,835,805 | |
Shares Issued on Reinvestment of Dividends | 272,884 | - | |
Early Redemption Fees * | 55 | - | |
Cost of Shares Redeemed | (292,266) | (399,836) | |
Net Increase from Capital Share Transactions | 844,375 | 1,435,969 | |
|
|
|
|
Net Assets: |
|
|
|
Net Increase in Net Assets | 2,102,040 | 2,325,051 | |
Beginning of Year | 7,242,773 | 4,917,722 | |
End of Year (Including Accumulated Undistributed Net |
|
| |
Investment Income of $165,870 and $0, respectively) | $ 9,344,813 | $ 7,242,773 | |
|
|
|
|
Share Transactions: |
|
| |
Shares Sold | 22,529 | 56,677 | |
Shares Issued on Reinvestment of Dividends | 7,034 | - | |
Shares Redeemed | (7,788) | (12,918) | |
Net Increase in Shares | 21,775 | 43,759 | |
Outstanding at Beginning of Year | 210,613 | 166,854 | |
Outstanding at End of Year | 232,388 | 210,613 | |
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* The Fund charges a 1.00% redemption fee on shares redeemed within 90 calendar days of purchase. | |||
The accompanying notes are an integral part of these financial statements. |
|
Archer Balanced Fund | ||||||||
Financial Highlights | ||||||||
Selected data for a share outstanding throughout the period. | ||||||||
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|
|
|
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|
|
| (Unaudited) |
|
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|
|
|
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| Six Months |
|
|
|
|
|
|
|
| Ended |
| For the Years Ended | ||||
|
| 2/28/2014 |
| 8/31/2013 | 8/31/2012 | 8/31/2011 | 8/31/2010 | 8/31/2009 |
|
|
|
|
|
|
|
|
|
Net Asset Value, at Beginning of Period | $ 9.48 |
| $ 9.04 | $ 8.68 | $ 8.24 | $ 8.09 | $ 9.68 | |
|
|
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|
|
|
|
|
|
Income (Loss) From Investment Operations: |
|
|
|
|
|
|
| |
Net Investment Income * | 0.06 |
| 0.20 | 0.24 | 0.19 | 0.16 | 0.17 | |
Net Gain (Loss) on Securities (Realized and Unrealized) | 1.11 |
| 0.49 | 0.33 | 0.43 | 0.19 | (1.48) | |
Total from Investment Operations | 1.17 |
| 0.69 | 0.57 | 0.62 | 0.35 | (1.31) | |
|
|
|
|
|
|
|
|
|
Distributions: |
|
|
|
|
|
|
|
|
Net Investment Income | (0.16) |
| (0.25) | (0.21) | (0.18) | (0.20) | (0.28) | |
Realized Gains |
| 0.00 |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total from Distributions | (0.16) |
| (0.25) | (0.21) | (0.18) | (0.20) | (0.28) | |
|
|
|
|
|
|
|
|
|
Proceeds from Redemption Fees ** | - |
| - | - | - | - | - | |
|
|
|
|
|
|
|
|
|
Net Asset Value, at End of Period | $ 10.49 |
| $ 9.48 | $ 9.04 | $ 8.68 | $ 8.24 | $ 8.09 | |
|
|
|
|
|
|
|
|
|
Total Return *** |
| 12.39% |
| 7.85% | 6.76% | 7.54% | 4.23% | (13.28)% |
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data: |
|
|
|
|
|
|
| |
Net Assets at End of Period (Thousands) | $ 18,453 |
| $ 16,391 | $ 15,433 | $ 13,949 | $ 14,021 | $ 10,490 | |
Before Waivers and Reimbursements |
|
|
|
|
|
|
| |
Ratio of Expenses to Average Net Assets | 1.96% | † | 2.07% | 2.16% | 2.00% | 2.01% | 2.93% | |
Ratio of Net Investment Income to Average Net Assets | 0.49% | † | 1.31% | 1.83% | 1.30% | 1.06% | 0.57% | |
After Waivers and Reimbursements |
|
|
|
|
|
|
| |
Ratio of Expenses to Average Net Assets | 1.20% | † | 1.20% | 1.20% | 1.20% | 1.20% | 1.20% | |
Ratio of Net Investment Income to Average Net Assets | 1.25% | † | 2.18% | 2.79% | 2.10% | 1.87% | 2.29% | |
Portfolio Turnover | 16.32% |
| 77.01% | 76.14% | 69.95% | 77.73% | 79.42% | |
|
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* Per share net investment income (loss) has been determined on the basis of average shares outstanding during the period. |
|
|
| |||||
** Amount less than $0.005 per share. |
|
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|
|
|
|
| |
*** Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming |
| |||||||
reinvestment of dividends. |
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| |
† Annualized |
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The accompanying notes are an integral part of these financial statements. |
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|
Archer Income Fund |
| ||||||
Financial Highlights |
| ||||||
Selected data for a share outstanding throughout the period. |
| ||||||
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
| Six Months |
|
|
|
|
|
|
| Ended |
| Years Ended | Period Ended | (b) | |
|
| 2/28/2014 |
| 8/31/2013 | 8/31/2012 | 8/31/2011 |
|
|
|
|
|
|
|
|
|
Net Asset Value, at Beginning of Period | $ 19.34 |
| $ 20.58 | $ 20.77 | $ 20.00 |
| |
|
|
|
|
|
|
|
|
Income (Loss) From Investment Operations: |
|
|
|
|
|
| |
Net Investment Income * | 0.32 |
| 0.66 | 1.03 | 0.73 |
| |
Net Gain (Loss) on Securities (Realized and Unrealized) | 0.44 |
| (1.29) | 0.20 | 0.04 |
| |
Total from Investment Operations | 0.76 |
| (0.63) | 1.23 | 0.77 |
| |
|
|
|
|
|
|
|
|
Distributions: |
|
|
|
|
|
|
|
Net Investment Income | (0.41) |
| (0.61) | (1.39) | - |
| |
Realized Gains |
| - |
| - | (0.03) | - |
|
Total from Distributions | (0.41) |
| (0.61) | (1.42) | - |
| |
|
|
|
|
|
|
|
|
Proceeds from Redemption Fees ** | - |
| - | - | - |
| |
|
|
|
|
|
|
|
|
Net Asset Value, at End of Period | $ 19.69 |
| $ 19.34 | $ 20.58 | $ 20.77 |
| |
|
|
|
|
|
|
|
|
Total Return *** |
| 3.97% |
| (3.15)% | 6.26% | 3.85% | (a) |
|
|
|
|
|
|
|
|
Ratios/Supplemental Data: |
|
|
|
|
|
| |
Net Assets at End of Period (Thousands) | $ 6,675 |
| $ 6,354 | $ 4,781 | $ 2,619 |
| |
Before Waivers and Reimbursements |
|
|
|
|
|
| |
Ratio of Expenses to Average Net Assets | 1.89% | † | 1.96% | 2.57% | 4.21% | † | |
Ratio of Net Investment Income to Average Net Assets | 2.67% | † | 2.49% | 3.67% | 4.43% | † | |
After Waivers and Reimbursements |
|
|
|
|
|
| |
Ratio of Expenses to Average Net Assets | 1.20% | † | 1.20% | 1.20% | 1.20% | † | |
Ratio of Net Investment Income to Average Net Assets | 3.35% | † | 3.25% | 5.04% | 7.44% | † | |
Portfolio Turnover | 11.47% |
| 18.32% | 24.29% | 11.01% |
| |
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(a) Not Annualized |
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| |
(b) The Fund commenced investment operations on March 11, 2011. |
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| |
† Annualized |
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* Per share net investment income (loss) has been determined on the basis of average shares outstanding during the period. |
|
| |||||
** Amount less than $0.005 per share. |
|
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|
| |
*** Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming reinvestment of dividends. |
|
| |||||
|
|
|
|
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|
| |
The accompanying notes are an integral part of these financial statements. |
|
|
|
|
|
Archer Stock Fund |
| ||||||
Financial Highlights |
| ||||||
Selected data for a share outstanding throughout the period. |
| ||||||
|
|
|
|
|
|
|
|
|
| (Unaudited) |
|
|
|
|
|
|
| Six Months |
|
|
|
|
|
|
| Ended |
| Years Ended | Period Ended | (b) | |
|
| 2/28/2014 |
| 8/31/2013 | 8/31/2012 | 8/31/2011 |
|
|
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|
|
|
|
|
|
Net Asset Value, at Beginning of Period | $ 34.39 |
| $ 29.47 | $ 27.57 | $ 30.00 |
| |
|
|
|
|
|
|
|
|
Income (Loss) From Investment Operations: |
|
|
|
|
|
| |
Net Investment Income (Loss) * | 1.53 |
| (0.01) | (0.07) | (0.03) |
| |
Net Gain (Loss) on Securities (Realized and Unrealized) | 5.59 |
| 4.93 | 1.97 | (2.40) |
| |
Total from Investment Operations | 7.12 |
| 4.92 | 1.90 | (2.43) |
| |
|
|
|
|
|
|
|
|
Distributions: |
|
|
|
|
|
|
|
Net Investment Income | - |
| - | - | - |
| |
Realized Gains |
| (1.30) |
| - | - | - |
|
Total from Distributions | (1.30) |
| - | - | - |
| |
|
|
|
|
|
|
|
|
Proceeds from Redemption Fees ** | - |
| - | - | - |
| |
|
|
|
|
|
|
|
|
Net Asset Value, at End of Period | $ 40.21 |
| $ 34.39 | $ 29.47 | $ 27.57 |
| |
|
|
|
|
|
|
|
|
Total Return *** |
| 20.84% |
| 16.69% | 6.89% | (8.10)% | (a) |
|
|
|
|
|
|
|
|
Ratios/Supplemental Data: |
|
|
|
|
|
| |
Net Assets at End of Period (Thousands) | $ 9,345 |
| $ 7,243 | $ 4,918 | $ 2,901 |
| |
Before Waivers and Reimbursements |
|
|
|
|
|
| |
Ratio of Expenses to Average Net Assets | 2.03% | † | 2.22% | 2.78% | 3.99% | † | |
Ratio of Net Investment Loss to Average Net Assets | 3.43% | † | (0.82)% | (1.59)% | (2.78)% | † | |
After Waivers and Reimbursements |
|
|
|
|
|
| |
Ratio of Expenses to Average Net Assets | 1.45% | † | 1.45% | 1.45% | 1.45% | † | |
Ratio of Net Investment Loss to Average Net Assets | 4.01% | † | (0.05)% | (0.26)% | (0.24)% | † | |
Portfolio Turnover | 30.66% |
| 195.28% | 399.91% | 163.69% |
| |
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(a) Not Annualized |
|
|
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|
| |
(b) The Fund commenced investment operations on March 11, 2011. |
|
|
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|
| ||
† Annualized |
|
|
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|
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|
|
* Per share net investment income (loss) has been determined on the basis of average shares outstanding during the period. |
|
| |||||
** Amount less than $0.005 per share. |
|
|
|
|
|
| |
*** Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming reinvestment of dividends. | |||||||
|
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| |
The accompanying notes are an integral part of these financial statements. |
|
|
|
|
|
THE ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2014 (UNAUDITED)
NOTE 1. ORGANIZATION
The Archer Investment Series Trust, an Ohio business trust (the “Trust”), is an open-end, diversified, investment management company established under the laws of Ohio by an Agreement and Declaration of Trust dated October 7, 2009 (the “Trust Agreement”). The Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest of separate series. The Trust currently consists of three funds: The Archer Balanced Fund (the “Balanced Fund”), the Archer Income Fund (the “Income Fund”), and the Archer Stock Fund (the “Stock Fund”). The investment objective of the Balanced Fund is total return. Total return is comprised of both income and capital appreciation. The Balanced Fund commenced operations on June 11, 2010. Prior to June 11, 2010, the Balanced Fund operated as a series of the Unified Series Trust, an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated October 17, 2002. The Balanced Fund originally commenced investment operations on September 27, 2005.
The Income Fund and the Stock Fund each commenced investment operations on March 11, 2011. The investment objective of the Income Fund is income while secondarily striving for capital appreciation. The investment objective of the Stock Fund is capital appreciation. The investment advisor to the Funds is Archer Investment Corporation, Inc. (the “Advisor”). See Note 5 for additional information regarding the Advisor.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by the Funds in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Securities Valuation – All investments in securities are recorded at their estimated fair value as described in Note 3.
Federal Income Taxes – The Funds make no provision for federal income or excise tax. The Funds intend to qualify each year as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of their taxable income. The Funds also intend to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. If the required amount of net investment income or gains is not distributed, the Funds could incur a tax expense.
In addition, GAAP requires management of the Funds to analyze all open tax years, fiscal years 2011-2013 for the Balanced, Income and Stock Funds, as defined by IRS statute of limitations for all major industries, including federal tax authorities and certain state tax authorities. As of and during the six months ended February 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress and are not aware of any tax positions for which it is reasonably possible that the total tax amounts of unrecognized tax benefits will significantly change in the next twelve months.
Security Transactions and Related Income - The Funds follow industry practice and record security transactions on the trade date. Realized gains and losses are computed using the specific cost of the security. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized or accreted using the effective interest method. Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates.
Dividends and Distributions – The Funds intend to distribute substantially all of its net investment income as dividends to its shareholders on at least an annual basis. The Funds intend to distribute its net realized long-term capital gains and its net realized short-term capital gains at least once a year. Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expenses or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of the net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset values per share of the Funds.
Redemption Fee - To discourage short-term trades by investors, the Balanced Fund will impose a redemption fee of 0.50% of the total redemption amount (calculated at market value) if shares are redeemed within thirty calendar days of purchase. The Income and Stock Funds will each impose a redemption fee of 1.00% of the total redemption amount (calculated at market value) if shares are redeemed within ninety calendar days of purchase. For the six months ended February 28, 2014, the Balanced Fund and Stock Fund collected $22 and $55 in redemption fees, respectively.
Options - The Balanced and Income Funds may sell covered call options as part of their investment programs to obtain market exposure or to manage risk or hedge against adverse market conditions. When a fund writes an option, an amount equal to the premium received by the fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchase transaction, as a realized loss.
If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the fund. The fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. See Note 4 for additional information on options transactions.
Expenses – Expenses incurred by the Trust that do no relate to a specific Fund of the Trust are allocated to the individual Funds based on each Fund’s relative net assets or other appropriate basis as determined by the Board.
Use of 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates.
Subsequent Events - Management has evaluated the impact of all subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements.
NOTE 3. SECURITIES VALUATION
Processes and Structure
The Funds’ Board of Trustees has adopted guidelines for valuing securities including in circumstances in which market quotes are not readily available and has delegated to the Adviser the responsibility for determining fair value prices, subject to review by the Board of Trustees.
Hierarchy of Fair Value Inputs
The Funds utilize various methods to measure the fair value of most of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:
·
Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the company has the ability to access.
·
Level 2. Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.
·
Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the company's own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair Value Measurements
A description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis follows:
Fair value is defined as the price that a Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. GAAP establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk (the risk inherent in a particular valuation technique used to measure fair value such as pricing model and/or the risk inherent in the inputs to the valuation technique). Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
Equity securities, including common stocks, American Depositary Receipts, real estate investment trusts, exchanged-traded funds, preferred securities and bonus certificates, are generally valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices more accurately reflect the fair value of such securities. Securities that are traded on any stock exchange are generally valued by the pricing service at the last quoted sale price. Lacking a last sale price, an exchange traded security is generally valued by the pricing service at its last bid price. Securities traded in the NASDAQ over-the-counter market are generally valued by the pricing service at the NASDAQ Official Closing Price. When using the market quotations or close prices provided by the pricing service and when the market is considered active, the security will be classified as a Level 1 security. Sometimes, an equity security owned by the Fund will be valued by the pricing service with factors other than market quotations or when the market is considered inactive. When this happens, the security will be classified as a Level 2 security. When market quotations are not readily available, when the Advisor determines that the market quotation or the price provided by the pricing service does not accurately reflect the current fair value, or when restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review by the Board. These securities will be categorized as Level 3 securities.
Investments in mutual funds, including money market mutual funds, are generally priced at the ending net asset value (NAV) provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
Fixed income securities, such as corporate bonds, municipal bonds and structured notes, when valued using market quotations in an active market, will be categorized as Level 1 securities. However, they may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices more accurately reflect the fair value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. These securities will generally be categorized as Level 2 securities. If the Advisor decides that a price provided by the pricing service does not accurately reflect the fair value of the securities, when prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees. These securities will be categorized as Level 3 securities. The Advisor used inputs such as pricing of similar securities and market movements of the underlying common stock to fair value reverse convertible bonds. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic and political developments in a specific country or region.
In accordance with the Trust’s good faith pricing guidelines, the Advisor is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. No single standard exists for determining fair value, because fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Advisor would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods. Good faith pricing is permitted if, in the Advisor’s opinion, the validity of market quotations appears to be questionable based on factors such as evidence of a thin market in the security based on a small number of quotations, a significant event occurs after the close of a market but before a Funds’ NAV calculation that may affect a security’s value, or the Advisor is aware of any other data that calls into question the reliability of market quotations. Good faith pricing may also be used in instances when the bonds the Fund invests in may default or otherwise cease to have market quotations readily available.
The following table summarizes the inputs used to value Balanced Fund’s assets and liabilities measured at fair value as of February 28, 2014:
BALANCED FUND | Financial Instruments—Assets | |||
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|
Categories | Level 1 | Level 2 | Level 3 | Fair Value |
Common Stocks | $ 13,242,572 | $ - | $ - | $ 13,242,572 |
Corporate Bonds | 1,096,887 | - | - | 1,096,887 |
Exchange Traded Funds | 1,072,063 | - | - | 1,072,063 |
Senior Note | 49,940 | - | - | 49,940 |
Structured Notes | 557,899 | 99,986 | - | 657,885 |
Real Estate Investment Trusts | 568,620 | - | - | 568,620 |
Preferred Securities | 108,740 | - | - | 108,740 |
Municipal Bonds | 1,117,743 | 222,054 | - | 1,339,797 |
Short-Term Investments: |
|
|
|
|
Fidelity Institutional Money Market | 214,110 | - | - | 214,110 |
| $ 18,028,574 | $ 322,040 | $ - | $ 18,350,614 |
The following table sets forth a summary of the changes in the fair value of the Balanced Fund’s level 2 investments for the six months ended February 28, 2014:
|
| Investments |
Balance Beginning at August 31, 2013 | $ 315,274 | |
Accrued Accretion/(Amortization) | (1,550) | |
Change in Unrealized Appreciation/(Depreciation) | 8,316 | |
Realized Gain/(Loss) | - | |
Purchases/Sales | - | |
Transfers In/(Out) of Level 2 | - | |
Balance End at February 28, 2014 | $ 322,040 |
The following table summarizes the inputs used to value Income Fund’s assets and liabilities measured at fair value as of February 28, 2014:
INCOME FUND | Financial Instruments—Assets | |||
|
|
|
|
|
Categories | Level 1 | Level 2 | Level 3 | Fair Value |
Corporate Bonds | $ 2,083,276 | $ 152,400 | $ - | $ 2,235,676 |
Exchange Traded Funds | 1,016,103 | - | - | 1,016,103 |
Municipal Bonds | 1,789,543 | 289,422 | - | 2,078,965 |
Preferred Securities | 299,860 | - | - | 299,860 |
Real Estate Investment Trusts | 299,470 | - | - | 299,470 |
Senior Note | 99,880 | - | - | 99,880 |
Structured Note | 328,611 | - | - | 328,611 |
Short-Term Investments: |
|
|
|
|
Fidelity Institutional Money Market | 275,038 | - | - | 275,038 |
| $ 6,191,781 | $ 441,822 | $ - | $ 6,633,603 |
The Income Fund did not hold any derivative instruments at any time during the period ended February 28, 2014.
The following table sets forth a summary of the changes in the fair value of the Income Fund’s level 2 investments for the six months ended February 28, 2014:
|
| Investments |
Balance Beginning at August 31, 2013 | $ 617,951 | |
Accrued Accretion/(Amortization) | (15,324) | |
Change in Unrealized Appreciation/(Depreciation) | 32,942 | |
Realized Gain/(Loss) | (10,381) | |
Purchases/Sales | (183,366) | |
Transfers In/(Out) of Level 2 | - | |
Balance End at February 28, 2014 | $ 441,822 |
The following table summarizes the inputs used to value Stock Fund’s assets and liabilities measured at fair value as of February 28, 2014:
STOCK FUND | Financial Instruments—Assets | |||
|
|
|
|
|
Categories | Level 1 | Level 2 | Level 3 | Fair Value |
Common Stocks | $ 9,135,362 | $ - | $ - | $ 9,135,362 |
Short-Term Investments: |
|
|
|
|
Fidelity Institutional Money Market | 175,172 | - | - | 175,172 |
| $ 9,310,534 | $ - | $ - | $ 9,310,534 |
There were no significant transfers into or out of Level 1, Level 2, or Level 3 during the period. It is the Stock Fund’s policy to recognize transfers into and out of Level 1, Level 2, and Level 3 at the end of the reporting period. The Stock Fund did not hold any derivative instruments at any time during the period ended February 28, 2014.
NOTE 4. DERIVATIVE TRANSACTIONS
As of February 28, 2014, there were no options outstanding in either the Balanced or Income Funds. The Balanced and Income Funds did not have any options transactions during the six months ended February 28, 2014.
The location on the Statement of Assets and Liabilities of the Balanced and Income Funds’ derivative positions, which are not accounted for as hedging instruments under GAAP, is as follows:
Asset Derivatives
Investment in Securities, at Value
Schedule of Investments - Structured Notes
Balanced Fund
$ 657,885
Income Fund
$ 328,611
NOTE 5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Advisor, under the terms of the management agreement (the “Agreement”), manages the Funds’ investments. As compensation for its management services, each Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 0.75% for the Balanced Fund, 0.50% for the Income Fund, and 0.75% for the Stock Fund of each Fund’s average daily net assets. For the six months ended February 28, 2014, the Advisor earned fees of $65,153 for the Balanced Fund, $16,072 for the Income Fund, and $30,986 for the Stock Fund, before the waivers and reimbursements described below.
The Advisor also performs administrative duties for the Funds, in which the Advisor receives administrative fees. Administrative fees are paid according to the following schedule for each of the Funds: 0.50% on average net assets under $50 million, 0.07% on assets from $50 million up to $100 million, 0.05% on average net assets over $100 million up to $150 million, and 0.03% on assets over $150 million. The minimum monthly fee is $2,500. During the six months ended February 28, 2014, the Advisor earned administrative fees of $43,435 for the Balanced Fund, $16,072 for the Income Fund, and $20,658 for the Stock Fund.
Archer Balanced Fund
The Advisor has contractually agreed to waive its management fee and/or reimburse expenses through December 31, 2016 so that total annual operating expenses, excluding brokerage fees and commissions, 12b-1 fees, borrowing costs (such as interest and dividend expenses on securities sold short), taxes, extraordinary expenses, and any indirect expenses (such as expenses incurred by other investment companies in which the Balanced Fund invests) do not exceed 1.20% of the Balanced Fund’s average daily net assets. For the six months ended February 28, 2014, the Advisor waived fees and/or reimbursed expenses of $66,224. Each waiver or reimbursement by the Advisor is subject to repayment by the Balanced Fund within the three fiscal years following the fiscal year in which the particular waiver or reimbursement occurred, provided that the Balanced Fund is able to make the repayment without exceeding the 1.20% expense limitation. Advisory fees waived and/or reimbursed expenses that may be subject to potential recoupment by the Advisor through August 31, 2016 totaled $395,170.
The amounts subject to repayment by the Balanced Fund, pursuant to the aforementioned conditions, at August 31, 2013 were as follows:
| Subject to Repayment |
Amount | by August 31, |
$120,162 | 2014 |
$139,404 | 2015 |
$135,604 | 2016 |
The Advisor owed the Balanced Fund $3,082 at February 28, 2014 for reimbursement of expenses.
Archer Income Fund
The Advisor has contractually agreed to waive its management fee and/or reimburse expenses through December 31, 2016 so that total annual operating expenses, excluding brokerage fees and commissions, 12b-1 fees, borrowing costs (such as interest and dividend expenses on securities sold short), taxes, extraordinary expenses, and any indirect expenses (such as expenses incurred by other investment companies in which the Income Fund invests) do not exceed 1.20% of the Income Fund’s average daily net assets. For the six months ended February 28, 2014, the Advisor waived fees and/or reimbursed expenses of $22,132. Each waiver or reimbursement by the Advisor is subject to repayment by the Income Fund within the three fiscal years following the fiscal year in which the particular waiver or reimbursement occurred, provided that the Income Fund is able to make the repayment without exceeding the 1.20% expense limitation. Advisory fees waived and/or reimbursed expenses that may be subject to potential recoupment by the Advisor through August 31, 2016 totaled $120,427.
The amounts subject to repayment by the Income Fund, pursuant to the aforementioned conditions, at August 31, 2013 were as follows:
| Subject to Repayment |
Amount | by August 31, |
$ 26,451 | 2014 |
$ 50,757 | 2015 |
$ 43,219 | 2016 |
The Advisor owed the Income Fund $1,986 at February 28, 2014 for reimbursement of expenses.
Archer Stock Fund
The Advisor has contractually agreed to waive its management fee and/or reimburse expenses through December 31, 2016 so that total annual operating expenses, excluding brokerage fees and commissions, 12b-1 fees, borrowing costs (such as interest and dividend expenses on securities sold short), taxes, extraordinary expenses, and any indirect expenses (such as expenses incurred by other investment companies in which the Stock Fund invests) do not exceed 1.45% of the Stock Fund’s average daily net assets. For the six months ended February 28, 2014, the Advisor waived fees and/or reimbursed expenses of $23,933. Each waiver or reimbursement by the Advisor is subject to repayment by the Stock Fund within the three fiscal years following the fiscal year in which the particular waiver or reimbursement occurred, provided that the Stock Fund is able to make the repayment without exceeding the 1.45% expense limitation. Advisory fees waived and/or reimbursed expenses that may be subject to potential recoupment by the Advisor through August 31, 2016 totaled $129,948.
The amounts subject to repayment by the Stock Fund, pursuant to the aforementioned conditions, at August 31, 2013 were as follows:
| Subject to Repayment |
Amount | by August 31, |
$ 29,562 | 2014 |
$ 54,406 | 2015 |
$ 45,980 | 2016 |
The Stock Fund owed the Advisor $166 at February 28, 2014 for Advisory fees.
Distribution Plan
The Funds have adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that each Fund will pay its Advisor and/or any registered securities dealer, financial institution or any other person (a “Recipient”) a shareholder servicing fee aggregating 0.25% of the average daily net assets of each Fund in connection with the promotion and distribution of Fund shares or the provision of personal services to shareholders, including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, the printing and mailing of sales literature and servicing shareholder accounts. The Fund and/or its Advisor may pay all or a portion of these fees to any Recipient who renders assistance in distributing or promoting the sale of shares, or who provides certain shareholder services, pursuant to a written agreement. The Plan is a compensation plan, which means that compensation is provided regardless of 12b-1 expenses actually incurred. The Plan is not currently activated and the plan will not be activated through December 31, 2016 for the Balanced, Income, and Stock Funds.
NOTE 6. INVESTMENTS
Archer Balanced Fund
For the six months ended February 28, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were $2,904,468 and $2,805,362, respectively.
Archer Income Fund
For the six months ended February 28, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were $863,569 and $715,114, respectively.
Archer Stock Fund
For the six months ended February 28, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were $2,988,431 and $2,502,502, respectively.
NOTE 7. BENEFICIAL OWNERSHIP
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2(a)(9) of the Investment Company Act of 1940 as amended. As of February 28, 2014, First Clearing, LLC., for the benefit of it’s customers owned, in aggregate, approximately 66.05% of the voting securities of the Balanced Fund, approximately 81.46% of the voting securities of the Income Fund, and approximately 81.12% of the voting securities of the Stock Fund and may be deemed to control each of the respective Funds.
NOTE 8. TAX MATTERS
The Funds tax basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at August 31, 2013, the following represents the tax basis capital gains and losses:
|
| Balanced |
| Income |
| Stock |
|
| Fund |
| Fund |
| Fund |
|
|
|
|
|
|
|
Undistributed ordinary income |
| $ 129,881 |
| $ 31,481 |
| $ 38,982 |
|
|
|
|
|
|
|
Post-October capital loss deferrals |
|
|
|
|
|
|
Realized between 11/1/2012 and 8/31/2013* |
| $ -0- |
| $ 75,783 |
| $ 12,780 |
|
|
|
|
|
|
|
Capital Loss Carryforwards (a) |
|
|
|
|
|
|
Expiring 08/30/2017 |
| $ (516,669) |
| $ -0- |
| $ -0- |
08/30/2018 |
| $ (1,046,650) |
| $ -0- |
| $ -0- |
No Expiration – Short-Term |
| $ -0- |
| $ (88,886) |
| $ -0- |
|
| $ (1,563,319) |
| $ (88,886) |
| $ -0- |
|
|
|
|
|
|
|
As of February 28, 2014, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities for each of the Funds were as follows:
|
| Balanced |
| Income |
| Stock |
|
| Fund |
| Fund |
| Fund |
|
|
|
|
|
|
|
Gross unrealized appreciation on investment securities |
| $ 3,200,487 |
| $ 122,981 |
| $ 2,068,981 |
Gross unrealized depreciation on investment securities |
| $ (258,425) |
| $ (142,090) |
| $ (199,959) |
Net unrealized appreciation on investment securities |
| $ 2,942,062 |
| $ (19,109) |
| $ 1,869,022 |
|
|
|
|
|
|
|
Cost of investment securities (including short-term |
|
|
|
|
|
|
Investments)** |
| $ 15,408,552 |
| $ 6,652,712 |
| $ 7,441,512 |
* These deferrals are considered incurred in the subsequent tax year.
** The difference between the book cost and tax cost of investments represents disallowed wash sales for tax purposes.
(a) The capital loss carryforward will be used to offset any capital gains realized by the Fund in future years through the expiration date. The Fund will not make distributions from capital gains while a capital loss carryforward remains.
Permanent book and tax differences relating to shareholder distributions may result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain/loss. Undistributed net investment income and accumulated undistributed net realized gain/loss on investment transactions may include temporary book and tax differences which reverse in subsequent periods. Any taxable income or gain remaining at fiscal year end is distributed in the following year.
The Regulated Investment Company Modernization Act of 2010 generally allows capital losses incurred in a taxable year beginning after December 22, 2010 (post-enactment year) to be carried forward for an unlimited period to the extent not utilized. However, any capital loss carry-forward generated in a post-enactment year must be carried forward to offset subsequent year net capital gains before any capital loss carry-forward from a pre-enactment year can be used. This may increase the risk that a capital loss generated in a pre-enactment year will expire unutilized. Income and long-term capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principles generally accepted in the United States.
The Balanced, Income and Stock Funds paid the following distributions for the six months ended February 28, 2014 and year ended August 31, 2013:
Balanced Fund |
|
|
Six Months Ended | $ Amount | Tax Character |
2/28/2014 | $ 275,585 | Ordinary Income |
|
|
|
Year Ended | $ Amount | Tax Character |
8/31/2013 | $ 416,235 | Ordinary Income |
|
|
|
Income Fund |
|
|
Six Months Ended | $ Amount | Tax Character |
2/28/2014 | $ 135,846 | Ordinary Income |
|
|
|
Year Ended | $ Amount | Tax Character |
8/31/2013 | $ 169,842 | Ordinary Income |
|
|
|
Stock Fund |
|
|
Six Months Ended | $ Amount | Tax Character |
2/28/2014 | $ 272,350 | Short-Term Capital Gain |
2/28/2014 | $ 10,095 | Long-Term Capital Gain |
The Archer Funds | |||
Expense Illustrations | |||
February 28, 2014 (Unaudited) | |||
|
|
|
|
Expense Example | |||
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs (such as short-term redemption fees); and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund(s) and to compare these costs with the ongoing costs of investing in other mutual funds. | |||
| |||
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2013 through February 28, 2014). | |||
|
|
|
|
Actual Expenses | |||
The first line of the tables below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. | |||
|
|
|
|
Hypothetical Example for Comparison Purposes | |||
The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not such Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. | |||
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. | |||
|
|
|
|
Balanced Fund |
|
|
|
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period* |
| September 1, 2013 | February 28, 2014 | September 1, 2013 to February 28, 2014 |
|
|
|
|
Actual | $1,000.00 | $1,123.92 | $6.32 |
Hypothetical |
|
|
|
(5% Annual Return before expenses) | $1,000.00 | $1,018.84 | $6.01 |
|
|
|
|
* Expenses are equal to the Balanced Fund's annualized expense ratio of 1.20%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). | |||
|
|
|
|
Income Fund |
|
|
|
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period* |
| September 1, 2013 | February 28, 2014 | September 1, 2013 to February 28, 2014 |
|
|
|
|
Actual | $1,000.00 | $1,039.74 | $6.07 |
Hypothetical |
|
|
|
(5% Annual Return before expenses) | $1,000.00 | $1,018.84 | $6.01 |
|
|
|
|
* Expenses are equal to the Income Fund's annualized expense ratio of 1.20%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). | |||
|
|
|
|
|
|
|
|
Stock Fund |
|
|
|
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period* |
| September 1, 2013 | February 28, 2014 | September 1, 2013 to February 28, 2014 |
|
|
|
|
Actual | $1,000.00 | $1,208.41 | $7.94 |
Hypothetical |
|
|
|
(5% Annual Return before expenses) | $1,000.00 | $1,017.60 | $7.25 |
|
|
|
|
* Expenses are equal to the Stock Fund's annualized expense ratio of 1.45%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
THE ARCHER FUNDS
TRUSTEES AND OFFICERS
FEBRUARY 28, 2014 (UNAUDITED)
The Board of Trustees supervises the business activities of the Trust. Each Trustee serves as a trustee until termination of the Trust unless the Trustee dies, resigns, retires or is removed.
The following tables provide information regarding the Trustees and Officers.
Independent Trustees
Name, Address*, (Age), Position with Trust**, Term of Position with Trust | Principal Occupation During Past 5 Years and Other Directorships |
David Miller (66) Independent Trustee, January 2010 to present | General Securities Corp. – President; 1982-Present |
Donald G. Orzeske, J. D. (58) Independent Trustee, January 2010 to present | Goodin, Orzeske & Blackwell, P.C. - Attorney at Law – Shareholder - 2000-Present
|
* The address for each trustee is: 9000 Keystone Crossing, Suite 630, Indianapolis, IN 46240
** The Trust currently consists of 3 Funds.
Interested Trustees & Officers
Name, Address*, (Age), Position with Trust,** Term of Position with Trust | Principal Occupation During Past 5 Years and Other Directorships |
Troy Patton (46) Trustee & President, December 2009 to present | Frontier CPA Group – Managing Partner. 1996-2004 Archer Investment Corporation, Inc. – President. July 2005 – Present Patton and Associates, LLC – Managing Partner. January 2005 – Present |
Gregory Getts, (56) Treasurer, December 2009 to present | Mutual Shareholders Services, LLC – Principal Owner. January 1999 – present. |
C. Richard Ropka, Esq. (50) Secretary, December 2009 to present | Attorney - Law Office of C. Richard Ropka, LLC May 1, 2008 – present, Attorney - Rabil, Ropka, Kingett and Stewart, LLC January 1, 2004 – May 1, 2008 |
Sara Mahon (33) Chief Compliance Officer, December 2009 to present | Executive Assistant/Compliance, Archer Financial Advisors, Inc., 2006 – present, Executive Assistant/Compliance, Archer Balanced Fund (NASDAQ: ARCHX), 2006 – present; Executive Assistant, Frontier Investment Advisors/Fiducial, 2001 – 2006. |
* The address for each trustee and officer of the Trust is 9000 Keystone Crossing, Suite 630, Indianapolis, IN 46240
** The Trust currently consists of 3 Funds.
THE ARCHER FUNDS
ADDITIONAL INFORMATION
FEBRUARY 28, 2014 (UNAUDITED)
Information Regarding Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, are available without charge upon request by (1) calling the Fund at (800)238-7701 and (2) from Fund documents filed with the Securities and Exchange Commission ("SEC") on the SEC's website at www.sec.gov.
Information Regarding Portfolio Holdings
The Fund files a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q. The Fund’s first and third fiscal quarters end on November 30 and May 31. The Fund’s Form N-Q’s are available on the SEC’s website at http://sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room). You may also obtain copies by calling the Fund at 1-800-238-7701.
Information Regarding Statement of Additional Information
The Statement of Additional Information includes additional information about the Directors and is available without charge upon request, by calling toll free at 1-800-238-7701.
INVESTMENT ADVISOR
Archer Investment Corporation, Inc.
9000 Keystone Crossing, Suite 630
Indianapolis, IN 46240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Sanville & Company
1514 Old York Road
Abington, PA 19001
LEGAL COUNSEL
Law Office of C. Richard Ropka, LLC
215 Fries Mill Road
Turnersville, NJ 08012
CUSTODIAN
Huntington National Bank
41 South Street
Columbus, OH 43125
TRANSFER AGENT AND FUND ACCOUNTANT
Mutual Shareholder Services
8000 Town Centre Drive, Suite 400
Broadview Heights, OH 44147
This report is intended only for the information of shareholders or those who have received the Funds’ prospectus which contains information about the Funds’ management fee and expenses. Please read the prospectus carefully before investing.
Item 2. Code of Ethics Not applicable.
Item 3. Audit Committee Financial Expert Not applicable.
Item 4. Principal Accountant Fees and Services Not applicable.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments. Included in Report to Shareholders.
Item 7. Disclosure of Closed End fund Proxy Voting Policies/Procedures. Not applicable.
Item 8. Portfolio Managers of Closed-End Funds. Not applicable.
Item 9. Purchases of Equity Securities by Closed End Funds. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders. Not applicable.
Item 11. Controls and Procedures.
(a)
Disclosure Controls & Procedures. Principal executive and financial officers have concluded that Registrant’s disclosure controls & procedures are effective based on their evaluation as of a date within 90 days of the filing date of this report.
(b)
Internal Controls. There were no significant changes in Registrant’s internal controls of in other factors that could significantly effect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Item 12. Exhibits.
(a)(1)
EX-99.CODE ETH. Not Applicable.
(a)(2)
EX-99.CERT. Filed herewith.
(a)(3)
Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b)
EX-99.906CERT. Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Archer Investment Series Trust
By /s/Troy C. Patton
* Troy C. Patton
President and Trustee
Date April 28, 2014
* Print the name and title of each signing officer under his or her signature.