UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21958
Exact name of registrant
as specified in charger: DGHM Investment Trust
Address of principal
executive offices: 8730 Stony Point Parkway, Suite 205
Richmond, VA 23235
Name and address
of agent for service: The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
with a copy to:
John H. Lively
Husch Blackwell Sanders LLP
4801 Main Street, Suite 1000
Kansas City, MO 64112
Registrant's telephone number,
including area code: 800-653-2839
Date of fiscal year end: Last day of February
Date of reporting period: August 31st
Item #1. Reports to Stockholders.
Semi-Annual Report 2008
August 31, 2008
(Unaudited)
DGHM ALL-CAP VALUE FUND
Class A Shares
Class C Shares
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the DGHM All-Cap Value Fund (the
Fund). This report is not authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an effective prospectus. The Funds
shares are not deposits or obligations of, or guaranteed by, any depository
institution. The Funds shares are also not insured by the FDIC, Federal Reserve
Board or any other agency, and are subject to investment risks, including
possible loss of principal amount invested. Neither the Fund nor the Funds
distributor is a bank.
Distributor: First Dominion Capital Corp., 8730 Stony Point Pkwy, Suite
205, Richmond VA 23235, Phone 1-800-653-2839.
An investment in the Fund is subject to investment risks, including the possible
loss of some or the entire principal amount invested. There can be no assurance
that the Fund will be successful in meeting its investment objective. Investment
in the Fund is subject to the following risks: market risk, small-cap, mid-cap
and large cap securities risk, management style risk, sector risk, issuer risk
and ETF risks. More information about these risks and other risks can be found
in the Funds prospectus.
The performance information quoted in this Semi-Annual Report represents past
performance, which is not a guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investors shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance data quoted.
An investor should consider the investment objectives, risks, and charges and
expenses of the Fund carefully before investing. The prospectus contains this
and other information about the Fund. A copy of the prospectus is available by
calling Shareholder Services at 1-800-653-2839. The prospectus should be read
carefully before investing.
Stated performance in the Fund was achieved at some or all points during the
period by Dalton, Greiner, Hartman, Maher & Co., LLC, the investment adviser to
the Fund, waiving or reimbursing part of the Funds total expenses to ensure
shareholders did not absorb expenses significantly greater than the industry
norm.
This Semi-Annual Report was first distributed to shareholders on or about
October 30, 2008.
For More Information on your DGHM All-Cap Value Fund:
Call Our Shareholder Services Group Toll-Free at 1-800-653-2839
FUND EXPENSES (UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees, distribution (12b-1) fees, and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses The first line of the table below provides information about the
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 Funds actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Funds actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical 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 and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments or contingent deferred sales charges on
redemption payments, if any. Therefore, the second line of the table is useful
in comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional costs
were included, your costs would have been higher.
Class A Shares Beginning Ending Expenses Paid
Expense Example Account Value March 1, 2008 Account Value August 31, 2008 During Period*
- --------------- --------------------------- ----------------------------- --------------
Actual $1,000.00 $1,047.50 $9.03
Hypothetical (5% return before expenses) $1,000.00 $1,016.38 $8.89
Class C Shares Beginning Ending Expenses Paid
Expense Example Account Value March 1, 2008 Account Value August 31, 2008 During Period*
- --------------- --------------------------- ----------------------------- --------------
Actual $1,000.00 $1,043.40 $12.88
Hypothetical (5% return before expenses) $1,000.00 $1,012.60 $12.68
* Expenses are equal to the Funds annualized expense ratios of 1.75% and 2.50%
for Class A and Class C shares, respectively, multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the one-half year
period).
1
DGHM ALL-CAP VALUE FUND
Schedule of Investments
(Unaudited)
As of August 31, 2008
Shares Market Value (Note 1)
------ ---------------------
COMMON STOCKS - 94.92%
Aerospace/Defense - 3.00%
General Dynamics Corporation 1,466 $ 135,312
---------------
Banks - 5.43%
City National Corporation 2,270 112,342
Old National Bancorp 7,600 132,468
----------------
244,810
----------------
Beverages - 1.12%
Amheuser-Busch Companies, Inc. 740 50,216
----------------
Chemicals - 5.54%
Lubrizol Corporation 2,080 110,219
PPG Industries, Inc. 2,215 139,235
----------------
249,454
----------------
Computers - 4.81%
International Business Machines
Corporation 810 98,601
*Teradata Corporation 4,815 118,305
----------------
216,906
----------------
Diversified Financial Services - 7.65%
Invesco Limited 5,875 150,576
JPMorgan Chase & Co. 2,455 94,493
The Goldman Sachs Group, Inc. 608 99,694
----------------
344,763
----------------
Electric - 5.27%
Dominion Resources, Inc. 2,450 106,648
NSTAR 3,870 130,961
----------------
237,609
----------------
Environmental Control - 1.97%
Waste Management, Inc. 2,520 88,654
----------------
Food - 4.96%
Kellogg Company 2,010 109,424
The Kroger Co. 4,120 113,794
----------------
223,218
----------------
Healthcare Services - 7.20%
*DaVita, Inc. 2,835 162,701
Quest Diagnostics, Inc. 2,990 161,610
----------------
324,311
----------------
Insurance - 6.10%
ACE Limited 2,890 152,043
The Travelers Companies, Inc. 2,780 122,765
----------------
274,808
----------------
Media - 5.56%
Comcast Corporation, Cl. A 4,910 103,797
Time Warner, Inc. 8,965 146,757
----------------
250,554
----------------
Metal Fabrication/Hardware - 2.14%
Mueller Industries, Inc. 3,440 96,492
----------------
Miscellaneous Manufacturing - 8.04%
3M Company 1,690 121,004
Dover Corporation 2,280 112,586
Teleflex Incorporated 1,995 128,817
----------------
362,407
----------------
Oil & Gas - 7.18%
EnCana Corporation 1,510 113,099
Helmerich & Payne, Inc. 1,690 96,533
Occidental Petroleum Corporation 1,435 113,882
----------------
323,514
----------------
Oil & Gas Services - 6.53%
BJ Services Company 5,680 152,508
*Oil States International 2,545 141,578
----------------
294,086
----------------
Real Estate Investment Trust - 2.25%
Vornado Realty Trust 1,020 101,449
----------------
Retail - 4.03%
Brinker International, Inc. 4,915 92,992
The Gap, Inc. 4,550 88,498
----------------
181,490
Savings & Loans - 3.14%
People's United Financial, Inc. 7,890 141,389
----------------
Telecommunications - 3.00%
Telephone & Data Systems, Inc. 3,520 135,168
----------------
TOTAL COMMON STOCKS (Cost $4,234,383) 4,276,610
----------------
(Continued)
2
DGHM ALL-CAP VALUE FUND
Schedule of Investments
(Unaudited)
As of August 31, 2008
Shares Market Value (Note 1)
------ --------------------
INVESTMENT COMPANY - 1.04%
Evergreen Institutional Treasury
Money Market Fund - 1.81% (Cost $46,880) 46,880 $ 46,880
Total Investments (Cost $4,281,263) - 95.96% $ 4,323,490
Other Assets Less Liabilities - 4.04% 181,966
Net Assets - 100.00% $ 4,505,456
*Non-income producing investment. Represents 7 day effective yield at August 31,
2008.
Summary of Investments by Industry
Industry % of Net Assets Market Value
- -------- --------------- ------------
Aerospace / Defense 3.00% $ 135,312
Banks 5.43% 244,810
Beverages 1.12% 50,216
Chemicals 5.54% 249,454
Computers 4.81% 216,906
Diversified Financial Services 7.65% 344,763
Electric 5.27% 237,609
Environmental Control 1.97% 88,654
Food 4.96% 223,218
Healthcare Services 7.20% 324,311
Insurance 6.10% 274,808
Investment Company 1.04% 46,880
Media 5.56% 250,554
Metal Fabrication / Hardware 2.14% 96,492
Miscellaneous Manufacturing 8.04% 362,407
Oil & Gas 7.18% 323,514
Oil & Gas Services 6.53% 294,086
Real Estate Investment Trust 2.25% 101,449
Retail 4.03% 181,490
Savings & Loans 3.14% 141,389
Telecommunications 3.00% 135,168
------ ------------
Total 95.96% $ 4,323,490
See Notes to Financial Statements
3
DGHM ALL-CAP VALUE FUND
Statement of Assets and Liabilities
(Unaudited)
As of August 31, 2008
Assets:
Investments, at value (cost $4,281,263) $ 4,323,490
Receivables:
Investments sold 128,927
Fund shares sold 9,882
Dividends 11,571
Prepaid expenses
Fund accounting fees 3,331
Compliance services fees 618
Registration & filing fees 22,480
Other expenses 1,613
Due from affiliates:
Advisor (note 2) 14,019
-------------
Total assets 4,515,931
-------------
Liabilities:
Accrued expenses 10,475
-------------
Total liabilities 10,475
-------------
Net Assets $ 4,505,456
Net Assets Consist of:
Capital (par value and paid in surplus)
$ 4,599,177
Undistributed net investment income 2,990
Accumulated net realized loss on investments (138,938)
Net unrealized appreciation on investments
42,227
-------------
Total Net Assets $ 4,505,456
-------------
Class A Shares
Shares Outstanding, $0.001 par value (unlimited authorized shares) 234,431
Net Assets $ 2,274,343
Net Asset Value and Redemption Price Per Share (a) $ 9.70
Maximum Offering Price Per Share ($9.70 95.00%) $ 10.21
-------------
Class C Shares
Shares Outstanding, $0.001 par value (unlimited authorized shares) 231,877
Net Assets $ 2,231,113
Net Asset Value, Maximum Offering Price and Redemption
Price Per Share (a) $ 9.62
(a) May be subject to a contingent deferred sales charge if redeemed within one
year of purchase date (see note 1).
See Notes to Financial Statements
4
DGHM ALL-CAP VALUE FUND
Statement of Operations
(Unaudited)
For the six month period ended August 31, 2008
Investment Income:
Dividends (Net of foreign withholding tax of $199) $ 48,199
-------------
Total Income 48,199
-------------
Expenses:
Advisory fees (note 2) 15,949
Administration fees (note 2) 12,000
Transfer agent fees (note 2) 15,012
Fund accounting fees (note 2) 21,082
Compliance service fees (note 2) 3,906
Custody fees 4,790
Distribution and service fees - Class A Shares (note 3) 2,644
Distribution and service fees - Class C Shares (note 3) 10,688
Registration and filing administration fees (note 2) 8,145
Legal fees 11,090
Audit and tax preparation fees 7,562
Registration and filing expenses 20,913
Printing expenses 504
Trustee fees and meeting expenses 6,050
Securities pricing fees 1,562
Other operating expenses 5,042
-------------
Total Expenses 146,939
-------------
Expenses reimbursed by advisor (note 2) (85,781)
Advisory fees waived (note 2) (15,949)
-------------
Net Expenses 45,209
-------------
Net Investment Income 2,990
-------------
Realized and Unrealized (Loss) Gain on Investments
Net realized loss from investment transactions (102,911)
Change in unrealized appreciation on investments 295,982
-------------
Realized and Unrealized Gain on Investments 193,071
-------------
Net Increase in Net Assets Resulting from Operations $ 196,061
-------------
See Notes to Financial Statements
5
DGHM ALL-CAP VALUE FUND
Statements of Changes in Net Assets
August 31, February 29,
For the six month period or fiscal year ended 2008 (a) 2008 (b)
Operations:
Net investment income (loss) $ 2,990 $ (4,504)
Net realized loss from investment transactions (102,911) (36,027)
Change in unrealized appreciation (depreciation)
on investments 295,982 (253,755)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations 196,061 (294,286)
----------- -----------
Capital Share Transactions: (note 7)
Class A Shares
Shares sold 430,450 2,229,146
Shares repurchased (317,640) (250,117)
Class C Shares
Shares sold 496,300 2,277,848
Shares repurchased (403,475) (113,831)
----------- ------------
Increase from Capital Share Transactions 205,635 4,143,046
----------- ------------
Net Increase in Net Assets 401,696 3,848,760
----------- ------------
Net Assets:
Beginning of period 4,103,760 255,000
----------- ------------
End of period $4,505,456 $ 4,103,760
----------- ------------
Undistributed Net Investment Income $ 2,990 $ -
(a)Unaudited.
(b)For the period from June 20, 2007 (Commencement of Operations) to February
29, 2008.
See Notes to Financial Statements
6
DGHM ALL-CAP VALUE FUND
Financial Highlights
Class A Shares
------------------------------------------------
For a share outstanding during the August 31, February 29,
six month period or fiscal year ended 2008 (a) 2008 (b)
------------ ----------------
Net Asset Value, Beginning of Period $ 9.26 $ 10.00
Income (Loss) from Investment Operations
Net investment income 0.02 0.01
Net realized and unrealized gain (loss) on securities 0.42 (0.75)
------------ -----------------
Total from Investment Operations 0.44 (0.74)
------------ -----------------
Net Asset Value, End of Period $ 9.70 $ 9.26
------------ -----------------
Total Return (e) 4.75% (7.40)%
Net Assets, End of Period (in thousands) $ 2,274 $ 2,066
Average Net Assets for the Period (in thousands) $ 2,098 $ 1,544
Ratios of:
Gross Expenses to Average Net Assets (c) 6.53%(d) 8.52%(d)
Net Expenses to Average Net Assets (c) 1.75%(d) 1.75%(d)
Net Investment Income to Average Net Assets 0.52%(d) 0.20%(d)
Portfolio Turnover Rate 62.22% 80.71%
Class C Shares
--------------------------------------------------
For a share outstanding during the August 31, February 29,
six month period or fiscal year ended 2008 (a) 2008 (b)
-------------- ------------------
Net Asset Value, Beginning of Period $ 9.22 $ 10.00
Income (Loss) from Investment Operations
Net investment loss (0.01) (0.03)
Net realized and unrealized gain (loss) on securities 0.41 (0.75)
-------------- -------------------
Total from Investment Operations 0.40 (0.78)
-------------- -------------------
Net Asset Value, End of Period $ 9.62 $ 9.22
-------------- -------------------
Total Return (e) 4.34% (7.80)%
Net Assets, End of Period (in thousands) $ 2,231 $ 2,038
Average Net Assets for the Period (in thousands) $ 2,120 $ 1,713
Ratios of:
Gross Expenses to Average Net Assets (c) 7.28%(d) 9.27%(d)
Net Expenses to Average Net Assets (c) 2.50%(d) 2.50%(d)
Net Investment Loss to Average Net Assets (0.23)%(d) (0.55)%(d)
Portfolio Turnover Rate 62.22% 80.71%
(a)Unaudited.
(b)For the period from June 20, 2007 (Commencement of Operations) to February
29, 2008.
(c)The expense ratios listedabove reflect total expenses prior to anywaivers and
reimbursements (gross expense ratio) and afterany waivers and reimbursements(net
expense ratio). (d)Annualized.
(e)Total return does not reflect sales charge, if any.
See Notes to Financial Statements
7
DGHM All-Cap Value Fund
Notes to Financial Statements (Unaudited)
1. Organization and Significant Accounting Policies
The DGHM All-Cap Value Fund (the Fund) is a series portfolio of the DGHM
Investment Trust (the Trust). The Trust was organized as a Delaware statutory
trust and is registered under the Investment Company Act of 1940 (the 1940 Act),
as amended, as an open-end management investment company. The Fund is classified
as diversified as defined in the 1940 Act.
The Fund commenced operations on June 20, 2007. The investment objective of the
Fund is to provide long-term capital appreciation through investments that its
investment advisor, Dalton, Greiner, Hartman, Maher & Co., LLC (the Advisor)
believes are undervalued.
The Fund has two classes of shares: Class A shares and Class C shares. Each
class of shares has equal rights as to assets of the Fund, and the classes are
identical except for differences in their sales charge structures and ongoing
distribution and service fees. Income, expenses (other than distribution and
service fees), and realized and unrealized gains or losses on investments are
allocated to each class of shares based upon its relative net assets. Both
classes have equal voting privileges, except where otherwise required by law or
when the Board of Trustees (the Trustees) determines that the matter to be voted
on affects only the interests of the shareholders of a particular class. The
Funds Class C shares are sold without an initial sales charge; however, both
Class A and C shares are subject to a contingent deferred sales charge. Class A
shares sold are subject to a maximum initial sales charge of 5%, as well as a
contingent deferred sales charge of 0.5% imposed on shares redeemed within one
year of purchase of $1,000,000 or more. Class C shares impose a 1% contingent
deferred sales charge on proceeds that are redeemed within one year of the
purchase date. The contingent deferred sales charge is payable to the
Distributor of the Trust. Class C shares automatically convert into Class A
shares after seven years.
The following accounting policies have been consistently followed by the Fund
and are in conformity with accounting principles generally accepted in the
United States of America in the investment company industry.
Investment Valuation
The Funds investments in securities are carried at value. Securities listed on
an exchange or quoted on a national market system are valued at the last sales
price as of 4:00 p.m. Eastern Time. Securities traded in the NASDAQ
over-the-counter market are generally valued at the NASDAQ Official Closing
Price. Other securities traded in the over-the-counter market and listed
securities for which no sale was reported on that date are valued at the most
recent bid price. Securities and assets for which representative market
quotations are not readily available or which cannot be accurately valued using
the Funds normal pricing procedures are valued at fair value as determined in
good faith under policies approved by the Trustees. Fair value pricing may be
used, for example, in situations where (i) a portfolio security is so thinly
traded that there have been no transactions for that security over an extended
period of time; (ii) the exchange on which the portfolio security is principally
traded closes early; or (iii) trading of the portfolio security is halted during
the day and does not resume prior to the Funds net asset value calculation. A
portfolio securitys fair value price may differ from the price next available
for that portfolio security using the Funds normal pricing procedures.
Investment companies are valued at net asset value. Instruments with maturities
of 60 days or less are valued at amortized cost, which approximates market
value.
Fair Value Measurement
In September 2006, Financial Accounting Standards Board (FASB) issued Statement
on Accounting Standards No. 157, Fair Value Measurement (SFAS 157). SFAS 157
defines fair value, establishes a frame work for measuring fair value and
expands disclosure about fair value measurements.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
a. Level 1: quoted prices in active markets for identical securities
b. Level 2: other significant observable inputs (including quoted prices for
similar securities, interest rates, credit risk, etc.) c. Level 3: significant
unobservable inputs (including the Funds own assumptions in determining fair
value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. The
following is a summary of the inputs used as of August 31, 2008, in valuing the
Fund's assets:
Valuation Inputs Investments In Securities
- ---------------- -------------------------
Level 1 $4,276,610
Level 2 $46,880
Level 3 -
(Continued)
8
DGHM All-Cap Value Fund
Notes to Financial Statements (Unaudited)
Investment Transactions and Investment Income
Investment transactions are accounted for as of the date purchased or sold
(trade date). Dividend income is recorded on the ex-dividend date. Certain
dividends from foreign securities will be recorded as soon as the Fund is
informed of the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is recorded on the accrual basis and includes
amortization of discounts and premiums. Gains and losses are determined on the
identified cost basis, which is the same basis used for federal income tax
purposes.
Expenses
The Fund bears expenses incurred specifically on its behalf as well as a portion
of general Trust expenses, if any, which are allocated according to methods
reviewed annually by the Trustees.
Dividend Distributions
The Fund may declare and distribute dividends from net investment income (if
any) quarterly. Distributions from capital gains (if any) are generally declared
and distributed annually. Dividends and distributions to shareholders are
recorded on ex-date.
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 the contingent assets and liabilities at the date
of the financial statements and the reported amounts of increases and decreases
in the net assets from operations during the reported period. Actual results
could differ from those estimates.
Federal Income Taxes
No provision for income taxes is included in the accompanying financial
statements, as the Fund intends to distribute to shareholders all taxable
investment income and realized gains and otherwise comply with Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
2. Transactions with Affiliates
Advisor
The Fund pays a monthly advisory fee to the Advisor based upon the average daily
net assets of the Fund and calculated at an annual rate shown in the table
below. The Advisor has entered into a contractual agreement (Expense Limitation
Agreement") with the Fund under which it has agreed to waive or reduce its fees
and to assume other expenses of the Fund through February 28, 2009, if
necessary, in amounts that limit the Funds total operating expenses (exclusive
of interest, taxes, brokerage fees, other expenditures which are capitalized in
accordance with generally accepted accounting principles, other extraordinary
expenses not incurred in the ordinary course of the Funds business, and amounts,
if any, payable pursuant to a plan adopted in accordance with Rule 12b-1 of the
1940 Act) to not more than a specified percentage of the average daily net
assets of the Fund. There can be no assurance that the Expense Limitation
Agreement will continue in the future. Below is the amount of fees waived and
expenses reimbursed.
Period Advisor Fees Expense AdvisorFees Expenses
Ending Rate Limitation Ratio Waived Reimbursed
- ---------- --------------- ------------------ -------------- --------------
08/31/08 0.75% 1.50% Class A
1.50% Class C $15,949 $85,781
- ----------------------------------------------------------------------------------------------
02/29/08 0.75% 1.50% Class A
1.50% Class C $17,020 $136,399
Administrator
During the period covered by this report, the Fund paid a monthly administration
fee to The Nottingham Company (the Previous Administrator) based upon the
average daily net assets of the respective share class and calculated at the
annual rates as shown in the schedule provided below.
The Previous Administrator also received a fee to procure and pay the custodian
for the Fund, additional compensation for fund accounting and recordkeeping
service and additional compensation for certain costs involved with the daily
valuation of securities and as reimbursement for out-of-pocket expenses (which
are immaterial in amount). A breakdown of these fees is provided on the
following page.
Certain Trustees and officers of the Trust are also officers of the Advisor.
During the period covered by this report, certain officers of the Trust were
also officers of the Previous Administrator.
Compliance Services
During the period covered by this report, Nottingham Compliance Services, LLC, a
wholly owned affiliate of the Previous Administrator, provided services which
assisted the Trusts Chief Compliance Officer in monitoring and testing the
policies and procedures of the Trust as required by Rule 38a-1 of the Securities
and Exchange Commission (SEC). It received compensation for this service at an
annual rate of $7,750.
(Continued)
9
DGHM All-Cap Value Fund
Notes to Financial Statements (Unaudited)
Transfer Agent
During the period covered by this report, North Carolina Shareholder Services,
LLC (Previous Transfer Agent) served as transfer, dividend paying, and
shareholder servicing agent for the Fund. It received compensation for its
services based upon a $15 per shareholder per year, subject to a minimum fee of
$1,750 per month, plus $500 per month for each additional class of shares.
Distributor
During the period covered by this report, Capital Investment Group, Inc. (the
Previous Distributor) served as the Funds principal underwriter and distributor.
The Previous Distributor received any sales charges imposed on purchases of
Class A shares and re-allocated a portion of such charges to dealers through
whom the sale was made, if any. For the six month period ended August 31, 2008,
the Previous Distributor retained sales charges in the amount of $6.
Change in Service Providers
Effective October 1, 2008, the Fund changed to the following service
providers: Commonwealth Shareholder Services, Administrator; First Dominion
Capital Corporation, Distributor; and Commonwealth Fund Services, Inc., Transfer
Agent.
Administration Fees (a) Fund Accounting Fees Fund Accounting Blue Sky Administration
(monthly) (b) Asset Based Fees Fees (annual)
- ----------------------------------- ------------------------- ------------------------------------ --------------
Average Net Assets Annual Rate Average Net Assets Annual Rate
- ------------------ ----------- ------------------ ------------
First $50 Million 0.175% $2,700 All Assets 0.01% $150 per state,
per class
Next $50 Million 0.150% $750
Next $50 Million 0.125%
Next $50 Million 0.100%
Over $200 Million 0.075%
(a) Subject to a minimum of $2,000 per month.
(b) Subject to $2,700 for the first class, $750 for each additional class.
3. Distribution and Service Fees
The Trustees, including a majority of the Trustees who are not interested
persons of the Trust as defined in the 1940 Act and a majority of the Trustees
who have no direct or indirect financial interest in the operation of the
distribution and service plans (the Plans), or any agreement relating to such
Plans, adopted such Plans pursuant to Rule 12b-1 of the 1940 Act applicable to
the Class A Shares and Class C Shares. The 1940 Act regulates the manner in
which a regulated investment company may assume costs of distributing and
promoting the sales of its shares and servicing of its shareholder accounts. The
Plan provides that the Fund may incur certain costs, which may not exceed 0.25%
per annum of the average daily net assets of the Class A Shares or 1.00% per
annum of the average daily net assets of the Class C Shares for each year
elapsed subsequent to adoption of the Plans, for payment to the Funds principal
underwriter and others for items such as advertising expenses, selling expenses,
commissions, travel, or other expenses reasonably intended to result in sales of
Class A Shares and Class C Shares in the Fund or support servicing of those
classes shareholder accounts. The Fund incurred $2,644, and $10,688, in
distribution and service fees under the Plans with respect to Class A Shares and
Class C Shares, respectively, for the six month period ended August 31, 2008.
4. Purchases and Sales of Investment Securities
For the six month period ended August 31, 2008, the aggregate cost of purchases
and proceeds from sales of investment securities (excluding short-term
securities) were as follows:
Purchases of Securities Proceeds from
Sales of Securities
- ------------------------ ---------------------
$2,675,837 $2,543,973
There were no purchases or sales of long-term U.S. government obligations
during the period.
5. Federal Income Tax
The tax components of capital shown in Table 1 on the following page represent:
(1) distribution requirements the Fund must satisfy under the income tax
regulations, and (2) unrealized appreciation or depreciation of investments for
federal income tax purposes as of February 29, 2008.
Accumulated capital losses noted below represent net capital loss carryovers as
of February 29, 2008 that may be available to offset future realized capital
gains and thereby reduce future taxable gain distributions. The Capital Loss
Carry-forward for the period ended February 29, 2008 is $3,338 which will expire
in February 29, 2016.
(Continued)
10
Other book to tax differences in the current year primarily consist of
post-October loss deferrals.
Table 1
Undistributed Other Book/Tax Differences
- --------------------------------------------------
Ordinary Income Accumulated Capital Losses Net Tax Appreciation
- --------------- -------------------------- --------------------------- ---------------------
$ - ($3,338) ($6,485) ($279,959)
As a result of the Funds operating net investment loss, the following
reclassification, shown in Table 2, was made for the fiscal year ended February
29, 2008. This reclassification had no effect on the net assets or the net asset
value of the Fund.
Table 2
Increase (Decrease) in
Paid-in Capital Undistributed Net Investment Gain (Loss) Undistributed Net Realized Gain on Investments
- ----------------------- ----------------------------------------- ----------------------------------------------
($4,504) $4,504 $ -
The aggregate cost of investments and the composition of unrealized appreciation
and depreciation of investment securities for federal income tax purposes as of
August 31, 2008, are shown in Table 3. There is no difference between the book
and tax cost.
Table 3
Federal Tax Cost Aggregate Gross Unrealized
-------------------------------
Appreciation Depreciation
- ----------------- ------------ ---------------
$4,281,263 $217,898 ($175,671)
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations which may differ from accounting principles generally accepted in
the United States of America. These differences may arise from differing
treatments for items such as net short-term gains, deferral of wash sale losses,
foreign currency transactions, net investment losses and capital loss
carry-forwards. Certain permanent differences such as tax returns of capital and
net investment losses, if any, would be classified against capital. There were
no dividends or distributions of net investment income or net realized gains
paid during the period from June 20, 2007 (Commencement of Operations) to
February 29, 2008
Management has analyzed the Funds potential tax position for the purposes of
implementing FIN 48, and has concluded that no provision for income tax is
required in the Funds financial statements.
6. Commitments and Contingencies
Under the Trusts organizational documents, its officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Trust
entered into contracts with its vendors, on behalf of the Fund, and others that
provide for general indemnifications. The Funds maximum exposure under these
arrangements is unknown, as this would involve future claims that may be made
against the Fund. The Fund expects that risk of loss to be remote.
(Continued)
11
DGHM All-Cap Value Fund
Notes to Financial Statements (Unaudited)
7. Capital Share Transactions
Class A Shares Class C Shares
---------------------------- ----------------------------
For the six month period or August 31, February 29, August 31, February 29,
fiscal period ended 2008 2008 (a)(b) 2008 2008 (a)(b)
- ----------------------------------------- ------------- ------------- ------------ -------------
Transactions in Capital Shares
Shares sold 44,847 228,769 51,881 228,136
Shares repurchased (33,590) (25,995) (41,150) (12,090)
Net Increase in Capital Shares 11,257 202,774 10,731 216,046
Shares Outstanding, Beginning of Period 223,174 20,400 221,146 5,100
Shares Outstanding, End of Period 234,431 223,174 231,877 221,146
(a) Period from June 20, 2007 (Commencement of Operations) to February 29, 2008
(b) Audited.
(Continued)
12
DGHM All-Cap Value Fund
Additional Information (Unaudited)
1. Proxy Voting Policies and Voting Record
A copy of the Trusts Proxy Voting and Disclosure Policy and the Advisors Proxy
Voting and Disclosure Policy are included as Appendix B to the Funds Statement
of Additional Information and is available, without charge, (1) upon request, by
calling 1-800-653-2839 and (2) on the SECs website at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge, (1) upon request, by calling the Fund at the number above and
(2) on the SECs website at http://www.sec.gov.
2. Quarterly Portfolio Holdings
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Funds Forms N-Q
are available on the SECs website at http://www.sec.gov. You may review and make
copies at the SECs Public Reference Room in Washington, D.C. You may also obtain
copies after paying a duplicating fee by writing the SECs Public Reference
Section, Washington, D.C. 20549-0102 or by electronic request to
publicinfo@sec.gov, or without charge, upon request, by calling the fund at
1-800-653-2839. Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 202-942-8090.
13
The DGHM ALL-CAP VALUE
FUND is a series of the
DGHM Investment Trust
For Shareholder Service Inquiries: For Investment Advisor Inquiries:
Documented: Documented:
Commonwealth Fund Services, Inc. Dalton, Greiner, Hartman, Maher & Co., LLC
8730 Stony Point Parkway, Suite 205 565 Fifth Avenue, Suite 2101
Richmond, Virginia 23235 New York, New York 10017-2413
Toll-Free Telephone: Toll-Free Telephone:
1-800-653-2839 1-800-653-2839
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 6. INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
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 INVESTMENT
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 and principal financial officers,
or persons performing similar functions, 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 "1940 Act") (17 CFR
270.30a-3(c)) are effective, as of a date within 90 days of the filing date of
the report that includes the disclosure required by this paragraph, based on
their evaluation of these controls and procedures required by Rule 30a-3(b)
under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a- 15(b) or 15d-15(b) under
the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal quarter of the period
covered by the report that has materially affected or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics. Not applicable when filing a semi-annual report to
shareholders.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
attached hereto.
(a)(3) Not applicable.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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): DGHM Investment Trust
By: /s/ Jeffrey C. Baker
---------------------
Jeffrey C. Baker
President and Principal Executive Officer
Date: November 10, 2008
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/ Jeffrey C. Baker
---------------------
Jeffrey C. Baker
President and Principal Executive Officer,
DGHM Investment Trust
Date: November 10, 2008
By: /s/ Thomas F. Gibson
---------------------
Thomas F. Gibson
Principal Financial Officer,
DGHM Investment Trust
Date: November 10, 2008