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
---------
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
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Julian G. Winters
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 252-972-9922
------------
Date of fiscal year end: May 31
------
Date of reporting period: November 30, 2005
-----------------
Item 1. REPORTS TO STOCKHOLDERS.
Semi-Annual Report 2005
WISDOM FUND
November 30, 2005
(Unaudited)
INSTITUTIONAL CLASS SHARES
INVESTOR CLASS SHARES
CLASS B SHARES
CLASS C SHARES
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.
Distributor: Capital Investment Group, Inc., 116 S. Franklin Street, Rocky
Mount, NC 27804, Phone 1-800-773-3863
- --------------------------------------------------------------------------------
Statements in this Semi-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.), 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 1-800-773-3863. The prospectus should be read
carefully before investing.
- --------------------------------------------------------------------------------
This Semi-Annual Report was first distributed to shareholders on or about
January 29, 2006.
For More Information on Your Wisdom Fund:
See Our Web site @ www.wisdomfund.com
or
Call Our Shareholder Services Group Toll-Free at 1-800-773-3863.
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 Ending
Account Value Account Value Expenses Paid
Institutional Class Shares June 1, 2005 November 30, 2005 During Period*
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Actual $1,000.00 $1,023.60 $6.54
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,018.60 $6.53
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Beginning Ending Expenses Paid
Account Value Account Value
Investor Class Shares June 1, 2005 November 30, 2005 During Period*
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Actual $1,000.00 $1,022.20 $7.81
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,017.35 $7.79
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Beginning Ending Expenses Paid
Account Value Account Value
Class B Shares June 1, 2005 November 30, 2005 During Period*
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Actual $1,000.00 $1,018.90 $11.59
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,013.59 $11.56
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Beginning Ending Expenses Paid
Account Value Account Value
Class C Shares June 1, 2005 November 30, 2005 During Period*
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Actual $1,000.00 $1,018.00 $11.58
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,013.59 $11.56
- ----------------------------------------------------- ----------------------- ----------------------- ----------------------
* Expenses are equal to the Fund's annualized expense ratio (1.29% for the
Institutional Class, 1.54% for the Investor Class, 2.29% for Class B and Class
C) multiplied by the average account value over the period, multiplied by the
number of days in the most recent fiscal half-year divided by 365 (to reflect
the semi-annual period).
WISDOM FUND
Schedule of Investments
(Unaudited)
As of November 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Shares or Market Value Shares or Market Value
Principal (Note 1) Principal (Note 1)
- ------------------------------------------------------------------ ---------------------------------------------------------------
COMMON STOCKS - 92.10% Foods - 4.69%
Cadbury Schweppes PLC 15,500 $ 597,990
Apparel - 0.33% * Dean Foods Company 2,000 76,380
Nike, Inc. 1,600 $ 136,480 Sysco Corporation 18,666 603,285
------------ WM Wrigley Jr. Company 9,800 672,182
------------
Banks - 4.26% 1,949,837
M & T Bank Corporation 2,030 219,687 ------------
Wells Fargo Company 24,722 1,553,778 Health Care Services - 0.00%
------------ * Five Star Quality Care, Inc. 4 27
1,773,465 ------------
------------
Home Builders - 0.23%
Beverages - 8.92% * Champion Enterprises, Inc. 6,700 96,949
Anheuser-Busch ------------
Companies, Inc. 7,300 319,302
Coca-Cola Company 79,430 3,390,867 Insurance - Multiline - 7.27%
------------ American International
3,710,169 Group, Inc. 12,150 815,751
------------ Aspen Insurance Holdings Ltd. 2,000 50,060
Endurance Specialty
Building Materials - 1.21% Holdings, Ltd. 8,500 292,825
American Standard Comp. Inc. 13,190 502,275 The Allstate Corporation 33,250 1,865,325
------------ ------------
3,023,961
Chemicals - 1.47% ------------
The Sherwin-Williams Company 13,970 612,445 Insurance - Property & Casualty - 17.26%
------------ Fidelity National Financial, Inc. 17,463 660,451
* Markel Corporation 8,400 2,664,900
Commercial Services - 6.27% The Chubb Corporation 16,400 1,588,176
Aaron Rents, Inc. 6,000 124,620 Wesco Financial Corporation 386 138,574
Cendant Corporation 10,000 177,700 White Mountains Insurance
* Iron Mountain, Inc. 11,650 480,562 Group, Ltd. 3,500 2,129,400
Moody's Corporation 29,410 1,769,011 ------------
The ServiceMaster Company 4,600 54,786 7,181,501
------------ ------------
2,606,679
------------ Investment Company - 4.15%
American Capital Strategies Ltd. 3,000 115,080
Computers - 0.23% Federated International
* Lexmark International, Inc. 2,000 95,240 Bond Fund 148,354 1,612,612
------------ ------------
1,727,692
Cosmetics & Personal Care - 5.65% ------------
Proctor & Gamble 41,095 2,350,223
------------ Media - 3.89%
* Comcast Corporation 12,500 330,000
Diversified Financial Services - 4.83% Gannett Company, Inc. 2,698 166,251
American Express Company 39,050 2,007,951 The Washington Post Company 1,520 1,120,240
------------ ------------
1,616,491
------------
Electric - 2.83%
* Allegheny Energy, Inc. 8,400 233,772 Miscellaneous Manufacturer - 0.38%
Constellation Energy Group, Inc. 3,800 201,362 Tyco International Ltd. 5,500 156,860
Duke Energy Corporation 12,500 335,750 ------------
FPL Group, Inc. 4,800 203,472
The Southern Company 5,800 201,318
------------
1,175,674
------------
(Continued)
WISDOM FUND
Schedule of Investments
(Unaudited)
As of November 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Shares or Market Value Shares or Market Value
Principal (Note 1) Principal (Note 1)
- ------------------------------------------------------------------ ---------------------------------------------------------------
COMMON STOCKS - (Continued) PRIVATE INVESTMENT COMPANY - 1.30%
(B)Pamlico Short-Term Income Fund
Oil & Gas - 1.92% (Cost $540,961) 540,961 $ 540,961
Burlington Resources, Inc. 3,000 $ 216,750 ------------
Chesapeake Energy Corp. 6,000 173,700
PetroChina Company Ltd. 3,000 236,100
Superior Energy Services, Inc. 8,000 174,160 Total Investments (Cost $33,224,252) - 96.99% $ 40,347,525
------------ Other Assets less Liabilities - 3.01% 1,252,349
800,710 ------------
------------
Packaging & Containers - 0.65%
* Sealed Air Corporation (a) 5,252 271,581 Net Assets - 100.00% $ 41,599,874
------------ ============
Pipelines - 2.92% SECURITY SOLD SHORT - COMMON STOCKS
Kinder Morgan, Inc. 13,400 1,214,040
------------
Insurance - Property & Casualty
Retail - 5.28% The Progressive Corporation
Costco Wholesale (Proceeds $484,717) 4,000 $ 491,961
Corporation (a) 4,000 199,920 ------------
Home Depot Inc. 10,500 438,690
Lowe's Companies, Inc. 1,500 101,220
McDonald's Corporation 7,000 236,950 * Non-income producing investment.
Outback Steakhouse, Inc. 1,800 72,504 (B) Restricted security - A restricted security cannot be
* Payless Shoesource, Inc. 6,000 137,100 resold to the general public without prior registration
Pier 1 Imports, Inc. 1,000 12,700 under the Securities Act of 1933. Restricted securities
* Red Robin Gourmet are valued according to the guidelines and procedures
Burgers, Inc. 1,500 82,350 adopted by the Board of Trustees. The Fund currently
The Gap, Inc. 10,000 173,800 holds 540,961 shares of Pamlico Short-Term Income Fund
Wal-Mart Stores, Inc. 10,100 490,456 at a cost of $540,961. The sale of this investment has
Yum! Brands, Inc. (a) 5,150 251,268 been restricted and has been valued in accordance with
------------ the guidelines adopted by the Board of Trustees. The
2,196,958 total fair value of this security at November 30, 2005
------------ is $540,961, which represents 1.30% of the net assets.
Software - 2.91% (a) All or a portion of this investment is subject to call
Automatic Data Processing, Inc. 12,200 573,400 options written.
First Data Corporation 14,770 639,098
------------
1,212,498
------------
Textiles - 4.55%
* Mohawk Industries, Inc. 21,495 1,891,130
------------
Total Common Stocks (Cost $31,209,830) 38,310,836
------------
FOREIGN GOVERNMENT OBLIGATIONS - 3.59%
New Zealand Government
7.000%, 07/15/09 $ 1,015,000 733,447
6.000%, 11/15/11 1,083,000 762,281
------------
Total Foreign Government Obligations
(Cost $1,473,461) 1,495,728
------------
(Continued)
WISDOM FUND
Call Options Written
(Unaudited)
As of November 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------ ---------------------------------------------------------------
Shares Summary of Investments by Industry
Subject to Market Value % of Net
Call (Note 1) Industry Assets Value
- ------------------------------------------------------------------ ---------------------------------------------------------------
Common Stocks, Expiration Date, Exercise Price Apparel 0.33% $ 136,480
Banks 4.26% 1,773,465
Costco Wholesale Corporation, 01/21/2006 Beverages 8.92% 3,710,169
Strike $47.50 1,500 $ 5,550 Building Materials 1.21% 502,275
Sealed Air Corporation, 01/21/2006 Chemicals 1.47% 612,445
Strike $50.00 3,000 7,950 Commercial Services 6.27% 2,606,679
Yum! Brands, Inc., 01/21/2006 Computers 0.23% 95,240
Strike $55.00 2,000 500 Cosmetics & Personal Care 5.65% 2,350,223
------------ Diversified Financial Services 4.83% 2,007,951
Electric 2.83% 1,175,674
Total (Premiums Received $6,961) $ 14,000 Foods 4.69% 1,949,837
------------ Foreign Government Obligations 3.59% 1,495,728
Health Care Services 0.00% 27
Home Builders 0.23% 96,949
Insurance - Multiline 7.27% 3,023,961
Insurance - Property & Casualty 17.26% 7,181,501
Investment Company 4.15% 1,727,692
Media 3.89% 1,616,491
Miscellaneous Manufacturer 0.38% 156,860
Oil & Gas 1.92% 800,710
Packaging & Containers 0.65% 271,581
Pipelines 2.92% 1,214,040
Private Investment Company 1.30% 540,961
Retail 5.28% 2,196,958
Software 2.91% 1,212,498
Textiles 4.55% 1,891,130
--------------------------------------------------------------
Total 96.99% $ 40,347,525
See Notes to Financial Statements
WISDOM FUND
Statement of Assets and Liabilities
(Unaudited)
As of November 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments, at value (cost $33,224,252) .................................................................. $ 40,347,525
Cash ...................................................................................................... 884
Receivables:
Investments sold ....................................................................................... 1,660,136
Fund shares sold ....................................................................................... 48,237
Interest and dividends ................................................................................. 119,603
Prepaid expenses .......................................................................................... 19,708
------------
Total assets .............................................................................................. 42,196,093
------------
Liabilities:
Securities sold short, at value (proceeds $484,717) ....................................................... 491,961
Call options written, at value (premiums received $6,961) ................................................. 14,000
Payables:
Fund shares repurchased ................................................................................ 28,157
Accrued expenses .......................................................................................... 61,517
Other liabilities ......................................................................................... 584
------------
Total liabilities ......................................................................................... 596,219
------------
Net Assets ................................................................................................... $ 41,599,874
============
Net Assets Consist of:
Capital (par value and paid in surplus) ................................................................... $ 31,805,265
Undistributed net investment income ....................................................................... 47,709
Undistributed net realized gain on investments and foreign currency transactions .......................... 2,637,649
Net unrealized appreciation on investments and translation of assets
and liabilities in foreign currencies .................................................................. 7,109,251
------------
Total Net Assets .......................................................................................... $ 41,599,874
============
Institutional Class Shares Outstanding, no par value (unlimited shares authorized) ........................... 341,612
Net Assets - Institutional Class Shares ................................................................... $ 4,590,781
------------
Net Asset Value, Offering Price and Redemption Price Per Share ............................................ $ 13.44
============
Investor Class Shares Outstanding, no par value (unlimited shares authorized) ................................ 1,032,789
Net Assets - Investor Class Shares ........................................................................ $ 13,768,914
------------
Net Asset Value, Offering Price and Redemption Price Per Share ............................................ $ 13.33
------------
Maximum Offering Price Per Share (100 / 94.25 of $13.33) .................................................. $ 14.14
============
Class B Shares Outstanding, no par value (unlimited shares authorized) ....................................... 1,074,348
Net Assets - Class B Shares ............................................................................... $ 13,887,706
------------
Net Asset Value, Offering Price and Redemption Price Per Share ............................................ $ 12.93
============
Class C Shares Outstanding, no par value (unlimited shares authorized) ....................................... 720,333
Net Assets - Class C Shares ............................................................................... $ 9,352,473
------------
Net Asset Value, Offering Price and Redemption Price Per Share ............................................ $ 12.98
============
See Notes to Financial Statements
WISDOM FUND
Statement of Operations
(Unaudited)
For the six month period ended November 30, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest ................................................................................................. $ 47,928
Dividends ................................................................................................ 418,385
------------
Total Income ............................................................................................. 466,313
------------
Expenses:
Advisory fees (note 2) ................................................................................... 109,844
Administration fees (note 2) ............................................................................. 27,461
Transfer agent fees (note 2) ............................................................................. 23,170
Fund accounting fees (note 2) ............................................................................ 29,197
Compliance service fees (note 2) ......................................................................... 3,875
Custody fees (note 2) .................................................................................... 5,898
Distribution and service fees - Investor Class Shares (note 3) ........................................... 18,830
Distribution and service fees - Class B Shares (note 3) .................................................. 71,653
Distribution and service fees - Class C Shares (note 3) .................................................. 47,604
Legal fees ............................................................................................... 15,041
Audit and tax preparation fees ........................................................................... 7,772
Registration and filing administration fees .............................................................. 13,749
Registration and filing expenses ......................................................................... 17,548
Shareholder servicing expenses ........................................................................... 7,521
Printing expenses ........................................................................................ 6,268
Trustee fees and meeting expenses ........................................................................ 2,507
Securities pricing fees .................................................................................. 2,758
Other operating expenses ................................................................................. 10,027
------------
Total Expenses ........................................................................................... 420,723
------------
Net Investment Income .......................................................................................... 45,590
------------
Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions
Net realized gain from investment and foreign securities transactions .................................... 782,340
Change in unrealized appreciation on investments and foreign currency translations ....................... (41,571)
------------
Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions .............................. 740,769
------------
Net Increase in Net Assets Resulting from Operations ........................................................... $ 786,359
============
See Notes to Financial Statements
WISDOM FUND
Statements of Changes in Net Assets
November 30, May 31,
For the six month period and fiscal year ended, 2005 (a) 2005
- ----------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income ......................................................... $ 45,590 $ 2,119
Net realized gain from investment and foreign securities transactions ......... 782,340 1,837,541
Change in unrealized appreciation on investments and
foreign currency translations ............................................. (41,571) 616,822
------------ ------------
Net Increase in Net Assets Resulting from Operations ................................ 786,359 2,456,482
------------ ------------
Distributions to Shareholders: (note 6)
Net realized gain from investment transactions - Institutional Class Shares ... -- (66,528)
Net realized gain from investment transactions - Investor Class Shares ........ -- (279,815)
Net realized gain from investment transactions - Class B Shares ............... -- (209,450)
Net realized gain from investment transactions - Class C Shares ............... -- (126,328)
------------ ------------
Decrease in Net Assets Resulting from Distributions ................................. -- (682,121)
------------ ------------
Capital Share Transactions: (note 7)
Institutional Class Shares
Shares sold ............................................................... 60,954 229,150
Reinvested dividends and distributions .................................... -- 66,296
Shares repurchased ........................................................ (665,814) (225,257)
------------ ------------
Investor Class Shares
Shares sold ............................................................... 564,794 3,663,038
Reinvested dividends and distributions .................................... -- 264,457
Shares repurchased ........................................................ (6,273,696) (5,337,005)
------------ ------------
Class B Shares
Shares sold ............................................................... 172,167 1,093,890
Reinvested dividends and distributions .................................... -- 203,679
Shares repurchased ........................................................ (1,168,802) (1,984,011)
------------ ------------
Class C Shares
Shares sold ............................................................... 336,640 1,818,621
Reinvested dividends and distributions .................................... -- 121,045
Shares repurchased ........................................................ (821,077) (1,232,810)
------------ ------------
Decrease in Net Assets Resulting from Capital Share Transactions .................... (7,794,834) (1,318,907)
------------ ------------
Net (Decrease) Increase in Net Assets ............................................... (7,008,475) 455,454
============ ============
Net Assets:
Beginning of period ........................................................... 48,608,349 48,152,895
End of period ................................................................. $ 41,599,874 $ 48,608,349
------------ ------------
Undistributed Net Investment Income ................................................. $ 47,709 $ 2,119
============ ============
(a) Unaudited
See Notes to Financial Statements
WISDOM FUND
Financial Highlights
Institutional Class Shares
May 31,
For a share outstanding during the November 30, ------------------------------------------------------------------
six month period or fiscal year ended 2005 (a) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 13.16 $ 12.62 $ 11.12 $ 11.54 $ 10.80 $ 9.90
Income (Loss) from Investment Operations
Net investment income (loss) 0.07 0.08 0.02 (0.03) (0.02) 0.17
Net realized and unrealized gain (loss) on
investment and foreign currency translations 0.21 0.63 1.48 (0.39) 0.85 0.90
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 0.28 0.71 1.50 (0.42) 0.83 1.07
------------ ------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends (from net investment income) - - - - - (0.17)
Distributions (from capital gains) - (0.17) - - (0.09) -
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions - (0.17) - - (0.09) (0.17)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 13.44 $ 13.16 $ 12.62 $ 11.12 $ 11.54 $ 10.80
============ ============ ============ ============ ============ ============
Total return 2.13 % 5.65 % 13.49 % (3.64)% 7.78 % 10.70 %
============ ============ ============ ============ ============ ============
Net Assets, End of Period (in thousands) $ 4,591 $ 5,090 $ 4,811 $ 4,229 $ 3,925 $ 3,165
Average Net Assets for the Period
(in thousands) $ 5,008 $ 4,953 $ 4,452 $ 3,862 $ 3,444 $ 2,983
Ratios of:
Gross Expenses to Average Net Assets 1.29 %(c) 1.23 % 1.29 % 1.67 % 3.19 % 3.30 %
Net Expenses to Average Net Assets 1.29 %(c) 1.23 % 1.29 % 1.62 % 1.71 % 0.26 %
Net Investment Income (Loss)
to Average Net Assets 0.84 %(c) 0.60 % 0.14 % (0.25)% (0.17)% 1.57 %
Portfolio turnover rate 5.33 % 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
Investor Class Shares
May 31,
For a share outstanding during the November 30, ------------------------------------------------------------------
six month period or fiscal year ended 2005 (a) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 13.07 $ 12.57 $ 11.10 $ 11.56 $ 10.84 $ 9.93
Income (Loss) from Investment Operations
Net investment income (loss) 0.06 0.05 (0.01) (0.04) (0.04) 0.13
Net realized and unrealized gain (loss) on
investment and foreign currency translations 0.20 0.62 1.48 (0.42) 0.85 0.91
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 0.26 0.67 1.47 (0.46) 0.81 1.04
------------ ------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends (from net investment income) - - - - - (0.13)
Distributions (from capital gains) - (0.17) - - (0.09) -
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions - (0.17) - - (0.09) (0.13)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 13.33 $ 13.07 $ 12.57 $ 11.10 $ 11.56 $ 10.84
============ ============ ============ ============ ============ ============
Total return (b) 1.99 % 5.36 % 13.24 % (3.98)% 7.57 % 10.41 %
============ ============ ============ ============ ============ ============
Net Assets, End of Period (in thousands) $ 13,769 $ 19,177 $ 19,789 $ 13,825 $ 2,740 $ 1,254
Average Net Assets for the Period
(in thousands) $ 15,023 $ 20,625 $ 17,326 $ 8,861 $ 1,794 $ 675
Ratios of:
Gross Expenses to Average Net Assets 1.54 %(c) 1.48 % 1.54 % 1.91 % 3.39 % 3.86 %
Net Expenses to Average Net Assets 1.54 %(c) 1.48 % 1.54 % 1.87 % 1.96 % 0.68 %
Net Investment Income (Loss)
to Average Net Assets 0.59 %(c) 0.34 % (0.11)% (0.53)% (0.48)% 1.21 %
Portfolio turnover rate 5.33 % 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
(a) Unaudited.
(b) Total return does not reflect payment of a sales charge.
(c) Annualized.
(Continued)
WISDOM FUND
Financial Highlights
Class B Shares
May 31,
For a share outstanding during the November 30, ------------------------------------------------------------------
six month period or fiscal year ended 2005 (a) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 12.72 $ 12.33 $ 10.97 $ 11.50 $ 10.87 $ 9.97
Income (Loss) from Investment Operations
Net investment (loss) income (0.02) (0.05) (0.10) (0.10) (0.07) 0.06
Net realized and unrealized gain (loss) on
investment and foreign currency translations 0.23 0.61 1.46 (0.43) 0.79 0.90
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 0.21 0.56 1.36 (0.53) 0.72 0.96
------------ ------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends (from net investment income) - - - - - (0.06)
Distributions (from capital gains) - (0.17) - - (0.09) -
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions - (0.17) - - (0.09) (0.06)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 12.93 $ 12.72 $ 12.33 $ 10.97 $ 11.50 $ 10.87
============ ============ ============ ============ ============ ============
Total return (b) 1.65 % 4.56 % 12.40 % (4.61)% 6.72 % 9.60 %
============ ============ ============ ============ ============ ============
Net Assets, End of Period (in thousands) $ 13,888 $ 14,660 $ 14,871 $ 12,796 $ 4,307 $ 1,797
Average Net Assets for the Period
(in thousands) $ 14,292 $ 15,060 $ 14,097 $ 8,738 $ 2,146 $ 1,817
Ratios of:
Gross Expenses to Average Net Assets 2.29 %(c) 2.23 % 2.29 % 2.66 % 4.14 % 4.33 %
Net Expenses to Average Net Assets 2.29 %(c) 2.23 % 2.29 % 2.62 % 2.71 % 1.28 %
Net Investment (Loss) Income
to Average Net Assets (0.16)%(c) (0.41)% (0.86)% (1.27)% (1.23)% 0.56 %
Portfolio turnover rate 5.33 % 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
Class C Shares
May 31,
For a share outstanding during the November 30, ------------------------------------------------------------------
six month period or fiscal year ended 2005 (a) 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 12.78 $ 12.38 $ 11.01 $ 11.54 $ 10.91 $ 9.98
Income (Loss) from Investment Operations
Net investment (loss) income (0.01) (0.05) (0.09) (0.09) (0.10) 0.03
Net realized and unrealized gain (loss) on
investment and foreign currency translations 0.21 0.62 1.46 (0.44) 0.82 0.93
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 0.20 0.57 1.37 (0.53) 0.72 0.96
------------ ------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends (from net investment income) - - - - - (0.03)
Distributions (from capital gains) - (0.17) - - (0.09) -
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions - (0.17) - - (0.09) (0.03)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 12.98 $ 12.78 $ 12.38 $ 11.01 $ 11.54 $ 10.91
============ ============ ============ ============ ============ ============
Total return (b) 1.56 % 4.63 % 12.44 % (4.59)% 6.69 % 9.64 %
============ ============ ============ ============ ============ ============
Net Assets, End of Period (in thousands) $ 9,352 $ 9,681 $ 8,682 $ 5,635 $ 1,808 $ 987
Average Net Assets for the Period
(in thousands) $ 9,495 $ 9,212 $ 6,972 $ 3,560 $ 1,274 $ 531
Ratios of:
Gross Expenses to Average Net Assets 2.29 %(c) 2.23 % 2.29 % 2.66 % 4.18 % 4.44 %
Net Expenses to Average Net Assets 2.29 %(c) 2.23 % 2.29 % 2.62 % 2.71 % 1.41 %
Net Investment (Loss) Income
to Average Net Assets (0.16)%(c) (0.39)% (0.86)% (1.27)% (1.19)% 0.40 %
Portfolio turnover rate 5.33 % 41.99 % 20.41 % 9.28 % 6.78 % 15.46 %
(a) Unaudited.
(b) Total return does not reflect payment of a sales charge.
(c) Annualized.
See Notes to Financial Statements
WISDOM FUND
Notes to Financial Statements (Unaudited)
________________________________________________________________________________
1. Organization and Significant market quotations are not readily
Accounting Policies available (e.g., if the exchange on
which the portfolio security is
The Wisdom Fund (the "Fund") is a principally traded closes early or if
series fund. The Fund is part of The trading of the particular portfolio
New Providence Investment Trust (the security is halted during the day and
"Trust"), which was organized as a does not resume prior to the Fund's
Massachusetts business trust and is net asset value calculation) or which
registered under the Investment cannot be accurately valued using the
Company Act of 1940 (the "1940 Act"), Fund's normal pricing procedures are
as amended, as an open-ended valued at fair value as determined in
management investment company. The good faith under policies approved by
Fund is classified as diversified as the Trustees. A portfolio security's
defined in the 1940 Act. "fair value" price may differ from the
price next available for that
The Wisdom Fund commenced operations portfolio security using the Fund's
February 16, 1999. The investment normal pricing procedures. Investment
objective of the Fund is to seek companies are valued at net asset
maximum total returns consisting of value. Instruments with maturities of
any combination of capital 60 days or less are valued at
appreciation, realized and unrealized, amortized cost, which approximates
and income under the constantly market value.
varying market conditions.
Investment Transactions and Investment
The Board of Trustees of the Trust Income
(the "Trustees") approved, on October Investment transactions are accounted
7, 1999, a plan to authorize two new for as of the date purchased or sold
classes of shares designated as Class (trade date). Dividend income is
B Shares and Class C Shares. On recorded on the ex-dividend date.
November 16, 1999, the Class B Shares Certain dividends from foreign
and Class C Shares became effective. securities will be recorded as soon as
The Fund has an unlimited number of the Trust is informed of the dividend
authorized shares, which are divided if such information is obtained
into four classes - Institutional subsequent to the ex-dividend date.
Class Shares, Investor Class Shares, Interest income is recorded on the
Class B Shares and Class C Shares. accrual basis and includes
amortization of discounts and
Each class of shares has equal rights premiums. Gains and losses are
as to assets of the Fund, and the determined on the identified cost
classes are identical except for basis, which is the same base used for
differences in their sales charge federal income tax purposes.
structures and ongoing distribution
and service fees. Income, expenses Expenses
(other than distribution and service The Fund bears expenses incurred
fees, which are not attributable to specifically on its behalf as well as
the Institutional Class Shares), and a portion of general expenses, which
realized and unrealized gains or are allocated according to methods
losses on investments are allocated to approved annually by the Trustees.
each class of shares based upon its
relative net assets. All classes have Foreign Currency Translation
equal voting privileges, except where Portfolio securities and other assets
otherwise required by law or when the and liabilities denominated in foreign
Trustees determine that the matter to currencies are translated into U.S.
be voted on affects only the interests dollars based on the exchange rate of
of the shareholders of a particular such currencies against U.S. dollars
class. on the date of valuation. Purchases
and sales of securities and income
The following accounting policies have items denominated in foreign
been consistently followed by the Fund currencies are translated into U.S.
and are in conformity with accounting dollars at the exchange rate in effect
principles generally accepted in the on the transaction date.
United States of America in the
investment company industry. The Fund does not separately report
the effect of changes in foreign
Investment Valuation exchange rates from changes in market
The Fund's investments in securities prices on securities held. Such
are carried at value. Securities changes are included in net realized
listed on an exchange or quoted on a and unrealized gain or loss from
national market system are valued at investments and foreign currency
the last sales price as of 4:00 p.m. transactions.
Eastern Time. Securities traded in the
NASDAQ over-the-counter market are Realized foreign exchange gains or
generally valued at the NASDAQ losses arise from sales of foreign
Official Closing Price. Other currencies, currency gains or losses
securities traded in the realized between the trade and
over-the-counter market and listed settlement dates on securities
securities for which no sale was transactions and the difference
reported on that date are valued at between the recorded amounts of
the most recent bid price. Securities dividends, interest, and foreign
and assets for which representative
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
________________________________________________________________________________
withholding taxes, and the U.S. dollar into contracts with their vendors and
equivalent of the amounts actually others that provide for general
received or paid. Net unrealized indemnifications. The Fund's maximum
foreign exchange gains and losses exposure under these arrangements is
arise from changes in foreign exchange unknown, as this would involve future
rates on foreign denominated assets claims that may be made against the
and liabilities other than investments Fund. The Fund expects the risk of
in securities held at the end of the loss to be remote.
reporting period.
2. Transactions with Affiliates
Restricted Security Transactions
Restricted securities held by the Fund Advisor
may not be sold unless registered The Fund pays a monthly advisory fee
pursuant to an effective registration to Atlanta Investment Counsel, LLC
statement filed under the Securities (the "Advisor") based upon the annual
Act of 1933, as amended (the rate of 0.50% of the first $500
"Securities Act") or offered pursuant million of the Fund's average daily
to an exemption from, or in a net assets and 0.40% of all assets
transaction not subject to, the over $500 million.
registration requirements of the
Securities Act. The risk of investing The Advisor currently intends to
in such securities is generally voluntarily waive all or a portion of
greater than the risk of investing in its fee and to reimburse expenses of
the securities of publicly traded the Fund to limit total Fund operating
companies. Lack of a secondary market expenses to a maximum of 1.75% of the
and resale restrictions may result in average daily net assets of the Fund's
the inability of the Fund to sell a Institutional Class Shares, Investor
security at a fair price and may Class Shares, Class B Shares and Class
substantially delay the sale of the C Shares, exclusive of interest,
security it seeks to sell. In taxes, brokerage fees and commissions,
addition, restricted securities may extraordinary expenses, and payments,
exhibit greater price volatility than if any, under a Rule 12b-1 Plan. There
securities for which secondary markets can be no assurances that the
exist. foregoing voluntary fee waivers or
reimbursements will continue. The Fund
Dividend Distributions may, at a later date, reimburse the
The Fund may declare and distribute Advisor for the management fees waived
dividends from net investment income or limited, and/or other expenses
(if any) quarterly. Distributions from assumed and paid by the Advisor
capital gains (if any) are generally pursuant to the Expense Limitation
declared and distributed annually. The Agreement during any of the previous
Fund may also make a supplemental three fiscal year provided that the
distribution subsequent to the end of Fund has reached a sufficient asset
its fiscal year. size to permit such reimbursement to
be made without causing the total
Estimates annual expense ratio of the Fund to
The preparation of financial exceed 1.75%, as stated above.
statements in conformity with
accounting principles generally Administrator
accepted in the United States of The Fund pays a monthly administration
America requires management to make fee to The Nottingham Company (the
estimates and assumptions that affect "Administrator") based upon the
the amount of assets, liabilities, average daily net assets of the
expenses and revenues reported in the respective share class and calculated
financial statements. Actual results at the annual rates as shown in the
could differ from those estimates. schedule provided below. The
Administrator also receives a fee to
Federal Income Taxes procure and pay the custodian for the
No provision for income taxes is funds, additional compensation for
included in the accompanying financial fund accounting and recordkeeping
statements, as the Fund intends to service and additional compensation
distribute to shareholders all taxable for certain costs involved with the
investment income and realized gains daily valuation of securities and as
and otherwise comply with the reimbursement for out-of-pocket
requirements of Subchapter M of the expenses (which are immaterial in
Internal Revenue Code applicable to amount). A breakdown of these is
regulated investment companies. provided on the following page.
Indemnifications Compliance Services
Under the Fund's organizational The Nottingham Compliance Services,
documents, its officers and Trustees LLC, a fully owned affiliate of the
are indemnified against certain Nottingham Company, provides services
liabilities arising out of the which assists the Trust's Chief
performance of their duties to the Compliance Officer in monitoring and
Fund. In addition, in the normal testing the policies and procedures of
course of business, the Fund enters the Trust in relation to requirements
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
________________________________________________________________________________
under Rule 38a-1 of the Securities and transfer, dividend paying, and
Exchange Commission. It receives shareholder servicing agent for the
compensation for this service at an Fund. It receives compensation for its
annual rate of $7,750. services based upon a $15 per
shareholder per year, subject to a
Transfer Agent minimum fee of $1,500 per month, plus
North Carolina Shareholder Services, $500 per month for each additional
LLC ("Transfer Agent") serves as class of shares.
- --------------------------------- -------------------------------- ---------------- ---------------------------- -------------------
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 Investor Class Shares, Class B Shares,
Capital Investment Group, Inc. (the and Class C Shares, respectively, for
"Distributor") serves as the Fund's the period ended November 30, 2005.
principal underwriter and distributor.
The Distributor receives any sales 4. Purchases and Sales of Investment
charges imposed on purchases of shares Securities
and re-allocates a portion of such
charges to dealers through whom the For the six month period ended
sale was made, if any. For the period November 30, 2005, the aggregate cost
ended November 30, 2005, the of purchases and proceeds from sales
Distributor retained sales charges in of investment securities (excluding
the amount of $2,224. short-term securities) are shown in
the table below:
Certain Trustees and officers of the
Trust are also officers of the --------------- ---------------------
Advisor, the Distributor or the Purchases Proceeds from
Administrator. of Sales of
Securities Securities
3. Distribution and Service Fees --------------- ---------------------
$2,203,742 $5,037,210
The Trustees, including a majority of --------------- ---------------------
the Trustees who are not "interested
persons" of the Trust as defined in There were no purchases or sales of
the Act, adopted distribution and long-term U.S. Government Obligations
service plans pursuant to Rule 12b-1 during the six month period ended
of the Act (the "Plans") applicable to November 30, 2005.
the Investor Class Shares, Class B
Shares and Class C Shares. The Act 5. Options Written
regulates the manner in which a
regulated investment company may --------------------- ----------- ----------
assume costs of distributing and Option Contracts
promoting the sales of its shares and Written for the
servicing of its shareholder accounts. Period from Number
The Plan provides that the Fund may June 1, 2005 to of Premiums
incur certain costs, which may not November 30, 2005. Contracts Received
exceed 0.25% per annum of the average --------------------- ----------- ----------
daily net assets of the Investor Class Options Outstanding, - $ -
Shares or 1.00% per annum of the Beginning of Period
average daily net assets of the Class --------------------- ----------- ----------
B or Class C Shares for each year Options written 147 31,407
elapsed subsequent to adoption of the Options exercised (60) (20,490)
Plans, for payment to the Distributor Options expired (22) (3,956)
and others for items such as --------------------- ----------- ----------
advertising expenses, selling Options Outstanding,
expenses, commissions, travel, or End of Period 65 $6,961
other expenses reasonably intended to --------------------- ----------- ----------
result in sales of Investor Class The aggregate market value of
Shares, Class B Shares and Class C securities subject to call options is
Shares in the Fund or support $722,769 or approximately 1.74% of net
servicing of those classes' assets at November 30, 2005.
shareholder accounts. The fund
incurred $18,830, $71,653, and
$47,604, in distribution and service
fees under the Plans with respect to
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
________________________________________________________________________________
6. Federal Income Tax Accumulated capital losses represent
net capital loss carryovers as of May
The tax components of capital shown in 31, 2005 that may be available to
the table on the following page offset future realized capital gains
represent: (1) distribution and thereby reduce future taxable gain
requirements the Fund must satisfy distributions. For the year ended May
under the income tax regulations, (2) 31, 2005, there are no accumulated
losses or deductions the Fund may be capital losses.
able to offset against income and
gains realized in future years, and Other book tax differences in the
(3) unrealized appreciation or current year primarily consist of post
depreciation of investments for October loss deferrals.
federal income tax purposes.
- ----------------------------- ----------------------- ----------------------- ----------------------- ------------------------------
Undistributed Ordinary Undistributed Accumulated Capital Other Book to Tax
Income Long-Term Gains Losses Differences Net Tax Appreciation
- ----------------------------- ----------------------- ----------------------- ----------------------- ------------------------------
$ - $1,866,461 $ - $8,175 $7,109,251
- ----------------------------- ----------------------- ----------------------- ----------------------- ------------------------------
The aggregate cost of investments and 2005 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 November 30, deferrals.
- ---------------------------------- ----------------------------------------------- -------------------------------------------------
Federal Tax Cost Aggregate Gross Unrealized Appreciation Aggregate Gross Unrealized Depreciation
- ---------------------------------- ----------------------------------------------- -------------------------------------------------
$32,725,330 $8,185,477 $(1,069,243)
- ---------------------------------- ----------------------------------------------- -------------------------------------------------
The amount of dividends and items such as net short-term gains,
distributions from net investment deferral of wash sale losses, foreign
income and net realized capital gains currency transactions, net investment
are determined in accordance with losses and capital loss
federal income tax regulations which carry-forwards. Certain permanent
may differ from accounting principles differences such as tax returns of
generally accepted in the United capital and net investment losses, if
States of America. These differences any, would be re-classified against
are due to differing treatments for capital.
- ----------------------------------- ----------------------------------------------------------------------- ------------------------
Distributions from
Long-Term Capital Tax Return of Net Investment
For the fiscal year ended Ordinary Income Gains Capital Loss
- ----------------------------------- ----------------------- ----------------------- ----------------------- ------------------------
May 31, 2005 $ - $682,121 $ - $ -
- ----------------------------------- ----------------------- ----------------------- ----------------------- ------------------------
May 31, 2004 $ - $ - $ - $ -
- ----------------------------------- ----------------------- ----------------------- ----------------------- ------------------------
7. Capital Share Transactions
- -------------------------------------------------- ---------------------------------------- ----------------------------------------
Institutional Class Investor Class
For the six month period and November 30, May 31, November 30, May 31,
fiscal year ended: 2005 2005 2005 2005
- -------------------------------------------------- ------------------- -------------------- -------------------- -------------------
Transactions in Fund Shares
Shares sold 4,625 18,062 42,994 289,599
Reinvested distributions - 5,065 - 20,312
Shares repurchased (49,755) (17,562) (477,118) (417,343)
Net (Decrease) Increase in Capital Share
Transactions (45,130) 5,565 (434,124) (107,432)
Shares Outstanding, Beginning of Period 386,742 381,177 1,466,913 1,574,345
Shares Outstanding, End of Period 341,612 386,742 1,032,789 1,466,913
- -------------------------------------------------- ------------------- -------------------- -------------------- -------------------
(Continued)
7. Capital Share Transactions
(continued)
- -------------------------------------------------- ---------------------------------------- ----------------------------------------
Class B Class C
For the six month period and November 30, May 31, November 30, May 31,
fiscal year ended: 2005 2005 2005 2005
- -------------------------------------------------- ------------------- -------------------- -------------------- -------------------
Transactions in Fund Shares
Shares sold 13,410 88,251 26,254 145,631
Reinvested distributions - 16,025 - 9,479
Shares repurchased (91,442) (158,165) (63,583) (98,651)
Net Decrease (Increase) in Capital Share
Transactions (78,032) (53,889) (37,329) 56,459
Shares Outstanding, Beginning of Period 1,152,380 1,206,269 757,662 701,203
Shares Outstanding, End of Period 1,074,348 1,152,380 720,333 757,662
- -------------------------------------------------- ------------------- -------------------- -------------------- -------------------
8. Change in Independent Registered
Public Accounting Firm
On July 19, 2005, the Board of
Trustees engaged Briggs, Bunting &
Dougherty, LLP ("BBD") as its new
independent registered public
accounting firm. At no time preceding
the engagement of BBD did the Fund
consult the firm regarding either (i)
the application of accounting
principles to a specified transaction,
either completed or proposed, or the
type of audit opinion that might be
rendered on the Fund's financial
statements, or (ii) any matter that
was either subject of a disagreement
or a reportable event, as such terms
are defined in Item 304 of Regulation
S-K.
Prior to this date, Deloitte & Touche
LLP ("Deloitte") served as the
independent registered public
accounting firm for the Trust and
issued reports on the Fund's financial
statements as of May 31, for the years
1999 through 2005. Such reports did
not contain an adverse opinion or a
disclaimer of opinion, nor were they
qualified or modified as to
uncertainty, audit scope, or
accounting principles.
At no time preceding the removal of
Deloitte & Touche LLP were there any
disagreements with Deloitte & Touche
LLP on any matter of accounting
principles or practices, financial
statement disclosure, or auditing
scope or procedure, which
disagreements, if not resolved to the
satisfaction of Deloitte & Touche LLP,
would have caused it to make reference
to the subject matter of the
disagreements in connection with its
report. At not time preceding the
removal of Deloitte & Touche LLP did
any of the events enumerated in
paragraphs (1)(v)(A) through (D) of
Item 304(a) of Regulation S-K occur.
WISDOM FUND
Additional Information (Unaudited)
________________________________________________________________________________
1. Approval of Investment Advisory
Agreement
coordination of services for the Fund
Atlanta Investment Counsel, LLC among the Fund's service providers,
("Investment Advisor") supervises the and its efforts to promote the Fund,
investments of the Wisdom Fund grow the Fund's assets, and assist in
("Fund") pursuant to an Investment the distribution of Fund shares. The
Advisory Agreement. During the Fund's Board noted that the Trust's principal
most recent fiscal half-year, the executive officer, principal financial
Investment Advisory Agreement came up officer, president, treasurer, and
for renewal. The Board unanimously chief compliance officer is an
approved the renewal of the Investment employee of the Investment Advisor who
Advisory Agreement for another year at serves the Trust without additional
the Board's Annual Meeting on October compensation. After reviewing the
18, 2005. foregoing information and further
information in the Investment Advisor
At the meeting, Trust Counsel Memorandum (e.g., descriptions of the
("Counsel") reviewed with the Board a Investment Advisor's business, the
memorandum from Counsel dated October Fund's and the Investment Advisor's
11, 2005 and addressed to the Trustees compliance programs, and the
that summarized the Board's fiduciary Investment Advisor's Form ADV), the
duties and responsibilities in Board concluded that the nature,
reviewing and approving the Investment extent, and quality of the services
Advisory Agreement for the Fund. provided by the Investment Advisor
Counsel discussed with the Board's were satisfactory and adequate for the
independent trustees ("Independent Fund.
Trustees") the types of information
and factors that should be reviewed by (ii) Considering the investment
the Board and their responsibilities performance of the Fund and the
in making an informed decision Investment Advisor. In this regard,
regarding the approval of the the Board compared the short and
continuation of the Investment long-term performance of the Fund with
Advisory Agreement. the performance of its benchmark
index, comparable funds with similar
The Investment Advisor then reviewed objectives and size managed by other
with the Board its response to a investment advisors, and comparable
memorandum from Counsel dated peer group indices (e.g., Morningstar
September 6, 2005 and addressed to the category averages). The Board also
Investment Advisor that contained considered the consistency of the
information relating to the Investment Advisor's management of the
continuation of the Investment Fund with the Fund's investment
Advisory Agreement ("Investment objective and policies. After
Advisor Memorandum"). The Investment reviewing the short and long-term
Advisor reviewed its Form ADV, investment performance of the Fund,
experience, profitability with respect the Investment Advisor's experience
to the Fund, financial strength, managing the Fund and whether the
financial capability, its personnel, Investment Advisor manages other
its services to the Fund, comparative advisory accounts, the Investment
expense ratio information for other Advisor's historical investment
mutual funds with strategies similar performance, and other factors, the
to those of the Fund, and other Board concluded that the investment
information contained in its performance of the Fund and the
Investment Advisor Memorandum. Investment Advisor were satisfactory.
In deciding whether to approve the (iii) Considering the costs of the
renewal of the Investment Advisory services to be provided and profits to
Agreements between the Trust and the be realized by the Investment Advisor
Investment Advisor, with respect to and its affiliates from the
the Fund, the Trustees considered relationship with the Fund. In this
numerous factors, including: regard, the Board considered the
Investment Advisor's staffing,
(i) Considering the nature, extent, personnel, and methods of operating;
and quality of the services provided the education and experience of the
by the Investment Advisor. In this Investment Advisor's personnel; the
regard, the Board considered the Investment Advisor's compliance
responsibilities the Investment policies and procedures; the financial
Advisor would have under its condition of the Investment Advisor,
Investment Advisory Agreement. The and the level of commitment to the
Board reviewed the services being Fund and the Investment Advisor by the
provided by the Investment Advisor to principals of the Investment Advisor;
the Fund including, without the asset levels of the Fund; and the
limitation, the quality of its overall expenses of the Fund,
investment advisory services since the including certain prior fee waivers
Fund's inception (including research and reimbursements by the Investment
and recommendations with respect to Advisor on behalf of the Fund and the
portfolio securities), its procedures nature and frequency of advisory fee
for formulating investment payments. The Board reviewed the
recommendations and assuring financial statements for the
compliance with the Fund's investment Investment Advisor and discussed the
objectives and limitations, its financial stability and profitability
(Continued)
WISDOM FUND
Additional Information (Unaudited)
________________________________________________________________________________
of the firm. The Board reviewed the were fair and reasonable in relation
Fund's Expense Limitation Agreement to the nature and quality of the
with the Investment Advisor, and services to be provided by the
discussed the Investment Advisor's Investment Advisor.
prior fee waivers under the Expense
Limitation Agreement in detail, (v) Considering brokerage and
including the nature and scope of cost portfolio transactions. In this
allocation for such fees. The Board regard, the Board considered the
noted that the Expense Limitation Investment Advisor's standards and
Agreement for the Fund had been performance in utilizing those
modified to change the recoupment standards to seek best execution for
period for reimbursements from five to Fund portfolio transactions, including
three years under the agreement. the use of alternative markets (e.g.,
direct purchases from issuers or
The Board considered potential underwriters or, as to equity
benefits for the Investment Advisor in securities, "third market" for listed
managing the Fund, including promotion securities and principal market makers
of the Investment Advisor's name, the for over-the-counter securities). The
ability for the Investment Advisor to Board noted that the Fund's fixed
place small accounts into the Fund, income portfolio transactions are
and the potential for the Investment normally principal transactions
Advisor to generate soft dollars from executed in over-the-counter markets
certain of the Fund's trades that may on a "net" basis. The Board also
benefit the Investment Advisor's other considered the anticipated portfolio
clients as well. The Board then turnover rate for the Fund; the
compared the fees and expenses of the process by which evaluations are made
Fund (including the management fee) to of the overall reasonableness of
other funds comparable to the Fund in commissions paid; the method and basis
terms of the type of fund, the style for selecting and evaluating the
of investment management, the size of broker-dealers used; any anticipated
the fund, and the nature of its allocation of portfolio business to
investment strategy, among other persons affiliated with the Investment
factors. The Board determined that the Advisor; and the opportunities for the
management fee was lower than Investment Advisor to recapture
comparable funds and that, while the brokerage or related fees (e.g. tender
net expense ratio was higher than the offer fees, underwriting fees, etc.)
industry average and comparable funds, and credit them against Fund expenses.
the size of the Fund was much smaller After further review and discussion,
than the industry average and the Board determined that the
comparable funds. Following this Investment Adviser's practices
comparison and upon further regarding brokerage and portfolio
consideration and discussion of the transactions were satisfactory.
foregoing, the Board concluded that
the fees to be paid to the Investment (vi) Considering possible conflicts of
Advisor by the Fund were fair and interest. In evaluating the
reasonable in relation to the nature possibility for conflicts of interest,
and quality of the services to be the Board considered such matters as
provided by the Investment Advisor. the experience and ability of the
advisory personnel assigned to the
(iv) Considering the extent to which Fund, which was currently a single
economies of scale would be realized individual; the basis of decisions to
as the Fund grows and whether advisory buy or sell securities for the Fund
fee levels reflect these economies of and/or the Investment Advisor's other
scale for the benefit of the Fund's accounts should the Investment Advisor
investors. In this regard, the Board accumulate other accounts; the method
considered that the Fund's fee for bunching of portfolio securities
arrangements with the Investment transactions; and the substance and
Advisor involved both the management administration of the Investment
fee and an Expense Limitation Advisor's code of ethics. Following
Agreement. The Board noted that the further consideration and discussion,
Fund utilizes breakpoints in its the Board indicated that the
advisory fee schedule and determined Investment Advisor's standards and
that the Fund's shareholders would practices relating to the
benefit from economies of scale as the identification and mitigation of
Fund grows. The Board noted that the potential conflicts of interests were
Fund's shareholders would receive satisfactory.
benefits from the Expense Limitation
Agreement if the Fund's assets were to Based upon all of the foregoing
decrease or the Fund's expenses were considerations, the Board, including a
to increase beyond the cap set by the majority of the Trust's Independent
Expense Limitation Agreement. The Trustees, approved the renewal of the
Board noted that the Fund's Investment Advisory Agreement for the
shareholders benefited from economies Fund.
of scale under the Fund's agreements
with service providers other than the 2. Proxy Voting Policies and Voting
Investment Advisor. Following further Record
discussion of the Fund's asset levels,
expectations for growth, and levels of A copy of the Trust's Proxy Voting and
fees, the Board determined that, at Disclosure Policy and the Advisor's
the Fund's current and projected asset Proxy Voting and Disclosure Policy are
levels, the Fund's fee arrangements included as Appendix B to the Fund's
(Continued)
WISDOM FUND
Additional Information (Unaudited)
________________________________________________________________________________
Statement of Additional Information
and is available, without charge, upon
request, by calling 1-800-773-3863.
Information regarding how the Fund
voted proxies relating to portfolio
securities during the most recent
12-month period ended June 30 will be
available (1) without charge, upon
request, by calling the Fund at the
number above and (2) on the SEC's
website at http://www.sec.gov.
3. Quarterly Portfolio Holdings
The Fund files its complete schedule
of portfolio holdings with the SEC for
the first and third quarters of each
fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the SEC's
website at http://www.sec.gov. You may
review and make copies at the SEC's
Public Reference Room in Washington,
D.C. You may also obtain copies after
paying a duplicating fee by writing
the SEC's Public Reference Section,
Washington, D.C. 20549-0102 or by
electronic request to
publicinfo@sec.gov, or is available,
without charge, upon request, by
calling the fund at 1-800-773-3863.
Information on the operation of the
Public Reference Room may be obtained
by calling the SEC at 202-942-8090.
Wisdom Fund
is a series of
The New Providence Investment Trust
For Shareholder Service Inquiries: For Investment Advisor Inquiries:
Documented: Documented:
NC Shareholder Services Atlanta Investment Counsel, LLC
116 South Franklin Street 3717 Haddon Hall Road, NW
Post Office Drawer 4365 Suite 200
Rocky Mount, North Carolina 27803-0365 Atlanta, Georgia 30327
Toll-Free Telephone: Toll-Free Telephone:
1-800-773-3863 1-877-352-0020
World Wide Web @: World Wide Web @:
nottinghamco.com wisdomfund.com
Item 2. CODE OF ETHICS.
Not applicable.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
Item 6. SCHEDULE OF INVESTMENTS.
A copy of Schedule I - Investments in securities 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.
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 Principal Executive Officer and the Principal Financial Officer have
concluded that the registrant's disclosure controls and procedures are
effective based on their evaluation of the 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) Not applicable.
(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: January 20, 2006
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: January 20, 2006