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 811-08295
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New Providence Investment Trust
-------------------------------
(Exact name of registrant as specified in charter)
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
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(Address of principal executive offices) (Zip code)
Julian G. Winters
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
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(Name and address of agent for service)
Registrant's telephone number, including area code: 252-972-9922
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Date of fiscal year end: May 31
------
Date of reporting period: May 31, 2005
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Item 1. REPORTS TO STOCKHOLDERS.
________________________________________________________________________________
WISDOM FUND
________________________________________________________________________________
a series of the New Providence Investment Trust
INSTITUTIONAL CLASS SHARES
INVESTOR CLASS SHARES
CLASS B SHARES
CLASS C SHARES
ANNUAL REPORT
FOR THE YEAR ENDED MAY 31, 2005
INVESTMENT ADVISOR
Atlanta Investment Counsel, LLC
3717 Haddon Hall Road, NW
Suite 200
Atlanta, Georgia 30327
WISDOM FUND
116 South Franklin Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803
1-800-525-3863
DISTRIBUTOR
Capital Investment Group, Inc.
116 South Franklin Street
Rocky Mount, North Carolina 27803
1-800-773-3863
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Wisdom Fund (the "Fund"). This
report is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus. Mutual fund shares
are not deposits or obligations of, or guaranteed by, any depository
institution. Shares are 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 Fund's distributor is a
bank.
- --------------------------------------------------------------------------------
Statements in this Annual Report that reflect projections or expectations of
future financial or economic performance of the Wisdom Fund ("Fund") and of the
market in general and statements of the Fund's plans and objectives for future
operations are forward-looking statements. No assurance can be given that actual
results or events will not differ materially from those projected, estimated,
assumed or anticipated in any such forward-looking statements. Important factors
that could result in such differences, in addition to the other factors noted
with such forward-looking statements, include, without limitation, general
economic conditions such as inflation, recession and interest rates. Past
performance is not a guarantee of future results.
Investments in the Fund are subject to investment risks, including, without
limitation, tracking risks (an investor in the Fund should not expect that the
investment performance of the Fund will be able to track the investment
performance of Berkshire Hathaway, Inc.), non-diversified risk, industry
concentration risk and other risks as set forth in the Fund's prospectus. More
information about these risks and other risks can be found in the Fund's
prospectus.
The performance information quoted in this 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 investor's 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
may obtain performance data current to the most recent month-end by visiting
www.nottinghamco.com.
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 1-877-892-4226. The prospectus should be read
carefully before investing.
- --------------------------------------------------------------------------------
WISDOM FUND
Annual Report to Shareholders
________________________________________________________________________________
July 22, 2005
Dear Shareholder:
For the 12 months ending May 31, 2005, the Wisdom Fund showed modest gains. The
performance tables in this report show comparative results for the fund and the
S&P 500 Index for the most 12 months and since inception for each class of
shares.
The fund underperformed the S&P 500 Index due to two main factors:
(1) The fund held a high level of short-term money market investments and
treasury bills, emulating Berkshire Hathaway's short-term cash
holdings. The S&P 500 Index is an index of 500 stocks and holds no
short-term cash investments.
(2) The financial stocks, which make up the largest percentage of stocks
in the fund, were negatively affected by the Federal Reserve's
increase in short-term interest rates.
Since the fund is a long-term investor, we are very pleased that our performance
results since inception of the fund have been greater than if one had invested
in the S&P 500 Index over the same period.
Human beings have a natural inclination to assume that the future is going to
look very similar to the recent past. Bill Safire articulated this tendency on
Meet The Press last year:
"I can remember back in the 1980's, the expression all the economists were using
was `As far as the eye can see.' That's where all the deficits were going to
lead us. And when in the 1990's, with the boom leading to the bubble and income
tax revenue flowing to the government, surpluses appeared and mushroomed and
everybody was saying, `There'll be surpluses as far as the eye can see.' And now
here we are again saying, `Deficits as far as the eye can see.' The eye can't
see very far."
Of course, Mr. Safire wasn't talking about investing, but the phenomenon of
which he speaks is alive and well in today's capital markets. For instance,
David Pottruck, former CEO of Charles Schwab, recently stated, "At some point,
investing seems neither emotionally nor financially rewarding." The statement is
shocking (and wrong) on several levels, especially for someone in his position.
However, rational or not, the negative returns experienced for the S&P 500 for
the last five years have had an effect on investor psychology.
The rules of investing have not changed. We believe investors still have a need
to:
o Preserve capital,
o Grow their principal at an above average rate, and
o Minimize taxes.
Investors face many decisions on the road to prosperity. One of the most
critical decisions you make is choosing the right mutual fund. You will place
your trust in, and want to do business with a fund that is ethical, hard
working, and exhibits positive attributes.
Atlanta Investment Counsel, LLC, manager of the Wisdom Fund:
o Displays a true commitment to long-term wealth creation,
o Remains staunch in its adherence to its investment principles,
o Practices what it preaches,
o Shares the same concerns as investors,
o Delivers exceptional client services, and
o Champions transparency.
We feel that investors want to do business with a mutual fund that is staunch in
its pursuit of principles. If you are an investor with another mutual fund, do
you know what their principles are? Have they practiced what they preach? We
have, year after year.
As you know we think very highly of Warren Buffett and his partner, Charles
Munger. These two have achieved an extraordinary investment record over the last
35 years. Theirs has not been a complicated investment strategy; rather, they
have kept it very simple. They buy good businesses with great management teams
at attractive prices and then hold on to them! There is no secret-that's it.
Buffett says that it is surprising that so few imitate what has worked for them.
In February of 1999 the Wisdom Fund opened to investors to do just exactly that!
To own as closely as possible the publicly held holdings of Berkshire Hathaway
and holdings of similar characteristics for the private holdings of Berkshire
Hathaway. We have always felt that by owning the Wisdom Fund one would avoid the
only problem we see with owning Berkshire Hathaway, that is Berkshire currently
WISDOM FUND
Annual Report to Shareholders
________________________________________________________________________________
trades at a premium to the market and its peers. As an open-end mutual fund, the
Wisdom Fund cannot trade at a premium or discount to its net asset value.
In July 14, 2005, Standard and Poor's Research issued a "sell" recommendation on
shares of Berkshire Hathaway. The recommendation stated that "The shares
currently trade at 22x our $3900 2005 earnings per share estimate, a premium to
both the market and its insurance peers. We do not believe that this premium is
warranted."
As stated above, our investment objective is to invest as closely as possible in
securities known to be owned by Berkshire Hathaway. In investing in public
companies with similar characteristics to those of privately held companies
owned by Berkshire Hathaway, our investment philosophy rests on a set of
established investment principles that we follow each day:
o We buy businesses, not just shares of stocks,
o We buy businesses we understand, and
o We measure long-term success, not short-term stock prices.
What does this mean to investors?
It means that investors can expect consistency and conservatism in our
investment approach. Our principles help us determine what to invest in and,
more importantly, what not to invest in.
We believe that economic factors will not weaken our investment principles. We
at Atlanta Investment Counsel, LLC are not influenced by political or economic
forecasts. In fact, we see these as expensive distractions to many investors. We
believe the following quotation serves well to reaffirm our commitment to this
investment principle:
"Thirty years ago, no one could have foreseen the huge expansion of the
Vietnam War, wage and price controls, two oil shocks, the resignation of a
president, a one day drop in the Dow of 508 points, or treasury bill yields
fluctuating between 2.8% and 17.4%. But, surprise - none of these
blockbuster events made the slightest dent in Ben Graham's investment
principles. Nor did they render unsound the negotiated purchase of fine
businesses at sensible prices.
Imagine the cost to us, then, if we had let a fear of the unknown cause us
to defer or alter the deployment of capital. Indeed, we have usually made
our best purchases when apprehensions about some macro event were at a
peak. Fear is the foe of the faddist, but the friend of the fundamentalist.
A different set of major shocks is sure to occur in the next 30 years. We
will neither try to predict these nor profit from them. If we can identify
businesses similar to those we have purchased in the past, external
surprises will have little effect on our long-term results."
(Warren E. Buffett, March 7, 1995)
Recent Purchases in the Fund
In the past several months the Fund has purchased:
o Wal-Mart Stores,
o Costco,
o Anheuser-Busch,
o Proctor and Gamble,
o Home Depot,
o Allegheny Energy,
o Constellation Energy,
o The Southern Company,
o Duke Energy, and
o FPL group^1.
Wal-Mart Stores (WMT) is the world's largest retailer. WMT stock reached a price
point in May 2005 that we found very attractive. At 19x fiscal 2006 earnings as
estimated by Standard and Poor's research, the shares were trading at a PE above
that of the S&P 500, but below their historical levels. The stock yielded 1.2%
as of May 30, 2005 and we felt it was a strong buy below $48 a share based on
the stock's strong fundamentals. The stock is not owned by Berkshire and is a
proxy for some of Berkshire Hathaway's private holdings.
- ----------------
1 Please refer to the "Portfolio Investments" section of the attached annual
report for a complete listing of fund holdings and the percentage each
represents of the portfolio.
WISDOM FUND
Annual Report to Shareholders
________________________________________________________________________________
Anheuser-Busch (BUD) is a stock Berkshire Hathaway purchased this past spring
and we purchased it also. The company controls over 50% of the U.S. beer market
and is making strong inroads in to China. The recent drop in share price gave us
the opportunity to buy into a dominant company that we believe truly is the king
of beers, and at what appears to be a very reasonable discount to its intrinsic
value.
At Berkshire's annual meeting this year, Mr. Buffett explained his rational for
buying BUD. He said that he had been reading BUD's annual report for over 25
years, waiting for the appropriate time to invest. That type of patience is what
he and Charles Munger are referring to when they talk about how important
temperament is to investment success.
We believe most portfolios are well served by owning consumer stalwarts like
Anheuser-Busch and other Wisdom Fund holdings like Coca-Cola, Cadbury-Schweppes,
William Wrigley Company, Yum Brands International, McDonalds and Outback
Steakhouse, Inc. Proctor and Gamble (PG) is a diversified consumer products
company that our research indicates has strong fundamentals and should benefit
from its planned acquisition of a current holding of the Wisdom Fund and
Berkshire, the Gillette Co., which has a dominant position in the wet shaving
industry. Gillette's high profit margins and healthy cash flow will be a plus
for PG. After the announcement of the Gillette purchase, Berkshire bought shares
of PG on the open market.
In May of 2005, the Wisdom Fund purchased shares of Home Depot (HD), the world's
largest home improvement retailer. We anticipate that there will be continued
strength in the housing market, an improving job market, solid demographic
trend, and a resilient consumer, which will benefit HD. In our view, HD can
achieve strong sales and earnings growth over the next few years. We estimate
that the company will open between 170 and 190 new stores in fiscal 2006 and
bring its store count to more than 2000 stores. The company's revenues have been
rising about 10% per year for the past several years, and we are looking for HD
to do about $80 billion in sales for fiscal 2006. More importantly, HD has
generated more than $2 billion in free cash flow for the last three years, which
allows it to repurchase its own shares. HD is not owned by Berkshire and is a
proxy in our portfolio.
Our recent purchase of five utility stocks is in response to Berkshire's
purchase of PacifiCorp from Scottish Power for $5.1 billion this past spring.
PacifiCorp is an electric utility with customers in six different western
states.
"The energy sector has long interested us, and this is the right fit. We are
excited to be making this long-term investment in the premier energy company in
the West. PacifiCorp is a great company with outstanding assets," said Buffett.
The Wisdom Fund also owns two other electric utilities, Great Plains Energy and
Reliant Resources.
With regards to a subject we hear about most every day, the rise and fall of the
US dollar, Mr. Buffett has been most vocal in his opinion of the ultimate
direction of the dollar. "I think, over time, unless we have a major change in
trade policies, I don't see how the dollar avoids going down," he told CNBC in
January of 2005. "I don't know when it will happen. I don't have any idea
whether it will be this month or this year or next year, but we are
force-feeding dollars on the rest of the world at a rate of close to a couple of
billion dollars a day, and that's going to drive the dollar down," he continued
to say.
The Wisdom Fund has invested in New Zealand Government Bonds maturing in 2009
and 2011 as our proxy for Berkshire's purchase of foreign currencies.
In Closing
I would like to remind investors that we are not in the business of managing
volatility; we are in the business of managing to optimize the compounding of
your capital. Long-term investment results are driven by the ability of the
underlying businesses to produce strong and to grow cash flow. Stock price
reflections of this underlying value will not be linear as they are impacted by
the collective sentiment of the market participants, which include both
investors (who may not always be rational and disciplined) as well as
speculators (who have a short-term time horizon). However, in the long-term,
investors who hold high quality investments and add to them at reduced prices
will generally be rewarded with above-average, after-tax compound returns.
This is what successful wealth creators like Warren Buffett do. This is the goal
of your portfolio management team at Atlanta Investment Counsel, LLC does. This
is what we encourage you to do.
C. Douglas Davenport, J.D.
President of Atlanta Investment Counsel, LLC
Portfolio Manager of the Wisdom Fund
WISDOM FUND INSTITUTIONAL CLASS SHARES
Performance Update - $25,000 Investment
For the period from February 16, 1999 (Date of Initial Public Investment) to
May 31, 2005
____________________________________________________________________________________________________________________________________
Wisdom Fund - --------------------------------------------------------------------------------
Institutional S&P 500 Total Performance Returns for the periods ended May 31, 2005
Class Shares Return Index --------------------------------------------------------------------------------
------------ ------------ Average Annual Total One Five Since
Returns Year Year Inception*
2/16/1999 $ 25,000 $ 25,000 --------------------------------------------------------------------------------
5/31/1999 24,889 26,307 Institutional Class Shares 5.65% 6.63% 5.43%
5/31/2000 25,295 29,063 --------------------------------------------------------------------------------
5/31/2001 28,001 25,996 Cumulative Total Since Final Value of $25,000
5/31/2002 30,181 22,396 Investment Returns Inception* Investment
5/31/2003 29,082 20,591 --------------------------------------------------------------------------------
5/31/2004 33,005 24,365 Institutional Class Shares 39.49% $34,871
5/31/2005 34,871 26,372 --------------------------------------------------------------------------------
S&P 500 Total Return Index 5.49% $26,372
--------------------------------------------------------------------------------
*The Fund's inception date - February 16, 1999 (Date of Initial Public
Investment).
--------------------------------------------------------------------------------
The graph assumes an initial $25,000 investment at February 16, 1999 (Date of
Initial Public Investment). All dividends and distributions are reinvested. This
graph depicts the performance of the Wisdom Fund - Institutional Class Shares
(the "Fund") versus the S&P 500 Total Return Index. It is important to note that
the Fund is a professionally managed mutual fund while the index is not
available for investment and is unmanaged. The comparison is shown for
illustrative purposes only.
________________________________________________________________________________
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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 may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses
________________________________________________________________________________
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 last 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 annual rate of return of
5% 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 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. Therefore, the last 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.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example June 1, 2004 May 31, 2005 Period*
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Actual $1,000.00 $1,056.50 $12.65
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Hypothetical (5%annual return before $1,000.00 $1,037.70 $12.53
expenses)
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
* Expenses are equal to the Fund's annualized expense ratio 1.23% multiplied by
the average account value over the period.
WISDOM FUND INVESTOR CLASS SHARES
Performance Update - $10,000 Investment
For the period from February 16, 1999 (Date of Initial Public Investment)
to May 31, 2005
____________________________________________________________________________________________________________________________________
Wisdom Fund - S&P 500 Total ---------------------------------------------------------------------------
Investor Class Shares Return Index Performance Returns for the periods ended May 31, 2005
--------------------- ------------ ---------------------------------------------------------------------------
2/16/1999 $ 9,425 $ 10,000 Average Annual Total One Five Since
5/31/1999 9,370 10,523 Returns Year Year Inception*
5/31/2000 9,498 11,625 ---------------------------------------------------------------------------
5/31/2001 10,487 10,399 Investor Class Shares - No 5.36% 6.35% 5.15%
5/31/2002 11,281 8,959 Sales Load
5/31/2003 10,832 8,236 ---------------------------------------------------------------------------
5/31/2004 12,266 9,746 Investor Class Shares - (0.70)% 5.10% 4.16%
5/31/2005 12,924 10,549 5.75% Maximum Sales Load
---------------------------------------------------------------------------
Cumulative Total Since Final Value of $10,000
Investment Returns Inception* Investment
---------------------------------------------------------------------------
Investor Class Shares - No 37.12% $13,712
Sales Load
---------------------------------------------------------------------------
Investor Class Shares - 29.24% $12,924
5.75% Maximum Sales Load
---------------------------------------------------------------------------
S&P 500 Total Return Index 5.49% $10,549
---------------------------------------------------------------------------
*The Fund's inception date - February 16, 1999 (Date of Initial Public
Investment).
---------------------------------------------------------------------------
The graph assumes an initial $10,000 investment ($9,425 after maximum sales load
of 5.75%) at February 16, 1999 (Date of Initial Public Investment). All
dividends and distributions are reinvested. This graph depicts the performance
of the Wisdom Fund - Investor Class Shares (the "Fund") versus the S&P 500 Total
Return Index. It is important to note that the Fund is a professionally managed
mutual fund while the index is not available for investment and is unmanaged.
The comparison is shown for illustrative purposes only.
________________________________________________________________________________
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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 may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses
________________________________________________________________________________
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 last 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 annual rate of return of
5% 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 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. Therefore, the last 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.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example June 1, 2004 May 31, 2005 Period*
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Actual $1,000.00 $1,053.60 $15.20
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Hypothetical (5%annual return before $1,000.00 $1,035.20 $15.06
expenses)
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
* Expenses are equal to the Fund's annualized expense ratio 1.48% multiplied by
the average account value over the period.
WISDOM FUND CLASS B SHARES
Performance Update - $10,000 Investment
For the period from November 16, 1999 (Date of Initial Public Investment)
to May 31, 2005
____________________________________________________________________________________________________________________________________
Wisdom Fund - S&P 500 Total --------------------------------------------------------------------------------
Class B Shares Return Index Performance Returns for the periods ended May 31, 2005
11/16/1999 $ 10,000 $ 10,000 --------------------------------------------------------------------------------
5/31/2000 9,815 10,070 Average Annual Total One Five Since
5/31/2001 10,757 9,007 Returns Year Year Inception*
5/31/2002 11,479 7,760 --------------------------------------------------------------------------------
5/31/2003 10,950 7,134 Class B Shares - No Sales 4.56% 5.57% 4.66%
5/31/2004 12,308 8,442 Charge
5/31/2005 12,769 9,137 --------------------------------------------------------------------------------
Class B Shares - Maximum 0.56% 5.41% 4.51%
Sales Charge
--------------------------------------------------------------------------------
Cumulative Total Since Final Value of $10,000
Investment Returns Inception* Investment
--------------------------------------------------------------------------------
Class B Shares - No Sales 28.69% $12,869
Charge
--------------------------------------------------------------------------------
Class B Shares - Maximum 27.69% $12,769
Sales Charge
--------------------------------------------------------------------------------
S&P 500 Total Return Index (8.63)% $9,137
--------------------------------------------------------------------------------
*The Fund's inception date - November 16, 1999 (Date of Initial Public
Investment).
--------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at November 16, 1999 (Date of
Initial Public Investment) and reflects the deduction of the applicable maximum
contingent deferred sales charge ("CDSC"), taken on the last business day of the
most recently completed fiscal year. The table above includes the maximum CDSC
corresponding to the length of time that the investment was held as noted. The
CDSC for the Class B Shares declines from 4% to 0% over seven years; and the
Class B Shares are converted to Investor Class Shares of the Fund after eight
years, without the imposition of any sales charges. All dividends and
distributions are reinvested. This graph depicts the performance of the Wisdom
Fund - Class B Shares (the "Fund") versus the S&P 500 Total Return Index. It is
important to note that the Fund is a professionally managed mutual fund while
the index is not available for investment and is unmanaged. The comparison is
shown for illustrative purposes only.
________________________________________________________________________________
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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 may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses
________________________________________________________________________________
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 last 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 annual rate of return of
5% 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 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. Therefore, the last 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.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example June 1, 2004 May 31, 2005 Period*
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Actual $1,000.00 $1,045.60 $22.81
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Hypothetical (5%annual return before $1,000.00 $1,027.70 $22.61
expenses)
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
* Expenses are equal to the Fund's annualized expense ratio 2.23% multiplied by
the average account value over the period.
WISDOM FUND CLASS C SHARES
Performance Update - $10,000 Investment
For the period from November 16, 1999 (Date of Initial Public Investment)
to May 31, 2005
____________________________________________________________________________________________________________________________________
Wisdom Fund - S&P 500 Total --------------------------------------------------------------------------------
Class C Shares Return Index Performance Returns for the periods ended May 31, 2005
11/16/1999 $ 10,000 $ 10,000 --------------------------------------------------------------------------------
5/31/2000 9,814 10,070 Average Annual Total One Five Since
5/31/2001 10,760 9,007 Returns Year Year Inception*
5/31/2002 11,480 7,760 --------------------------------------------------------------------------------
5/31/2003 10,953 7,134 Class C Shares - No Sales 4.63% 5.60% 4.68%
5/31/2004 12,316 8,442 Charge
5/31/2005 12,886 9,137 --------------------------------------------------------------------------------
Cumulative Total Since Final Value of $10,000
Investment Returns Inception* Investment
--------------------------------------------------------------------------------
Class C Shares 28.86% $12,886
--------------------------------------------------------------------------------
S&P 500 Total Return Index (8.63)% $9,137
--------------------------------------------------------------------------------
*The Fund's inception date - November 16, 1999 (Date of Initial Public
Investment).
--------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at November 16, 1999 (Date of
Initial Public Investment). The deduction of the maximum contingent deferred
sales charge ("CDSC") is not reflected in the graph because the 1% CDSC for the
Class C Shares is imposed on proceeds redeemed within 1 year of the purchase
date. The CDSC may be waived or reduced under certain circumstances. All
dividends and distributions are reinvested. This graph depicts the performance
of the Wisdom Fund - Class C Shares (the "Fund") versus the S&P 500 Total Return
Index. It is important to note that the Fund is a professionally managed mutual
fund while the index is not available for investment and is unmanaged. The
comparison is shown for illustrative purposes only.
________________________________________________________________________________
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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 may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses
________________________________________________________________________________
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 last 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 annual rate of return of
5% 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 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. Therefore, the last 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.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example June 1, 2004 May 31, 2005 Period*
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Actual $1,000.00 $1,046.30 $22.82
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
Hypothetical (5%annual return before $1,000.00 $1,027.70 $22.61
expenses)
- ------------------------------------------- ------------------------- ---------------------------- -------------------------
* Expenses are equal to the Fund's annualized expense ratio 2.23% multiplied by
the average account value over the period.
WISDOM FUND
Schedule of Investments
As of May 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value Shares Market Value
or Principal (Note 1) or Principal (Note 1)
- ----------------------------------------------------------------- ----------------------------------------------------------------
COMMON STOCKS - 79.12% Foods - 4.11%
Cadbury Schweppes PLC 15,500 $ 611,010
Apparel - 0.63% * Dean Foods Company 2,000 77,940
Nike, Inc. 1,600 $ 131,520 Sysco Corporation 18,166 675,049
Wolverine World Wide, Inc. 7,500 172,350 WM Wrigley Jr. Company 9,300 634,911
------------ ------------
303,870 1,998,910
------------ ------------
Banks - 3.40% Health Care Services - 0.00%
M & T Bank Corporation 2,030 207,344 * Five Star Quality Care, Inc. 4 26
Wells Fargo Company 23,922 1,445,128 ------------
------------
1,652,472 Holding Companies - Diversified - 1.27%
------------ Leucadia National Corporation 15,450 616,300
Beverages - 7.97% ------------
Anheuser-Busch Companies Inc. 7,000 327,950
Coca-Cola Company 79,430 3,544,961 Home Builders - 0.44%
------------ * Champion Enterprises, Inc. 6,700 65,191
3,872,911 Winnebago Industries, Inc. 4,500 147,105
------------ ------------
Building Materials - 1.07% 212,296
American Standard Comp. Inc. 12,190 521,732 ------------
------------
Insurance - Multiline - 9.41%
Chemicals - 1.28% Alleghany Corporation 1,224 343,026
The Sherwin-Williams Company 13,970 620,967 American International
------------ Group, Inc. 14,150 786,032
* Arch Capital Group Ltd. 2,000 89,300
Commercial Services - 4.45% Aspen Insurance Holdings Ltd. 2,000 55,000
Aaron Rents, Inc. 6,000 135,660 Endurance Specialty Holdings
Cendant Corporation 10,000 212,100 Ltd. 18,500 674,325
H&R Block, Inc. 3,000 149,760 Fairfax Financial Holding Ltd. 2,000 320,000
* Iron Mountain, Inc. 11,650 334,355 Old Republic International Corp. 11,000 273,460
Moody's Corporation 29,410 1,272,571 The Allstate Corporation 31,250 1,818,750
The ServiceMaster Company 4,600 59,800 Transatlantic Holdings Inc. 1,000 57,110
------------ United Fire & Casualty Co. 4,000 157,480
2,164,246 ------------
------------ 4,574,483
Cosmetics & Personal Care - 4.43% ------------
Proctor & Gamble 9,000 496,350 Insurance - Property & Casualty - 16.89%
The Gillette Company 31,380 1,654,981 Fidelity National Financial,
------------ Inc. 17,463 628,493
2,151,331 * Markel Corporation 8,200 2,802,350
------------ Montpelier Re Holdings Ltd. 3,500 120,225
The Chubb Corporation 15,400 1,297,142
Diversified Financial Services - 4.33% The Progressive Corporation 9,360 899,215
American Express Company 39,050 2,102,842 Wesco Financial Corporation 386 138,296
------------ White Mountains Ins. Group Ltd. 3,500 2,325,750
Electric - 3.07% ------------
* Allegheny Energy, Inc. 8,400 203,112 8,211,471
Constellation Energy Group, ------------
Inc. 3,800 203,110 Investment Company - 0.22%
Duke Energy Corporation 7,500 206,100 American Capital Strategies Ltd. 3,000 105,060
FPL Group, Inc. 4,800 195,120 ------------
Great Plains Energy, Inc. 5,000 157,500 Media - 3.58%
* Reliant Energy, Inc. 27,000 332,100 * Comcast Corporation 12,500 402,500
The Southern Company 5,800 196,910 Gannett Company, Inc. 2,698 200,893
------------ The Washington Post Company 1,370 1,137,100
1,493,952 ------------
------------ 1,740,493
------------
(Continued)
WISDOM FUND
Schedule of Investments
As of May 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value Shares Market Value
or Principal (Note 1) or Principal (Note 1)
- ----------------------------------------------------------------- ----------------------------------------------------------------
COMMON STOCKS - (Continued) FOREIGN GOVERNMENT OBLIGATIONS - 3.12%
Oil & Gas - 0.40% New Zealand Government
PetroChina Company Ltd. 3,000 $ 193,440 7.000%, 07/15/09 $ 1,015,000 $ 745,368
------------ New Zealand Government
6.000%, 11/15/11 1,083,000 773,404
Packaging & Containers - 0.56% ------------
* Sealed Air Corporation 5,252 272,001
------------
Total Foreign Government Obligations
Pipelines - 2.14% (Cost $1,477,746) 1,518,772
Kinder Morgan, Inc. 13,400 1,041,314 ------------
------------
PRIVATE INVESTMENT COMPANY - 1.28%
Retail - 3.62%
Costco Wholesale Corporation 4,000 181,680 (beta)Pamlico Enhanced Cash Trust
Home Depot Inc. 7,500 295,125 (Cost $620,358) 620,358 620,358
McDonald's Corporation 7,000 216,580 ------------
Outback Steakhouse, Inc. 1,800 79,650
* Payless Shoesource, Inc. 6,000 100,980 Total Investments (Cost $41,344,348) - 99.78% $ 48,495,616
* Red Robin Gourmet Burgers, Inc. 1,500 82,320 Other Assets less Liabilities - 0.22% 112,733
The Gap, Inc. 10,000 210,000 ------------
Wal-Mart Stores, Inc. 7,000 330,610 Net Assets - 100.00% $ 48,608,349
Yum! Brands, Inc. 5,150 264,144 ============
------------
1,761,089
------------
Software - 2.16% * Non-income producing investment.
Automatic Data Processing, Inc. 11,200 490,560 (beta)Restricted security - A restricted security cannot be
First Data Corporation 14,770 558,749 resold to the general public without prior registration
------------ under the Securities Act of 1933. Restricted securities
1,049,309 are valued according to the guidelines and procedures
------------ adopted by the Board of Trustees. The Fund currently
Textiles - 3.69% holds 620,358 shares of Pamlico Enhanced Cash Trust at a
* Mohawk Industries, Inc. 21,495 1,793,113 cost of $620,358. The sale of this investment has been
------------ restricted and has been valued in accordance with the
guidelines adopted by the Board of Trustees. The total
Total Common Stocks (Cost $31,318,522) 38,453,628 fair value of this security at May 31, 2005 is $620,358,
------------ which represents 1.28% of net assets.
MUTUAL FUNDS - 3.93%
Federated International
Bond Fund 148,354 1,731,296
Templeton Global Income Fund 20,200 178,366
------------
Total Mutual Funds (Cost $1,933,735) 1,909,662
------------
U.S. GOVERNMENT OBLIGATION - 12.33%
United States Treasury Bill
0.000%, 06/16/05
(Cost $5,993,987) $ 6,000,000 5,993,196
------------
(Continued)
WISDOM FUND
Schedule of Investments
As of May 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Summary of Investments by Industry
% of Net
Industry Assets Value
- -------------------------------------------------------------------------------
Apparel 0.63% $ 303,870
Banks 3.40% 1,652,472
Beverages 7.97% 3,872,911
Building Materials 1.07% 521,732
Chemicals 1.28% 620,967
Commercial Services 4.45% 2,164,246
Cosmetics & Personal Care 4.43% 2,151,331
Diversified Financial Services 4.33% 2,102,842
Electric 3.07% 1,493,952
Foods 4.11% 1,998,910
Foreign Government Obligations 3.12% 1,518,772
Health Care Services 0.00% 26
Holding Companies - Diversified 1.27% 616,300
Home Builders 0.44% 212,296
Insurance - Multiline 9.41% 4,574,483
Insurance - Property & Casualty 16.89% 8,211,471
Investment Company 0.22% 105,060
Media 3.58% 1,740,493
Mutual Funds 3.93% 1,909,662
Oil & Gas 0.40% 193,440
Packaging & Containers 0.56% 272,001
Pipelines 2.14% 1,041,314
Private Investment Company 1.28% 620,358
Retail 3.62% 1,761,089
Software 2.16% 1,049,309
Textiles 3.69% 1,793,113
U.S. Government Obligation 12.33% 5,993,196
- -------------------------------------------------------------------------------
Total 99.78% $ 48,495,616
See Notes to Financial Statements
WISDOM FUND
STATEMENT OF ASSETS AND LIABILITIES
As of May 31, 2005
- ----------------------------------------------------------------------------------------------------------------
Assets:
Investments, at value (cost $41,344,348) $ 48,495,616
Cash 4,610
Receivables:
Fund shares sold 81,738
Income (cost $82,861) 82,415
Prepaid expenses 15,747
------------
Total assets 48,680,126
Liabilities:
Accrued expenses 71,228
Other liability 549
------------
Total liabilities 71,777
Net Assets $ 48,608,349
============
Net Assets Consist of:
Capital (par value and paid in surplus) $ 39,600,099
Undistributed net investment income 2,119
Undistributed net realized gain on investments and foreign currency translations 1,855,309
Net unrealized appreciation on investments and translation of assets
and liabilities in foreign currencies 7,150,822
------------
Total Net Assets $ 48,608,349
============
Institutional Class Shares Outstanding, no par value (unlimited shares authorized) 386,742
Net Assets - Institutional Class Shares $ 5,090,119
Net Asset Value, Offering Price and Redemption Price Per Share $ 13.16
Investor Class Shares Outstanding, no par value (unlimited shares authorized) 1,466,914
Net Assets - Investor Class Shares $ 19,176,873
Net Asset Value, Offering Price and Redemption Price Per Share $ 13.07
Maximum Offering Price Per Share (100 / 94.25 of $13.07) $ 13.87
Class B Shares Outstanding, no par value (unlimited shares authorized) 1,152,380
Net Assets - Class B Shares $ 14,660,323
Net Asset Value, Offering Price and Redemption Price Per Share $ 12.72
Class C Shares Outstanding, no par value (unlimited shares authorized) 757,662
Net Assets - Class C Shares $ 9,681,034
Net Asset Value, Offering Price and Redemption Price Per Share $ 12.78
See Notes to Financial Statements
WISDOM FUND
STATEMENT OF OPERATIONS
For the Fiscal Year ended May 31, 2005
- ----------------------------------------------------------------------------------------------------------------
Investment Income:
Interest $ 150,634
Dividends 758,816
------------
Total Income 909,450
Expenses:
Advisory fees (note 2) 249,247
Administration fees (note 2) 62,312
Transfer agent fees (note 2) 53,623
Fund accounting fees (note 2) 58,985
Compliance service fees (note 2) 4,077
Custody fees (note 2) 13,149
Distribution and service fees - Investor Class Shares (note 3) 51,562
Distribution and service fees - Class B Shares (note 3) 150,596
Distribution and service fees - Class C Shares (note 3) 92,121
Legal fees 29,177
Audit and tax preparation fees 20,514
Registration and filing expenses 37,985
Registration and administration filing fees (note 2) 27,482
Shareholder servicing expenses 14,611
Printing expenses 12,586
Trustee fees and meeting expenses 4,448
Securities pricing fees 5,442
Other operating expenses 19,414
------------
Total Expenses 907,331
------------
Net Investment Income 2,119
Net Realized and Unrealized Gain on Investments
Net realized gain from investment and foreign securities transactions 1,837,541
Change in unrealized appreciation on investments and foreign currency translations 616,822
------------
Net Realized and Unrealized Gain on Investments 2,454,363
Net Increase in Net Assets Resulting from Operations $ 2,456,482
============
See Notes to Financial Statements
WISDOM FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Fiscal Years ended May 31, 2005 2004
- -------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income (loss) $ 2,119 $ (193,351)
Net realized gain from investment and foreign securities transactions 1,837,541 1,219,133
Change in unrealized appreciation on investments and 616,822 4,101,451
foreign currency translations
------------ ------------
Net Increase in Net Assets Resulting from Operations 2,456,482 5,127,233
Distributions to Shareholders: (note 5)
Net realized gain from investment transactions - Institutional Class Shares (66,528) 0
Net realized gain from investment transactions - Investor Class Shares (279,815) 0
Net realized gain from investment transactions - Class B Shares (209,450) 0
Net realized gain from investment transactions - Class C Shares (126,328) 0
------------ ------------
Decrease in Net Assets Resulting from Distributions (682,121) 0
Capital Share Transactions: (note 6)
Institutional Class Shares
Shares sold 229,150 602,397
Reinvested dividends and distributions 66,296 0
Shares repurchased (225,257) (570,625)
Investor Class Shares
Shares sold 3,663,038 7,013,977
Reinvested dividends and distributions 264,457 0
Shares repurchased (5,337,005) (3,202,206)
Class B Shares
Shares sold 1,093,890 2,562,201
Reinvested dividends and distributions 203,679 0
Shares repurchased (1,984,011) (2,123,336)
Class C Shares
Shares sold 1,818,621 2,712,247
Reinvested dividends and distributions 121,045 0
Shares repurchased (1,232,810) (453,048)
------------ ------------
(Decrease) Increase from Capital Share Transactions (1,318,907) 6,541,607
Net Increase in Net Assets 455,454 11,668,840
Net Assets:
Beginning of Year 48,152,895 36,484,055
------------ ------------
End of Year $ 48,608,349 $ 48,152,895
============ ============
Undistributed Net Investment Income $ 2,119 $ 0
See Notes to Financial Statements
WISDOM FUND
FINANCIAL HIGHLIGHTS
Institutional Class Shares
For a share outstanding during the
fiscal years ended May 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 12.62 $ 11.12 $ 11.54 $ 10.80 $ 9.90
Income (Loss) from Investment Operations
Net investment income (loss) 0.08 0.02 (0.03) (0.02) 0.17
Net realized and unrealized gain (loss) on 0.63 1.48 (0.39) 0.85 0.90
investment and foreign currency translation -------- -------- -------- -------- --------
Total from Investment Operations 0.71 1.50 (0.42) 0.83 1.07
Less Distributions:
Dividends (from net investment income) 0 0 0 0 (0.17)
Distributions (from capital gains) (0.17) 0 0 (0.09) 0
-------- -------- -------- -------- --------
Total Distributions (0.17) 0 0 (0.09) (0.17)
Net Asset Value, End of Year $ 13.16 $ 12.62 $ 11.12 $ 11.54 $ 10.80
======== ======== ======== ======== ========
Total return 5.65 % 13.49 % (3.64)% 7.78 % 10.70 %
Net Assets, End of Year (in thousands) $ 5,090 $ 4,811 $ 4,229 $ 3,925 $ 3,165
Average Net Assets for the Year (in thousands) $ 4,953 $ 4,452 $ 3,862 $ 3,444 $ 2,983
Ratios of:
Gross Expenses to Average Net Assets 1.23 % 1.29 % 1.67 % 3.19 % 3.30 %
Net Expenses to Average Net Assets 1.23 % 1.29 % 1.62 % 1.71 % 0.26 %
Net Investment Income (Loss) to Average Net Assets 0.60 % 0.14 % (0.25)% (0.17)% 1.57 %
Portfolio turnover rate 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
Investor Class Shares
For a share outstanding during the
fiscal years ended May 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 12.57 $ 11.10 $ 11.56 $ 10.84 $ 9.93
Income (Loss) from Investment Operations
Net investment income (loss) 0.05 (0.01) (0.04) (0.04) 0.13
Net realized and unrealized gain (loss) on 0.62 1.48 (0.42) 0.85 0.91
investment and foreign currency translation -------- -------- -------- -------- --------
Total from Investment Operations 0.67 1.47 (0.46) 0.81 1.04
Less Distributions:
Dividends (from net investment income) 0 0 0 0 (0.13)
Distributions (from capital gains) (0.17) 0 0 (0.09) 0
-------- -------- -------- -------- --------
Total Distributions (0.17) 0 0 (0.09) (0.13)
Net Asset Value, End of Year $ 13.07 $ 12.57 $ 11.10 $ 11.56 $ 10.84
======== ======== ======== ======== ========
Total return (a) 5.36 % 13.24 % (3.98)% 7.57 % 10.41 %
Net Assets, End of Year (in thousands) $ 19,177 $ 19,789 $ 13,825 $ 2,740 $ 1,254
Average Net Assets for the Year (in thousands) $ 20,625 $ 17,326 $ 8,861 $ 1,794 $ 675
Ratios of:
Gross Expenses to Average Net Assets 1.48 % 1.54 % 1.91 % 3.39 % 3.86 %
Net Expenses to Average Net Assets 1.48 % 1.54 % 1.87 % 1.96 % 0.68 %
Net Investment Income (Loss) to Average Net Assets 0.34 % (0.11)% (0.53)% (0.48)% 1.21 %
Portfolio turnover rate 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
(a) Total return does not reflect payment of a sales charge.
(Continued)
WISDOM FUND
FINANCIAL HIGHLIGHTS
Class B Shares
For a share outstanding during the
fiscal years ended May 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 12.33 $ 10.97 $ 11.50 $ 10.87 $ 9.97
Income (Loss) from Investment Operations
Net investment (loss) income (0.05) (0.10) (0.10) (0.07) 0.06
Net realized and unrealized gain (loss) on 0.61 1.46 (0.43) 0.79 0.90
investment and foreign currency translation -------- -------- -------- -------- --------
Total from Investment Operations 0.56 1.36 (0.53) 0.72 0.96
Less Distributions:
Dividends (from net investment income) 0 0 0 0 (0.06)
Distributions (from capital gains) (0.17) 0 0 (0.09) 0
-------- -------- -------- -------- --------
Total Distributions (0.17) 0 0 (0.09) (0.06)
Net Asset Value, End of Year $ 12.72 $ 12.33 $ 10.97 $ 11.50 $ 10.87
======== ======== ======== ======== ========
Total return (a) 4.56 % 12.40 % (4.61)% 6.72 % 9.60 %
Net Assets, End of Year (in thousands) $ 14,660 $ 14,871 $ 12,796 $ 4,307 $ 1,797
Average Net Assets for the Year (in thousands) $ 15,060 $ 14,097 $ 8,738 $ 2,146 $ 1,817
Ratios of:
Gross Expenses to Average Net Assets 2.23 % 2.29 % 2.66 % 4.14 % 4.33 %
Net Expenses to Average Net Assets 2.23 % 2.29 % 2.62 % 2.71 % 1.28 %
Net Investment (Loss) Income to Average Net Assets (0.41)% (0.86)% (1.27)% (1.23)% 0.56 %
Portfolio turnover rate 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
Class C Shares
For a share outstanding during the
fiscal years ended May 31, 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 12.38 $ 11.01 $ 11.54 $ 10.91 $ 9.98
Income (Loss) from Investment Operations
Net investment (loss) income (0.05) (0.09) (0.09) (0.10) 0.03
Net realized and unrealized gain (loss) on 0.62 1.46 (0.44) 0.82 0.93
investment and foreign currency translation -------- -------- -------- -------- --------
Total from Investment Operations 0.57 1.37 (0.53) 0.72 0.96
Less Distributions:
Dividends (from net investment income) 0 0 0 0 (0.03)
Distributions (from capital gains) (0.17) 0 0 (0.09) 0
-------- -------- -------- -------- --------
Total Distributions (0.17) 0 0 (0.09) (0.03)
Net Asset Value, End of Year $ 12.78 $ 12.38 $ 11.01 $ 11.54 $ 10.91
======== ======== ======== ======== ========
Total return (a) 4.63 % 12.44 % (4.59)% 6.69 % 9.64 %
Net Assets, End of Year (in thousands) $ 9,681 $ 8,682 $ 5,635 $ 1,808 $ 987
Average Net Assets for the Year (in thousands) $ 9,212 $ 6,972 $ 3,560 $ 1,274 $ 531
Ratios of:
Gross Expenses to Average Net Assets 2.23 % 2.29 % 2.66 % 4.18 % 4.44 %
Net Expenses to Average Net Assets 2.23 % 2.29 % 2.62 % 2.71 % 1.41 %
Net Investment (Loss) Income to Average Net Assets (0.39)% (0.86)% (1.27)% (1.19)% 0.40 %
Portfolio turnover rate 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
(a) Total return does not reflect payment of a sales charge.
See Notes to Financial Statements
(This page was intentionally left blank.)
WISDOM FUND
Notes to Financial Statements
________________________________________________________________________________
1. Organization and Significant exchange on which the portfolio
Accounting Policies security is principally traded closes
early or if trading of the particular
The Wisdom Fund (the "Fund") is a portfolio security is halted during
series fund. The Fund is part of The the day and does not resume prior to
New Providence Investment Trust (the the Fund's net asset value
"Trust"), which was organized as a calculation) or which cannot be
Massachusetts business trust and is accurately valued using the Fund's
registered under the Investment normal pricing procedures are valued
Company Act of 1940 (the "1940 Act"), at fair value as determined in good
as amended, as an open-ended faith under policies approved by the
management investment company. The Trustees. A portfolio security's "fair
Fund is classified as diversified as value" price may differ from the price
defined in the 1940 Act. next available for that portfolio
security using the Fund's normal
The Wisdom Fund commenced operations pricing procedures. Investment
February 16, 1999. The investment companies are valued at net asset
objective of the Fund is to seek value. Instruments with maturities of
maximum total returns consisting of 60 days or less are valued at
any combination of capital amortized cost, which approximates
appreciation, realized and unrealized, market value.
and income under the constantly
varying market conditions. Investment Transactions and Investment
Income
The Board of Trustees of the Trust Investment transactions are accounted
(the "Trustees") approved, on October for as of the date purchased or sold
7, 1999, a plan to authorize two new (trade date). Dividend income is
classes of shares designated as Class recorded on the ex-dividend date.
B Shares and Class C Shares. On Certain dividends from foreign
November 16, 1999, the Class B Shares securities will be recorded as soon as
and Class C Shares became effective. the Trust is informed of the dividend
The Fund has an unlimited number of if such information is obtained
authorized shares, which are divided subsequent to the ex-dividend date.
into four classes - Institutional Interest income is recorded on the
Class Shares, Investor Class Shares, accrual basis and includes
Class B Shares and Class C Shares. amortization of discounts and
premiums. Gains and losses are
Each class of shares has equal rights determined on the identified cost
as to assets of the Fund, and the basis, which is the same base used for
classes are identical except for federal income tax purposes.
differences in their sales charge
structures and ongoing distribution Expenses
and service fees. Income, expenses The Fund bears expenses incurred
(other than distribution and service specifically on its behalf as well as
fees, which are not attributable to a portion of general expenses, which
the Institutional Class Shares), and are allocated according to methods
realized and unrealized gains or approved annually by the Trustees.
losses on investments are allocated to
each class of shares based upon its Foreign Currency Translation
relative net assets. All classes have Portfolio securities and other assets
equal voting privileges, except where and liabilities denominated in foreign
otherwise required by law or when the currencies are translated into U.S.
Trustees determine that the matter to dollars based on the exchange rate of
be voted on affects only the interests such currencies against U.S. dollars
of the shareholders of a particular on the date of valuation. Purchases
class. and sales of securities and income
items denominated in foreign
The following accounting policies have currencies are translated into U.S.
been consistently followed by the Fund dollars at the exchange rate in effect
and are in conformity with accounting on the transaction date.
principles generally accepted in the
United States of America in the The Fund does not separately report
investment company industry. the effect of changes in foreign
exchange rates from changes in market
Investment Valuation prices on securities held. Such
The Fund's investments in securities changes are included in net realized
are carried at value. Securities and unrealized gain or loss from
listed on an exchange or quoted on a investments.
national market system are valued at
the last sales price as of 4:00 p.m. Realized foreign exchange gains or
Eastern Time. Other securities traded losses arise from sales of foreign
in the over-the-counter market and currencies, currency gains or losses
listed securities for which no sale realized between the trade and
was reported on that date are valued settlement dates on securities
at the most recent bid price. transactions and the difference
Securities and assets for which between the recorded amounts of
representative market quotations are dividends, interest, and foreign
not readily available (e.g., if the
(Continued)
WISDOM FUND
Notes to Financial Statements
________________________________________________________________________________
withholding taxes, and the U.S. dollar others that provide for general
equivalent of the amounts actually indemnifications. The Fund's maximum
received or paid. Net unrealized exposure under these arrangements is
foreign exchange gains and losses unknown, as this would involve future
arise from changes in foreign exchange claims that may be made against the
rates on foreign denominated assets Fund. The Fund expects the risk of
and liabilities other than investments loss to be remote.
in securities held at the end of the
reporting period. Proxy Voting Policies and Voting
Record (Unaudited)
Restricted Security Transactions A copy of the Trust's Proxy Voting and
Restricted securities held by the Fund Disclosure Policy and the Advisor's
may not be sold unless registered Proxy Voting and Disclosure Policy are
pursuant to an effective registration included as Appendix B to the Fund's
statement filed under the Securities Statement of Additional Information
Act of 1933, as amended (the and is available, without charge, upon
"Securities Act") or offered pursuant request, by calling 1-800-773-3863.
to an exemption from, or in a Information regarding how the Fund
transaction not subject to, the voted proxies relating to portfolio
registration requirements of the securities during the most recent
Securities Act. The risk of investing 12-month period ended June 30 will be
in such securities is generally available (1) without charge, upon
greater than the risk of investing in request, by calling the Fund at the
the securities of publicly traded number above and (2) on the SEC's
companies. Lack of a secondary market website at http://www.sec.gov.
and resale restrictions may result in
the inability of the Fund to sell a Quarterly Portfolio Holdings
security at a fair price and may (Unaudited)
substantially delay the sale of the The Fund files its complete schedule
security it seeks to sell. In of portfolio holdings with the SEC for
addition, restricted securities may the first and third quarters of each
exhibit greater price volatility than fiscal year on Form N-Q. The Fund's
securities for which secondary markets Forms N-Q are available on the SEC's
exist. website at http://www.sec.gov. You may
review and make copies at the SEC's
Dividend Distributions Public Reference Room in Washington,
The Fund may declare and distribute D.C. You may also obtain copies after
dividends from net investment income paying a duplicating fee by writing
(if any) quarterly. Distributions from the SEC's Public Reference Section,
capital gains (if any) are generally Washington, D.C. 20549-0102 or by
declared and distributed annually. The electronic request to
Fund may also make a supplemental publicinfo@sec.gov, or is available,
distribution subsequent to the end of without charge, upon request, by
its fiscal year. calling the fund at 1-800-773-3863.
Information on the operation of the
Estimates Public Reference Room may be obtained
The preparation of financial by calling the SEC at 202-942-8090.
statements in conformity with
accounting principles generally 2. Agreements
accepted in the United States of
America requires management to make Advisor
estimates and assumptions that affect The Fund pays a monthly advisory fee
the amount of assets, liabilities, to Atlanta Investment Counsel, LLC
expenses and revenues reported in the (the "Advisor") based upon the annual
financial statements. Actual results rate of 0.50% of the first $500
could differ from those estimates. million of the Fund's average daily
net assets and 0.40% of all assets
Federal Income Taxes over $500 million.
No provision for income taxes is
included in the accompanying financial The Advisor currently intends to
statements, as the Fund intends to voluntarily waive all or a portion of
distribute to shareholders all taxable its fee and to reimburse expenses of
investment income and realized gains the Fund to limit total Fund operating
and otherwise comply with Subchapter M expenses to a maximum of 1.75% of the
of the Internal Revenue Code average daily net assets of the Fund's
applicable to regulated investment Institutional Class Shares, Investor
companies. Class Shares, Class B Shares and Class
C Shares. There can be no assurances
Indemnifications that the foregoing voluntary fee
Under the Fund's organizational waivers or reimbursements will
documents, its officers and Trustees continue. The Fund may, at a later
are indemnified against certain date, reimburse the Advisor for the
liabilities arising out of the management fees waived or limited,
performance of their duties to the and/or other expenses assumed and paid
Fund. In addition, in the normal by the Advisor pursuant to the Expense
course of business, the Fund enters Limitation Agreement during any of the
into contracts with their vendors and previous five fiscal years
(Continued)
WISDOM FUND
Notes to Financial Statements
________________________________________________________________________________
provided that the Fund has reached a Compliance Services
sufficient asset size to permit such The Nottingham Compliance Services,
reimbursement to be made without LLC, a fully owned affiliate of the
causing the total annual expense ratio Nottingham Company, provides services
of the Fund to exceed 1.75%, as stated which assists the Trust's Chief
above. Compliance Officer in monitoring and
testing the policies and procedures of
Administrator the Trust in relation to requirements
The Fund pays a monthly administration under Rule 38a-1 of the Securities and
fee to The Nottingham Company (the Exchange Commission. It receives
"Administrator") based upon the compensation for this service at an
average daily net assets of the annual rate of $7,750.
respective share class and calculated
at the annual rates as shown in the Transfer Agent
schedule provided below. The North Carolina Shareholder Services,
Administrator also receives a fee to LLC ("Transfer Agent") serves as
procure and pay the custodian for the transfer, dividend paying, and
funds, additional compensation for shareholder servicing agent for the
fund accounting and recordkeeping Fund. It receives compensation for its
service and additional compensation services based upon a $15 per
for certain costs involved with the shareholder per year, subject to a
daily valuation of securities and as minimum fee of $1,500 per month, plus
reimbursement for out-of-pocket $500 per month for each additional
expenses (which are immaterial in class of shares.
amount). A breakdown of these is
provided below.
- ---------------------------- ----------------------------- ---------------- ------------------------- -------------------
Fund Accounting
Administration Fees (a) Custody Fees Fund Asset Based Fees
Accounting Blue Sky
Average Net Annual Average Net Annual Fees Average Net Annual Administration
Assets Rate Assets Rate (monthly) Assets Rate Fees (annual)
- ----------------- ---------- ------------------- --------- ---------------- -------------- ---------- -------------------
First $50 Million 0.125% First $100 Million 0.02% $4,500 All Assets 0.01% $150 per state
Next $50 Million 0.100% Over $100 Million 0.009%
Over $100 Million 0.075%
- ----------------- ---------- ------------------- --------- ---------------- -------------- ---------- -------------------
(a) Subject to a minimum fee of $2,000 per month.
Distributor incur certain costs, which may not
Capital Investment Group, Inc. (the exceed 0.25% per annum of the average
"Distributor") serves as the Fund's daily net assets of the Investor Class
principal underwriter and distributor. Shares or 1.00% per annum of the
The Distributor receives any sales average daily net assets of the Class
charges imposed on purchases of shares B or Class C Shares for each year
and re-allocates a portion of such elapsed subsequent to adoption of the
charges to dealers through whom the Plans, for payment to the Distributor
sale was made, if any. For the year and others for items such as
ended May 31, 2005, the Distributor advertising expenses, selling
retained sales charges in the amount expenses, commissions, travel, or
of $6,111. other expenses reasonably intended to
result in sales of Investor Class
Certain Trustees and officers of the Shares, Class B Shares and Class C
Trust are also officers of the Shares in the Fund or support
Advisor, the Distributor or the servicing of those classes'
Administrator. shareholder accounts. The fund
incurred $51,562, $150,596, and
3. Distribution and Service Fees $92,121, in distribution and service
fees under the Plans with respect to
The Trustees, including a majority of Investor Class Shares, Class B Shares,
the Trustees who are not "interested and Class C Shares, respectively, for
persons" of the Trust as defined in the fiscal year ended May 31, 2005.
the Act, adopted distribution and
service plans pursuant to Rule 12b-1 4. Purchases and Sales of Investment
of the Act (the "Plans") applicable to Securities
the Investor Class Shares, Class B
Shares and Class C Shares. The Act For the year ended May 31, 2005, the
regulates the manner in which a aggregate cost of purchases and
regulated investment company may proceeds from sales of investment
assume costs of distributing and securities (excluding short-term
promoting the sales of its shares and securities) are shown in the table on
servicing of its shareholder accounts. the following page:
The Plan provides that the Fund may
(Continued)
WISDOM FUND
Notes to Financial Statements
________________________________________________________________________________
- ----------------- ----------------- losses or deductions the Fund may be
Purchases Proceeds from able to offset against income and
of Sales of gains realized in future years, and
Securities Securities (3) unrealized appreciation or
- ----------------- ----------------- depreciation of investments for
$18,469,159 $16,739,874 federal income tax purposes.
- ----------------- -----------------
Accumulated capital losses represent
There were no purchases or sales of net capital loss carryovers as of May
long-term U.S. Government Obligations 31, 2005 that may be available to
during the period ended May 31, 2005. offset future realized capital gains
and thereby reduce future taxable gain
5. Federal Income Tax distributions. For the year ended May
31, 2005, there are no accumulated
The tax components of capital shown in capital losses.
the table on the following page
represent: (1) distribution Other book tax differences in the
requirements the Fund must satisfy current year primarily consist of post
under the income tax regulations, (2) October loss deferrals.
- ------------------------------- ----------------------- --------------------- ----------------------- ------------------------------
Undistributed Ordinary Undistributed Accumulated Capital Other Book to Tax
Income Long-Term Gains Losses Differences Net Tax Appreciation
- ------------------------------- ----------------------- --------------------- ----------------------- ------------------------------
$0 $1,866,461 $0 $8,175 $7,150,396
- ------------------------------- ----------------------- --------------------- ----------------------- ------------------------------
The aggregate cost of investments and are noted below. The primary
the composition of unrealized difference between book and tax
appreciation and depreciation of appreciation or depreciation of
investment securities for federal investments is wash sale loss
income tax purposes as of May 31, 2005 deferrals.
- ------------------------------- ----------------------------------------------- ----------------------------------------------------
Federal Tax Cost Aggregate Gross Unrealized Appreciation Aggregate Gross Unrealized Depreciation
- ------------------------------- ----------------------------------------------- ----------------------------------------------------
$41,345,220 $7,696,757 $(546,361)
- ------------------------------- ----------------------------------------------- ----------------------------------------------------
The amount of dividends and short-term gains, deferral of wash
distributions from net investment sale losses, foreign currency
income and net realized capital gains transactions, net investment losses
are determined in accordance with and capital loss carry-forwards.
federal income tax regulations which Certain permanent differences such as
may differ from generally accepted tax returns of capital and net
accounting principles. These investment losses, if any, would be
differences are due to differing classified against capital.
treatments for items such as net
____________________________________________________________________________________________________________________________________
Distributions from
Long-Term Capital Tax Return of Net Investment
For the fiscal year ended Ordinary Income Gains Capital Loss
- ----------------------------------- ----------------------- ----------------------- ----------------------- ------------------------
May 31, 2005 $0 $682,121 $0 $0
- ----------------------------------- ----------------------- ----------------------- ----------------------- ------------------------
May 31, 2004 $0 $0 $0 $0
- ----------------------------------- ----------------------- ----------------------- ----------------------- ------------------------
6. Capital Share Transactions
____________________________________________________________________________________________________________________________________
For the Years ended May 31, Institutional Class Investor Class
2005 2004 2005 2004
- ---------------------------------------------- -------------------- --------------------- -------------------- ---------------------
Transactions in Fund Shares
Shares sold 18,062 50,016 289,599 599,999
Reinvested distributions 5,065 0 20,312 0
Shares repurchased (17,562) (49,270) (417,343) (271,446)
Net Increase (Decrease) in Capital Share
Transactions 5,565 746 (107,432) 328,553
Shares Outstanding, Beginning of Year 381,177 380,431 1,574,345 1,245,792
Shares Outstanding, End of Year 386,742 381,177 1,466,913 1,574,345
- ---------------------------------------------- -------------------- --------------------- -------------------- ---------------------
(Continued)
WISDOM FUND
Notes to Financial Statements
________________________________________________________________________________
6. Capital Share Transactions -(Continued)
____________________________________________________________________________________________________________________________________
For the Years ended May 31, Class B Class C
2005 2004 2005 2004
- ---------------------------------------------- -------------------- --------------------- -------------------- ---------------------
Transactions in Fund Shares
Shares sold 88,251 222,576 145,631 227,578
Reinvested distributions 16,025 0 9,479 0
Shares repurchased (158,165) (183,265) (98,651) (38,040)
Net (Decrease) Increase in Capital Share
Transactions (53,889) 39,311 56,459 189,538
Shares Outstanding, Beginning of Year 1,206,269 1,166,958 701,203 511,666
Shares Outstanding, End of Year 1,152,380 1,206,269 757,662 701,203
- ---------------------------------------------- -------------------- --------------------- -------------------- ---------------------
(Continued)
WISDOM FUND
Additional Information (Unaudited)
________________________________________________________________________________
7. Information about Trustees and Statement of Additional Information of
Officers the Fund includes additional
information about the Trustee and
The business and affairs of the Fund officers and is available, without
and the Trust are managed under the charge, upon request by calling the
direction of the Trustees. Information Fund toll-free at 1-800-773-3863. The
concerning the Trustee and officers of address of each Trustee and officer,
the Trust and Fund is set forth below. unless otherwise indicated below, is
Generally, each Trustee and officer 116 South Franklin Street, Rocky
serves an indefinite term or until Mount, North Carolina 27804. The
certain circumstances such as their Trustee received aggregate
resignation, death, or otherwise as compensation of $3,250 during the
specified in the Trust's fiscal year ended May 31, 2005 from
organizational documents. Any Trustee the Fund for his services to the Fund
may be removed at a meeting of and Trust. The officers did not
shareholders by a vote meeting the receive compensation from the Fund for
requirements of the Trust's their services to the Fund and Trust.
organizational documents. The
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios
in Fund
Position(s) Length Complex
Name, Address, held with of Time Principal Occupation(s) Overseen Other Directorships Held by
And Age Fund/Trust Served During Past 5 Years by Trustee Trustee
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
Independent Trustee
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
Jack E. Brinson, 73 Trustee Since Retired; Previously, President of 1 Independent Trustee - Gardner
1997 Brinson Investment Co. (personal Lewis Investment Trust for the
investments) and President of three series of that trust; The
Brinson Chevrolet, Inc. (auto Nottingham Investment Trust II
dealership) for the six series of that trust;
Hillman Capital Management
Investment Trust for the two
series of that trust;
MurphyMorris Investment Trust and
its one series; de Leon Funds
Trust for the one series of that
trust; Tilson Investment Trust
for the two series of that trust;
and The Piedmont Investment Trust
for the one series of that trust
(all registered investment
companies)
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
Officers
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
C. Douglas Davenport, President, Since President (since 1998) of Atlanta n/a n/a
54 Treasurer, 2003 Investment Counsel, LLC (Adviser of
Atlanta Investment Principal the Fund); previously, stockbroker
Counsel,LLC Executive at Lehman Brothers
3717 Haddon Hall Road, Officer,
NW, Suite 200 and
Atlanta, GA 30327 Principal
Financial
Officer
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
Julian G. Winters, 36 Secretary Since Vice President-Compliance n/a n/a
and 2004 Administration (since 1998) of The
Assistant Nottingham Company
Treasurer
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
Tracey L. Hendricks, Assistant Since Vice President of Financial n/a n/a
37 Secretary 2004 Reporting, Tax, Internal Audit, and
Compliance of The Nottingham
Company (Administrator to the Fund)
since 2004; previously, Vice
President of Special Projects of The
Nottingham Company from 2000 to 2004
- ---------------------- ------------ --------- -------------------------------------- ------------- ---------------------------------
(This page was intentionally left blank.)
Deloitte
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1414
USA
Tel: +1 212 436 2000
Fax: +1 212 436 5000
www.deloitte.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of New Providence Investment Trust and Shareholders
of Wisdom Fund:
We have audited the accompanying statement of assets and liabilities of Wisdom
Fund (the "Fund"), including the portfolio of investments, as of May 31, 2005,
and the related statements of operations for the year then ended, the statements
of changes in net assets for each of the two years in the year then ended, and
the financial highlights for each of the five years in the year then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of May 31, 2005, by correspondence with the custodian and
brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Wisdom
Fund as of May 31, 2005, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the year then ended,
and the financial highlights for each of the five years in the year then ended,
in conformity with accounting principles generally accepted in the United States
of America.
/s/ Deloitte & Touche LLP
July 8, 2005
Member of
Deloitte Touche Tohmatsu
________________________________________________________________________________
WISDOM FUND
________________________________________________________________________________
a series of the New Providence Investment Trust
This Report has been prepared for
shareholders and may be distributed to
others only if preceded or accompanied by
a current prospectus.
Item 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to its Principal Executive Officer,
Principal Financial Officer, and Principal Accounting Officer(s), or
persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.
(c) There have been no amendments during the period covered by this report.
(d) The registrant has not granted, during the period covered by this report,
any waivers, including an implicit waiver.
(f)(1) A copy of the code of ethics that applies to the registrant's Principal
Executive Officer and Principal Financial Officer is filed pursuant to
Item 12(a)(1) below.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant does not have an audit committee financial expert serving
on its audit committee.
(a)(2) Not applicable.
(a)(3) At this time, the registrant believes that the collective experience
provided by the members of the audit committee together offer the
registrant adequate oversight for the registrant's level of financial
complexity.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees - Audit fees billed to the registrant for the last two fiscal
years are described in the table below. These amounts represent aggregate
fees billed by the registrant's independent accountant, Deloitte & Touche
LLP ("Accountant"), in connection with the annual audit of the
registrant's financial statements and for services normally provided by
the Accountant in connection with statutory and regulatory filings.
----------------------------------- -------------- -------------
Fund 2004 2005
----------------------------------- -------------- -------------
Wisdom Fund $ 10,500 $ 14,000
----------------------------------- -------------- -------------
(b) Audit-Related Fees - There were no additional fees billed in the fiscal
years ended May 31, 2004 or 2005 for assurance and related services by
the Accountant that were reasonably related to the performance of the
audit of the registrant's financial statements that were not reported
under paragraph (a) of this Item.
(c) Tax Fees - The tax fees billed in the last two fiscal years for
professional services rendered by the Accountant for tax compliance, tax
advice, and tax planning are described in the table below. These services
were for the completion of the fund's federal, state, and excise tax
returns.
----------------------------------- -------------- -------------
Fund 2004 2005
----------------------------------- -------------- -------------
Wisdom Fund $ 4,875 $ 4,900
----------------------------------- -------------- -------------
(d) All Other Fees -There were no other fees billed by the Accountant, which
were not disclosed in Items (a) through (c) above during the last two
fiscal years.
(e)(1) The registrant's board of trustees pre-approved the engagement of the
Accountant for the last two fiscal years at audit committee meetings of
the board of trustees called for such purpose and will pre-approve the
Accountant for each fiscal year thereafter at audit committee meetings
called for such purpose. The charter of the audit committee states that
the audit committee should pre-approve any audit services and, when
appropriate, evaluate and pre-approve any non-audit services provided by
the Accountant to the registrant and to pre-approve, when appropriate,
any non-audit services provided by the Accountant to the registrant's
investment adviser, or any entity controlling, controlled by, or under
common control with the investment adviser that provides ongoing services
to the registrant if the engagement relates directly to the operations
and financial reporting of the registrant.
(2) There were no services as described in each of paragraph (b) through (d)
of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable.
(g) There were no non-audit fees billed by the Accountant for services
rendered to the registrant, the registrant's investment adviser, or any
other entity controlling, controlled by, or under common control with the
registrant's investment adviser.
(h) Not applicable.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
Item 6. SCHEDULE OF INVESTMENTS.
A copy of the schedule of investments of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed 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 SECURITYHOLDERS.
None.
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 are effective based on their evaluation of these disclosure
controls and procedures as of a date within 90 days of the filing of this
report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's second fiscal quarter of
the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
Item 12.EXHIBITS.
(a)(1) Code of Ethics required by Item 2 of Form N-CSR is filed herewith as
Exhibit 12.(a)(1).
(a)(2) Certifications required by Item 12.(a)(2) of Form N-CSR are filed
herewith as Exhibit 12.(a)(2).
(a)(3) Not applicable.
(b) Certifications required by Item 12.(b) of Form N-CSR are filed herewith
as Exhibit 12.(b).
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.
New Providence Investment Trust
By: (Signature and Title) /s/ C. Douglas Davenport
________________________________
C. Douglas Davenport
President, Treasurer, Principal Executive
Officer and Principal Financial Officer
Date: July 20, 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: (Signature and Title) /s/ C. Douglas Davenport
________________________________
C. Douglas Davenport
President, Treasurer, Principal Executive
Officer and Principal Financial Officer
New Providence Investment Trust
Date: July 20, 2005