Registrant's telephone number, including area code: 1-800-453-4392
------------------
Date of fiscal year end: December 31
---------------
Date of reporting period: June 30, 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. ss. 3507.
Item 1. Reports to Stockholders.
The semi-annual report to stockholders is filed herewith.
FAM Funds
In-depth research. Insightful investing.
SEMI-ANNUAL REPORT - JUNE 30, 2014
Value Fund
Equity-Income Fund
Small Cap Fund
Table of Contents
Chairman’s Commentary
1
Expense Data
4
FAM Value Fund
Letter to Shareholders
6
Portfolio Data
11
Statement of Investments
12
FAM Equity-Income Fund
Letter to Shareholders
17
Portfolio Data
22
Statement of Investments
23
FAM Small Cap Fund
Letter to Shareholders
28
Portfolio Data
32
Statement of Investments
33
Statement of Assets and Liabilities
37
Statement of Operations
38
Statement of Changes in Net Assets
39
Notes to Financial Statements
41
Supplemental Information
52
Privacy Policy
FAM Funds has adopted a Code of Ethics that applies to its principal
executive and principal financial officers. You may obtain a copy of this Code
without charge, by calling FAM Funds at (800) 932-3271.
Chairman’s Commentary
June 30, 2014
Dear Fellow Shareholder,
As I write, people around the world are fixated on the outcomes of a series of soccer matches
called the World Cup. Every day reports of the unexpected emanate from Brazil. For
instance, it surprised many that the U.S. advanced from its ominous-sounding “Group of
Death” to play even one match in the knockout round. Even more astounding to some was
that 2010 World Cup Champion Spain failed to advance out of group rounds. Despite the
heightened drama, Brazil is not the only source of surprises this summer. We too have found
a few as we take this mid-year pause to assess the state of financial markets and provide
you with a review of the Funds.
The fact that U.S. equities (as measured by the S&P 500 Index) were in positive territory at
the halfway mark is a wonder to many. Conventional wisdom at the end of 2013 seemed to
be that U.S. equities were destined to fall in 2014 if for no other reason than they had such
a strong run last year. It initially looked like the conventionalists were, in fact, wise as the
S&P 500 fell nearly 6% in January on uncertainty in emerging markets and heightened ten-
sions with Russia over Ukraine and the Crimea Conflict. Calm was eventually restored and
the markets embarked on a slow, surprisingly staid slog upward to mid-year gains. Overall,
every major U.S. stock market index was up during the first half of 2014.
Using second quarter earnings estimates, the S&P 500’s operating earnings per share are
expected to be up 4.2% year-to-date. So, the index grew slightly faster than earnings which
resulted in a modest increase in the market’s trailing price-to-earnings multiple (P/E) from
17.2 to 17.7. Using projected estimates, the S&P 500 was priced at 15.6 times earnings
expected over the next 12 months. Valuation levels — whether using trailing or projected
earnings — fall within historical ranges and help confirm our view that equity markets, in
the aggregate, are fairly valued.
While equity performance thus far this year may have astonished some, lower interest rates
have been a shock to most. At this time last year, I was writing about fears that the Federal
Reserve’s plan to begin reducing long-term bond purchases (“tapering”) would lead to higher
interest rates and be, at the very least, disruptive to U.S. equity markets. Well, after six
months of tapering not only are our stocks higher, but long-term interest rates have actually
fallen. On December 31, 2013 the benchmark 10-year Treasury note yielded 3.03% and on
June 30, 2014 it was 2.53%, a decline of 50 basis points! Yields on other longer-dated fixed
income instruments, such as corporate and municipal bonds, fell in similar fashion — often
more.
The surprise decline in long-term interest rates is important for many reasons; I will men-
tion a few. First, it serves as an important reminder that the consensus is often wrong;
1
Chairman’s Commentary
frequently so on matters of macroeconomics. This lesson never gets old. Second, it has given
companies more time to raise cheap capital to reinvest internally, make acquisitions, or
reconstitute their capital structures — all of which often leads to per-share intrinsic value
growth. Most of the businesses we invest in have completed one or more of these activities
in 2014. Lastly, the lower interest rate environment has extended and intensified the agony
of those seeking to live off interest generated from fixed income securities. With increased
pressure, some have stretched even further in credit quality or duration to achieve a tar-
geted yield and, we fear, may be taking on risks of which they are unaware. This may lead
to some unpleasant surprises.
As estimated, the companies in which we invest have collectively grown their earnings —
and earning power — during the first half of 2014. Reflecting this, all three FAM mutual
funds ended this time period in positive territory performing admirably in an equity mar-
ket that has favored the lower-quality companies we avoid. The Value Fund rose 6.29%, the
Equity-Income Fund grew 5.52%, and the Small Cap Fund was up 0.68%. By our estimates,
business values of our holdings appreciated more than their share prices. Over time, we
expect these two to track pretty closely but values and prices often diverge in the short run.
We have invested in a collection of businesses with impressive earnings power. On a dollar-
weighted basis, our holdings reported a return of 15% on equity over the past year, with only
a modest amount of leverage. Adjusting for dividend payouts these companies also reported
that they grew nearly 12% over the past year without the use of new, potentially dilutive
capital. This, along with other avenues for value enhancement including acquisitions, cost
cutting, and share repurchases, should help drive growth of the value of our businesses.
In the first half of 2014 we added 10 new companies to our Funds and sold 10. This parity
is just a coincidence, but it is indicative of opportunistic upgrades to our portfolios — swap-
ping good companies for equal or better enterprises that have better return potential.
Indeed, with a couple of exceptions, our sales were the kind we like: good companies that
had appreciated to levels that diminished our margin of safety beyond what we think is
reasonable. The businesses we added to our holdings, some of which you will read about in
the Fund Managers’ letters, run the gamut from banks to retailers and land developers to
hotels. Shared among them, though, are key characteristics — they are quality, well-run,
conservatively-financed businesses.
For many, the World Cup will produce no surprises merely because there were no expecta-
tions. For the same reason, we will not likely be startled by stock performance in the back
half of 2014. Absent a large decline, though, we do expect it to continue to be difficult to
2
Chairman’s Commentary
find great companies selling at bargain prices. You can rest assured, however, that we are
not deterred. We will travel further, make more phone calls, read more 10Ks, and turn over
more stones as we seek to preserve capital and achieve positive risk-adjusted returns for
you our shareholders.
Thomas O. Putnam, Founder & Chairman
Research Team
Andrew F. Boord
John D. Fox, CFA
Kevin D. Gioia, CFA
Paul C. Hogan, CFA
Marc D. Roberts, CFA
Drew P. Wilson, CFA
3
FAM Funds —Expense Data
As of June 30, 2014 (Unaudited)
As a shareholder of the Funds, you incur 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 Funds 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 at the beginning of the period and held
for the entire period (1/1/2014 to 6/30/2014).
Actual Expenses
Line (A) of the following tables provides information about actual account values and ac-
tual expenses. You may use the information in this line, together with the amount you in-
vested, 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 mul-
tiply the result by the number in the line for your share class 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
Line (B) of the following table provides information about hypothetical account values and
hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of re-
turn of 5% per year before expenses, which is not the Fund’s actual return. The hypotheti-
cal 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% hypo-
thetical example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs
only. Therefore, line (B) of the table is useful in comparing ongoing costs only, and will not
help you determine the relative costs of owning different funds.
4
FAM Funds —Expense Data continued
Six months ended June 30, 2014 (Unaudited)
FAM Value Fund
Beginning
Ending
Expenses
Account Value
Account Value
Paid
1/1/2014
6/30/14
During Period
A. Ongoing Costs Based on Actual Fund
$1,000.00
$1,062.90
$5.98*
Return
B. Ongoing Costs Based on Hypothetical
$1,000.00
$1,019.20
$5.86*
5% Yearly Return
*Expenses are equal to the Fund’s annualized expense ratio of (1.17%), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
FAM Equity-Income Fund
Beginning
Ending
Expenses
Account Value
Account Value
Paid
1/1/2014
6/30/14
During Period
A. Ongoing Costs Based on Actual Fund
$1,000.00
$1,055.20
$6.42*
Return
B. Ongoing Costs Based on Hypothetical
$1,000.00
$1,018.75
$6.31*
5% Yearly Return
*Expenses are equal to the Fund’s annualized expense ratio of (1.26%), multiplied by the average account
value over the period, multiplied by 181/365 (to reflect the one-half year period).
FAM Small Cap Fund
Beginning
Ending
Expenses
Account Value
Account Value
Paid
1/1/2014
6/30/2014
During Period
A. Ongoing Costs Based on Actual Fund
$1,000.00
$1,006.80
$7.17*
Return
B. Ongoing Costs Based on Hypothetical
$1,000.00
$1,017.65
$7.20*
5% Yearly Return
* Expenses are equal to the Fund’s net annualized expense ratio of (1.44%), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
5
FAM Value Fund
June 30, 2014
Dear Fellow Value Fund Shareholder,
News from around the globe may be unsettling, but U.S. stocks continued their record-
setting pace for the first half of the year. Political challenges and unrest made headlines in
Russia and Iraq, but the stock market shrugged off these concerns with both the Dow Jones
Industrial Average and the S&P 500 Index hitting numerous all-time highs during the first
half of 2014. The biggest surprise in the financial markets this year is that interest rates in
the U.S. declined compared to unanimous predictions of an increase.
Performance Detail
At June 30, 2014 the net asset value per share of the FAM Value Fund was $65.70. This
represents an increase of 6.29% from the beginning of the year. For comparison, the S&P
500 Index increased 7.14%, the Russell Midcap Index increased 8.67%, and the Russell 2000
Index increased 3.19%.
Best Performers
The best performer, on a dollar-weighted basis, was EOG Resources with a gain of $10.314
million. EOG continues to be a successful investment since our original purchase in 2009.
Under former CEO Mark Pappa, EOG made a transition from a natural gas to an oil compa-
ny during the last five years. This transition proved visionary as oil prices have remained
elevated since 2011. The transition to a new CEO has not changed the EOG story as the busi-
ness remains committed to a strong balance sheet, high returns on capital, and a growing
dividend.
The Fund’s second-best performer wasZebraTechnologies with a gain of $9.221 million.
Zebra performed well due to an acceleration of sales in its core business and the announce-
ment of a large acquisition.In April Zebra announced that it was acquiring the Enterprise
Business owned by Motorola Solutions for $3.45 billion. While the stock dropped more than
10% on the announcement of the acquisition, it quickly rebounded and hit new highs dur-
ing the second quarter. We took the opportunity to sell all of our shares in Zebra during
this period. To complete the acquisition Zebra will be borrowing $3 billion which we believe
is an excessive amount of debt given the cash flow of the combined company. While the
new corporation may be successful, we decided to maintain our discipline of investing in
businesses with strong balance sheets and sold the stock.
The third-best performer wasProtectiveLife with a gain of $8.067 million. The price in-
crease was also the result of an acquisition, but in this case Protective is the seller — not
the buyer. In June Protective announced it was being purchased by a large Japanese insur-
ance company for $70 a share. It is bittersweet for us to see Protective go as it has one of
the better management teams in the life insurance business and is a longtime holding in
6
FAM Value Fund
the Fund. However, the $70 takeover offer is an excellent price and offers us full value for
our shares.
Worst Performers
In the six months ended June 30, 2014, our most significant losses were in the retail indus-
try. The entire retail sector has been a difficult area in 2014. The brutal winter of 2013-14,
along with increased competition from online commerce, has weighed on retail results
everywhere.
The Fund’s worst performer, on a dollar-weighted basis, wasBedBathandBeyond with
a loss of -$7.921 million. The company’s stock hit an all-time high of $80 at the end of last
year. Since that time, Bed Bath has reported two disappointing quarters of earnings. The
poor performance is due to a combination of items including cold weather, increased com-
petition, and its investment spending on new initiatives. After a 29% price decline year-
to-date, the stock looks inexpensive at less than 12 times last year’s earnings per share.
Bed Bath maintains a fortress balance sheet with more than $500 million in cash and is an
aggressive buyer of its own shares.
The second-worst performer was also a retailer, Ross Stores, with a loss of -$5.041 million.
We have written about Ross Stores over the years as the stock has been a top performer
several times. While many retailers have reported declining earnings, Ross continues to
grow. Earnings per share increased last year by 10% and this year’s first quarter results
grew 7%. We still believe that Ross Stores remains relatively insulated from the challenges
in retail as the company’s offering of brand name fashions for less remains very popular.
Additionally, their physical stores allow consumers to partake in the “treasure hunt” as
new merchandise arrives every week.
The third-worst performer wasHomeBancShares which generated a loss of -$2.450 mil-
lion. The good news is that Home Bancshares was a very successful investment for the
Fund. We first purchased shares in Home in early 2011 at around $10 (adjusted for stock
splits). At that time investors were still licking their wounds from the financial crisis and
were suspicious of banks. We felt that Home BancShares was a well-run bank with con-
siderable financial strength that could take advantage of weaker competitors. This is ex-
actly what happened as the bank announced a number of acquisitions — growing their
assets from $3.8 billion, at the time of our purchase, to almost $7 billion by December 31,
2013. This success was recognized in the stock’s valuation which we estimated to be at the
high-end when 2013 closed. Consequently, we sold all of the Fund’s shares above $30 in the
first quarter. The $30+ price was considerably higher than our original stock purchase, but
lower than the stock’s price on 12/31/13 — this created the loss.
7
FAM Value Fund
Portfolio Activity
Purchases
We purchased stock in three new companies during the first half of the year: CDW Corpo-
ration, Starwood Hotels, and T. Rowe Price Group.
CDW is a distributor of technology equipment and services to customers in both business
and government segments. This is the second time we have invested in the company. We
originally purchased the stock in 2005. Two years later CDW was taken over by a private
equity firm. After six years of private ownership, CDW was taken public late last year and
this gave us the opportunity to repurchase the stock. As is typical under private ownership,
the business was saddled with a fair amount of debt. As CDW became public, its manage-
ment team indicated that they were committed to using the company’s significant free
cash flow to reduce that debt. As we track their progress so far, they are doing exactly as
they said and debt is declining at a fast pace. Each dollar of debt that is repaid creates one
dollar of new value for the stock holders. We believe that CDW will grow its core business
at a modest pace and, through the smart use of free cash flow, will have good returns for
its shareholders.
Starwood Hotels is an owner and operator of hotels around the world. Starwood operates
well-known brands like Sheraton, Westin, St. Regis, and W hotels. It is a global company
with hotels in 100 countries and is in the process of executing a time-tested strategy in
the hotel business called asset-lite. During this process, Starwood is selling hotels to other
investors and retaining the right to manage the hotel for a fee. This model has been very
successful for other large hotel enterprises and should create more than $3 billion of free
cash flow to deploy for the benefit of its shareholders over the next few years.
T. Rowe Price Group is an investment advisory firm that offers mutual funds and managed
accounts to a wide range of customers. The company has been very successful in the retire-
ment market. T. Rowe maintains a fortress balance sheet with more than $3 billion in cash
and investments along with no debt. The company is well-run with excellent long-term
earnings growth and more than 20 years of dividend increases. At our purchase price the
stock is trading in the lower end of its valuation range over the last decade.
Sales
In addition to the sales of Home BancShares and Zebra Technologies detailed above, there
were two other significant sales: TCF Financial and VCA Antech.
We owned shares in TCF Financial for more than a decade and it proved to be a poor in-
vestment. TCF was impacted by a host of difficulties over the years including a severe set-
back from the financial crisis. We owned a number of financial stocks through the crisis
and many of these stocks have gone on to all-time highs. TCF was different as it struggled
with credit losses long after most banks were reporting improved results. Additionally,
8
FAM Value Fund
TCF relied on consumer banking fees that were reduced in post-crisis regulations. We most
certainly should have sold the stock earlier, but it always seemed to be a good bargain. We
did add to the position at very low prices in 2012 and made an excellent return on those
purchases, but our overall results were poor.
Our ownership of VCA Antech is a better story. VCA Antech is the leading provider of pet
health care services in the country. We held a small position in the Fund in 2012 and added
to it in 2013 when we believed the stock was discounted nicely and the business was im-
proving. We were right on both counts and sold the stock this year after a good one-year
return.
Outlook
Commentary from the media concerning investing usually revolves around big themes
like economic growth or geopolitical developments. We tend to focus on individual com-
panies because we believe the results of a business will be reflected in its stock price over
time. As we look at the state of American commerce today through the lens of the compa-
nies in which we invest, we see a number of positive trends for stocks. First of all, stock
prices follow profits and the collective earnings of American industry are at record levels.
In fact, we expect 2014 to be the fourth consecutive year of record profits for the corpora-
tions in the S&P 500 Index. These earnings are the result of modest sales growth and excel-
lent cost control as many businesses are posting record margins.
In addition to profitability, there are two other important trends. The first is that the merg-
ers and acquisition market is very active. Companies are using their cash flow and the
ample financing environment to grow their businesses through acquisitions. For example,
six of the Top 10 Holdings in the Fund have been involved in at least one acquisition this
year. Our holdings, Brown & Brown and Mednax, have completed multiple transactions.
These acquisitions increase their sales and profits allowing them to grow faster in a slow-
growing economy. The other important trend is that management teams are getting bet-
ter at allocating the cash that their businesses generate. The current trend of shareholder
activists is well-recognized in corporate boardrooms and directors and executives alike are
sharpening their focus on using resources efficiently. As a result, we are seeing increased
dividends and smart share repurchases at many companies whose stock we own.
Of course, we are not the only ones to recognize these trends and the good performance
of businesses is currently reflected in the price you have to pay to purchase their stock.
We see most stocks at fair value, certainly not cheap, and it is much harder to find a bar-
gain compared to three years ago. However, the good news is that we do not necessarily
need new ideas at this time. We believe that each of the Fund’s holdings is solid and well-
positioned for the future. They also meet our four core criteria: quality/distinct business;
strong management team; financially strong; and selling at a reasonable price based on
our estimate of their economic worth. We are optimistic about the long term and will con-
tinue to work diligently on your behalf.
9
FAM Value Fund
Table of Long-Term Returns
Average Annual Total Returns as of June 30, 2014
Since
Inception
YTD
1-Year 3-Year 5-Year 10-Year
(1/2/87)
FAM Value Fund (FAMVX) 6.29% 21.90% 13.57% 16.84%
7.15%
10.69%
Russell Midcap Index
8.67% 26.85% 16.09% 22.07% 10.43%
12.06%
Russell 2000 Index
3.19% 23.64% 14.57% 20.21%
8.70%
9.88%
S&P 500 Index
7.14% 24.61% 16.58% 18.83%
7.78%
10.36%
The performance table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Thank you for investing with us in the FAM Value Fund.
John D. Fox, CFA
Thomas O. Putnam
Co-Manager
Co-Manager
The opinions expressed herein are those of the portfolio managers as of the date of the
report and are subject to change. There is no guarantee that any forecast made will come
to pass. This material does not constitute investment advice and is not intended as an
endorsement of any specific investment.
Performance data quoted above is historical. Past performance is no guarantee of future
results. Current performance may be higher or lower than the performance data quoted.
The principal value and investment return of an investment will fluctuate so that your
shares, when redeemed, may be worth more or less than their original cost.
10
FAM Value Fund —Portfolio Data (Unaudited)
As of June 30, 2014 (Unaudited)
COMPOSITION OF TOTAL INVESTMENTS
Property & Casualty Insurance
12.9%
Machinery & Equipment
9.2%
Money Market Fund
6.5%
Retail Stores
6.1%
Oil & Gas Exploration
4.8%
Health Care Services
4.8%
Real Estate Development
4.7%
Insurance Agency
4.6%
Banking
4.5%
Investment Management
4.0%
Health Care Equipment/Devices
3.7%
Transportation
3.4%
Automotive
3.3%
Life Insurance
3.2%
Diversified Manufacturing
3.1%
Restaurants
2.8%
Computer Software & Services
2.5%
Advertising Agencies
2.4%
Auto Parts & Equipment
2.4%
Electronic Equipment
2.1%
Other
9.0%
Statement Regarding Availability of Quarterly Portfolio Schedule. Please note that (i) the Fund files
its complete schedule of portfolio holdings with the Securities and Exchange Commission for the
first and third quarters of each fiscal year on Form N-Q; (ii) the Fund’s Forms N-Q are available on the Commission’s website at http://www.sec.gov; (iii) the Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330; and (iv) the Fund makes the information on Form N-Q available to shareholders, upon request, by calling FAM Funds at 1-800-932-3271.
11
FAM Value Fund —Statement of Investments
June 30, 2014 (Unaudited)
SHARES
VALUE
COMMON STOCKS (93.5%)
Advertising Agencies (2.4%)
The Interpublic Group of Companies, Inc.
• provides advertising and marketing services
1,182,700
$ 23,074,477
Automotive (3.3%)
CarMax, Inc.*
• specialty retailer of used cars and light-trucks in the USA
600,000
31,206,000
Auto Parts & Equipment (2.4%)
Autozone, Inc.*
• retail and distribution of automotive replacement parts and accessories
41,700
22,361,208
Banking (4.5%)
Bank of the Ozarks, Inc.
• retail and commercial banking services in the Southeast
506,000
16,925,700
M&T Bank Corporation
• commercial and retail banking services to individuals, businesses, cor-
porations and institutions in the Northeast and Mid-Atlantic
95,000
11,784,750
South State Corporation+
• banking services to individual and corporate customers in the Carolinas
234,110
14,203,454
+Name changed 6/30/14 from First Financial Holdings, Inc.
42,913,904
Commercial Services (1.3%)
McGrath RentCorp
• modular building and electronic test equipment rentals,
347,000
12,752,250
subsidiary classroom manufacturing
Computer Software & Services (2.5%)
CDW Corporation
• provides information technology (IT) solutions
740,000
23,591,200
Diversified Manufacturing (3.1%)
Illinois Tool Works
• manufactures engineered products such as plastic and metal
339,950
29,766,022
components and fasteners
See Notes to Financial Statements
12
FAM Value Fund —Statement of Investments continued
• personal property and casualty insurance, and reinsurance
61,693
37,536,489
122,878,021
Publishing (1.4%)
John Wiley & Sons, Inc. - Class A
• publisher of print and electronic products, specializing in scientific,
technical, professional and medical books and journals
217,000
13,148,030
Real Estate Development (4.7%)
Brookfield Asset Management, Inc. - Class A
• asset management holding company that invests in property,
735,000
32,354,700
powerand infrastructure
Forest City Enterprises Inc. - Class A*
• acquires, owns, develops, and manages commercial and residential real
600,000
11,922,000
estate and land in the United States
44,276,700
Restaurants (2.8%)
YUM! Brands, Inc.
• quick service restaurants including KFC, Pizza Hut and Taco Bell
330,600
26,844,720
Retail Stores (6.1%)
Bed Bath & Beyond, Inc.*
• national chain of retail stores selling domestic merchandise such as bed
345,600
19,830,528
linens, bath items, kitchen textiles and home furnishings
Ross Stores, Inc.
• chain of off-price retail apparel and home accessories stores
572,844
37,882,174
57,712,702
See Notes to Financial Statements
15
FAM Value Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Semiconductors (1.3%)
Microchip Technology, Inc.
• develops, manufactures and sells semiconductor products for various
260,000
$ 12,690,600
embedded control applications
Specialty Chemical (0.6%)
Sigma-Aldrich Corporation
• develops, manufactures, purchases and distributes high quality
60,000
6,088,800
chemicals, biochemicals and equipment available throughout the world
Transportation (3.4%)
Forward Air Corporation
• provides surface transportation and related logistics services to the
389,233
18,624,799
deferred air freight market in North America
Knight Transportation
• transportation of general commodities in the U.S.
576,900
13,712,913
32,337,712
Total Common Stocks (Cost $347,004,847)
$888,857,831
TEMPORARY INVESTMENTS (6.5%)
Money Market Fund (6.5%)
Invesco Short Term Treasury Fund(Institutional Class)
(0.02%)**
61,847,520
61,847,520
Total Temporary Investments (Cost $61,847,520)
$ 61,847,520
Total Investments (Cost $408,852,367)
$950,705,351
* Non-income producing securities
** The rate shown represents the effective yield at 6/30/14
See Notes to Financial Statements
16
FAM Equity-Income Fund
June 30, 2014
Dear Fellow FAM Equity-Income Fund Shareholder,
Highlights
• FAM Equity-Income Fund posted a return of 5.52% for the first half of 2014.
• The 5-year annualized growth rate of the dividends for the Fund’s holdings was
9.8% as of 6/30/2014.
The strategy of the Fund is to invest in high-quality companies that pay solid dividends
and we like these dividends to grow over time. This can be a great advantage to sharehold-
ers because the dividend yield, based on the original cost basis of the investment, grows
as well. Our team handpicks each investment in the Fund through our active research
process. Due to the fact that we spend so much time getting to know these investments,
we want them to contribute to the performance of the Fund for many years. We have no
interest in selling holdings just to make a few percentage points of return before moving
on to the next short-term trade. We are looking for investments which will compound over
the long term; this has been the Fund’s philosophy since its inception in 1996.
Performance Detail
For the first half of the year the FAM Equity-Income Fund appreciated 5.52%, compared
to the S&P 500 Index which appreciated 7.14%, Russell Midcap Index which rose 8.67%,
and Russell 2000 Index which increased 3.19%. The Lipper Equity Income category which
tracks funds with a dividend strategy appreciated 7.27%. The strong stock market perfor-
mance continues to propel equities higher and the Fund participated in this upward trend.
Energy was our best performing sector in the Fund due to the turmoil in Ukraine and Iraq.
The technology sector also made a healthy contribution to performance. The consumer
sector had the largest negative impact on performance year-to-date, but also provided the
best opportunities to purchase stock in quality companies at deeply discounted prices.
Best Performers
The best performing company in the portfolio, on a dollar-weighted basis, wasEOGRe-
sources with a gain of $2.569 million. EOG continues to be a successful investment since
our original purchase below $40 in 2009 to the recent quarter-end price of $116 per share.
Under former CEO Mark Pappa, EOG made a transition from a natural gas to an oil compa-
ny during the last five years. This transition proved visionary as oil prices have remained
elevated since 2011. The transition to a new CEO has not changed the EOG story as the busi-
ness remains committed to a strong balance sheet, high returns on capital, and a growing
dividend.
CDWCorp. contributed $1.487 million to the value of the Fund as the stock appreciated
17
FAM Equity-Income Fund
38% in the first half of the year and was the second-best performer. CDW is a distributor
of technology equipment and services to customers in both business and government seg-
ments. The corporation reported nice earnings growth in the first quarter and manage-
ment continued to pay down high-cost debt. The percent of ownership by private equity
also continued to decline.
The third-best performer, US Ecology, added $1.379 million to the value of the Fund with a
total return on the stock of 30.4%. US Ecology is a leading North American provider of en-
vironmental services to commercial and government entities. The company reported very
strong results for the first quarter which is typically a slow quarter due to winter weather.
Additionally, management made a large acquisition of Environmental Quality Company.
This acquisition makes US Ecology even more valuable in our eyes; however, it does have
some near-term execution risk as management integrates the organization. The stock is
up 35% year-to-date and 80% for the last 12 months.
Worst Performers
The toy companyMattel, Inc. was the worst performer, on a dollar-weighted basis, and de-
tracted from the value of the Fund by -$1.075 million. While Mattel has been a strong com-
pounder for several years, it reported weak results in both the fourth quarter (Christmas
season) and first quarter. The company struggled with a higher percentage of toy sales
coming from online sources — this left inventory levels too high at brick and mortar retail
stores. This is a fixable issue and management is dedicating great effort to address this
changing dynamic in the sales channel. Management is also working on better targeting
their advertising budget toward online sales. We bought additional shares after the stock
declined which we believe will be advantageous to the longer-term return of the Fund.
Discount apparel retailer Ross Stores was the second-worst performer with a loss of
-$0.914 million to the value of the Fund. The business reported earnings for their first fis-
cal quarter that were at the high end of management’s guidance, yet the stock declined in
tandem with other retailers. Ross is executing very well in this tough environment and we
believe it is well-positioned to continue growing into the future. We also feel it remains
relatively insulated from the challenges in retail as the company’s offering of brand name
fashions for less remains very popular. Ross only has 1,300 stores in 33 states and we be-
lieve it can support another 500 to 1,000 stores providing a long runway for growth. Ad-
ditionally, management continuously buys back stock and increased the dividend by 19%
over last year. It’s worth noting that the Fund has owned shares in Ross Stores for more
than a decade. Over the last 10 years the stock has compounded at 18.5% compared to 7.8%
for the S&P 500 Index. We are not concerned that the stock price return of Ross Stores lags
the S&P 500 for a six-month period.
18
FAM Equity-Income Fund
Tupperware Brands, also in the consumer space, was the third-worst performer declining
in value by -$0.386 million due to issuing guidance for the current year that was below
analysts’ expectations. Management is working to stabilize and transform their beauty
business in Mexico which is experiencing some competitive pressure from discounting as
well as a sales force reshuffle. The good news is that Tupperware continues to experience
double-digit growth in emerging markets which should provide continued organic growth
opportunities going forward. Moreover, share repurchases and dividends this year will
represent greater than $6.00/share returned to shareholders. In the long term, we are
happy to own part of a business with strong growth opportunities run by a management
team dedicated to returning considerable amounts of cash to shareholders in the form of
dividends and buybacks. This is another case where we added to our position as the stock
declined.
Portfolio Activity
We took advantage of the recent dislocation in the retail industry to purchase two new
names in the portfolio. We initiated a position in American Eagle Outfitters which strug-
gled last year and so far this year. The stock declined 30% in 2013 and another 20% through
the first six months of 2014. We believe the stock has declined enough to put the odds of
success in this investment strongly in our favor. American Eagle has no long-term debt
and a large war chest of cash. Their strong financial position should provide the busi-
ness with staying power as some of their missteps are corrected. Additionally, American
Eagle’s Chairman beneficially owns 8% of the stock which provides him with plenty of
incentive to get them back on track. Finally, the dividend yield is 4.5%.
Late in the quarter we bought shares in the shoe retailer DSW, Inc. after they reported a
sub-par quarter. The stock declined by 40% from year-end which gave us an attractive en-
try point to buy shares. The stock has subsequently rebounded by 13% already making this
a successful investment, and it has a dividend yield of 2.7% as of quarter-end. We expect
this dividend to grow over time.
Also in the quarter we continued to build our position in CDW, which is now nearly 4% of
the Fund’s assets. Additionally, we bought more shares in Mattel, McGrath RentCorp, and
Tupperware Brands.
We exited our position in CA Technologies because we thought the valuation was over-
extended. The stock appreciated 53% last year and we didn’t see any evidence that the
company was going to be able to get back on a growth track. We bought this position at a
modest valuation and a 4% dividend yield. Since we exited the position, the stock has de-
clined 12%. We also exited our position in Dr. Pepper Snapple Group so we could invest the
proceeds in a company that we estimate has better long-term growth prospects.
19
FAM Equity-Income Fund
There were a number of positions that we trimmed due to valuations that were at the high-
er end of their historical valuation range. These companies included IDEX Corp., OneBea-
con Insurance, and US Ecology.
Outlook
We continue to seek investments with growth potential as well as strong balance sheets.
This combination should allow companies to grow their dividends paid to shareholders as
well as weather any future economic turbulence that may arise. We recognize that the
market is trading at all-time highs and this makes bargains more difficult to find; howev-
er, at any given time there is always a sub-sector of the market that is unloved by investors.
This historically has been fertile ground to till for the next crop of investments.
We continue to work diligently on your behalf. Thank you.
Table of Long-Term Returns
Average Annual Total Returns as of June 30, 2014
Since
Inception
YTD
1-Year 3-Year 5-Year 10-Year
(4/1/96)
FAM Equity-Income Fund 5.52%
19.75% 15.20% 17.44%
6.91%
8.83%
(FAMEX)
Russell Midcap Index
8.67% 26.85% 16.09% 22.07% 10.43%
10.80%
Russell 2000 Index
3.19% 23.64% 14.57% 20.21%
8.70%
8.70%
S&P 500 Index
7.14% 24.61% 16.58% 18.83%
7.78%
8.23%
Paul Hogan, CFA
Thomas O. Putnam
Co-Manager
Co-Manager
20
FAM Equity-Income Fund
The opinions expressed herein are those of the portfolio managers as of the date of the
report and are subject to change. There is no guarantee that any forecast made will come
to pass. This material does not constitute investment advice and is not intended as an
endorsement of any specific investment.
Performance data quoted above is historical. Past performance is no guarantee of future
results. Current performance may be higher or lower than the performance data quoted.
The principal value and investment return of an investment will fluctuate so that your
shares, when redeemed, may be worth more or less than their original cost.
21
FAM Equity-Income Fund —Portfolio Data
As of June 30, 2014 (Unaudited)
COMPOSITION OF TOTAL INVESTMENTS
Semiconductors
9.8%
Machinery & Equipment
7.2%
Money Market Fund
6.8%
Retail - Apparel Stores
6.4%
Oil & Gas Exploration
5.8%
Health Care Equipment/Devices
5.7%
REITS - Data Center
4.7%
Toys
4.6%
Insurance Agency
4.1%
Computer Software & Services
4.0%
Consumer Staples
3.9%
Hazardous Waste Disposal
3.7%
Banking
3.4%
Commercial Services
3.4%
Utilities/Water
3.3%
Specialty Chemical
3.2%
Household Durables
2.7%
REITS - Diversified
2.7%
Technology
2.5%
Investment Management
2.5%
Health Care Distribution
2.4%
Property & Casualty Insurance
2.1%
Other
5.1%
Statement Regarding Availability of Quarterly Portfolio Schedule. Please note that (i) the Fund files
its complete schedule of portfolio holdings with the Securities and Exchange Commission for the
first and third quarters of each fiscal year on Form N-Q; (ii) the Fund’s Forms N-Q are available on the Commission’s website at http://www.sec.gov; (iii) the Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330; and (iv) the Fund makes the information on Form N-Q available to shareholders, upon request, by calling FAM Funds at 1-800-932-3271.
22
FAM Equity-Income Fund —Statement of Investments
June 30, 2014 (Unaudited)
SHARES
VALUE
COMMON STOCKS (92.4%)
Banking (3.4%)
M&T Bank Corporation
• commercial and retail banking services to individuals, businesses, corpora-
15,000
$ 1,860,750
tions and other institutions in the Northeast and Mid-Atlantic
South State Corporation+
• banking services to individual and corporate customers in the Carolinas
58,000
3,518,860
+Name changed 6/30/14 from First Financial Holdings, Inc.
5,379,610
Commercial Services (3.4%)
McGrath RentCorp
• modular building and electronic test equipment rentals, subsidiary class-
146,264
5,375,202
room manufacturing
Computer Software & Services (4.0%)
CDW Corporation
• provides information technology (IT) solutions
197,000
6,280,360
Consumer Staples (3.9%)
Flowers Foods, Inc.
• produces and markets bakery products in the USA
292,850
6,173,278
Data Processing & Outsourcing (1.1%)
The Western Union Company
• leader in global money movement and payment services, providing people
100,000
1,734,000
and businesses with fast, reliable and convenient ways to send money and
make payments around the world
Hazardous Waste Disposal (3.7%)
U.S. Ecology, Inc.
• provides radioactive, pcb, hazardous and non-hazardous waste services to
118,569
5,803,953
commercial and government customers
See Notes to Financial Statements
23
FAM Equity-Income Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Health Care Distribution (2.4%)
Patterson Companies, Inc.
• operates as a distributor serving dental, companion-pet, veterinarian, and
96,000
$ 3,792,960
rehabilitation supply markets in the USA and Canada
Health Care Equipment/Devices (5.7%)
Stryker Corp.
• operates a medical technology company offering Orthopedic Implants and
105,500
8,895,760
MedSurg Equipment
Health Care Services (0.5%)
Landauer, Inc.
• provides personal radiation dosimeters and radiation related services
20,000
840,000
Household Durables (2.7%)
Tupperware Brands Corporation
• manufacture and sales of preparation, storage, and serving solutions for
50,000
4,185,000
the kitchen and home
Insurance Agency (4.1%)
Arthur J. Gallagher & Co.
• provides insurance brokerage and risk management services to
137,920
6,427,072
commercial, industrial, institutional, and governmental organizations
Investment Management (2.5%)
Franklin Resources, Inc.
• provides investment management and fund administration
66,900
3,869,496
services as well as retail-banking and consumer lending services
Machinery & Equipment (7.2%)
Donaldson Company, Inc.
• designs, manufactures and sells filtration systems and replacement parts
125,600
5,315,392
IDEX Corporation
• manufactures proprietary, highly engineered industrial products and
72,984
5,892,728
pumps
11,208,120
See Notes to Financial Statements
24
FAM Equity-Income Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Oil & Gas Exploration (5.8%)
EOG Resources, Inc.
• engages in the exploration, development, production and marketing of
78,000
$ 9,115,080
natural gas and crude oil
Packaged Goods (1.2%)
McCormick & Company, Inc.
• manufactures, markets and distributes spices, seasonings, specialty
27,000
1,932,930
foods and flavorings to the entire food industry.
Property and Casualty Insurance (2.1%)
OneBeacon Insurance Group, Ltd.
• commercial, personal and specialty insurance products
211,866
3,292,398
Publishing (0.3%)
John Wiley & Sons, Inc. - Class A
• publisher of print and electronic products, specializing in scientific,
8,350
505,926
technical, professional and medical books and journals
REITS - Data Center (4.7%)
Digital Realty Trust Inc.
• engages in the ownership, acquisition, development, redevelopment and
127,000
7,406,640
management of technology-related real estate
REITS - Diversified (2.7%)
Physicians Realty Trust
• self-managed healthcare real estate company, focuses on the acquisi-
85,800
1,234,662
tion, development, ownership, and management of healthcare properties
leased to physicians
Winthrop Realty Trust
• real estate investment trust that engages in the ownership and manage-
189,350
2,906,522
ment of real property and real estate-related assets
4,141,184
Retail - Apparel Stores (6.4%)
Destination Maternity Corporation
• designing and retail of maternity clothing in the United States
7,800
177,606
DSW Inc.
• operates as a branded footwear and accessories retailer
62,000
1,732,280
See Notes to Financial Statements
25
FAM Equity-Income Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Retail - Apparel Stores (continued)
Ross Stores, Inc.
• chain of off-price retail apparel and home accessories stores
103,843
$ 6,867,138
American Eagle Outfitters, Inc.
• specialty retailer of clothing, accessories, and personal care products
114,000
1,279,080
10,056,104
Semiconductors (9.8%)
Altera Corporation
• manufacturer of programmable logic solutions
81,000
2,815,560
Microchip Technology, Inc.
• develops, manufactures and sells semiconductor
101,000
4,929,810
products for various embedded control applications
Xilinx, Inc.
• worldwide leader of programmable logic solutions
161,414
7,636,496
15,381,866
Specialty Chemical (3.2%)
Sigma-Aldrich Corporation
• develops, manufactures, purchases and distributes high quality
50,000
5,074,000
chemicals, biochemicals and equipment available throughout the world
Technology (2.5%)
National Instruments Corporation
• manufactures and supplies measurement and automation products
122,000
3,951,580
Toys (4.6%)
Mattel, Inc.
• designs, manufactures, and markets various toy products
185,299
7,221,102
Utilities/Gas (1.2%)
Questar Corporation
• natural gas utility in the state of Utah
77,800
1,929,440
Utilities/Water (3.3%)
Aqua America, Inc.
• water and waste water utility
198,750
5,211,225
See Notes to Financial Statements
26
FAM Equity-Income Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Total Common Stocks (Cost $85,927,238)
$145,184,286
PREFERRED STOCKS (0.8%)
REITS - Storage (0.8%)
Public Storage - (6.5%) Preferred Q
• engages in the acquisition, development, ownership, and
50,300
$ 1,309,812
operation of self-storage facilities in the USA and Europe
Total Preferred Stocks (Cost $1,393,838)
$ 1,309,812
TEMPORARY INVESTMENTS (6.8%)
Money Market Fund (6.8%)
Invesco Short Term Treasury Fund(Institutional Class)
(0.02%)*
10,578,847
10,578,847
Total Temporary Investments (Cost $10,578,847)
$ 10,578,847
Total Investments (Cost $97,899,923)
$ 157,072,945
*The rate shown represents the effective yield at 6/30/14
See Notes to Financial Statements
27
FAM Small Cap Fund
June 30, 2014
Dear Fellow FAM Small Cap Fund Shareholder,
A year ago we reminded investors that,“Wearefocusedonbuildingwealthoverlongperiods
Despite our continued outperformance since inception, these comments were prescient and
we have lagged the Russell 2000, our benchmark, year-to-date and over the past year.
Fortunately, our comments regarding the intrinsic value of our companies have also been
prescient. In aggregate, our holdings continue to grow their intrinsic value giving us oppor-
tunities to put capital to work across many names in the portfolio at more attractive valu-
ations. For the long-term shareholder this may be a positive development because our goal
is to continue to outperform over longer-term periods of time.
Further exacerbating short-term relative results has been a preference in the market toward
speculative and lower-quality investments. With a continuation of the low interest rate
environment and strong markets in 2013, we have witnessed investors engaging in riskier
behavior. We will take no part in this activity as we remain committed to not only growing
capital, but preserving it as well. We will expand on this market activity later.
Performance Detail
Small caps have underperformed this year, following stellar results last year, as shown by
the relative returns of the Russell 2000 Index versus the S&P 500 Index. The FAM Small Cap
Fund underperformed year-to-date (YTD) and on a one-year basis, but continued its outper-
formance since inception.
Since Inception
As of 6/30/14
YTD
1 Year
Annualized
(3/1/2012)
FAM Small Cap Fund
0.68%
21.41%
21.02%
Russell 2000 Index
3.19%
23.64%
19.41%
S&P 500 Index
7.14%
24.61%
18.97%
28
FAM Small Cap Fund
Best Performers
The Fund’s best performer, on a dollar-weighted basis, was Winthrop Realty Trust with a
gain of $0.965 million year-to-date. Winthrop was on our worst performers list in each of
our last two letters! This goes to show you that if value creation is occurring, then it will
eventually be recognized by the market. In this case CEO Michael Ashner decided to speed
up the process by announcing the liquidation of the company at a time when valuations for
high-quality commercial real estate have increased quite substantially, yet these market
prices were not being recognized in the stock. Recent property sales indicate that there may
still be some upside between now and the eventual complete liquidation of the business.
The second-best performing stock was Skullcandy with a gain of $0.564 million. This is a
transitional story in which new CEO Hoby Darling, formerly of Nike, is leading the change.
Our thesis was that the investor disfavor had gone too far for a company with potential
earnings power that was much greater than what was being reported as well as net cash on
the balance sheet. Although progress had been made, the stock market gave us an oppor-
tunity that we could not resist. Following better than expected earnings results the stock
rose considerably in one day! As this price was well above our estimate of intrinsic value,
we sold all of our shares to take advantage of market participants’ overly joyous mood.
Worst Performers
The worst performing stock, on a dollar-weighted basis, wasDestination Maternity with a
loss of -$0.598 million year-to-date. Despite being preceded by six straight quarters of
positive same-store sales, the company was not immune to the adverse retail environment
that hit the majority of the apparel industry. As a result, Destination Maternity twice low-
ered its full-year fiscal 2014 earnings guidance — this has weighed heavily on the stock. We
hate to blame the weather, but living through this winter personally we have no doubt that
it had a negative effect. Although this is a setback in the short term, we still like the com-
pany’s niche presence along with management’s ability to allocate capital wisely.
The second-worst performing stock wasBiglariHoldings with a loss of -$0.452 million. We
continue to believe that CEO Sardar Biglari is building long-term shareholder wealth
through his capital allocation decisions, even if these decisions may negatively impact
short-term results. One such decision has been an initiative to build out the necessary
infrastructure to sustain a much larger Steak ‘n Shake franchise organization. This has
affected earnings today, but should create a growing, steady stream of cash flow into the
future. Furthermore, Steak ‘n Shake has continued to grow organically as shown by its 21st
consecutive quarter of positive same-store sales despite the negative weather and retail
environment. Steak ‘n Shake represents the largest operating business at Biglari Holdings,
a company Mr. Biglari views as a “cash generating machine.”
29
FAM Small Cap Fund
Portfolio Activity
We sold five companies completely in the first half of the year, including the aforemen-
tioned Skullcandy. Other sales included America’s Car-Mart, Gordmans, Inventure Foods,
and Rofin-Sinar Technologies. We also purchased five new holdings: Consolidated-Tomoka
Land Co., Hallmark Financial, Hudson Valley Holding Corp., Landauer, and PC Connection.
In each case we felt that we were able to upgrade the portfolio by buying shares in businesses
that were more attractively valued and/or higher quality than our previous holdings. Our
cash balance ended the quarter at just over 9% as we also added to numerous existing posi-
tions in the portfolio.
Investment vs. Speculation
Today, we believe that speculation has crept into certain corners of the market. There have
been many consequences of the fallout from the financial crisis and the resulting period of
low interest rates. These low interest rates have driven investors to chase returns whether
in high-yield bonds, sub-prime auto loans, or in speculative stocks which have taken off in
this “easy money” environment. Investors may be turning a blind eye to the increased risk
that accompanies these returns. Areas fostering speculative activity may include biotech,
small pharma, social media, cloud computing, and alternative energy.
What are some of the signs of overheating? Let’s take a look at returns and use small pharma
and biotech as examples. Since the start of 2013 small pharma and biotech stocks have
outperformed the Russell 2000 by a wide margin. This has driven investors to look in the
rear view mirror and engage in typical herd-like behavior. We have seen investor flows into
ETFs related to these two areas pick up significantly. Furthermore, IPO activity in the space
has been red hot. In fact, in the first quarter of this there were 26 biotech IPOs — a quarterly
record. This matched the entire year of 2000 when speculation was rampant!
As a whole, we find that these industries have negative earnings and investors are hoping
to find the next great thing before it takes off. Undoubtedly some of these speculative secu-
rities will turn into the next great businesses, but many more will not have the wherewithal
to survive. Even so, these are exactly the types of companies that have outperformed over
the last couple of years as investors have been willing to take on more risk (whether they
know it or not). As we think about not only return, but also risk, we will avoid jumping on
the bandwagon.
We believe that investing in quality, financially durable, well-run businesses at the right
price is the key to building real wealth over the long term. Our team conducts in-depth,
30
FAM Small Cap Fund
independent research and analyzes the companies behind the stocks to gain unique insights.
We use this firsthand knowledge and our time-tested process to help mitigate risk and gen-
erate attractive returns.
As Ben Graham once said, “Investment is most intelligent when it is most businesslike.”
Outlook
Recently, we have become more excited about our opportunity set as some volatility and
weakness in small caps have created the prospect of purchasing shares at a discount to their
intrinsic value. It is periods like these that set up future performance. We continue to
search diligently to find bargain opportunities on your behalf.
Thank you for investing with us in the FAM Small Cap Fund.
Marc D. Roberts, CFA
Thomas O. Putnam
Co-Manager
Co-Manager
The opinions expressed herein are those of the portfolio managers as of the date of the
report and are subject to change. There is no guarantee that any forecast made will come
to pass. This material does not constitute investment advice and is not intended as an
endorsement of any specific investment.
Performance data quoted above is historical. Past performance is no guarantee of future
results. Current performance may be higher or lower than the performance data quoted.
The principal value and investment return of an investment will fluctuate so that your
shares, when redeemed, may be worth more or less than their original cost.
31
FAM Small Cap Fund —Portfolio Data
As of June 30, 2014 (Unaudited)
COMPOSITION OF TOTAL INVESTMENTS
Banking
12.4%
Property & Casualty Insurance
11.3%
Transportation
10.5%
Money Market Fund
9.1%
REITS - Diversified
8.2%
Commercial Services
6.6%
Computer Software & Services
6.4%
Electronic Manufacturing
5.7%
Diversified Holding Company
4.3%
Retail - Apparel Stores
4.3%
Investment Management
4.0%
Industrial Machinery
2.8%
Health Care Services
2.8%
Real Estate Mgmt. & Development
2.6%
Wholesale Wire & Cable
2.5%
Hazardous Waste Disposal
2.5%
Oil & Gas Exploration
2.1%
Health Care Facilities
1.9%
Statement Regarding Availability of Quarterly Portfolio Schedule. Please note that (i) the Fund files
its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q; (ii) the Fund’s Forms N-Q are available on the Commission’s website at http://www.sec.gov; (iii) the Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330; and (iv) the Fund makes the information on Form N-Q available to shareholders, upon request, by calling FAM Funds at 1-800-932-3271.
32
FAM Small Cap Fund —Statement of Investments
June 30, 2014 (Unaudited)
SHARES
VALUE
COMMON STOCKS (90.9%)
Banking (12.4%)
First NBC Bank Holding Company*
• holding company for First NBC Bank that provides various financial
services for businesses, institutions, and individuals
103,500
$ 3,468,285
Hudson Valley Holding Corporation
• operates as the bank holding company for Hudson Valley Bank, N.A.
that provides banking and related services to businesses, professionals,
municipalities, not-for-profit organizations, and individuals in New York
State
110,700
1,998,135
Pinnacle Financial Partners, Inc.
• holding company for Pinnacle National Bank that provides commercial
banking services to individuals, small to mid-size businesses and profes-
26,500
1,046,220
sional entities
South State Corporation+
• banking services to individual and corporate customers in the Carolinas
13,300
806,911
+Name changed 6/30/14 from First Financial Holdings, Inc.
7,319,551
Commercial Services (6.6%)
McGrath RentCorp
• modular building and electronic test equipment rentals, subsidiary
• supplies test systems and industrial position sensors
6,500
440,440
3,890,145
Computer Software & Services (6.4%)
PC Connection, Inc.*
• operates as a direct marketer of a range of information technology (IT)
108,100
2,235,508
solutions.
Rosetta Stone, Inc.*
• provides technology-based learning products in the United States and
157,500
1,530,900
Internationally
3,766,408
See Notes to Financial Statements
33
FAM Small Cap Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Diversified Holding Company (4.3%)
Biglari Holdings Inc.*
• engages in the ownership, development, operation, and franchising of
6,038
$ 2,553,893
restaurants
Electronic Manufacturing (5.7%)
Fabrinet*
• provides precision optical, electro-mechanical, and electronic manufac-
164,250
3,383,550
turing services
Hazardous Waste Disposal (2.5%)
U.S. Ecology, Inc.
• provides radioactive, pcb, hazardous and non-hazardous waste services
29,800
1,458,710
to commercial and government customers
Health Care Facilities (1.9%)
U.S. Physical Therapy, Inc.
• through its subsidiaries, operates outpatient physical therapy clinics
32,700
1,118,013
Health Care Services (2.8%)
Landauer, Inc.
• provides personal radiation dosimeters and radiation related services
39,578
1,662,276
Industrial Machinery (2.8%)
John Bean Technologies Corporation
• provides technology solutions for the food processing and air
53,000
1,642,470
transportation industries
Investment Management (4.0%)
Westwood Holdings Group Inc.
• manages investment assets and provides services for its clients
38,987
2,340,779
Oil & Gas Exploration (2.1%)
Evolution Petroleum Corp.
• engages in the acquisition, exploitation, and development of properties
116,000
1,270,200
for the production of crude oil and natural gas
See Notes to Financial Statements
34
FAM Small Cap Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Property and Casualty Insurance (11.3%)
Amerisafe, Inc.
• insurance holding company that markets and underwrites workers’
35,500
$ 1,443,785
compensation and general liability insurance
Hallmark Financial Services, Inc.*
• insurance holding company that markets, distributes, underwrites,
270,000
2,902,500
and services property/casualty insurance products to businesses
and individuals
Infinity Property and Casualty Corporation
• provides personal automobile insurance with a focus on nonstandard
34,265
2,303,636
auto insurance
6,649,921
Real Estate Management & Development (2.6%)
Consolidated-Tomoka Land Company
• operates as a diversified real estate operating company
33,200
1,523,880
REITS - Diversified (8.2%)
Physicians Realty Trust
• self-managed healthcare real estate company, focuses on the acquisi-
176,000
2,532,640
tion, development, ownership, and management of healthcare properties
leased to physicians
Winthrop Realty Trust
• real estate investment trust that engages in the ownership and manage-
150,750
2,314,013
ment of real property and real estate-related assets
4,846,653
Retail - Apparel Stores (4.3%)
Destination Maternity Corporation
• designing and retail of maternity clothing in United States
111,500
2,538,855
Transportation (10.5%)
Echo Global Logistics, Inc.*
• provides technology-enabled transportation and supply chain manage-
128,300
2,459,511
ment solutions
Patriot Transporation Holding Inc.*
• engages in the transportation and real estate businesses
106,058
3,708,848
6,168,359
See Notes to Financial Statements
35
FAM Small Cap Fund —Statement of Investments continued
June 30, 2014 (Unaudited)
SHARES
VALUE
Wholesale Wire & Cable (2.5%)
Houston Wire and Cable Company
• distributor of wire and cable products in the U.S.
121,667
$ 1,509,887
Total Common Stocks (Cost $45,053,590)
$ 53,643,550
TEMPORARY INVESTMENTS (9.1%)
Money Market Fund (9.1%)
Invesco Short Term Treasury Fund(Institutional Class)
(0.02%)**
5,344,102
5,344,102
Total Temporary Investments (Cost $5,344,102)
$ 5,344,102
Total Investments (Cost $50,397,692)
$ 58,987,652
* Non-income producing securities
** The rate shown represents the effective yield at 6/30/14
36
FAM Funds — Statement of Assets and Liabilities
June 30, 2014 (Unaudited)
Value Fund Equity-IncomeFund SmallCapFund
Assets
Investments in securities at value (Cost
$408,852,367; $97,899,923; and $50,397,692,
$950,705,351
$157,072,945
$58,987,652
respectively)
Cash
203,892
10,879
175,794
Dividends and interest receivable
345,319
132,857
61,888
Total Assets
951,254,562
157,216,681
59,225,334
Liabilities
Accrued investment advisory fee
771,378
126,800
46,926
Accrued shareholder servicing and administrative fees
98,218
16,852
6,433
Accrued trustee fees
6,000
6,000
6,000
Accrued expenses
133,976
54,235
25,076
Payable for investment securities purchased
—
—
127,895
Total Liabilities
1,009,572
203,887
212,330
Net Assets
$950,244,990
$157,012,794
$59,013,004
Net Assets Consist Of:
Net capital paid in on shares of beneficial interest $362,103,681
$93,512,585
$49,453,281
Accumulated net investment income/(loss)
(3,822,084)
22,714
(42,867)
Accumulated net realized gains
50,110,409
4,304,473
1,012,630
Net unrealized appreciation
541,852,984
59,173,022
8,589,960
Net Assets
$950,244,990
$157,012,794
$59,013,004
Fund shares outstanding
14,464,410
6,035,475
3,969,563
Net Asset Value, Offering and Redemption Price per
share (unlimited shares of beneficial interest autho-
rized at $0.001 par value)
$65.70
$26.01
$14.87
See Notes to Financial Statements
37
FFAAM Funds — Statement of Assets and LiabilitiesM Funds — Statement of Operations
June 30, 2014 (Unaudited)
Six Months Ended June 30, 2014 (Unaudited)
Value Fund Equity-IncomeFund SmallCapFund
Investment Income
Income
Dividends
$ 4,285,081
$1,687,609
$ 388,326
Interest
3,435
828
503
Total Investment Income
4,288,516
1,688,437
388,829
Expenses
Investment advisory fee (Note 2)
4,574,337
734,674
256,817
Administrative fee (Note 2)
380,267
62,447
21,829
Shareholder servicing and related
expenses (Note 2)
205,386
35,644
12,971
Printing and mailing
50,890
9,348
5,202
Professional fees
34,730
5,832
2,245
Registration fees
21,082
14,572
26,444
Custodial fees
51,590
9,849
6,224
Trustee’s fees
19,447
19,447
19,447
Officer’s fees (Note 2)
14,328
14,328
14,328
Other
34,404
23,306
7,637
Total Expenses
5,386,461
929,447
373,144
Net Investment Income/(Loss)
(1,097,945)
758,990
15,685
RealizedandUnrealizedGainonInvestments
Net realized gain on investments
47,810,508
3,793,760
944,508
Net change in unrealized appreciation/de-
preciation of investments
9,833,057
3,678,334
(215,749)
Net Realized and Unrealized Gain on
Investments
57,643,565
7,472,094
728,759
NetIncreaseInNetAssetsFromOperations
$56,545,620
$8,231,084
$744,444
See Notes to Financial Statements
38
FAM Funds — Statement of Changes in Net Assets
Six Months Ended June 30, 2014 (Unaudited) and Year Ended December 31, 2013
Value Fund
Six Months Ended
June 30, 2014
Year Ended
(Unaudited)
December 31, 2013
Change in Net Assets
From operations
Net investment income/(loss)
$ (1,097,945)
$ (2,029,700)
Net realized gain on investments
47,810,508
45,959,785
Net change in unrealized appreciation/(deprecia-
tion of investments
9,833,057
194,657,003
Net increase in net assets from operations
56,545,620
238,587,088
Distributions to shareholders from:
Net investment income
—
—
Net realized gain on investments
—
(45,959,785)
Return of capital distributions
—
(187,016)
Total distributions
—
(46,146,801)
Capital share transactions (Note 3)
(48,065,525)
17,341,536
Total increase/(decrease) in net assets
8,480,095
209,781,823
Net Assets
Beginning of period
941,764,895
731,983,072
End of period*
$950,244,990
$941,764,895
*Includes accumulated net investment income/(loss) of $(3,822,084), $0, $22,714, $0, $(42,867) and $(1,626), respectively.
See Notes to Financial Statements
39
FAM Funds — Statement of Changes in Net Assets
Six Months Ended June 30, 2014 (Unaudited) and Year Ended December 31, 2013
Equity-Income Fund
Small Cap Fund
Six Months Ended
Six Months Ended
June 30, 2014
Year Ended
June 30, 2014
Year Ended
(Unaudited)
December 31, 2013
(Unaudited)
December 31, 2013
$758,990
$
933,537
$15,685
$ 73,341
3,793,760
5,881,052
944,508
1,871,430
3,678,334
26,716,899
(215,749)
7,528,501
8,231,084
33,531,488
744,444
9,473,272
(736,984)
(999,213)
—
(75,018)
—
(5,815,376)
—
(1,871,338)
—
(366,030)
—
(9,210)
(736,984)
(7,180,619)
—
(1,955,566)
2,950,263
7,277,316
15,594,203
18,315,470
10,444,363
33,628,185
16,338,647
25,833,176
146,568,431
112,940,246
42,674,357
16,841,181
$157,012,794
$146,568,431
$59,013,004
$42,674,357
See Notes to Financial Statements
40
FAM Funds - Notes to Financial Statements (Unaudited)
Note 1 Nature of Business and Summary of Significant Accounting Policies
FAM Value Fund, FAM Equity-Income Fund and FAM Small Cap Fund are each a series of
Fenimore Asset Management Trust, a diversified, open-end management investment
company registered under the Investment Company Act of 1940. Each Fund offers a
single class of shares. The investment objective of the FAM Value Fund is to maximize
long-term return on capital. The investment objective of the FAM Equity-Income Fund is
to provide current income and long term capital appreciation from investing primarily in
income-producing equity securities. The investment objective of the FAM Small Cap Fund
is to maximize long-term return on capital.
The following is a summary of each Fund’s significant accounting policies, which are in
accordance with accounting principles generally accepted in the United States of Ameri-
ca (“GAAP”), followed by the Funds in the preparation of their financial statements.
a) Valuation of Securities
Securities traded on a national securities exchange or admitted to trading on NASDAQ are valued at the last reported sale price or the NASDAQ official closing price. Common stocks for which no sale was reported, and over-the-counter securities, are valued at the last reported bid price. Short-term securities are carried at amortized cost, which approximates value. Securities for which market quotations are not readily available or have not traded are valued at fair value as determined by procedures established by the Board of Trustees. Investments in Invesco Short Term Treasury Fund are valued at that fund’s net asset value.
GAAP establishes a three-tier framework for measuring fair value based on a hier-
archy of inputs. The hierarchy distinguishes between market data obtained from
independent sources (observable inputs) and the Funds’ own market assumptions
(unobservable inputs). These inputs are used in determining the value of the Funds’
investments. These inputs are summarized in the three broad levels listed below:
Level 1 – quoted prices in active markets for identical securities
Level 2 – other significant observable inputs (including quoted prices for identical
securities in inactive markets and quoted prices for similar securities)
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in
determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indica-
tion of the risk associated with investing in those securities.
41
FAM Funds - Notes to Financial Statements (Unaudited)
The following is a summary of the inputs used to value each Fund’s net assets as of
June 30, 2014:
FAM Value Fund
Level 1
Common Stocks
$888,857,831
Temporary Investments
61,847,520
Total Investments in Securities
$950,705,351
FAM Equity-Income Fund
Level 1
Common Stocks
$145,184,286
Preferred Stocks
1,309,812
Temporary Investments
10,578,847
Total Investments in Securities
$157,072,945
FAM Small Cap Fund
Level 1
Common Stocks
$ 53,643,550
Temporary Investments
5,344,102
Total Investments in Securities
$ 58,987,652
During the period ended June 30, 2014 there were no Level 2 or 3 inputs used to value
the Funds’ net assets. Refer to the Statement of Investments to view securities segre-
gated by industry type.
b) Federal Income Taxes
It is each Fund’s policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its tax-
able income to its shareholders. Therefore, no provision for federal income or excise
tax is required.
GAAP requires uncertain tax positions to be recognized, measured, presented and
disclosed in the financial statements. For the period ended June 30, 2014 manage-
ment has evaluated the tax positions taken or expected to be taken in the course of
42
FAM Funds - Notes to Financial Statements (Unaudited)
preparing the Funds’ tax returns to determine whether the tax positions are “more-
likely-than-not” of being sustained upon review by the applicable tax authority.
Tax positions not deemed to meet the “more-likely-than-not” threshold would be
recorded as a tax expense in the current year. Based on the evaluation, management
has determined that no liability for unrecognized tax expense is required. Tax years
2010 through present remain subject to examination by U.S. and New York taxing
authorities. No examination of the Fund’s tax filings is presently in progress.
c) Use of Estimates
The preparation of financial statements in conformity with GAAP requires manage-
ment 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
those estimates.
d) Other
Securities transactions are recorded on trade date. Realized gains and losses on
securities sold are determined on the basis of identified cost. Interest income is ac-
crued as earned and dividend income is recorded on the ex-dividend date. Non-cash
dividends are included in dividends on the ex-dividend date at the fair market value
of the shares received. The Funds record distributions received in excess of income
from underlying investments as a reduction of cost of investments and/or realized
gain. Such amounts are based on estimates if actual amounts are not available, and
actual amounts of income, realized gain and return of capital may differ from the
estimated amounts. The Funds adjust the estimated amounts of the components
of distributions (and consequently its net investment income) as an increase to
unrealized appreciation/(depreciation) and realized gain/(loss) on investments as
necessary once the issuers provide information about the actual composition of the
distributions. Distributions to shareholders are recorded on the ex-dividend date.
Distributions to shareholders are determined in accordance with income tax regula-
tions and may differ from those determined for financial statement purposes. To
the extent these differences are permanent such amounts are reclassified within the
capital accounts.
Note 2 Investment Advisory Fees and Other Transactions with Affiliates
Under each Investment Advisory Contract, each series pays an investment advisory fee to
Fenimore Asset Management, Inc. (the “Advisor”) equal, on an annual basis, to 1% of each
Fund’s average daily net assets. The Advisor has entered into a voluntary agreement with
each Fund to reduce the investment advisory fee for each Fund through December 31,
2014 to 0.95% of the Funds’ average daily net assets in excess of $1 billion. No such waiver
43
FAM Funds - Notes to Financial Statements (Unaudited)
was required for the period ended June 30, 2014. Thomas Putnam is an officer and trustee
of the Funds and also an officer and director of the Advisor. The Chief Compliance Officer
is an officer of the Funds and compensated by the Funds in the amount of $42,984 as well
as an officer of the Advisor and compensated additionally by the Advisor.
The Investment Advisory Contract requires the Advisor to reimburse the Fund’s its
expenses to the extent that such expenses, including the advisory fee, for the fiscal year
exceed 2.00% of the average daily net assets. For the period ended June 30, 2014 the Advi-
sor contractually agreed to reimburse the FAM Value Fund for its expenses to the extent
such expenses exceeded 1.28% of the average daily net assets; the FAM Equity-Income
Fund for its expenses to the extent such expenses exceeded 1.40% of the average daily net
assets; and the FAM Small Cap Fund for its expenses to the extent such expenses exceed
1.50% of the average daily net assets. No such reimbursement was required for the period
ended June 30, 2014 for the FAM Value Fund, FAM Equity-Income Fund, and FAM Small
Cap Fund.
FAM Shareholder Services, Inc. (“FSS”), a company under common control with the Advi-
sor, serves as shareholder servicing agent and receives a monthly fee of $2.33 per share-
holder account. For the period ended June 30, 2014, shareholder servicing agent fees paid
to FSS were as follows:
FAM Value Fund
$205,386
FAM Equity-Income Fund
$ 35,644
FAM Small Cap Fund
$ 12,971
Additionally, FSS serves as the Fund administrative agent and receives an annual fee
of 0.085% on the first $750,000,000 of the Funds’ average daily net assets, and 0.075%
thereafter. For the period ended June 30, 2014, the Funds’ administrative fees paid to FSS
amounted to:
FAM Value Fund
$380,267
FAM Equity-Income Fund
$ 62,447
FAM Small Cap Fund
$ 21,829
Fenimore Securities, Inc. (“FSI”), a company also under common control with the Advi-
sor, acts as distributor of the Funds’ shares. FSI receives no compensation for providing
distribution services to the Funds.
44
FAM Funds - Notes to Financial Statements (Unaudited)
Note 3. Shares of Beneficial Interest
At June 30, 2014 an unlimited number of $0.001 par value of beneficial interest were
authorized.
Transactions for each Fund are as follows:
SIX MONTHS ENDED 6/30/14
YEAR ENDED 12/31/13
FAM Value Fund
Shares
Amount
Shares
Amount
Shares sold
337,700 $21,092,100
1,020,970
$59,967,065
Shares issued on reinvest-
ment of distributions
—
—
727,957
44,805,783
Shares redeemed
(1,110,057)
69,157,625
(1,487,975)
(87,431,312)
Net Increase/Decrease
(772,357) $(48,065,525)
260,952
$17,341,536
FAM Equity-Income Fund
Shares sold
374,661 $ 9,295,391
758,419
$17,688,025
Shares issued on reinvest-
ment of distributions
26,068
662,296
281,199
6,883,604
Shares redeemed
(283,608)
(7,007,424)
(745,224)
(17,294,313)
Net Increase
117,121 $ 2,950,263
294,394
$ 7,277,316
FAM Small Cap Fund
Shares sold
1,186,096 $ 17,118,629
1,321,237
$17,589,875
Shares issued on reinvest-
ment of distributions
—
—
130,894
1,934,620
Shares redeemed
(105,409)
(1,524,426)
(90,209)
(1,209,025)
Net Increase
1,080,687 $ 15,594,203
1,361,922
$18,315,470
45
FAM Funds - Notes to Financial Statements (Unaudited)
Note 4. Investment Transactions
During the period ended June 30, 2014, purchases and sales of investment securities,
other than short-term obligations were:
Purchases
Sales
FAM Value Fund
$45,249,529
$102,529,912
FAM Equity-Income Fund
$12,263,311
$10,714,504
FAM Small Cap Fund
$19,979,460
$4,249,243
The cost of securities for federal income tax purposes is the same as shown in the state-
ment of investments.
Note 5. Income Taxes and Distributions to Shareholders
The components of accumulated income/(losses) on a tax basis at December 31, 2013 (the
Funds’ most recent tax year end) were as follows:
Undistributed Undistributed
Deferred
Unrealized
Ordinary
Long-Term
Post-October
Appreciation
Income
Gain
Losses
FAM Value Fund
—
—
—
$531,595,688
FAM Equity-Income Fund
—
—
—
$ 56,006,109
FAM Small Cap Fund
—
—
(1,585)
$ 8,816,864
The aggregate gross unrealized appreciation and depreciation of portfolio securities at
June 30, 2014, based on cost for federal income tax purposes, was as follows:
FAM Value Fund
Unrealized appreciation
$541,857,806
Unrealized depreciation
(4,822)
Net unrealized appreciation
$541,852,984
FAM Equity-Income Fund
Unrealized appreciation
$ 60,216,623
Unrealized depreciation
(1,043,601)
Net unrealized appreciation
$ 59,173,022
FAM Small Cap Fund
Unrealized appreciation
$ 10,162,662
Unrealized depreciation
(1,572,702)
Net unrealized appreciation
$ 8,589,960
46
FAM Funds - Notes to Financial Statements (Unaudited)
The tax composition of dividends and distributions paid to shareholders for the six
months ended June 30, 2014, and the year ended 2013:
Six Months Ended
Year Ended
June 30, 2014
December 31, 2013
FAM Value Fund
Ordinary income
—
—
Long-term capital gain
—
$45,959,785
Return of capital
—
187,016
—
$46,146,801
FAM Equity-Income Fund
Ordinary income
$736,984
$ 2,028,069
Long-term capital gain
—
4,786,520
Return of capital
—
366,030
$736,984
$ 7,180,619
FAM Small Cap Fund
Ordinary income
—
$ 563,219
Long-term capital gain
—
1,383,137
Return of capital
—
9,210
—
$ 1,955,566
Note 6. Line of Credit
The FAM Value Fund, Equity-Income Fund, and Small Cap Fund each has a line of credit
up to 33 1/3% of its net assets with a maximum of $125,000,000, $20,000,000, and
$3,000,000, respectively.
Borrowings under the agreement bear interest at the prime rate as announced by the
lending bank. The line of credit is available until December 1, 2014, when any advances
are to be repaid. During the period ended June 30, 2014, no amounts were drawn from
the available lines.
47
FAM Funds - Notes to Financial Statements (Unaudited)
Note 7. Commitments and Contingencies
In the normal course of business, the Funds enter into contracts that contain a variety
of representations and warranties which provide general indemnifications. The Funds’
maximum exposure under these arrangements is unknown as this would involve future
claims that might be made against the Funds that have not yet occurred. However, based
on the experience of the Advisor, the Funds expect the risk of loss to be remote.
Note 8. Subsequent Events
Management has evaluated subsequent events through the date the financial statements
were available to be issued, and has determined that there were no subsequent events
requiring recognition or disclosure in the financial statements.
48
FAM Funds - Notes to Financial Statements (Unaudited)
Note 9. Financial Highlights
FAM Value Fund
Years Ended December 31,
Six Months
Per share information
Ended
(For a share outstanding throughout each
June 30, 2014
period)
(Unaudited)
2013
2012
2011
2010
2009
Net asset value, beginning of period
$61.81
$48.88
$45.15
$45.34
$39.32
$32.22
Income/Loss from investment operations:
Net investment income/(loss)†
(0.07)
(0.18)
0.06
(0.04)
0.09
0.05
Net realized and unrealized
gain/(loss) on investments
3.96
16.28
5.07
(0.15)
6.61
7.10
Total from investment operations
3.89
16.10
5.13
(0.19)
6.70
7.15
Less distributions:
Dividends from net investment income
—
—
(0.07)
—*
(0.09)
(0.05)
Distributions from net realized gains
—
(3.16)
(1.32)
—*
(0.59)
—
Return of capital
—
(0.01)
(0.01)
—
—
—
Total distributions
—
(3.17)
(1.40)
—*
(0.68)
(0.05)
Change in net asset value for the period
3.89
12.93
3.73
(0.19)
6.02
7.10
Net asset value, end of period
$65.70
$61.81
$48.88
$45.15
$45.34
$39.32
TotalReturn
6.29%**
32.96%
11.39%
(0.41)%
17.02%
22.18%
Ratios/supplementaldata
Net assets, end of period (000)
$950,245
$941,765
$731,983
$698,546 $737,211 $659,621
Ratios to average net assets of:
Expenses
1.17%***
1.19%
1.21%
1.22%
1.23%
1.26%
Net investment income/(loss)
(0.24)%***
(0.24)%
0.13%
(0.10)%
0.21%
0.14%
Portfolio turnover rate
5.19%**
8.38%
4.41%
7.78%
5.08%
7.55%
†Basedonaveragesharesoutstanding.
*Pershareamountislessthan$0.005.
**NotAnnualized
***Annualized
49
FAM Funds - Notes to Financial Statements (Unaudited)
Note 9. Financial Highlights
FAM Equity-Income Fund
Years Ended December 31,
Six Months
Per share information
Ended
(For a share outstanding throughout each
June 30, 2014
2013
2012
2011
2010
2009
period)
(Unaudited)
Net asset value, beginning of period
$24.77
$20.08
$19.39
$18.43
$16.02
$13.34
Income/Loss from investment operations:
Net investment income†
0.13
0.17
0.24
0.29
0.36
0.17
Net realized and unrealized
gain on investments
1.23
5.79
1.88
0.95
2.41
2.68
Total from investment operations
1.36
5.96
2.12
1.24
2.77
2.85
Less distributions:
Dividends from net investment income
(0.12)
(0.18)
(0.26)
(0.28)
(0.36)
(0.17)
Distributions from net realized gains
—
(1.03)
(1.14)
—
—
—
Return of capital
—
(0.06)
(0.03)
—
—
—
Total distributions
(0.12)
(1.27)
(1.43)
(0.28)
(0.36)
(0.17)
Change in net asset value for the period
1.24
4.69
0.69
0.96
2.41
2.68
Net asset value, end of period
$26.01
$24.77
$20.08
$19.39
$18.43
$16.02
TotalReturn
5.52%**
29.79%
11.02%
6.79%
17.47%
21.43%
Ratios/supplementaldata
Net assets, end of period (000)
$157,013
$146,568
$112,940
$125,832
$85,824
$76,096
Ratios to average net assets of:
Before waivers:
Expenses
1.26%**
1.29%
1.31%
1.40%
1.41%
1.47%
Net investment income
1.03%***
0.71%
1.17%
1.57%
2.10%
1.11%
After waivers:
Expenses
1.26%**
1.29%
1.31%
1.40%
1.40%
1.40%
Net investment income
1.03%***
0.71%
1.17%
1.57%
2.11%
1.18%
Portfolio turnover rate
7.74%**
10.33%
43.1%
17.96%
13.38%
10.51%
†Basedonaveragesharesoutstanding.
**NotAnnualized
***Annualized
50
FAM Funds - Notes to Financial Statements (Unaudited)
Note 9. Financial Highlights
FAM Small Cap Fund
Six Months
For the Period
Ended
Ended
Per share information
June 30, 2014
2013
December 31, 2012*
(For a share outstanding throughout each period)
(Unaudited)
Net asset value, beginning of period
$14.77
$11.03
$10.00
Income/Loss from investment operations:
Net investment income/(loss)†
0.00(b)
0.04
(0.04)
Net realized and unrealized gain on investments
0.10
4.43
1.07
Total from investment operations
0.10
4.47
1.03
Less distributions:
Dividends from net investment income
—
(0.03)
—
Distributions from net realized gains
—
(0.70)
—
Return of capital
—
(0.00)(b)
—
Total distributions
—
(0.73)
—
Change in net asset value for the period
0.10
3.74
1.03
Net asset value, end of period
$14.87
$14.77
$11.03
TotalReturn
0.68%**
40.49%
10.30%**(a)
Ratios/supplementaldata
Net assets, end of period (000)
$59,013
$42,674
$16,841
Ratios to average net assets of:
Before waivers:
Expenses
1.44%***
1.57%
2.79%***
Net investment income/(loss)
0.06%***
0.05%
(1.89)%***
After waivers:
Expenses
1.44%***
1.35%
1.46%***
Net investment income/(loss)
0.06%***
0.27%
(0.56)%***
Portfolio turnover rate
9.21%**
19.65%
7.59%**
†Basedonaveragesharesoutstanding.
*Small Cap Fund inception 3/1/12
** Not Annualized
*** Annualized
(a)Total return includes the effect of a voluntary contribution by the Advisor of $5,649. Absent this contribution, total return
would have been 10.26%.
(b)Amount is less than $0.01 per share.
51
FAM Funds —Supplemental Information (Unaudited)
Statement Regarding Availability of Proxy Voting Policies and Procedures. Please note that a description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling FAM Funds at 1-800-932-3271; (ii) and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Statement Regarding Availability of Proxy Voting Record. Please note that information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (i) without charge, upon request, by calling FAM Funds at 1-800-932-3271; or on the FAM Fund’s Website at http://famfunds.com (ii) and on the Securities and Exchange Commission’s website at http://www.sec.gov.
See Notes to Financial Statements
52
Investment Advisor
Fenimore Asset Management, Inc.
Cobleskill, NY
Custodian
U.S. Bank, N.A.
Cincinnati, OH Trustees
Donald J. Boteler
Paul Keller, CPA
Fred “Chico” Lager
John J. McCormack, Jr.,
Independent Chairman
Kevin J. McCoy, CPA
Thomas O. Putnam
Barbara V. Weidlich
Legal Counsel
Dechert, LLP
Washington, DC
Shareholder Servicing Agent
FAM Shareholder Services, Inc.
Cobleskill, NY
Distributor
Fenimore Securities, Inc.
Cobleskill, NY
FAM Funds
384 North Grand Street
PO Box 399
Cobleskill, New York
12043-0399
(800) 932-3271
www.famfunds.com
FACTS
WHAT DOES FAM FUNDS (FENIMORE ASSET MANAGEMENT TRUST)
DO WITH YOUR PERSONAL INFORMATION?
Financial companies choose how they share your personal information. Feder-
al law gives consumers the right to limit some but not all sharing. Federal law
Why?
also requires us to tell you how we collect, share, and protect your personal
information. Please read this notice carefully to understand what we do.
The types of personal information we collect and share depend on the product
or service you have with us. This information can include:
Social Security number and account balances
What?
Transaction history and investment experience
Retirement assets and wire transfer instructions
When you are no longer our customer, we continue to share your information
as described in this notice.
All financial companies need to share customers’ personal information to run
their everyday business. In the section below, we list the reasons financial
How?
companies can share their customers’ personal information; the reasons FAM
Funds (Fenimore Asset Management Trust) chooses to share; and whether you
can limit this sharing.
Reasons we can share your personal
Does Fenimore Asset
information
Management, Inc.
Can you limit this
share?
sharing?
For our everyday business purposes
- such as to process your transactions,
maintain your account(s), respond to
Yes
No
court orders and legal investigations, or
report to credit bureaus
For our marketing purposes - to offer our
products and services to you
No
We don’t share
For joint marketing with other financial
companies
No
We don’t share
For our affiliates’ everyday business pur-
poses - information about your transac-
No
We don’t share
tions and experiences
For our affiliates’ everyday business
purposes - information about your credit-
No
We don’t share
worthiness
For affiliates to market to you
No
We don’t share
For nonaffiliates to market to you
No
We don’t share
Questions?
Call (800) 932-3271 or go to www. famfunds.com
Rev. 01/2014
Page 2
What We Do
To protect your personal information from
How does FAM Funds (Fenimore Asset unauthorized access and use, we use secu-
Management Trust) protect my personal infor- rity measures that comply with federal law.
mation?
These measures include computer safe-
guards and secured files and buildings.
We collect your personal information, for
example, when you:
How does FAM Funds (Fenimore Asset • open an account
Management Trust) collect my personal infor- • direct us to buy securities
mation?
• direct us to sell your securities
• make deposits or withdrawals from your
account
• tell us about your investment or retire-
ment portfolio
Federal law gives you the right to limit only
• sharing for affiliates’ everyday business
purposes - information about your credit-
worthiness
• affiliates from using your information to
Why can’t I limit all sharing?
market to you
• sharing for nonaffiliates to market to you
State laws and individual companies may
give you additional rights to limit sharing.
See below for more on your rights under
state law.
Definitions
Companies related by common ownership or
control. They can be financial and nonfinan-
Affiliates
cial companies.
• FAM Funds (Fenimore Asset Management
Trust) does not share with our affiliates.
Companies not related by common owner-
ship or control. They can be financial and
nonfinancial companies.
Nonaffiliates
• FAM Funds (Fenimore Asset Manage-
ment Trust) does not share with nonaffili-
ates so they can market to you.
A formal agreement between nonaffiliated
financial companies that together market
Joint Marketing
financial products or services to you.
• FAM Funds (Fenimore Asset Management)
does not market jointly.
Not part of the Semi-Annual Report
FAM Funds
384 North Grand Street
PO Box 399
Cobleskill, NY 12043
800.932.3271 / famfunds.com
Distributed by Fenimore Securities, Inc. Member FINRA/SIPC
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not Applicable.
Item 6. Schedule of Investments
This Schedule of Investments in securities of unaffiliated issuers is
included as part of the Report to Shareholders.
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c)) under the Investment Company
Act of 1940, as amended (the "Act") are effective based on their
evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act that
occurred during the registrant's first fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) in the exact form set forth below:
(Attached hereto).
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.
(Registrant) Fenimore Asset Management Trust
By (Signature and Title)* /s/ Thomas O. Putnam
---------------------------
Thomas O. Putnam, President
Date August 11, 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 (Signature and Title)* /s/ Thomas O. Putnam
---------------------------
Thomas O. Putnam, President
Date August 11, 2014
By (Signature and Title)* /s/ Joseph A. Bucci
--------------------------
Joseph A. Bucci, Treasurer
Date August 11, 2014
* Print the name and title of each signing officer under his or her signature.
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