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: August 31, 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.
ANNUAL REPORT
THE ARCHER FUNDS
BALANCED FUND (ARCHX)
INCOME FUND (ARINX)
STOCK FUND (ARSKX)
AUGUST 31, 2014
ARCHER FUNDS
MANAGERS COMMENTARY
AUGUST 31, 2014 (UNAUDITED)
To Our Shareholders,
Archer Balanced Fund (ARCHX)
The Archer Balanced fund had a total return of 21.34% for the Year ended August 31, 2014 and 4.25% since inception (September 27, 2005) compared to a total return of 16.61% and 7.75% for the Dow Jones U.S. Moderate Relative Risk Index, over the same periods.
Performance Review
We have been very pleased with the performance of the Archer Balanced Fund for the past year. The Fund’s annual performance has been consistent throughout its tenure. The managers of the Fund, having stayed consistent with long-term value positions in equities, believe the conservative positions of this fund are appropriate for this style of fund. The managers continue to reinforce their positions by managing stocks in long-term value and high quality short-term duration securities. We continue to position the portfolio for what we believe is an inevitable rise in long-term interest rates by overweighting high quality, short- to intermediate-term bonds. We have taken this position for quite some time and although have not been correct on the long-term direction of interest rates, we continue to believe the reversion to a mean will put the 10 yr. US Treasury bond at approximately 3.5%. Even with interest rates remaining near historic lows, price insensitive buyers flocked to the perceived relative safety of U.S. debt obligations driven by growing fear in the markets of other nations. We continue to believe that the United States will be forced to address its own debt problems which will add additional upward pressure on interest rates. We are comfortable avoiding the Treasury bandwagon and believe it is prudent to avoid attempts to capture short-term performance in an effort to create long-term value for our fellow shareholders. Although the adage that broken clocks are also right twice a day, we believe once the clock gets fixed, rates will rise and our clocks will all be reset.
With this being said, our management team feels it is important to keep a portfolio of stocks and bonds that we feel will weather a downturn instead of chasing any upside. This reduced risk should help us outperform for the next downturn in equities.
Equity Portfolio
Similar to prior year, we have continued to see the market perform well and corporate profits and cash flows have continued to increase. Just like we mentioned in last year’s shareholder letter, the latest four quarters has produced by some accounts one of the healthiest earnings Wall Street has ever seen.
·
We believe the Technology, Consumer Defensive, and Industrials will provide for a solid offense while enabling us to play defense if the market turns adversarial.
We will continue to adjust our equity portfolio to changing market conditions and look to reduce risk in the overall portfolio by maintaining a significant weighting in Industrials, Technology, Consumer Defensives, and Basic Materials.
Fixed-Income Portfolio
We will reiterate our position from the prior year: “We have remained in much the same position as the prior year and have added a few shorter duration fixed income positions as some have matured during the last year. We continue to remain short-term with our holdings. Although it is becoming quite clear that the general level of interest rates may stay low for a
ARCHER FUNDS
MANAGERS COMMENTARY (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
couple of years still to come. We to continue to focus on value, sustainability, and patience and we believe it is prudent to avoid strategies that risk the destruction of principal in order to capture short-term income. With the end of Quantitative Easing on the horizon, the fight over the Debt Ceiling and the level of debt our Country faces, we believe staying invested in high-quality, short-term instruments remains our focus. Interest rates will rise at some point.”
Current Strategy
We will continue to monitor the performance of each security on a case by case basis putting valuations on the securities and adjusting the portfolio likewise. There will be times when we discontinue holding a specific security if we feel the valuation is beyond a reasonable valuation of the company. There may be companies that have positive outlooks, but we feel the valuation becomes too high to justify staying in at those levels. If we feel the valuation plays to a “buying” level, then we may re-enter into stocks we have once sold.
While investing in the markets, it is important to focus on buying companies with long-term horizons, using a strict fundamental valuation of an individual company and not buying sectors because they are currently hot. All shareholders are encouraged to invest in the Fund over a long-term horizon.
The fund managers of the Archer Balanced Fund will continue to invest their own dollars in the Fund’s we manage to better align our interests with those we serve. Our investment strategy does not change and it is; be long-term in nature. We believe this portfolio is well positioned and we are confident that our disciplined process will reward our shareholders going forward. As always, we welcome any comments or questions from shareholders at any time.
The views expressed are those of the investment advisor as of August 31, 2014 and are not intended as a forecast or investment recommendation.
Archer Stock Fund (ARSKX)
The Archer Stock Fund posted a gain of 28.53% for the year ended August 31, 2014 and 11.79% since inception of March 11, 2011. This compared to a gain of 25.25% for the S&P 500 Index and 15.8% since inception.
Performance Review
The Fund opened in March of 2011 and thus did not get the benefit of the upward market trend in the first two months of 2011. However, we feel extremely comfortable with our positions and relative performance to the benchmarks. The Stock Fund is a go anywhere Fund seeking to maximize capital appreciation by investing in the most attractive equity investment opportunities regardless of company size, sector, industry, or country domicile. We are comfortable with the equity positions as of 8/31/2014. As of August 31, 2014 we have selected 50 equity positions we believe will outpace the S&P 500 index. This in turn will ultimately reduce our turnover of the portfolio as we plan to hold these positions until they reach beyond their Fair Market Values. We are overweight in Technology, Energy, Financial Services, and Consumer Defensive stocks and related industries. We continue to seek out positions with strong balance sheets of companies having upward revised estimates and/or strong relative performance which have the opportunity to outperform the indices over the long-term.
ARCHER FUNDS
MANAGERS COMMENTARY (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
Archer Income Fund (ARINX)
The Archer Income Fund had a gain of 7.79% for the year ended August 31, 2014 and 4.15% from the date of inception on March 11, 2011 compared to a gain of 5.66% and 4.33% for the year ended and since inception for the Barclay’s Capital US Aggregate Bond Index and 6.12% and 5.08% for the year ended and since inception for the Barclay’s Intermediate Credit Index.
Performance Review
The Fund opened in March of 2011 and has turned in positive returns during what we would characterize as a volatile market for bond investors since the date of inception. The bond market continues to present investors with many challenges. Fund performance relative to the Aggregate Index since inception has suffered due to our overweight position in corporate debt. We have thought for some time that interest rates would ultimately rise with the backdrop of Washington Politics, end to “QE3”, and the sequestration which began in 2013. We expect rates to continue to rise as they have been artificially lowered by government intervention for several years.
We believe one advantage we have over many of our counterpart funds is we plan to hold our positions until they mature. We have not seen the outflow as many others competitors as reported in the news. In fact, we continue to have inflows into all our funds which has given us a distinct advantage of not having to liquidate positions at a gain or loss. In fact, with the anticipation of yields rising, we continue to look to additional holdings and are buyers of shorter-term duration debt with the intention to collect the coupons until maturity. This should bode well for our shareholders. We believe in the positions we hold and continue to personally own the fund in our and our family accounts.
We continue to seek attractive long-term investment opportunities primarily in higher-yielding, segments of the investment grade corporate markets. While we do not envision a sudden spike in interest rates, nor a default which would directly impact our holdings, we are mindful of the “tail risk” and continue to position the fixed income portfolio to protect against interest-rate, default and currency risks.
![[archerncsr002.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr002.gif)
Troy C. Patton, CPA/ABV
President
ARCHER BALANCED FUND
PERFORMANCE ILLUSTRATION
AUGUST 31, 2014 (UNAUDITED)
Cumulative Performance Comparison of $10,000 Investment Since Inception *
![[archerncsr004.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr004.gif)
| | |
Average Annual Total Returns | |
For the Periods Ended August 31, 2014 |
| Archer Balanced Fund | Dow Jones Moderate U.S. Portfolio Index |
1 Year | 21.34% | 16.61% |
3 Year | 11.78% | 13.71% |
5 Year | 9.41% | 12.76% |
Since Inception | 4.25% | 7.75% |
Value | $ 14,508 | $ 19,193 |
*This chart assumes an initial investment of $10,000 made on September 27, 2005.
Past Performance does not guarantee future results.
Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
The Dow Jones Moderate Portfolio is a member of the Dow Jones Relative Risk Indexes that measures the performance of conservative, moderate and aggressive portfolios based on incremental levels of potential risk. The indexes are designed to systematically measure various levels of risk relative to the risk of a U.S. all-stock index. Investors can identify an appropriate benchmark as the index that has the most similar historic risk characteristics.
Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call (800) 238-7701.
ARCHER INCOME FUND
PERFORMANCE ILLUSTRATION
AUGUST 31, 2014 (UNAUDITED)
Cumulative Performance Comparison of $10,000 Investment Since Inception *
![[archerncsr006.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr006.gif)
| | | |
Average Annual Total Returns | | |
For the Periods Ended August 31, 2014 |
| Archer Income Fund | Barclay's Capital U.S. Aggregate Bond Index | Barclay’s Intermediate Credit Index |
1 Year | 7.79% | 5.66% | 6.12% |
3 Year | 3.52% | 3.26% | 4.17% |
Since Inception | 4.15% | 4.33% | 5.08% |
Value | $ 11,520 | $ 11,587 | $ 11,879 |
*This chart assumes an initial investment of $10,000 made on March 11, 2011.
Past Performance does not guarantee future results.
Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
Returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
The Barclay's Capital U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS. The U.S. Aggregate Index was created in 1986.
The Barclay's Capital Intermediate Credit Index consists of dollar-denominated, investment-grade, publicly-issued securities with a maturity of between one and ten years and that are issued by both corporate issuers and non-corporate issuers.
Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call (800) 238-7701.
ARCHER STOCK FUND
PERFORMANCE ILLUSTRATION
AUGUST 31, 2014 (UNAUDITED)
Cumulative Performance Comparison of $10,000 Investment Since Inception *
![[archerncsr008.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr008.gif)
| | | |
Average Annual Total Returns | | |
For the Periods Ended August 31, 2014 | |
| Archer Stock Fund | S&P 500 Index | S&P 400 Midcap Index |
1 Year | 28.53% | 25.25% | 23.19% |
3 Year | 17.02% | 20.59% | 19.73% |
Since Inception | 11.79% | 15.80% | 14.42% |
Value | $ 14,734 | $ 16,655 | $ 15,975 |
*This chart assumes an initial investment of $10,000 made on March 11, 2011.
Past Performance does not guarantee future results.
Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
Returns shown do not reflect taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
The Standard & Poor’s 500 Index (“S&P 500”) is a market value-weighted index, representing the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange. The S&P 500 is a widely recognized, unmanaged index of common stock prices. The figures for the S&P 500 reflect all dividends reinvested but do no reflect any deductions for fees, expenses or taxes.
The Standard & Poor's 400 Index ("S&P 400") is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. The Index is composed of 400 medium capitalization domestic common stocks and is representative of a broader market range of securities than is found in the Fund’s portfolio. Individuals cannot invest directly in the Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call (800) 238-7701.
ARCHER BALANCED FUND
PORTFOLIO ILLUSTRATION
AUGUST 31, 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.
![[archerncsr010.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr010.gif)
ARCHER INCOME FUND
PORTFOLIO ILLUSTRATION
AUGUST 31, 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.
![[archerncsr012.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr012.gif)
ARCHER STOCK FUND
PORTFOLIO ILLUSTRATION
AUGUST 31, 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.
![[archerncsr014.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr014.gif)
ARCHER BALANCED FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
COMMON STOCKS - 67.00% | |
| | | |
Air Courier Services - 2.85% | |
4,000 | | FedEx Corp. | $ 591,520 |
| | | |
Air Transportation, Scheduled - 1.87% | |
10,000 | | American Airlines Group, Inc. | 388,810 |
| | | |
Aircraft - 4.53% | |
4,000 | | Boeing Co. | 507,200 |
4,000 | | United Technologies Corp. | 431,920 |
| | | 939,120 |
Beverages - 1.56% | |
3,500 | | PepsiCo, Inc. | 323,715 |
| | | |
Cable & Other Pay Television Services - 3.03% | |
7,000 | | Walt Disney Co. | 629,160 |
| | | |
Electronic Computers - 2.77% | |
5,600 | | Apple, Inc. | 574,000 |
| | | |
Farm Machinery & Equipment - 1.26% | |
3,100 | | Deere & Co. | 260,679 |
| | | |
Financial Services - 1.94% | |
4,500 | | American Express Co. | 402,975 |
| | | |
Fire, Marine & Casualty Insurance - 1.10% | |
3,700 | | The Allstate Corp. | 227,513 |
| | | |
Food -Retail - 1.83% | |
4,900 | | Nestle S.A. ADR | 380,093 |
| | | |
Footwear - 0.76% | |
2,000 | | Nike, Inc. | 157,100 |
| | | |
Hospital & Medical Service Plans - 1.96% | |
3,500 | | WellPoint, Inc. | 407,785 |
| | | |
Mining Machinery & Equipment (No Oil & Gas Field Machinery & Equipment) - 0.91% | |
3,000 | | Joy Global, Inc. | 189,450 |
ADR - American Depository Receipt
The accompanying notes are an integral part of these financial statements.
ARCHER BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
National Commercial Banks - 5.01% | |
4,500 | | JPMorgan Chase & Co. | $ 267,525 |
9,000 | | US Bancorp. | 380,520 |
7,600 | | Wells Fargo & Co. | 390,944 |
| | | �� 1,038,989 |
Natural Gas Transmission - 2.13% | |
11,000 | | Kinder Morgan, Inc. | 442,860 |
| | | |
Oil & Gas Filed Machinery & Equipment - 1.67% | |
4,000 | | National Oilwell Varco, Inc. | 345,720 |
| | | |
Oil & Gas Filed Services, NBC - 1.48% | |
2,800 | | Schlumberger Ltd. | 306,992 |
| | | |
Pharmaceutical Preparations - 3.97% | |
5,400 | | Celgene Corp. * | 513,108 |
3,000 | | Johnson & Johnson | 311,190 |
| | | 824,298 |
Petroleum Refining - 1.32% | |
3,000 | | Marathon Petroleum Corp. | 273,030 |
| | | |
Railroads, Line-Haul Operating - 1.52% | |
3,000 | | Union Pacific Corp. | 315,810 |
| | | |
Retail - Drug Stores - 3.06% | |
8,000 | | CVS Caremark Corp. | 635,600 |
| | | |
Retail - Eating Places - 1.80% | |
4,800 | | Starbucks Corp. | 373,488 |
| | | |
Retail - Lumber & Other Building Material Dealers - 1.71% | |
3,800 | | The Home Depot, Inc. | 355,300 |
| | | |
Retail - Variety Stores - 1.45% | |
5,000 | | Target Corp. | 300,350 |
| | | |
Search, Detection, Navigation, Guidance - 1.86% | |
4,000 | | Raytheon Co. | 385,360 |
| | | |
Services - Business Services - 1.48% | |
3,800 | | Accenture Plc. Class A | 308,028 |
* Non-income producing
The accompanying notes are an integral part of these financial statements.
ARCHER BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
Services - Computer Programming & Data - 2.53% | |
900 | | Google, Inc. Class A * | $ 524,124 |
| | | |
Services - General Medical & Surgical Hospitals, NEC - 2.93% | |
8,700 | | HCA Holdings, Inc. * | 607,434 |
| | | |
Services - Prepackaged Software - 1.97% | |
9,000 | | Microsoft Corp. | 408,870 |
| | | |
Soap, Detergent, Cleaning Preparations, Perfumes, Cosmetics - 1.60% | |
4,000 | | Procter & Gamble Co. | 332,440 |
| | | |
Surgical & Medical Instruments - 1.70% | |
4,700 | | Baxter International, Inc. | 352,406 |
| | | |
Telephone Communications - 1.44% | |
6,000 | | Verizon Communications, Inc. | 298,920 |
| | | |
TOTAL FOR COMMON STOCKS (Cost $10,098,673) - 67.00% | 13,901,939 |
| | | |
CORPORATE BONDS - 7.41% (a) | |
| | | |
Banks & Financial Institutions - 0.24% | |
50,000 | | Societe Generale, 1.4162%, 4/22/20 ** | 50,003 |
| | | |
Bituminous Coal & Lignite Surface Mining - 0.25% | |
50,000 | | Peabody Energy Corp., 7.875%, 11/1/26 | 51,500 |
| | | |
Distribution/Wholesale - 0.25% | |
50,000 | | Tech Data Corp., 3.75%, 9/21/17 | 52,409 |
| | | |
Finance Services - 0.49% | |
100,000 | | Block Financial Corp., 5.125%, 10/30/14 | 100,590 |
| | | |
Integrated Oils - 0.74% | |
150,000 | | Murphy Oil Corp., 4.00%, 6/01/22 | 153,564 |
| | | |
Miscellaneous Business Credit Institution - 0.48% | |
100,000 | | Ford Motor Credit Co. LLC., 1.5141%, 11/20/18 ** | 99,715 |
* Non-income producing
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
(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.
The accompanying notes are an integral part of these financial statements.
ARCHER BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
Printed Circuit Boards - 0.26% | |
50,000 | | Jabil Circuit, Inc., 5.625%, 12/15/20 | $ 54,182 |
| | | |
Property & Casualty Insurance - 0.82% | |
140,000 | | Zurich Reinsurance Centre Holdings, Inc., 7.125%, 10/15/23 | 170,797 |
| | | |
Radio Telephone Communications - 0.50% | |
100,000 | | T-Mobile USA, Inc., 6.464%, 4/28/19 | 104,250 |
| | | |
Real Estate - 0.52% | |
100,000 | | Aurora Military Housing, 5.35%, 12/15/25 | 108,500 |
| | | |
Retail - Apparel & Accessory Store - 0.52% | |
100,000 | | Hanesbrands, Inc., 6.375%, 12/15/20 | 107,375 |
| | | |
Retail - Department Store - 0.82% | |
150,000 | | Dillards, Inc., 7.13%, 8/1/18 | 171,000 |
| | | |
Retail - Grocery Stores - 0.24% | |
50,000 | | Safeway, Inc., 4.75%, 12/1/21 | 50,593 |
| | | |
Security Broker Dealers - 0.25% | |
50,000 | | Morgan Stanley & Co., 3.00%, 8/31/15 ** | 50,875 |
| | | |
Services - General Medical & Surgical Hospitals - 0.53% | |
100,000 | | HCA Holdings, Inc., 6.25%, 2/15/20 | 108,750 |
| | | |
Sugar & Confectionery Products - 0.50% | |
100,000 | | WM. Wrigley Jr. Co., 4.65%, 7/15/15 | 103,471 |
| | | |
TOTAL FOR CORPORATE BONDS (Cost $1,515,255) - 7.41% | 1,537,574 |
| | | |
EXCHANGE TRADED FUNDS - 4.88% | |
1,000 | | iShares Barclays 20+ Year Treasury Bond Fund | 119,050 |
1,000 | | iShares iBoxx $ High Yield Corporate Bond | 94,240 |
1,500 | | iShares Floating Rate Bond Fund | 76,200 |
1,000 | | iShares Intermediate Credit Bond | 110,400 |
3,000 | | PIMCO 0-5 Year High Yield Corporate Bond Index | 316,920 |
500 | | PIMCO Enhanced Short Maturity | 50,720 |
6,000 | | PowerShares Senior Loan Port Fund | 148,380 |
1,200 | | Vanguard Short-Term Corporate Bond Index | 96,288 |
TOTAL FOR EXCHANGE TRADED FUNDS (Cost $1,003,447) - 4.88% | 1,012,198 |
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
EXCHANGE TRADED NOTE - 1.72% | |
6,600 | | JPMorgan Alerian MLP Index ETN | $ 355,938 |
TOTAL FOR EXCHANGE TRADED NOTE (Cost $267,172) - 1.72% | 355,938 |
| | | |
MUNICIPAL BONDS - 6.47% (a) | |
40,000 | | Akron, OH Economic Dev., 5.50%, 12/1/15 | 41,828 |
25,000 | | Belding, MI Area Schools, 6.15%, 5/1/2024 | 26,942 |
35,000 | | Bryan County, OK Indpt School District, 6.554%, 12/1/29 | 39,477 |
45,000 | | California St. University Revenue Bond Series B, 2.785%, 11/1/22 | 45,514 |
100,000 | | Chicago, IL Build America Bonds - Series B, 4.564%, 12/1/20 | 103,435 |
70,000 | | Gary, IN Community School Bldg., 7.50%, 2/1/29 | 77,725 |
99,000 | | Georgia Loc. Govt., 4.75%, 6/1/28 | 105,596 |
30,000 | | Illinois St., 5.877%, 3/1/19 | 33,554 |
55,000 | | Illinois St. Build America Bonds, 4.85%, 7/1/15 | 56,665 |
50,000 | | Kalamazoo, MI Bldg Auth, 5.40%, 10/1/25 | 51,431 |
25,000 | | Katy Texas Schools, 5.999%, 2/15/2030 | 28,548 |
100,000 | | Kern Cnty, CA Pension Oblg., 5.25%, 8/15/19 | 83,902 |
55,000 | | Moncks Corner, SC Regl Recreation Corp. Build America Bonds, 6.299%, 12/01/30 | 58,081 |
50,000 | | Reeves Cnty, TX Cops, 5.00%, 12/1/16 | 51,814 |
60,000 | | Reeves Cnty, TX Cops, 6.375%, 12/1/21 | 64,988 |
40,000 | | Richland Bean Blossom, IN Sch. Bldg. Corp., 5.75%, 1/15/24 | 43,377 |
70,000 | | Saint Clair Cnty, IL School District., 4.00%, 1/1/21 | 69,572 |
25,000 | | Sangamon Cnty, IL School District, 4.00%, 2/1/15 | 25,345 |
25,000 | | Scago, SC Public Facs Corp. for Georgetown Cnty, 6.75%, 12/1/29 | 28,007 |
25,000 | | Sedona, AZ Wastewater, 0.00%, 7/1/21 | 20,049 |
222,000 | | Tobacco Settlement Auth Iowa, 6.50%, 6/1/23 | 220,950 |
60,000 | | University Enterprises Inc. CA, 5.25%, 10/1/20 | 65,242 |
TOTAL FOR MUNICIPAL BONDS (Cost $1,315,442) - 6.47% | 1,342,042 |
| | | |
STRUCTURED NOTES - 3.37% (a) | |
100,000 | | Barclays Bank Plc., 11.00%, 5/14/29 | 100,000 |
93,000 | | Citigroup, Inc., 3.00%, 12/23/19 | 97,665 |
100,000 | | International Finance Corp., 2.00%, 11/15/22 | 100,016 |
100,000 | | JP Morgan Chase Bank, 10.50%, 1/23/29 ** | 89,990 |
50,000 | | Morgan Stanley, 3.00%, 11/9/19 ** | 51,562 |
200,000 | | Suntrust Bank, Atlanta, GA, 0.00%, 9/22/14 | 260,961 |
TOTAL FOR STRUCTURED NOTES (Cost $647,332) - 3.37% | 700,194 |
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
(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.
The accompanying notes are an integral part of these financial statements.
ARCHER BALANCED FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
REAL ESTATE INVESTMENT TRUSTS - 2.64% | |
10,000 | | Duke Realty Corp. | $ 186,000 |
500 | | PS Business Parks Inc. Series T, PFD 6.00%, 12/31/49 | 12,415 |
2,000 | | Public Storage | 350,360 |
TOTAL FOR REAL ESTATE INVESTMENT TRUSTS (Cost $470,855) - 2.64% | 548,775 |
| | | |
PREFERRED SECURITIES - 1.29% | |
3,000 | | PNC Financial Services Group, Inc. Series Q, 5.375%, 12/31/49 | 70,320 |
2,000 | | Public Storage, Series P, 6.50%, 12/31/49 | 52,600 |
2,000 | | QWest Corp., 6.125%, 6/1/53 | 47,620 |
2,000 | | US Cellular Corp., PFD 6.95%, 5/15/60 | 50,760 |
2,000 | | Wells Fargo & Co. Series P, 5.25%, 12/31/49 | 47,100 |
TOTAL FOR PREFERRED SECURITIES (Cost $274,299) - 1.29% | 268,400 |
| | | |
SHORT TERM INVESTMENT - 5.92% | |
1,229,015 | | Fidelity Institutional Money Market Portfolio 0.09% ** (Cost $1,229,015) | 1,229,015 |
| | | |
TOTAL INVESTMENTS (Cost $16,821,490) - 100.70% | 20,896,075 |
| | | |
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.70)% | (144,600) |
| | | |
NET ASSETS - 100.00% | $20,751,475 |
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
CORPORATE BONDS - 36.32% (a) | |
| | | |
Aerospace/Defense - Major Diversified - 1.04% | |
75,000 | | Exelis, Inc. 5.55%, 10/01/21 | $ 82,174 |
| | | |
Banks & Financial Institutions - 1.21% | |
50,000 | | JPMorgan Chase & Co., 10.50%, 1/23/29 ** | 44,995 |
50,000 | | Societe Generale, 1.3816%, 4/22/20 (France) ** | 50,003 |
| | | 94,998 |
Bituminous Coal & Lignite Surface Mining - 0.65% | |
50,000 | | Peabody Energy Corp., 7.875%, 11/1/26 | 51,500 |
| | | |
Brewery - 1.38% | |
250,000 | | Ambev Intl. Finance Co., 9.50%, 7/24/17 (Cayman Islands) ** | 108,400 |
| | | |
Commercial Banks - Western US - 0.64% | |
50,000 | | Barclays Bank Plc., 11.00%, 5/14/29 | 50,000 |
| | | |
Commercial Service - Finance - 0.89% | |
800,000 | | GE Capital Corp., 8.87%, 6/02/18 | 69,920 |
| | | |
Computer & Office Equipment - 1.38% | |
100,000 | | Hewlett-Packard, 4.375%, 9/15/21 | 108,229 |
| | | |
Container & Packaging - 0.66% | |
50,000 | | Ball Corp. 5.00%, 3/15/22 | 51,937 |
| | | |
Consumer Products - 0.68% | |
50,000 | | Avon Products, Inc., 5.75%, 3/01/18 | 53,391 |
| | | |
Distribution/Wholesale - 2.01% | |
100,000 | | Ingram Micro, Inc., 5.00%, 8/10/22 | 105,880 |
50,000 | | Tech Data Corp., 3.75%, 9/21/17 | 52,409 |
| | | 158,289 |
Electric & Other Services Combined - 1.99% | |
50,000 | | CMS Energy, Inc., 6.25%, 2/01/20 | 59,059 |
100,000 | | PPL Energy Supply LLC., 4.6%, 12/15/21 | 97,340 |
| | | 156,399 |
Finance Services - 0.62% | |
50,000 | | Morgan Stanley, 4.90%, 2/23/17 | 49,092 |
(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 August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
Guided Missiles & Space Vehicles & Parts - 1.46% | |
100,000 | | Alliant Techsystems, Inc., 6.875%, 9/15/20 | $ 114,584 |
| | | |
Medical - Generic Drugs - 1.11% | |
75,000 | | Watson Pharmaceuticals, Inc. 6.125%, 8/15/19 | 87,717 |
| | | |
Metal Mining - 1.21% | |
100,000 | | Cliffs Natural Resources, Inc., 4.875%, 4/01/21 | 94,973 |
| | | |
Miscellaneous Business Credit Institution - 1.25% | |
50,000 | | Ford Credit Canada Ltd., 7.50%, 8/18/15 (Canada) | 48,248 |
50,000 | | Ford Motor Credit Co. LLC., 1.4821%, 11/20/18 ** | 49,857 |
| | | 98,105 |
Multimedia - 0.70% | |
50,000 | | Time Warner Inc., 4.75%, 3/29/21 | 55,418 |
| | | |
Oil Company - Exploration & Production - 2.11% | |
100,000 | | Southwestern Energy Co., 7.125%, 10/10/17 | 114,234 |
50,000 | | Whiting Petroleum Corp., 6.50%, 10/01/18 | 51,688 |
| | | 165,922 |
Petroleum Refining - 0.66% | |
50,000 | | Frontier Oil, 6.875%, 11/15/18 | 52,188 |
| | | |
Printed Circuit Boards - 0.69% | |
50,000 | | Jabil Circuit, 5.625%, 12/15/20 | 54,182 |
| | | |
Property & Casualty Insurance - 0.78% | |
50,000 | | Zurich Reinsurance Centre Holdings, 7.125%, 10/15/23 | 60,999 |
| | | |
Radio Telephone Communications - 1.32% | |
100,000 | | T Mobile US, Inc., 6.464%, 04/28/19 | 104,250 |
| | | |
Real Estate - 1.38% | |
100,000 | | Aurora Military Housing LLC., 5.35%, 12/15/25 | 108,500 |
| | | |
Retail - Apparel & Accessory Stores - 1.36% | |
100,000 | | Hanesbrands, Inc., 6.375%, 12/15/20 | 107,375 |
| | | |
Retail - Department Stores - 1.94% | |
35,000 | | Dillards, Inc., 7.75%, 7/15/26 | 38,850 |
100,000 | | Dillards, Inc., 7.13%, 8/1/18 | 114,000 |
| | | 152,850 |
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| |
Retail - Discretionary - 1.27% | |
100,000 | | Staples, Inc., 4.375%, 1/12/23 | $ 100,204 |
| | | |
Security Broker Dealers - 0.65% | |
50,000 | | Morgan Stanley & Co., 3.00%, 8/31/15 ** | 50,875 |
| | | |
Services-General Medical & Surgical Hospitals, Nec - 1.38% | |
100,000 | | HCA Holdings, Inc., 6.25%, 2/15/21 | 108,750 |
| | | |
State Commercial Banks - 0.66% | |
50,000 | | United Comm BK Blairsvll, GA, 6.00%, 8/13/18 (a) | 51,875 |
| | | |
Steel Works, Blast Furnaces, Rolling Mills (Coke Ovens) - 0.98% | |
75,000 | | Arcelormittal, 3.75%, 3/1/16 | 77,340 |
| | | |
Supranational Bank - 0.64% | |
50,000 | | International Finance Corp., 2.00%, 11/15/22 ** | 50,008 |
| | | |
Telephone Communications (No Radio Telephone) - 0.80% | |
50,000 | | Indiana Bell Tel Co. Inc., 7.30%, 8/15/26 | 62,750 |
| | | |
Television Broadcasting Stations - 0.82% | |
54,000 | | CBS Broadcasting, Inc. 7.125%, 11/1/23 | 64,160 |
| | | |
TOTAL FOR CORPORATE BONDS (Cost $2,835,224) - 36.32% | 2,857,354 |
| | | |
EXCHANGE TRADED FUNDS - 14.89% | |
1,000 | | iShares Barclays 20+ Year Treasury Bond | 119,050 |
800 | | iShares Barclays Intermediate Credit Bond | 88,320 |
2,000 | | iShares Floating Rate Bond | 101,600 |
1,000 | | iShares iBoxx $ Investment Grade Corp Bond | 120,580 |
500 | | iShares JPMorgan USD Emerging Markets Bond | 57,815 |
1,000 | | PIMCO Enhanced Short Maturity | 101,440 |
1,500 | | PIMCO 0-5 Year High Yield Corp Bond Index | 158,460 |
3,000 | | PowerShares Build America Bond | 90,120 |
6,000 | | PowerShares Preferred | 87,900 |
5,000 | | PowerShares Senior Loan Port | 123,650 |
1,400 | | Vanguard Intermediate-Term Corp. Bond Idx ETF | 122,010 |
TOTAL FOR EXCHANGE TRADED FUNDS (Cost $1,119,661) - 14.89% | 1,170,945 |
(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 August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
EXCHANGE TRADED NOTE - 1.18% | |
2,000 | | UBS ETRACS Alerian MLP Infrastucture Index | $ 92,440 |
TOTAL FOR EXCHANGE TRADED NOTE (Cost $90,017) - 1.18% | 92,440 |
| | | |
MUNICIPAL BONDS - 25.91% | |
25,000 | | Brier Creek, IN School Bldg. Corp., 6.08%, 7/15/24 | 27,759 |
35,000 | | Caddo County OK Gov't Bldg., 5.858%, 9/01/25 | 36,273 |
50,000 | | Chicago, IL Build America Bonds - Series B, 4.564%, 12/1/20 (a) | 51,718 |
60,000 | | City of Akron OH, 5.50%, 12/01/15 | 62,743 |
25,000 | | City of Auburndale FL, 4.30%, 12/01/26 | 26,178 |
30,000 | | Cleveland, OH Income Tax Revenue Build America Bonds, 6.06%, 10/1/26 | 34,656 |
50,000 | | County of Clark NV, 6.36%, 11/1/24 | 58,468 |
50,000 | | County of Reeves TX, 5.00%, 12/1/16 | 51,814 |
25,000 | | County of Reeves TX, 6.75%, 12/01/19 | 25,716 |
40,000 | | County of Reeves TX, 6.375%, 12/21/21 | 43,325 |
50,000 | | Dickinson County MI, 4.80%, 11/01/18 | 50,304 |
90,000 | | Erie County NY Tobacco Asset Corp, 6.00%, 6/1/28 | 83,549 |
35,000 | | Evansville, IN Redevelopment Authority, 6.15%, 2/01/24 | 39,726 |
60,000 | | Evansville, IN Redevelopment BAB, 6.86%, 2/01/29 | 68,863 |
25,000 | | Fresno County, CA Pension, Series A, 4.928%, 8/15/19 | 25,281 |
50,000 | | Georgia Local Government, 4.75%, 6/1/28 | 53,331 |
40,000 | | Hoboken NJ Services, 5.33%, 2/01/18 | 42,278 |
65,000 | | Hudson County, NJ 6.89%, 3/01/26 | 77,033 |
50,000 | | Illinois St. Build America Bonds, 4.85%, 7/1/15 | 51,514 |
93,000 | | Iowa Tobacco Settlement Authority, 6.50%, 6/1/23 | 92,560 |
50,000 | | Louisiana State Local Gov't Envt, 5.75%, 9/01/2019 | 51,301 |
50,000 | | Macomb, MI Interceptor Drain Dist Build America Bonds, Series A, 4.95%, 5/1/25 | 52,720 |
25,000 | | Missouri State Health & Educational Fac., 5.80%, 10/01/23 | 26,895 |
25,000 | | Mountain Iron-Buhl, MN Indep Sch Dist, Series A, 6.30%, 2/1/19 | 29,180 |
75,000 | | Nassau County, NY Series F, 6.80%, 10/01/27 | 87,624 |
25,000 | | Oregon State Sch Brds Assn Pension, Series B, 5.45%, 6/30/24 | 29,041 |
75,000 | | Public Finance Authority, WI 5.75%, 6/1/23 | 76,195 |
30,000 | | Saint Clair County, IL School District No. 189 East St. Louis, 4.00%, 1/1/21 | 29,816 |
50,000 | | State of Illinois, 5.665%, 3/1/18 | 55,401 |
70,000 | | State of Illinois, 5.877%, 3/1/19 | 78,293 |
50,000 | | State of Illinois, 6.200%, 7/01/21 | 56,176 |
75,000 | | State of Illinois, 4.95%, 6/1/23 | 79,862 |
110,000 | | TSACS Inc., NY 4.75%, 6/1/22 | 109,429 |
100,000 | | University of Central Florida, 5.125, 10/01/20 | 106,416 |
35,000 | | Van Buren MI Public Schools Build America Bonds, 6.43%, 5/1/29 | 38,467 |
(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.
The accompanying notes are an integral part of these financial statements.
ARCHER INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
MUNICIPAL BONDS - (Continued) | |
15,000 | | Virginia Commonwealth Build American Bonds, 5.750%, 5/15/28 | $ 16,912 |
75,000 | | Westfield County IN Option Income Tax Revenue 3.50%, 11/01/16 | 75,099 |
35,000 | | Worcester County, MD 2.50%, 12/01/18 | 36,550 |
TOTAL FOR MUNICIPAL BONDS (Cost $1,994,175) - 25.91% | 2,038,466 |
| | | |
PREFERRED SECURITIES - 5.37% | |
2,000 | | Citigroup, Inc., PFD 5.80%, 12/31/49 Series C | 47,960 |
50,000 | | Edison International, PFD 6.25%, 8/01/49 Series E ** | 54,375 |
2,500 | | First Republic Bank, PFD 6.70%, 12/31/49 Series A | 65,475 |
3,000 | | PNC Financial Services Group, Inc., 5.375%, 12/31/49 Series Q | 70,320 |
2,500 | | QWest Corp., 6.125%, 6/1/53 | 59,525 |
4,000 | | US Cellular Corp., PFD 6.95%, 5/15/60 | 101,520 |
1,000 | | Wells Fargo & Co., PFD 5.25%, 12/31/49 Series P | 23,550 |
TOTAL FOR PREFERRED SECURITIES (Cost $418,833) - 5.37% | 422,725 |
| | | |
REAL ESTATE INVESTMENT TRUSTS - 4.78% | |
2,500 | | Digital Realty Trust, PFD 6.625%, Series F | 63,000 |
2,000 | | Digital Realty Trust, PFD 7.375% Series H | 52,000 |
5,500 | | Duke Realty Corp., PFD 6.50%, 12/31/49 Series K | 137,775 |
3,000 | | Public Storage, PFD 5.20%, 12/31/49 Series W | 69,540 |
2,000 | | Regency Centers Corp., PFD 6.625%, 12/31/49, Series 6 | 53,420 |
TOTAL FOR REAL ESTATE INVESTMENT TRUST (Cost $370,789) - 4.78% | 375,735 |
| | | |
STRUCTURED NOTES - 4.82% | |
75,000 | | Goldman Sachs Group, Inc., 10.00%, 9/5/28 ** | 75,000 |
100,000 | | Goldman Sachs Group, Inc., 10.00%, 12/13/28 ** | 88,500 |
63,000 | | Goldman Sachs Group, Inc., 5.75%, 11/29/20 ** | 62,272 |
100,000 | | Morgan Stanley, 3.00%, 8/31/15 ** | 101,988 |
50,000 | | Morgan Stanley & Co., 3.00%, 11/9/19 ** | 51,562 |
TOTAL FOR STRUCTURED NOTES (Cost $387,929) - 4.82% | 379,322 |
| | | |
SHORT TERM INVESTMENT - 8.62% | |
678,139 | | Fidelity Institutional Money Market 0.08% ** (Cost $678,139) | 678,139 |
| | | |
TOTAL INVESTMENTS (Cost $7,894,767) - 101.89% | 8,015,126 |
| | | |
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.89)% | (149,012) |
| | | |
NET ASSETS - 100.00% | $ 7,866,114 |
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER STOCK FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
COMMON STOCKS - 98.47% | |
| | | |
Agriculture Chemicals - 1.91% | |
1,900 | | Monsanto Co. | $ 219,735 |
| | | |
Air Courier Services - 1.61% | |
16,000 | | Air T, Inc. * | 185,760 |
| | | |
Air Transportation - 1.85% | |
4,600 | | Alaska Air Group, Inc. | 213,164 |
| | | |
Asset Management - 3.77% | |
650 | | Blackrock, Inc. | 214,844 |
4,800 | | Cognizant Technology Solutions Corp. * | 219,504 |
| | | 434,348 |
Biological Products (No Diagnostic Substances) - 2.43% | |
2,600 | | Gilead Sciences, Inc. * | 279,656 |
| | | |
Business Services - 1.84% | |
1,000 | | Visa, Inc. Class A | 212,520 |
| | | |
Calculating & Accounting Machines - 2.04% | |
6,900 | | NCR Corp. * | 235,704 |
| | | |
Computer Storage Devices - 2.08% | |
8,100 | | EMC Corp. | 239,193 |
| | | |
Cutlery, Handtools & General Hardware - 1.83% | |
2,300 | | Stanley Black & Decker, Inc. | 210,450 |
| | | |
Diversified Machinery - 1.89% | |
2,600 | | Lennox International, Inc. | 217,776 |
| | | |
Electric & Other Services Combined - 1.92% | |
6,100 | | Quanta Services, Inc. * | 221,674 |
| | | |
Electric Computers - 1.95% | |
8,000 | | Omnicell, Inc. * | 225,200 |
| | | |
Farm Products - 1.98% | |
2,700 | | Bunge Ltd. | 228,555 |
* Non-income producing
The accompanying notes are an integral part of these financial statements.
ARCHER STOCK FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
Life Insurance - 1.90% | |
4,000 | | MetLife, Inc. | $ 218,960 |
| | | |
Measuring & Controlling Devices - 1.77% | |
1,700 | | Thermo Fisher Scientific, Inc. | 204,357 |
| | | |
Miscellaneous Food Preparations & Kindred Products - 2.20% | |
1,900 | | Keurig Green Mountain, Inc. | 253,308 |
| | | |
Motor Vehicle Parts & Accessories - 5.67% | |
7,300 | | Gentex Corp. | 215,715 |
4,000 | | Gentherm, Inc. * | 195,400 |
2,400 | | Lear Corp. | 242,712 |
| | | 653,827 |
Motor Vehicle & Passenger Car Bodies - 1.83% | |
5,600 | | Navistar International Corp. * | 211,176 |
| | | |
Oil & Gas Equipment & Services - 2.11% | |
3,600 | | Halliburton Co. | 243,396 |
| | | |
Oil & Gas Field Services - 1.90% | |
2,000 | | Schlumberger Ltd. N.V. | 219,280 |
| | | |
Orthopedic, Prosthetic & Surgical Appliances & Supplies - 1.79% | |
8,620 | | Exactech, Inc. * | 205,846 |
| | | |
Paperboard Containers & Boxes - 2.01% | |
3,400 | | Packaging Corporation of America | 231,166 |
| | | |
Personal Computers - 2.18% | |
2,450 | | Apple, Inc. | 251,125 |
| | | |
Personal Credit Institutions - 1.89% | |
3,500 | | Discover Financial Services | 218,295 |
| | | |
Petroleum Refining - 2.10% | |
5,900 | | Suncor Energy, Inc. | 242,431 |
| | | |
Pharmaceutical Preparations - 3.60% | |
4,500 | | Novo Nordisk ADR | 206,820 |
5,700 | | Roche Holding, Ltd. ADR | 208,107 |
| | | 414,927 |
* Non-income producing
ADR - American Depository Receipt
The accompanying notes are an integral part of these financial statements.
ARCHER STOCK FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
Public Building & Related Furniture - 1.99% | |
2,700 | | B/E Aerospace, Inc. * | $ 228,798 |
| | | |
Radio & TV Broadcasting & Communications - 1.98% | |
3,000 | | Qualcomm, Inc. | 228,300 |
| | | |
Retail - Drug Stores - 2.05% | |
3,200 | | Express Scripts Holding Co. * | 236,576 |
| | | |
Retail - Retail Stores - 4.17% | |
4,400 | | Foot Locker, Inc. | 246,884 |
2,400 | | Ulta Salon, Cosmetics & Fragrance, Inc. * | 233,544 |
| | | 480,428 |
Security Brokers, Dealers & Flotation Company - 1.86% | |
1,200 | | The Goldman Sachs Group, Inc. | 214,932 |
| | | |
Semiconductors, Integrated Circuits & Related Services - 6.72% | |
8,300 | | Diodes, Inc. * | 211,235 |
3,200 | | First Solar, Inc. * | 222,976 |
6,000 | | Skyworks Solutions Inc. | 339,960 |
| | | 774,171 |
Services - Auto Rental & Leasing (No Drivers) - 2.04% | |
2,600 | | Ryder System, Inc. | 234,884 |
| | | |
Services - Computer Programming - 5.58% | |
3,400 | | Computer Programs & Systems, Inc. | 208,896 |
2,800 | | Synaptics, Inc. * | 229,880 |
350 | | Google, Inc. Class A * | 203,826 |
| | | 642,602 |
Services - Educational Services - 1.95% | |
5,200 | | Grand Canyon Education, Inc. * | 224,848 |
| | | |
Services - Equipment Rental & Leasing - 4.22% | |
6,000 | | Air Lease Corp. | 227,400 |
2,200 | | United Rentals, Inc. * | 258,830 |
| | | 486,230 |
Services - Health Services - 1.89% | |
4,400 | | ICON Public Limited Co. * | 217,976 |
| | | |
Textile - Apparel Clothing - 2.05% | |
2,300 | | Hanesbrands, Inc. | 236,164 |
* Non-income producing
The accompanying notes are an integral part of these financial statements.
ARCHER STOCK FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
AUGUST 31, 2014
| | | |
Shares/Principal | Value |
| | | |
Transportation Services - 1.95% | |
3,400 | | GATX Corp. | $ 225,318 |
| | | |
Wholesale - Motor Vehicles & Motor Vehicles Parts & Supplies - 1.97% | |
8,000 | | LKQ Corp. * | 227,200 |
| | | |
TOTAL FOR COMMON STOCKS (Cost $9,154,416) - 98.47% | 11,350,256 |
| | | |
SHORT-TERM INVESTMENT - 1.46% | |
168,226 | | Fidelity Institutional Money Market Portfolio 0.09%** (Cost $168,226) | 168,226 |
| | | |
TOTAL INVESTMENTS (Cost $9,322,642) - 99.93% | 11,518,482 |
| | | |
OTHER ASSETS LESS LIABILITIES - 0.07% | 7,717 |
| | | |
NET ASSETS - 100.00% | $11,526,199 |
* Non-income producing
** Variable rate security; the coupon rate shown represents the yield at August 31, 2014.
The accompanying notes are an integral part of these financial statements.
ARCHER FUNDS
STATEMENT OF ASSETS & LIABILITIES
AUGUST 31, 2014
| | | | |
Assets: | | Balanced Fund | Income Fund | Stock Fund |
Investments in Securities, at Value (Cost $16,821,490, | $ 20,896,075 | $8,015,126 | $11,518,482 |
$7,894,767, and $9,322,642, respectively) | | | |
Cash | | 23,558 | 670 | 1,201 |
Receivables | | | |
Shareholder Subscriptions | 2,640 | - | 5,216 |
Interest | 32,193 | 67,380 | 19 |
Dividend | 28,126 | 2,865 | 11,396 |
Prepaid Expenses | 15,421 | 6,311 | 10,628 |
Total Assets | 20,998,013 | 8,092,352 | 11,546,942 |
Liabilities: | | | | |
Payables: | | | | |
Investments Purchased | 213,746 | 213,746 | - |
Due to Advisor | 1,985 | 218 | 3,663 |
Due to Administrator | 8,531 | 3,278 | 4,716 |
Due to Trustees | 925 | 245 | 240 |
Accrued Expenses | 21,351 | 8,751 | 12,124 |
Total Liabilities | 246,538 | 226,238 | 20,743 |
Net Assets | | $ 20,751,475 | $7,866,114 | $11,526,199 |
| | | | |
Net Assets Consist of: | | | |
Paid In Capital | $ 17,871,800 | $7,936,777 | $ 8,787,421 |
Undistributed Net Investment Loss | (29,698) | (1,200) | (17,876) |
Accumulated Net Realized Gain (Loss) on Investments | (1,165,212) | (189,822) | 560,814 |
Net Unrealized Appreciation in Value of Investments | 4,074,585 | 120,359 | 2,195,840 |
Net Assets (unlimited shares authorized; 1,847,129, 391,868, and 269,489 shares outstanding, respectively) | $ 20,751,475 | $7,866,114 | $11,526,199 |
Net Asset Value and Offering Price Per Share | $ 11.23 | $ 20.07 | $ 42.77 |
| | | | |
Redemption Price Per Share ($11.23 x 0.995), | | | |
($20.07 x 0.99), & ($42.77 x 0.99), respectively * | $ 11.17 | $ 19.87 | $ 42.34 |
*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.
ARCHER FUNDS
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST, 31 2014
| | | | |
Investment Income: | Balanced Fund | Income Fund | Stock Fund |
Dividends (net of foreign withholding taxes of $3,073, $0, and $258, respectively) | $ 317,503 | $ 78,108 | $ 101,821 |
Interest | | 179,634 | 228,789 | 151 |
Total Investment Income | 497,137 | 306,897 | 101,972 |
| | | | |
Expenses: | | | | |
Advisory Fees (a) | 138,015 | 34,085 | 69,806 |
Transfer Agent | 30,462 | 19,190 | 26,005 |
Administrative (a) | 92,010 | 34,085 | 46,537 |
Registration | 37,800 | 13,538 | 13,931 |
Legal | | 16,041 | 6,037 | 7,972 |
Audit | | 15,697 | 5,409 | 9,437 |
Custody | 5,090 | 3,540 | 4,380 |
Trustee | | 6,570 | 2,162 | 3,059 |
Miscellaneous | 4,900 | 5,096 | 2,641 |
Insurance | 2,306 | 817 | 974 |
Printing and Mailing | 2,336 | 902 | 1,355 |
Total Expenses | 351,227 | 124,861 | 186,097 |
Fees Waived and Reimbursed by the Advisor (a) | (130,403) | (43,058) | (51,140) |
Net Expenses | 220,824 | 81,803 | 134,957 |
| | | | |
Net Investment Income (Loss) | 276,313 | 225,094 | (32,985) |
| | | | |
Realized and Unrealized Gain (Loss) on Investments: | | | |
Net Realized Gain (Loss) on Investments | 394,922 | (26,006) | 845,808 |
Capital Gain Distributions from Portfolio Companies | 5,474 | 1,329 | 42 |
Net Change in Unrealized Appreciation on Investments | 2,861,198 | 311,090 | 1,382,133 |
Net Realized and Unrealized Gain on Investments | 3,261,594 | 286,413 | 2,227,983 |
| | | | |
Net Increase in Net Assets Resulting from Operations | $3,537,907 | $511,507 | $2,194,998 |
(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
| | | |
| | Years Ended |
| | 8/31/2014 | 8/31/2013 |
Increase in Net Assets From Operations: | | |
Net Investment Income | $ 276,313 | $ 341,161 |
Net Realized Gain on Investments | 394,922 | 120,210 |
Capital Gain Distributions from Portfolio Companies | 5,474 | 6,145 |
Net Change in Unrealized Appreciation on Investments | 2,861,198 | 677,245 |
Net Increase in Net Assets Resulting from Operations | 3,537,907 | 1,144,761 |
| | | |
Distributions to Shareholders: | | |
Net Investment Income | (435,893) | (416,235) |
Total Distributions | (435,893) | (416,235) |
| | | |
Capital Share Transactions: | | |
Proceeds from Sale of Shares | 3,421,898 | 2,499,709 |
Shares Issued on Reinvestment of Dividends | 422,607 | 411,019 |
Early Redemption Fees * | 212 | - |
Cost of Shares Redeemed | (2,586,022) | (2,681,269) |
Net Increase from Capital Share Transactions | 1,258,695 | 229,459 |
| | | |
Net Assets: | | | |
Net Increase in Net Assets | 4,360,709 | 957,985 |
Beginning of Year | 16,390,766 | 15,432,781 |
End of Year (Including Accumulated Undistributed Net | | |
Investment Income (Loss) of $(29,698) and $129,881, respectively) | $20,751,475 | $ 16,390,766 |
| | | |
Share Transactions: | | |
Shares Sold | 323,253 | 268,513 |
Shares Issued on Reinvestment of Dividends | 40,452 | 46,920 |
Shares Redeemed | (246,156) | (292,832) |
Net Increase in Shares | 117,549 | 22,601 |
Outstanding at Beginning of Year | 1,729,580 | 1,706,979 |
Outstanding at End of Year | 1,847,129 | 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
STATEMENTS OF CHANGES IN NET ASSETS
| | | |
| | Years Ended |
| | 8/31/2014 | 8/31/2013 |
Increase (Decrease) in Net Assets From Operations: | | |
Net Investment Income | $ 225,094 | $ 185,783 |
Net Realized Loss on Investments | (26,006) | (56,125) |
Capital Gain Distributions from Portfolio Companies | 1,329 | 707 |
Net Change in Unrealized Appreciation (Depreciation) on Investments | 311,090 | (354,874) |
Net Increase (Decrease) in Net Assets Resulting from Operations | 511,507 | (224,509) |
| | | |
Distributions to Shareholders: | | |
Net Investment Income | (257,765) | (169,842) |
Realized Gains | - | - |
Total Distributions | (257,765) | (169,842) |
| | | |
Capital Share Transactions: | | |
Proceeds from Sale of Shares | 2,001,784 | 2,427,956 |
Shares Issued on Reinvestment of Dividends | 249,253 | 164,062 |
Early Redemption Fees * | 126 | - |
Cost of Shares Redeemed | (993,177) | (624,329) |
Net Increase from Capital Share Transactions | 1,257,986 | 1,967,689 |
| | | |
Net Assets: | | | |
Net Increase in Net Assets | 1,511,728 | 1,573,338 |
Beginning of Year | 6,354,386 | 4,781,048 |
End of Year (Including Accumulated Undistributed Net | | |
Investment Income (Loss) of $(1,200) and $31,471, respectively) | $ 7,866,114 | $ 6,354,386 |
| | | |
Share Transactions: | | |
Shares Sold | 101,091 | 118,739 |
Shares Issued on Reinvestment of Dividends | 12,689 | 8,102 |
Shares Redeemed | (50,510) | (30,506) |
Net Increase in Shares | 63,270 | 96,335 |
Outstanding at Beginning of Year | 328,598 | 232,263 |
Outstanding at End of Year | 391,868 | 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
STATEMENTS OF CHANGES IN NET ASSETS
| | | |
| | Years Ended |
| | 8/31/2014 | 8/31/2013 |
Increase (Decrease) in Net Assets From Operations: | | |
Net Investment Loss | $ (32,985) | $ (2,746) |
Net Realized Gain on Investments | 845,808 | 323,220 |
Capital Gain Distributions from Portfolio Companies | 42 | - |
Net Change in Unrealized Appreciation on Investments | 1,382,133 | 568,608 |
Net Increase in Net Assets Resulting from Operations | 2,194,998 | 889,082 |
| | | |
Distributions to Shareholders: | | |
Net Investment Income | - | - |
Realized Gains | (282,445) | - |
Total Distributions | (282,445) | - |
| | | |
Capital Share Transactions: | | |
Proceeds from Sale of Shares | 3,000,795 | 1,835,805 |
Shares Issued on Reinvestment of Dividends | 272,884 | - |
Early Redemption Fees * | 55 | - |
Cost of Shares Redeemed | (902,861) | (399,836) |
Net Increase from Capital Share Transactions | 2,370,873 | 1,435,969 |
| | | |
Net Assets: | | | |
Net Increase in Net Assets | 4,283,426 | 2,325,051 |
Beginning of Year | 7,242,773 | 4,917,722 |
End of Year (Including Accumulated Undistributed Net | | |
Investment Income (Loss) of $(17,876) and $0, respectively) | $11,526,199 | $ 7,242,773 |
| | | |
Share Transactions: | | |
Shares Sold | 74,417 | 56,677 |
Shares Issued on Reinvestment of Dividends | 7,035 | - |
Shares Redeemed | (22,576) | (12,918) |
Net Increase in Shares | 58,876 | 43,759 |
Outstanding at Beginning of Year | 210,613 | 166,854 |
Outstanding at End of Year | 269,489 | 210,613 |
* 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.
| | | | | | |
| | For the Years Ended |
| | 8/31/2014 | 8/31/2013 | 8/31/2012 | 8/31/2011 | 8/31/2010 |
| | | | | | |
Net Asset Value, at Beginning of Period | $ 9.48 | $ 9.04 | $ 8.68 | $ 8.24 | $ 8.09 |
| | | | | | |
Income From Investment Operations: | | | | | |
Net Investment Income * | 0.16 | 0.20 | 0.24 | 0.19 | 0.16 |
Net Gain on Securities (Realized and Unrealized) | 1.84 | 0.49 | 0.33 | 0.43 | 0.19 |
Total from Investment Operations | 2.00 | 0.69 | 0.57 | 0.62 | 0.35 |
| | | | | | |
Distributions: | | | | | | |
Net Investment Income | (0.25) | (0.25) | (0.21) | (0.18) | (0.20) |
Realized Gains | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total from Distributions | (0.25) | (0.25) | (0.21) | (0.18) | (0.20) |
| | | | | | |
Proceeds from Redemption Fees ** | - | - | - | - | - |
| | | | | | |
Net Asset Value, at End of Period | $ 11.23 | $ 9.48 | $ 9.04 | $ 8.68 | $ 8.24 |
| | | | | | |
Total Return *** | 21.34% | 7.85% | 6.76% | 7.54% | 4.23% |
| | | | | | |
Ratios/Supplemental Data: | | | | | |
Net Assets at End of Period (Thousands) | $ 20,751 | $ 16,391 | $ 15,433 | $ 13,949 | $ 14,021 |
Before Waivers and Reimbursements | | | | | |
Ratio of Expenses to Average Net Assets | 1.91% | 2.07% | 2.16% | 2.00% | 2.01% |
Ratio of Net Investment Income to Average Net Assets | 0.79% | 1.31% | 1.83% | 1.30% | 1.06% |
After Waivers and Reimbursements | | | | | |
Ratio of Expenses to Average Net Assets | 1.20% | 1.20% | 1.20% | 1.20% | 1.20% |
Ratio of Net Investment Income to Average Net Assets | 1.50% | 2.18% | 2.79% | 2.10% | 1.87% |
Portfolio Turnover | 35.18% | 77.01% | 76.14% | 69.95% | 77.73% |
* 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.
The accompanying notes are an integral part of these financial statements.
ARCHER INCOME FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD.
| | | | | | |
| | Years Ended | Period Ended | (a) |
| | 8/31/2014 | 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 * | 0.65 | 0.66 | 1.03 | 0.73 | |
Net Gain (Loss) on Securities (Realized and Unrealized) | 0.83 | (1.29) | 0.20 | 0.04 | |
Total from Investment Operations | 1.48 | (0.63) | 1.23 | 0.77 | |
| | | | | | |
Distributions: | | | | | | |
Net Investment Income | (0.75) | (0.61) | (1.39) | - | |
Realized Gains | - | - | (0.03) | - | |
Total from Distributions | (0.75) | (0.61) | (1.42) | - | |
| | | | | | |
Proceeds from Redemption Fees ** | - | - | - | - | |
| | | | | | |
Net Asset Value, at End of Period | $ 20.07 | $ 19.34 | $ 20.58 | $ 20.77 | |
| | | | | | |
Total Return *** | 7.79% | (3.15)% | 6.26% | 3.85% | (b) |
| | | | | | |
Ratios/Supplemental Data: | | | | | |
Net Assets at End of Period (Thousands) | $ 7,866 | $ 6,354 | $ 4,781 | $ 2,619 | |
Before Waivers and Reimbursements | | | | | |
Ratio of Expenses to Average Net Assets | 1.83% | 1.96% | 2.57% | 4.21% | (c) |
Ratio of Net Investment Income to Average Net Assets | 2.67% | 2.49% | 3.67% | 4.43% | (c) |
After Waivers and Reimbursements | | | | | |
Ratio of Expenses to Average Net Assets | 1.20% | 1.20% | 1.20% | 1.20% | (c) |
Ratio of Net Investment Income to Average Net Assets | 3.30% | 3.25% | 5.04% | 7.44% | (c) |
Portfolio Turnover | 15.45% | 18.32% | 24.29% | 11.01% | (b) |
(a) The Fund commenced investment operations on March 11, 2011.
(b) Not Annualized
(c) Annualized
* 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.
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.
| | | | | | |
| | Years Ended | Period Ended | (a) |
| | 8/31/2014 | 8/31/2013 | 8/31/2012 | 8/31/2011 | |
| | | | | | |
Net Asset Value, at Beginning of Period | $ 34.39 | $ 29.47 | $ 27.57 | $ 30.00 | |
| | | | | | |
Income (Loss) From Investment Operations: | | | | | |
Net Investment Loss * | (0.14) | (0.01) | (0.07) | (0.03) | |
Net Gain (Loss) on Securities (Realized and Unrealized) | 9.82 | 4.93 | 1.97 | (2.40) | |
Total from Investment Operations | 9.68 | 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 | $ 42.77 | $ 34.39 | $ 29.47 | $ 27.57 | |
| | | | | | |
Total Return *** | 28.53% | 16.69% | 6.89% | (8.10)% | (b) |
| | | | | | |
Ratios/Supplemental Data: | | | | | |
Net Assets at End of Period (Thousands) | $ 11,526 | $ 7,243 | $ 4,918 | $ 2,901 | |
Before Waivers and Reimbursements | | | | | |
Ratio of Expenses to Average Net Assets | 2.00% | 2.22% | 2.78% | 3.99% | (c) |
Ratio of Net Investment Loss to Average Net Assets | (0.90)% | (0.82)% | (1.59)% | (2.78)% | (c) |
After Waivers and Reimbursements | | | | | |
Ratio of Expenses to Average Net Assets | 1.45% | 1.45% | 1.45% | 1.45% | (c) |
Ratio of Net Investment Loss to Average Net Assets | (0.35)% | (0.05)% | (0.26)% | (0.24)% | (c) |
Portfolio Turnover | 67.68% | 195.28% | 399.91% | 163.69% | (b) |
(a) The Fund commenced investment operations on March 11, 2011.
(b) Not Annualized
(c) Annualized
* 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.
The accompanying notes are an integral part of these financial statements.
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
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 year ended August 31, 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds have no examination in progress
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
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 year ended August 31, 2014, the Balanced Fund, Income Fund, and Stock Fund collected $212, $126, 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.
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
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.
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. 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
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
reliability of market quotations. Good faith pricing may also be used in instances when the bonds the Funds invest in may default or otherwise cease to have market quotations readily available.
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 each Fund’s major categories of assets and liabilities measured at fair value on a recurring basis follows:
Equity securities (common and preferred stock, mutual funds, exchange traded fund, real estate investment trusts and senior note ). Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy. Certain foreign securities may be fair valued using a pricing service that
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
considers the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, Exchange Traded Funds, and the movement of the certain indexes of securities based on a statistical analysis of the historical relationship and that are categorized in level 2. Preferred stock and other equities traded on inactive markets or valued by reference to similar instruments are also categorized in level 2.
Fixed income securities (corporate bonds, structured notes and municipal bonds). The fair value of fixed income securities is estimated using various techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (when observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. Although most fixed income securities are categorized in level 2 of the fair value hierarchy, in instances when lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in level 3.
The following table summarizes the inputs used to value Balanced Fund’s assets and liabilities measured at fair value as of August 31, 2014:
| | | | |
BALANCED FUND | Financial Instruments—Assets |
| | | | |
Categories | Level 1 | Level 2 | Level 3 | Fair Value |
Common Stocks | $13,901,939 | $ - | $ - | $ 13,901,939 |
Corporate Bonds | - | 1,537,574 | - | 1,537,574 |
Exchange Traded Funds | 1,012,198 | - | - | 1,012,198 |
Exchange Traded Note | 355,938 | - | - | 355,938 |
Structured Notes | - | 700,194 | - | 700,194 |
Real Estate Investment Trusts | 548,775 | - | - | 548,775 |
Preferred Securities | 268,400 | - | - | 268,400 |
Municipal Bonds | - | 1,342,042 | - | 1,342,042 |
Short-Term Investments: | | | | |
Fidelity Institutional Money Market | 1,229,015 | - | - | 1,229,015 |
| $17,316,265 | $3,579,810 | $ - | $ 20,896,075 |
The following table summarizes the inputs used to value Income Fund’s assets and liabilities measured at fair value as of August 31, 2014:
| | | | |
INCOME FUND | Financial Instruments—Assets |
| | | | |
Categories | Level 1 | Level 2 | Level 3 | Fair Value |
Corporate Bonds | $ - | $2,857,354 | $ - | $ 2,857,354 |
Exchange Traded Funds | 1,170,945 | - | - | 1,170,945 |
Exchange Traded Note | 92,440 | - | - | 92,440 |
Municipal Bonds | - | 2,038,466 | - | 2,038,466 |
Preferred Securities | 422,725 | - | - | 422,725 |
Real Estate Investment Trusts | 375,735 | - | - | 375,735 |
Structured Notes | - | 379,322 | - | 379,322 |
Short-Term Investments: | | | | |
Fidelity Institutional Money Market | 678,139 | - | - | 678,139 |
| $2,739,984 | $5,275,142 | $ - | $ 8,015,126 |
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
The Income Fund did not hold any derivative instruments at any time during the year ended August 31, 2014.
The following table summarizes the inputs used to value Stock Fund’s assets and liabilities measured at fair value as of August 31, 2014:
| | | | |
STOCK FUND | Financial Instruments—Assets |
| | | | |
Categories | Level 1 | Level 2 | Level 3 | Fair Value |
Common Stocks | $11,350,256 | $ - | $ - | $11,350,256 |
Short-Term Investments: | | | | |
Fidelity Institutional Money Market | 168,226 | - | - | 168,226 |
| $11,518,482 | $ - | $ - | $11,518,482 |
There were no significant transfers into or out of Level 3 during the period. It is the Funds’ policy to recognize transfers into and out of Level 1, Level 2, and Level 3 at the end of the reporting period. The Balanced Fund and Income Fund moved investments into Level 2, from Level 1, after further consideration about how the investments are priced in the market. No changes have been made on how the investments are being priced. The Funds did not hold any derivative instruments at any time during the year ended August 31, 2014.
NOTE 4. DERIVATIVE TRANSACTIONS
As of August 31, 2014, there were no options outstanding in any Fund. The Funds did not have any options transactions during the year ended August 31, 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
$ 700,194
Income Fund
$ 379,322
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 year ended August 31, 2014, the Advisor earned fees of $138,015 for the Balanced Fund, $34,085 for the
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
Income Fund, and $69,806 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 year ended August 31, 2014, the Advisor earned administrative fees of $92,010 for the Balanced Fund, $34,085 for the Income Fund, and $46,537 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 year ended August 31, 2014, the Advisor waived fees and/or reimbursed expenses of $130,403. 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, 2017 totaled $405,411.
The amounts subject to repayment by the Balanced Fund, pursuant to the aforementioned conditions, at August 31, 2014 were as follows:
| |
| Subject to Repayment |
Amount | by August 31, |
$139,404 | 2015 |
$135,604 | 2016 |
$130,403 | 2017 |
The Balanced Fund owed the Advisor $1,985 at August 31, 2014.
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 year ended August 31, 2014, the Advisor waived fees and/or reimbursed
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
expenses of $43,058. 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, 2017 totaled $137,034.
The amounts subject to repayment by the Income Fund, pursuant to the aforementioned conditions, at August 31, 2014 were as follows:
| |
| Subject to Repayment |
Amount | by August 31, |
$ 50,757 | 2015 |
$ 43,219 | 2016 |
$ 43,058 | 2017 |
The Income Fund owed the Advisor $218 at August 31, 2014.
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 year ended August 31, 2014, the Advisor waived fees and/or reimbursed expenses of $51,140. 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, 2017 totaled $151,526.
The amounts subject to repayment by the Stock Fund, pursuant to the aforementioned conditions, at August 31, 2014 were as follows:
| |
| Subject to Repayment |
Amount | by August 31, |
$ 54,406 | 2015 |
$ 45,980 | 2016 |
$ 51,140 | 2017 |
The Stock Fund owed the Advisor $3,663 at August 31, 2014 for Advisory fees.
Distribution Plan
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
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 year ended August 31, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were $6,603,782 and $6,301,352, respectively.
Archer Income Fund
For the year ended August 31, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were $2,005,810 and $1,005,027, respectively.
Archer Stock Fund
For the year ended August 31, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations were $8,210,870 and $6,181,054, 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 August 31, 2014, First Clearing, LLC., for the benefit of it’s customers owned, in aggregate, approximately 66.10% of the voting securities of the Balanced Fund, approximately 80.40% of the voting securities of the Income Fund, and approximately 81.20% of the voting securities of the Stock Fund and may be deemed to control each of the respective Funds.
NOTE 8. TAX MATTERS
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
The Funds tax basis capital gains and losses are determined only at the end of each fiscal year. For tax purposes, at August 31, 2014, the following represents the tax basis components of distributable earnings and capital gains and losses:
| | | | | |
| Balanced | | Income | | Stock |
| Fund | | Fund | | Fund |
| | | | | |
Undistributed ordinary income (loss) | $ (29,699) | | $ (1,190) | | $ (975) |
| | | | | |
Undistributed capital gains/losses | $ - | | $ (489) | | $ 570,596 |
| | | | | |
| | | | | |
Post-October capital loss deferrals | | | | | |
Realized between 11/1/13-8/31/14 * | $ - | | $ 26,351 | | $ - |
Post-December ordinary losses | $ - | | $ - | | $ 17,876 |
| | | | | |
Capital loss carryforwards (a) | | | | | |
Expiring 8/31/17 | $ (116,274) | | $ - | | $ - |
8/31/18 | (1,046,650) | | - | | - |
No Expiration - Short-Term | - | | (132,025) | | - |
No Expiration - Long-Term | - | | (30,966) | | - |
| $(1,162,924) | | $ (162,991) | | - |
Under current tax law, net capital losses realized after October 31st and net ordinary losses incurred after December 31st may be deferred and treated as occurring on the first day of the following fiscal year. Each Fund’s capital loss carryforward losses, post-October losses and post-December losses are determined only at the end of each fiscal year.
As of August 31, 2014 for US Federal income tax purposes, the cost of securities owned, unrealized appreciation (depreciation) of investments for the Funds was as follows:
| | | | | |
| Balanced | | Income | | Stock |
| Fund | | Fund | | Fund |
| | | | | |
Gross unrealized appreciation on investment securities | $ 4,131,499 | | $ 209,528 | | $ 2,251,050 |
Gross unrealized depreciation on investment securities | (59,204) | | (89,169) | | (64,015) |
Net unrealized appreciation | $ 4,072,295 | | $ 120,359 | | $ 2,187,035 |
| | | | | |
Tax cost of investments (including short-term investments)** | $16,823,780 | | $ 7,894,767 | | $ 9,331,447 |
* 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.
ARCHER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 2014
(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.
The Balanced, Income and Stock Funds paid the following distributions for the years ended August 31, 2014 and August 31, 2013:
| | | | | |
| Year End | | $ Amount | | Tax Character |
Balanced Fund | 08/31/14 | | $ 435,893 | | Ordinary Income |
Balanced Fund | 08/31/13 | | $ 416,235 | | Ordinary Income |
| | | | | |
Income Fund | 08/31/14 | | $ 257,765 | | Ordinary Income |
Income Fund | 08/31/13 | | $ 169,842 | | Ordinary Income |
| | | | | |
Stock Fund | 08/31/14 | | $ 272,350 | | Short term capital gain |
| | | $ 10,095 | | Long term capital gain |
Stock Fund | 08/31/13 | | $ - | | |
NOTE 9. NEW ACCOUNTING PRONOUNCEMENT
In June 2013, the FASB issued ASU 2013-08, Financial Services Investment Companies, which updates the scope, measurement, and disclosure requirements for U.S. GAAP including identifying characteristics of an investment company, measurement of ownership in other investment companies and requires additional disclosures regarding investment company status and following guidance in Topic 946 of the FASB Accounting Standards Codification (FASC). The ASU is effective for interim and annual reporting periods that begin after December 15, 2013. Management is currently evaluating the impact that these pronouncements may have on the Fund’s financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees
of the Archer Balanced Fund, Archer Income Fund
and Archer Stock Fund, each a Series of the Archer
Investment Series Trust
We have audited the accompanying statements of assets and liabilities of the Archer Balanced Fund, the Archer Income Fund and the Archer Stock Fund, (the "Funds"), each a series of the Archer Investment Series Trust (the “Trust”), including the schedules of investments, as of August 31, 2014 and the related statements of operations for the year then ended, changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended for the Archer Balanced Fund, and for each of the three years in the period then ended and the period March 11, 2011 (commencement of investment operations) through August 31, 2011 for the Archer Income Fund and the Archer Stock Fund. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. For the Archer Balanced Fund, the financial highlights for the year ended August 31, 2010 were audited by other auditors whose report dated October 29, 2010 expressed an unqualified opinion on those statements.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. The Funds were not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2014, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of the Archer Balanced Fund, the Archer Income Fund and the Archer Stock Fund, each a series the Archer Investment Series Trust, as of August 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended for the Archer Balanced Fund, and for each of the three years in the period then ended and the period March 11, 2011 (commencement of investment operations) through August 31, 2011 for the Archer Income Fund and the Archer Stock Fund in conformity with accounting principles generally accepted in the United States of America.
![[archerncsr016.gif]](https://capedge.com/proxy/N-CSR/0001162044-14-001370/archerncsr016.gif)
Abington, Pennsylvania
October 27, 2014
ARCHER FUNDS
EXPENSE ILLUSTRATION
AUGUST 31, 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 - March 1, 2014 through August 31, 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.
ARCHER FUNDS
EXPENSE ILLUSTRATION (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
| | | |
Balanced Fund | | | |
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period* |
| March 1, 2014 | August 31, 2014 | March 1, 2014 to August 31, 2014 |
| | | |
Actual | $1,000.00 | $1,079.63 | $6.29 |
Hypothetical | | | |
(5% Annual Return before expenses) | $1,000.00 | $1,019.16 | $6.11 |
| | | |
* 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 184/365 (to reflect the one-half year period). |
| | | |
| | | |
Income Fund | | | |
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period* |
| March 1, 2014 | August 31, 2014 | March 1, 2014 to August 31, 2014 |
| | | |
Actual | $1,000.00 | $1,036.69 | $6.16 |
Hypothetical | | | |
(5% Annual Return before expenses) | $1,000.00 | $1,019.16 | $6.11 |
| | | |
* 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 184/365 (to reflect the one-half year period). |
| | | |
| | | |
Stock Fund | | | |
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period* |
| March 1, 2014 | August 31, 2014 | March 1, 2014 to August 31, 2014 |
| | | |
Actual | $1,000.00 | $1,063.67 | $7.54 |
Hypothetical | | | |
(5% Annual Return before expenses) | $1,000.00 | $1,017.90 | $7.38 |
| | | |
* 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 184/365 (to reflect the one-half year period). |
ARCHER FUNDS
TRUSTEES AND OFFICERS
AUGUST 31, 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 (67)
Independent Trustee, January 2010 to present |
General Securities Corp. – President; 1982-Present |
Donald G. Orzeske, J. D. (59)
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 (47)
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, (57)
Treasurer, December 2009 to present |
Mutual Shareholders Services, LLC – Principal Owner. January 1999 – present. |
C. Richard Ropka, Esq. (51)
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 (34)
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.
ARCHER FUNDS
ADDITIONAL INFORMATION
AUGUST 31, 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.
Advisory Renewal Agreement
Archer Investment Corporation (“AIC” or “Advisor”) is retained to manage the investments of the following series portfolios (each may be referred to herein as a “Fund” or collectively as the “Funds”) of the Archer Investment Series Trust (the “Trust”): the Archer Balanced Fund (the “Balanced Fund”), the Archer Stock Fund, (the “Stock Fund”) and the Archer Income Fund (the “Income Fund”), pursuant to the Management Service Agreement (each an “Agreement” and collectively, the “Agreements”) between the Advisor and the Trust with respect to each Fund. At the in-person quarterly meeting of the Board of Trustees (the “Board”) of the Trust that was held on August 22, 2014, the Trustees, including a majority of the trustees who are not parties to the Agreements or interested persons of any party to any of the Agreements (the “Independent Trustees”), unanimously approved the renewal of the Agreements for another one year term.
Legal Counsel reviewed with the Board legal Counsel’s memorandum addressed to the Trustees dated August 22, 2014 and addressed to the Trustees that summarized, among other things, the fiduciary duties and responsibilities of the Board in reviewing and approving the renewal of each Agreement. Counsel discussed with the Trustees the information and factors that should be considered by the Board in order to make an informed decision regarding the approval of the continuation of each Agreement, including the following material factors: (i) the nature, extent, and quality of the services provided by AIC; (ii) the investment performance of the Funds; (iii) the costs of the
ARCHER FUNDS
ADDITIONAL INFORMATION (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
services to be provided and profits to be realized by AIC from the relationship with the Funds; (iv) the extent to which economies of scale would be realized if the Funds grow and whether advisory fee levels reflect those economies of scale for the benefit of the Funds’ investors; and (v) AIC’s practices regarding possible conflicts of interest. Counsel noted that the continuation of the Agreements was discussed in preliminary discussions with AIC at the Board’s May 13, 2014 quarterly meeting. Counsel and the Board recapped the discussions that had occurred in this earlier meeting.
In assessing these factors and reaching its decisions, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board meetings, as well as information specifically prepared and/or presented in connection with the annual renewal process. The Board, requested and was provided with information and reports relevant to the annual renewal of each Agreement, including: (i) reports regarding the services and support provided to the Funds and their shareholders by AIC; (ii) quarterly assessments of the investment performance of the Funds by personnel of AIC; (iii) commentary on the reasons for the performance; (iv) presentations by the Funds’ portfolio managers addressing AIC’s investment philosophy, investment strategy, personnel and operations; (v) compliance and audit reports concerning the Funds and AIC; (vi) disclosure information contained in the registration statement of the Trust and the Form ADV of AIC; (vii) information on relevant developments in the mutual fund industry and how the Funds and/or AIC are responding to them; and (viii) a memorandum from Counsel, that summarized the fiduciary duties and responsibilities of the Board in reviewing and approving each of the Agreements, including the material factors set forth above and the types of information included in each factor that should be considered by the Board in order to make an informed decision. The Board also requested and received various informational materials including, without limitation: (i) documents containing information about AIC, including financial information of AIC, a description of personnel and the services provided to each Fund, information on investment advice, performance, summaries of fund expenses, compliance program, current legal matters, and other general information; (ii) comparative expense and performance information for other mutual funds with strategies similar to the Funds; (iii) the effect of size on the Funds’ performance and expenses; and (iv) benefits to be realized by AIC from its relationship with the Funds.
The Board did not identify any particular information that was most relevant to its consideration to approve the Agreements and each Trustee may have afforded different weight to the various factors that are specifically required to be consider for purposes of disclosure in the Funds’ next set of financial statements.
Nature, Extent and Quality of the Services Provided by AIC. In considering the nature, extent, and quality of the services provided by AIC, the Trustees reviewed the responsibilities of AIC under each Agreement. The Trustees reviewed the services being provided by AIC to each Fund including, without limitation: the quality of its investment advisory services (including research and recommendations with respect to portfolio securities); its process for formulating investment recommendations and assuring compliance with each Fund’s investment objectives and limitations, as well as for
ARCHER FUNDS
ADDITIONAL INFORMATION (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
ensuring compliance with regulatory requirements; its coordination of services for the Funds among the service providers and the Independent Trustees; and its efforts to promote the Funds and grow each Fund’s assets. The Trustees noted AIC’s continuity of, and commitment to retain, qualified personnel and AIC’s commitment to maintain and enhance its resources and systems; the commitment of AIC’s personnel to finding alternatives and options that allow the Funds to maintain their goals; and AIC’s continued cooperation with the Independent Trustees, the chief compliance officer and Counsel for the Funds. The Trustees evaluated AIC’s personnel, including the education and experience of AIC’s personnel. The Trustees noted that several of the officers of the Trust, including the principal executive officer and president for the Trust were employees of AIC, and they served the Trust without additional compensation. The Trustees noted the continued efforts of AIC in marketing the Funds. After reviewing the foregoing information and further information in the materials provided by AIC (including AIC’s Form ADV), the Board concluded that the nature, extent, and quality of the services provided by AIC were of high quality, reasonable and consistent with the Board's expectations and those set forth in the current and proposed Management Services Agreement.
Investment Performance of the Funds and AIC. In considering the investment performance of the Funds and AIC, the Trustees compared the short and long-term performance of each Fund with the performance of funds with similar objectives managed by other investment advisors, as well as with aggregated peer group data. The Trustees also considered the consistency of AIC’s management of the Funds with the investment objectives and policies. With respect to the Archer Balanced Fund (“Balanced Fund”), the Trustees noted the overall performance that the Balanced Fund had experienced on a short and long-term basis in comparison to its benchmark. The Trustees also noted that the Fund has a two-star rating with Morningstar. The returns of the Archer Balanced Fund compared to its Morningstar category, out-performed its peers during the first and second quarter of 2014 as well as fiscal year 2013. Further, the Archer Balanced Fund was in the top 10% in its Morningstar category during the half of 2014. The Trustees observed that the Balanced Fund slightly underperformed its benchmark for the 3-year and 5-year periods.
With respect to the Archer Income Fund (“Income Fund”), the Trustees noted that the Income Funds’ had underperformed its Morningstar peer group category in the short-term and longer-term. The Trustees also noted that the Income Fund generally outperformed its comparative indices over the time periods presented. The Archer Income Fund currently has a two-star Morningstar rating. The Fund continues to add assets which will assist in its performance ratings as well.
With respect to the Archer Stock Fund (“Stock Fund”) the Trustees noted that the Fund has a three-star Morningstar rating and has significantly out-performed its indices and its category for the 1-year period and for the 3-year period the Stock Fund underperformed its comparative indices but slightly outperformed its category. Further, the Archer Stock Fund was in the upper 95% in its category during the half of 2014.
ARCHER FUNDS
ADDITIONAL INFORMATION (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
While the Trustees noted moderate concerns over each of the Archer Funds in their respective category performances, they recognized that some portion of any Funds’ category performance could be attributed to the fees and expenses paid by a Fund when compared to the Index. Overall, the Trustees concluded that performance was acceptable, although the Trustees will continue to monitor each Fund’s performance against its benchmark and peer group.
Costs of the Services to be provided and Profits to be Realized by AIC. In considering the costs of the services to be provided and profits to be realized by AIC from the relationship with the Funds, the Trustees considered: (1) AIC’s financial condition (as reflected in the financial statements of the company) and the level of commitment to the Funds and by the principals of AIC; (2) the asset level of the Funds; (3) the overall expenses of the Funds; and (4) the nature and frequency of advisory fee payments. The Trustees reviewed information provided by AIC regarding its profits associated with managing the Funds. The Trustees also considered potential benefits for AIC in managing the Funds. The Trustees noted that AIC is profitable with regard to its relationship with the Funds. The Trustees then compared the fees and expenses of the Funds (including the management fee) to other comparable mutual funds. The Trustees noted that the Funds’ advisory fees were slightly higher than other funds. The Trustees concluded that given the relatively small asset levels of the Funds, it would be difficult for any adviser to operate the Funds at average cost levels and that AIC had put forth significant and reasonable efforts to control the operating expenses of the Funds. The Trustees noted AIC’s efforts to manage the expenses of the Funds. The Board concluded that although Fund expenses were higher than peer averages, such expenses were justified and unavoidable given the complex regulatory requirements, and most importantly, the relatively small levels of assets in each of the Funds. Based on the foregoing, the Board concluded that the fees to be paid to AIC by the Funds and the profits to be realized by AIC, in light of all the facts and circumstances, were fair and reasonable in relation to the nature and quality of the services provided by AIC.
Economies of Scale. The Board, including the Independent Trustees, also considered whether there have been any economies of scale with respect of the management of the Archer Funds and whether there is potential for realization of any further economies of scale having multiple funds for which the Advisor manages. In doing so, the Board considered the potential benefits for the Adviser in managing multiple series under the Archer Investment Series Trust, including promotion of the Adviser’s name, the ability for the Adviser to place small accounts into one of the Archer Funds,. After comparing the fees under the Management Services Agreement with those paid by comparable funds and considering all of the foregoing, the Board concluded that the management fees to be paid to the Adviser by each Fund were fair and reasonable in relation to the nature and quality of the services provided by AIC.
Advisor’s Practices Regarding Possible Conflicts of Interest and Benefits to the Adviser. In considering AIC’s practices regarding conflicts of interest, the Trustees evaluated the potential for conflicts of interest and considered such matters as the experience and ability of the advisory personnel assigned to the Funds; the basis for soft dollar payments
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ADDITIONAL INFORMATION (CONTINUED)
AUGUST 31, 2014 (UNAUDITED)
with broker-dealers; the basis of decisions to buy or sell securities for the Funds and/or AIC’s other accounts; and the substance and administration of AIC’s code of ethics. The Trustees also considered disclosure in the registration statement of the Trust related to AIC’s potential conflicts of interest. The Trustees considered that AIC may assess a fee to its separate account clients that invest a portion of the assets of such separate accounts into the Fund in addition to the management fees that are assessed at the Fund level although the Trustees expressed the view that the services rendered to the separate accounts were distinct from those rendered to the Funds. The Trustees also noted that AIC may enjoy some enhanced status as an investment adviser to a family of registered mutual funds. Based on the foregoing, the Board determined that AIC’s standards and practices relating to the identification and mitigation of possible conflicts of interest were satisfactory.
Conclusion. Having requested and received such information from the Adviser as the Board believed to be reasonably necessary to evaluate renewing the Management Services Agreement, and as assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, concluded that the overall arrangement provided under the terms of the Management Services Agreement was a reasonable business arrangement and that renewal of the Management Services Agreement was in the best interests of the Trust and each Fund’s shareholders.
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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.
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b) For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and regulations;
(4) The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) Amendments: During the period covered by the report, there have not been any amendments to the provisions of the code of ethics.
(d) Waivers: During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.
(e) The Code of Ethics is not posted on registrant’s website.
(f) A copy of the Code of Ethics is attached as an exhibit.
Item 3. Audit Committee Financial Expert.
(a) The registrant’s Board of Trustees has determined that it does not have an audit committee financial expert serving on its audit committee. At this time, the registrant believes that the experience provided by each member of the audit committee together offer the registrant adequate oversight for the registrant’s level of financial complexity.
Item 4. Principal Accountant Fees and Services.
(a)
Audit Fees
FY 2014
$ 25,500
FY 2013
$ 24,500
(b)
Audit-Related Fees
Registrant
FY 2014
$ 0
FY 2013
$ 0
Nature of the fees:
Not applicable.
(c)
Tax Fees
Registrant
FY 2014
$ 5,400
FY 2013
$ 1,600
Nature of the fees:
Tax preparation and filing.
(d)
All Other Fees
Registrant
FY 2014
$ 0
FY 2013
$ 0
Nature of the fees:
Not applicable.
(e)
(1)
Audit Committee’s Pre-Approval Policies
The audit committee approves all audit and non-audit related services and, therefore, has not adopted pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2)
Percentages of Services Approved by the Audit Committee
None of the services described in paragraph (b) through (d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f)
During audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
(g)
The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:
Registrant
FY 2014
$ 0,000
FY 2013
$ 1,600
(h)
The registrant's audit committee has not considered whether the provision of non-audit services to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments. Not applicable – schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. 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. Filed herewith.
(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: November 10, 2014
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /s/Troy C. Patton
* Troy C. Patton
President and Trustee
Date: November 10, 2014
* Print the name and title of each signing officer under his or her signature.
