UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-8974
The Jhaveri Trust
(Exact name of registrant as specified in charter)
27881 Clemens Road, Westlake, Ohio 44145
(Address of principal executive offices)
(Zip code)
Ramesh C. Jhaveri, 27881 Clemens Road, Westlake, Ohio 44145
(Name and address of agent for service)
With copy to:
Donald S. Mendelsohn, Thompson Hine LLP.
312 Walnut St., 14th Floor, Cincinnati, Ohio 45202
Registrant's telephone number, including area code: (440) 250-9136
Date of fiscal year end: March 31
Date of reporting period: September 30, 2005
Form N-CSRS 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-CSRS in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSRS, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSRS unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
SEMI-ANNUAL REPORT
Jhaveri Value Fund
A No-Load Capital Appreciation Fund
September 30, 2005 (Unaudited)
JHAVERI VALUE FUND
27881 Clemens Road
Westlake, Ohio 44145
(440) 250-9136
www.jhaverivaluefund.com
November 29, 2005
Dear Fellow Shareholders:
The major market indices were stuck in a trading range for the first three quarters of 2005, however recently have rallied almost 8% off their lows. The Jhaveri Value Fund (JVF) has risen off its lows as well and the NAV as of November 28, 2005 was $9.31. This places JVF slightly under the market for year to date performance, however, over a three year period JVF is up 14.7% which outperformed the S&P 500 by over 2½% for that period. With the recent market rise, we feel the market is overbought in the near term and subsequently we have accumulated a 25% cash position. The long term prospects for the market continue to be positive and we believe this cash position will allow us to take advantage of the strong sectors for the upcoming year. Our current top ten holdings are:
1. | Pfizer Inc | 5. | Johnson & Johnson | 9. | Wal-Mart Stores |
2. | Intel Corp | 6. | Microsoft Corp | 10. | General Electric Co |
3. | Verizon Comms | 7. | Dell Computer Corp | ||
4. | DuPont DeNemours | 8. | Cisco Systems Inc |
Market Outlook
Over the first three quarters of the year we had positive and negative news that kept the market in a trading range. Recently the falling oil prices and the Federal Reserve nearing the end of its tightening have propelled the market higher. The market will resume its trading range with an upward bias due to the conflicting negative and positive factors:
Negative News:
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Rising trade and budget deficit
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Rising inflation and interest rate expectation
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No end is sight for suicide bombings and terrorist threat
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Rising energy cost with increased worldwide demand for energy
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Housing bubble and rising housing prices
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Airline bankruptcy filings
Positive News:
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Employment at a high level
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Inflation and interest rates are rising but are still at a historically low level
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Corporate cash flow and balance sheets are healthy
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The Dollar is strengthening against all major currencies
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Net foreign investment in the US is still high
Against the backdrop of positive and negative economic news, the market performed reasonably well. We expect the GDP growth rate for 2006 will be 3.5%. Although we feel the market is overbought in the near term, we believe the long term prospects for the market remain positive and we will invest accordingly.
We would like to wish you a safe and Happy Holiday Season and a prosperous New Year.
Sincerely,
![[jhaverisemi122005001.jpg]](https://capedge.com/proxy/N-CSRS/0001162044-05-000548/jhaverisemi122005001.jpg)
![[jhaverisemi122005002.jpg]](https://capedge.com/proxy/N-CSRS/0001162044-05-000548/jhaverisemi122005002.jpg)
Ramesh C. Jhaveri - CEO
Saumil R. Jhaveri – President
*JVF Average Annual Returns – 9/30/2005
1-year = 5.56%
5-year = -2.61%
Since Inception (5/3/95) = 2.63%
Past performance is not predictive of future performance. The value of shares will fluctuate and will be worth more or less than their original cost at the time of redemption. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Jhaveri Value Fund
Graphical Illustration (Unaudited)
The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.
![[jhaverisemi122005004.jpg]](https://capedge.com/proxy/N-CSRS/0001162044-05-000548/jhaverisemi122005004.jpg)
Jhaveri Value Fund |
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Schedule of Investments | ||||||
September 30, 2005 (Unaudited) | ||||||
Shares/Principal Amt- % of Net Assets | Market Value |
| Shares/Principal Amt- % of Net Assets | Market Value | ||
. | ||||||
COMMON STOCKS | Millwood, Veneer, Plywood, & Stuctural Wood Members - 0.33% | |||||
1,000 | Masco Corp. | 30,680 | ||||
Agricultural Production-Crops - 0.73% | ||||||
2,500 | Fresh Del Monte Produce, Inc. | 68,050 | Miscellaneous Electrical Machinery Equipment & Supplies - 1.27% | |||
5,000 | Spectrum Brands, Inc.* | 117,750 | ||||
Bottled & Canned Soft Drinks - 0.21% | ||||||
1,000 | Coca Cola Enterprises | 19,500 | Miscellaneous Manufacturing - 1.40% | |||
3,000 | Interantional Game Technology | 81,000 | ||||
Communications Equipment, NEC - 0.44% | 2,000 | The Yankee Candle Compnay, Inc. | 49,000 | |||
5,000 | UT Starcom, Inc.* | 40,850 | 130,000 | |||
Computer & Office Equipment - 1.75% | Mortgage Bankers & Loan Corres - 0.99% | |||||
500 | International Business Mahines, Inc. | 40,110 | 7,000 | Doral Financial Corp. | 91,490 | |
2,000 | Lexmark International Group* | 122,100 | ||||
162,210 | Mortgage Bankers & Loan Correspondents - 7.31% | |||||
6,000 | Citigroup | 273,120 | ||||
Computer Communications Equipment - 2.61% | 3,000 | First Horizon National | 109,050 | |||
13,500 | Cisco Systems, Inc.* | 241,920 | 5,000 | Bankamerica Corp. | 210,500 | |
3,500 | MBNA Corp. | 86,240 | ||||
Computer Peripheral Equipment - 0.37% | 678,910 | |||||
3,500 | Symbols Technologies, Inc. | 33,880 | ||||
Ordnance & Accessories - 0.43% | ||||||
Computer Storage Devices - 0.51% | 6500 | Taser International, Inc.* | 40,105 | |||
3,000 | Seagate Technology | 47,550 | ||||
Orthopedic, Prosthetic & Surgical Appliances & Supplies - 1.67% | ||||||
Computer Terminals - 0.23% | 500 | Biomet, Inc. | 17,355 | |||
1,500 | ATI Technologies* | 20,910 | 2,000 | Zimmer Holdings, Inc.* | 137,780 | |
155,135 | ||||||
Converted Paper & Paperboard Products (No Contaners/Boxes) - 2.30% | ||||||
2,500 | 3M Co. | 183,400 | Paints, Varnishes, Lacquers, Enamels & Allied Prods - 0.32% | |||
500 | Kimberly Clark Corp. | 29,765 | 500 | PPG Industries, Inc. | 29,595 | |
213,165 | ||||||
Perfumes, Cosmetics & Other Toilet Preparations - 0.73% | ||||||
Electronic & Other electrical - 2.54% | 2500 | Avon Products, Inc. | 67,500 | |||
7,000 | General Electric Co. | 235,690 | ||||
Periodicals: Publishing or Pub- 0.19% | ||||||
Electronic Computers - 2.03% | 1,000 | Marvel Entertainment Group* | 17,870 | |||
5,500 | Dell Computer Corp.* | 188,100 | ||||
Pharmaceutical Preparations- 15.73% | ||||||
Electronic Connectors - 0.60% | 3,000 | Abbott Laboratories | 127,200 | |||
2,000 | Tyco International LTD | 55,700 | 2,500 | Bristol Myers Squibb Co. | 60,150 | |
4,500 | Johnson & Hohnson | 284,760 | ||||
Federal & Federally-Sponsored Credit Agencies - 2.17% | 4,000 | Lilly, Eli & Co. | 214,080 | |||
4,500 | Federal National Mortgage Assoc. | 201,690 | 3,500 | Merck & Co., Inc. | 95,235 | |
4,000 | Mylan Laboratories, Inc. | 77,040 | ||||
Food and Kindred Products - 1.13% | 22,500 | Pfizer, Inc. | 561,825 | |||
1,000 | Kraft Foods | 30,590 | 1,500 | Pharmaceutical Resources, Inc.* | 39,930 | |
3,900 | Lee, Sara Corp. | 73,905 | 1,460,220 | |||
104,495 | ||||||
Plastic Material, Synth Resin - 3.59% | ||||||
Games, Toys & Children's Vehicals - 0.24% | 8,500 | Dupont E.I. Denemours & Co. | 332,945 | |||
1,500 | Leapfrog Enterprises, Inc.* | 22,155 | ||||
Plastic Products, NEC - 0.24% | ||||||
General industrial Machinery & Equipment - 0.84% | 1,000 | Newell Rubbermaid, Inc. | 22,650 | |||
2,000 | Zebra Technologies Corp. CL A* | 78,180 | ||||
Public Building & Related Furniture - 0.37% | ||||||
Grain Mill Products - 1.04% | 1,000 | Lear Corp. | 33,970 | |||
2,000 | General Mills, Inc. | 96,400 | ||||
Radio & Tv Broadcasting & Comm.- 0.53% | ||||||
Household Appliances- 0.30% | 2,000 | Dolby Laboratories, Inc.* | 32,000 | |||
1,500 | Maytag Corp. | 27,390 | 1,000 | Nokia Corp. | 16,910 | |
48,910 | ||||||
Industrial Organic Chemicals - 1.15% | ||||||
3,000 | International Flavors & Fragrances, Inc. | 106,920 | Refuse Systems - 0.31% | |||
1,000 | Waste Management, Inc. | 28,610 | ||||
Instruments For Meas. & Testing of Electricity & Elec. Signals - 0.54% | ||||||
2,000 | Tektronix | 50,460 | Retail-Apparel &Accessory Stores - 0.54% | |||
1,000 | Abercrombie & Fitch | 49,850 | ||||
Investment Advice - 0.53% | ||||||
1,500 | Investors Financial Services CP. | 49,350 | Retail-Eating Places - 0.22% | |||
1,000 | Applebees International, Inc. | 20,690 | ||||
Life Insurance - 0.26% | ||||||
500 | HCA, Inc. | 23,960 | Retail-Eating & Drinking Places - 0.54% | |||
1,000 | Starbucks Corp.* | 50,100 | ||||
Malt Beverages - 2.78% | ||||||
6,000 | Anheuser Busch Co's., Inc. | 258,240 | Retail-Family Clothing Stores - 1.00% | |||
3,000 | Gap, Inc. | 52,290 | ||||
Metal Cans - 0.20% | 2,000 | TJX Companies, Inc. | 40,960 | |||
500 | Ball Corp. | 18,370 | 93,250 | |||
Retail-Miscellaneous Shopping- 0.97% | Wholesale-Chemicals & Allied Products - 0.60% | |||||
3,000 | Dick's Sporting Goods* | 90,330 | 1,000 | Ashland, Inc. | 55,240 | |
Retail-Radio, Tv & Comsumer Electronics - 0.70% | Wholesale-Groceries & Related Products - 0.68% | |||||
1,500 | Best Buy Co., Inc. | 65,295 | 2,000 | Sysco Corp. | 62,740 | |
Retail-Retail Stores - 1.85% | Women's, Misses', and Juniors - 0.38% | |||||
4,000 | Petco* | 84,640 | 2,000 | Bebe Stores, Inc. | 35,000 | |
4,000 | Petsmart, Inc. | 87,120 | ||||
171,760 | ||||||
Total for Common Stock - 102.16% | 9,482,457 | |||||
Retail-Shoe Stores - 0.24% | ||||||
1,000 | Foot Locker, Inc. | 21,940 | ||||
Total Investments - 102.16% | $9,482,457 | |||||
Retail-Variety Stores - 4.25% | ||||||
9,000 | Wal-Mart Stores, Inc. | 394,380 | (Cost $10,568,853) | |||
Retail-Women's Clothing Stores - 0.22% | Liabilities In Excess of Other Assets (2.16%) | (200,625) | ||||
1,000 | Limited Brands, Inc. | 20,430 | ||||
Net Assets - 100.00% | $9,281,832 | |||||
Rolling Drawing & Extruding of Nonferrous Metals - 0.60% | ||||||
1,500 | Alcoa, Inc. | 36,630 | ||||
1,000 | Olin Corp. | 18,990 | ||||
55,620 | ||||||
Semiconductors & Related Devices - 5.76% | ||||||
6,500 | Applied Materials, Inc. | 110,240 | ||||
17,200 | Intel Corp. | 423,980 | ||||
534,220 | ||||||
Services-Computer Integrated Systems Design - 0.36% | ||||||
1,000 | Yahoo, Inc.* | 33,840 | ||||
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Services-Computer Processing & Data Preparation - 0.48% | ||||||
1,000 | Infospace, Inc.* | 23,870 | ||||
1,000 | Sabre Holdings | 20,280 | ||||
44,150 |
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Services-General Medical & Surgical Devices - 0.24% | ||||||
500 | Triad Hospitals, Inc.* | 22,635 | ||||
Services-Medical Laboratories - 0.82% | ||||||
1,500 | Quest Diagnostics | 75,810 | ||||
Services-Miscellaneous Amusement - 0.78% | ||||||
3,000 | Disney (Walt) Co. | 72,390 | ||||
Services-Personal Services - 0.52% | ||||||
2,000 | Block (H.R.), Inc. | 47,960 | ||||
Services-Prepachaged Software - 4.51% | ||||||
1,000 | Adobe Systems, Inc.* | 29,850 | ||||
11,900 | Microsoft Corp. | 306,187 | ||||
3,000 | Oracle Corp.* | 37,200 | ||||
2,000 | Symantec Corp.* | 45,320 | ||||
418,557 | ||||||
ServicesVideo Tape Rental - 0.56% | ||||||
5,000 | Movie Gallery, Inc. | 51,950 | ||||
State Commercial Banks - 3.53% | ||||||
2,000 | Fifth Third Bancorp | 73,500 | ||||
7,500 | Morgan (J.P.) & Co. | 254,475 | ||||
327,975 | ||||||
Surgical & Medical Instruments & Apparatus - 3.71% | ||||||
3,000 | Becton Dickinson & Co. | 157,290 | ||||
8,000 | Boston Scientific Corp.* | 186,960 | ||||
344,250 | ||||||
Telephone Communications (No Radiotelephone) - 6.37% | ||||||
3,000 | Bellsouth Corp. | 78,900 | ||||
5,000 | SBC Communications, Inc. | 119,850 | ||||
12,000 | Verizon Communications, Inc. | 392,280 | ||||
591,030 | ||||||
Television Broadcasting Stations - 0.86% | ||||||
3,000 | Univision Communications, Inc.* | 79,590 | ||||
* Non-Income producing securities.
+ ADR – American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
Jhaveri Value Fund |
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Statement of Assets and Liabilities | |
September 30, 2005 (Unaudited) | |
Assets: | |
Investment Securities at Market Value | $ 9,482,457 |
( Cost $10,568,853) | |
Receivables: | |
Dividends and Interest | 7,960 |
Total Assets | 9,490,417 |
Liabilities: | |
Accrued Management Fees | 19,346 |
Payable to Custodian Bank | 189,239 |
Total Liabilities | 208,585 |
Net Assets | $ 9,281,832 |
Net Assets Consist of: | |
Paid-In Capital | $12,131,454 |
Accumulated Undistributed Net Investment Loss | (25,203) |
Accumulated Realized Gain (Loss) on Investments - Net | (1,738,023) |
Unrealized Appreciation (Depreciation) in Value of Investments | (1,086,396) |
Net Assets, for 1,018,495 Shares Outstanding | $ 9,281,832 |
Net Asset Value and Redemption Price | |
Per Share ($9,281,832/1,018,495 shares) | $9.11 |
The accompanying notes are an integral part of the financial statements.
Jhaveri Value Fund |
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Statement of Operations | |
For the six months ended September 30, 2005 (Unaudited) | |
Investment Income: | |
Dividends | $ 79,532 |
Interest | 14,975 |
Total Investment Income | 94,507 |
Expenses | |
Management Fees | 119,710 |
Total Expenses | 119,710 |
Net Investment Income (Loss) | (25,203) |
Realized and Unrealized Gain (Loss) on Investments: | |
Realized Gain (Loss) on Investments | 185,225 |
Unrealized Appreciation (Depreciation) on Investments | 67,860 |
Net Realized and Unrealized Gain (Loss) on Investments | 253,085 |
Net Increase (Decrease) in Net Assets from Operations | $227,882 |
The accompanying notes are an integral part of the financial statements.
Jhaveri Value Fund |
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Statements of Changes in Net Assets | ||
(Unaudited) | ||
4/1/2005 | 4/1/2004 | |
to | to | |
9/30/2005 | 3/31/2005 | |
From Operations: | ||
Net Investment Income (Loss) | $ (25,203) | $ (50,913) |
Net Realized Gain (Loss) on Investments | 183,935 | 725,820 |
Net Realized Gain (Loss) on Securities Sold Short | 1,290 | 0 |
Net Unrealized Appreciation (Depreciation) | 67,860 | (433,639) |
Increase (Decrease) in Net Assets from Operations | 227,882 | 241,268 |
From Distributions to Shareholders | ||
Net Realized Gain from Security Transactions | 0 | 0 |
Net Decrease from Distributions | 0 | 0 |
From Capital Share Transactions: | ||
Proceeds From Sale of Shares | 44,603 | 1,237,646 |
Shares Issued on Reinvestment of Dividends | 0 | 0 |
Cost of Shares Redeemed | (380,333) | (897,729) |
Net Increase (Decrease) from Shareholder Activity | (335,730) | 339,917 |
Net Increase (Decrease) in Net Assets | (107,848) | 581,185 |
Net Assets at Beginning of Period | 9,389,680 | 8,808,491 |
Net Assets at End of Period (Including accumulated undistributed net | ||
investment income of $0 and $0, respectively) | $9,281,832 | $9,389,676 |
Share Transactions: | ||
Issued | 5,004 | 138,557 |
Reinvested | 0 | 0 |
Redeemed | (41,162) | (98,696) |
Net Increase (Decrease) in Shares | (36,158) | 39,861 |
Shares Outstanding Beginning of Period | 1,054,653 | 1,014,792 |
Shares Outstanding End of Period | 1,018,495 | 1,054,653 |
The accompanying notes are an integral part of the financial statements.
Jhaveri Value Fund |
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Financial Highlights | ||||||
Selected data for a share outstanding throughout the period: | (Unaudited) | |||||
4/1/2005 | 4/1/2004 | 4/1/2003 | 4/1/2002 | 4/1/2001 | ||
to | to | to | to | to | ||
9/30/2005 | 3/31/2005 | 3/31/2004 | 3/31/2003 | 3/31/2002 | ||
Net Asset Value - | ||||||
Beginning of Period | $ 8.90 | $ 8.68 | $ 6.42 | $ 8.31 | $ 10.02 | |
Net Investment Income (Loss) * | (0.02) | (0.05) | (0.09) | (0.07) | (0.14) | |
Net Gains or Losses on Securities | ||||||
(realized and unrealized) | 0.07 | 0.27 | 2.35 | (1.82) | (0.97) | |
Total from Investment Operations | 0.21 | 0.22 | 2.26 | (1.89) | (1.11) | |
Dividends (from net investment income) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
Distributions (from capital gains) | 0.00 | 0.00 | 0.00 | 0.00 | (0.60) | |
Total Distributions | 0.00 | 0.00 | 0.00 | 0.00 | (0.60) | |
Net Asset Value - | ||||||
End of Period | $ 9.11 | $ 8.90 | $ 8.68 | $ 6.42 | $ 8.31 | |
Total Return (a) | 2.36 % | 2.53 % | 35.20 % | (22.74)% | (11.43)% | |
Ratios/Supplemental Data | ||||||
Net Assets - End of Period (Thousands) | 9,282 | 9,390 | 8,808 | 5,911 | 8,330 | |
Ratio of Expenses to Average Net Assets Before Reimbursement | 2.50 % | (b) | 2.50 % | 2.50 % | 2.55 % | 2.51 % |
Ratio of Net Income (Loss) to Average Net Assets Before Reimbursement | (0.53)% | (b) | (0.55)% | (1.10)% | (1.11)% | (1.52)% |
Ratio of Expenses to Average Net Assets After Reimbursement | 2.50 % | (b) | 2.50 % | 2.50 % | 2.50 % | 2.50 % |
Ratio of Net Income (Loss) to Average Net Assets After Reimbursement | (0.53)% | (b) | (0.55)% | (1.10)% | (1.06)% | (1.51)% |
Portfolio Turnover Rate | 307.15 % | (b) | 346.02 % | 367.21 % | 283.93 % | 80.17 % |
(a) Total return in the above represents the rate that the investor would have earned or lost on an investment | ||||||
in the Fund assuming reinvestment of all dividends and distributions. | ||||||
(b) Annualized | ||||||
* Per share amounts were calculated using the average shares method. | ||||||
The accompanying notes are an integral part of the financial statements.
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005 (UNAUDITED)
Note 1. Organization
The Jhaveri Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Trust was established under the laws of Ohio by an Agreement and Declaration of Trust dated January 18, 1995 (the “Trust Agreement”). The Trust Agreement permits the Board of Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. Shares of one series have been authorized, which shares constitute the interests in the Jhaveri Value Fund (the “Fund”). The Fund commenced operations May 1, 1995. The Fund’s investment objective is to provide long term capital appreciation. The Fund seeks to achieve its objective by investing primarily in a broad range of common stocks believed by its Adviser to have above average prospects for appreciation, based on a proprietary investment model developed by the Adviser. The investment adviser to the Fund is Investments Technology, Inc. (The “Adviser”).
Note 2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation-Securities that are traded on any exchange or on the NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking a last sale price, a security is valued at its last bid price except when, in the Adviser’s opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Adviser determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board of Trustees.
Federal Income Taxes-The Fund intends to qualify each year as a “Regulated Investment Company” under the Internal Revenue Code of 1986, as amended. By so qualifying, the Fund will not be subject to federal income taxes to the extent that it distributes substantially all of its net investment income and any realized capital gains. Capital loss carryforwards as of September 30, 2005, total $1,844,381 of which $377,227 expire in 2010, and $1,467,154 expire in 2011. Capital loss carryforwards are available to offset future capital gains. To the extent that these carryforwards are used to offset future capital gains, it is probable that the amount which is offset will not be distributed to shareholders.
Dividends and Distributions-The Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. The amounts of distributions to shareholders from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, and are recorded on the ex-dividend date. To the extent these book/tax differences are permanent, they are reclassified to paid-in capital or net short-term capital gains in the period that the difference arises.
Estimates-The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.
Short Sales-The Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When the Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale.
Other-The Fund follows industry practice and records security transactions on the trade date. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.
Note 3. Investment Advisory Agreement
The Trust has an investment advisory agreement with Investments Technology, Inc. Ramesh C. Jhaveri and Saumil R. Jhaveri may be deemed to be controlling persons and affiliates of the Fund due to their ownership of its shares and their positions as officers and directors of both the Fund and the Adviser. Because of such affiliation, they may receive benefits from the management fees paid to the Adviser.
Under the terms of the management agreement (the “Agreement”), the Adviser manages the Fund’s investments subject to approval of the Board of Trustees and pays all of the expenses of the Fund except brokerage fees and commissions, taxes, interest, expenses incurred in connection with the organization and initial registration of its shares and extraordinary expenses. As compensation for its management services and agreement to pay the Fund’s expenses, the Fund is obligated to pay the Adviser a fee computed and accrued daily and paid monthly at an annual rate of 2.50% of the average daily net assets of the Fund. In this regard, it should be noted that most investment companies pay their own operating expenses directly, while the Fund’s expenses, except those specified above, are paid by the Adviser. For the period from April 1, 2005 to September 30, 2005, the Adviser earned a fee of $119,710 from the Fun d.
Note 4. Investments
During the period from March 31, 2005 to September 30, 2005, purchases and sales of investment securities, other than short-term investments, aggregated $13,218,555 and $13,718,850, respectively. The gross unrealized appreciation for all securities totaled $53,342 and the gross unrealized depreciation for all securities totaled $1,130,960, or a net unrealized depreciation for federal income tax purposes of $1,086,396. The aggregate cost of securities for federal income tax purposes at September 30, 2005 was $10,568,853.
Note 5. Control
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2 (a) (9) of the Investment Company Act of 1940. As of September 30, 2005, Nalini R. Jhaveri, M.D. and Ramesh C. Jhaveri and other family members collectively owned beneficially over 58% of the Fund.
Note 6. Distributions to Shareholders
There were no distributions during the period of March 31, 2005 and September 30, 2005.
As of September 30, 2005, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
Undistributed ordinary income/ (accumulated losses) | $ (25,203) |
Undistributed long-term capital gain/ (accumulated losses) | (1,738,023) |
Unrealized appreciation/ (depreciation) | (1,086,396) |
| $ (2,849,622) |
The difference between book basis and tax-basis unrealized depreciation is attributable to the tax deferral of losses on wash sales.
JHAVERI VALUE FUND
EXPENSE EXAMPLE
SEPTEMBER 30, 2005 (UNAUDITED)
As a shareholder of the Jhaveri Value Fund, you incur one type of cost: management fees. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare this cost with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, April 1, 2005 through September 30, 2005.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in this Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | ||||
April 1, 2005 | September 30, 2005 | April 1,2005 to September 30, 2005 | ||||
Actual | $1,000.00 | $1,023.60 | $12.68 | |||
Hypothetical | ||||||
(5% Annual Return before expenses) | $1,000.00 | $1,012.53 | $12.61 | |||
* Expenses are equal to the Fund's annualized expense ratio of 2.50%, multiplied by the average account value over the period, | ||||||
183/365 multiplied by (to reflect the one-half year period). | ||||||
JHAVERI VALUE FUND
TRUSTEES AND OFFICERS
SEPTEMBER 30, 2005 (UNAUDITED)
The Board of Trustees supervises the business activities of the Trust. Each Trustee serves as a trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed. The Fund is not part of a “fund complex”. The following table provides information regarding each Trustee who is an “interested person” of the Trust, as defined in the Investment Company Act of 1940.
Name, Address and Year of Birth | Position(s) Held With Trust | Principal Occupations (Past 5 Years) | Other Directorships Held by Trustee |
Ramesh C. Jhaveri1 18820 High Parkway Cleveland, Ohio 44116 1937 | Trustee since 1995; Chairman of the Board and Chief Executive Officer since 1996 | President of the Adviser since 1983; licensed account executive, options principal and general securities principal, Financial America Securities, Inc., an NASD broker-dealer, since 1970 | None |
Saumil R. Jhaveri1 18820 High Parkway Cleveland, Ohio 44116 1969 | Trustee and Secretary since 1995; President and Treasurer since 1996 | Vice President of the Adviser, where he has been working full time since 1991 | None |
1 Ramesh C. Jhaveri is the father of Saumil R. Jhaveri. They are “interested persons” of the Trust because they are officers of the Trust. In addition, they may be deemed to be “interested persons” of the Trust because they are officers of the Fund’s adviser.
The following table provides information regarding each Trustee who is not an “interested person” of the Trust, as defined in the Investment Company Act of 1940.
Name, Address and Year of Birth | Position(s) Held With Trust | Principal Occupations (Past 5 Years) | Other Directorships Held by Trustee |
Mukul M. Mehta 27070 Detroit Road Suite 201 Westlake, Ohio 44145 1945 | Trustee since 1995 | President of Quality Sciences, Inc., a consulting and software development firm assisting chemical industry clientele including Fortune 500 companies, since 1992 | None |
James E. Mueller 2246 Johnstone Way Westlake, Ohio 44145 1943 | Trustee since 1995 | Advertising director for Ed Mullinax Ford, a car dealer, from 1987-2000. Independent Contractor in Broadcasting since 2000. | None |
David R. Zavagno 5852 Glasglow Court Solon, Ohio 44139 1954 | Trustee since 1995 | President of Universal Medical Systems, Inc., a company specializing in diagnostic imaging equipment design, sales and installation, since 1985 | None |
For the six months ended September 30, 2005, the Adviser paid trustee fees and expenses totaling $1,200.
Board of Trustees
Ramesh C. Jhaveri
Saumil R. Jhaveri
Mukul M. Mehta
James F. Mueller
David R. Zavagno
Investment Adviser
Investments Technology, Inc.
27881 Clemens Road
Westlake, Ohio 44145
Dividend Paying Agent,
Shareholders’ Servicing Agent,
Transfer Agent
Mutual Shareholder Services
8869 Brecksville Rd, Ste. C
Brecksville, Ohio 44141
Custodian
U.S. Bank
P.O. Box 640994
Cincinnati, Ohio 45264-0994
Counsel
Thompson Hine LLP
312 Walnut Street
14th Floor
Cincinnati, Ohio 45202-4089
Independent Auditors
Cohen McCurdy Ltd.
826 West Point Parkway Suite 1250
Westlake, Ohio 44145
This report is provided for the general information of the shareholders of the Jhaveri Value Fund. This report is not intended for distribution to prospective investors in the Fund, unless preceded or accompanied by an effective prospectus.
Item 2. Code of Ethics. Not applicable.
Item 3. Audit Committee Financial Expert. Not applicable.
Item 4. Principal Accountant Fees and Services. Not applicable.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments.
Not applicable – schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable.
Item 8. Portfolio Managers of Closed-End Funds. Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant's board of trustees
Item 11. Controls and Procedures.
(a)
Based on an evaluation of the registrant’s disclosure controls and procedures as of May 25, 2005, the disclosure controls and procedures are reasonably designed to ensure that the information required in filings on Forms N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b)
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1)
EX-99.CODE ETH. Not applicable.
(a)(2)
EX-99.CERT. Filed herewith.
(a)(3)
Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b)
EX-99.906CERT. Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
The Jhaveri Trust
By /s/Ramesh C. Jhaveri
*Ramesh C. Jhaveri
Chief Executive Officer
Date December 7, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /s/Ramesh C. Jhaveri
*Ramesh C. Jhaveri
Chief Executive Officer
Date December 7, 2005
By /s/Saumil R. Jhaveri
*Saumil R. Jhaveri
Chief Financial Officer
Date December 7, 2005
* Print the name and title of each signing officer under his or her signature.