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, 2006
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Item 1. REPORTS TO STOCKHOLDERS.
Annual Report 2006
WISDOM FUND
May 31, 2006
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
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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.), 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.
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This Annual Report was first distributed to shareholders on or about July 28,
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.
WISDOM FUND
Annual Report to Shareholders
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July 19, 2006
HOW THE WISDOM FUND IS DIFFERENT
The Wisdom Fund is a value investor emulating the public and private holdings of
Berkshire Hathaway, Inc., managed by Warren Buffett and Charles Munger.
We look to buy companies that we understand well and when possible stocks that
are trading a substantial discount to our conservative estimate of intrinsic
value. It never ceases to amaze us how few investment managers or investors
actually adhere to this simple strategy.
The concept is simple, but the executions are not. Determining the intrinsic
value of a company is very difficult and takes lots of patience and discipline.
In this annual report you will find the performance results of the Wisdom Fund
since inception. As always, whether performance results are strong or weak, we
believe the longer the measuring period, the more meaningful the record.
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Performance as of May 31, 2006
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Since Since
One Three Five Inception Inception
Year Year Year 02/16/1999 11/16/1999
- ---------------------------------------------------------------------------------------------------------
Wisdom Fund
Institutional Class Shares 2.63% 7.16% 5.03% 5.04% N/A
Investor Class Shares 2.36% 6.89% 4.76% 4.76% N/A
Class B Shares 1.66% 6.11% 3.99% N/A 4.19%
Class C Shares 1.60% 6.13% 4.00% N/A 4.20%
S&P 500 Total Return Index 8.64% 11.64% 1.96% 1.89% (0.11)%
Dow Jones Industrial Average 6.70% 8.06% 0.47% 2.55% 0.33%
Performance shown is for the period ended May 31, 2006. The performance
information quoted above 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. To obtain more current performance data regarding the
Fund, including performance data current to the Fund's most recent month-end,
please call (800) 773-3863. Current performance may be lower or higher than the
performance data quoted.
A maximum contingent deferred sales charge of 1% may be imposed on Class C
Shares. A maximum contingent deferred sales charge of 4% may be imposed on Class
B Shares. The performance data quoted above does not reflect the deduction of
the sales charge and if reflected, the sales charge would reduce the performance
quoted. The prospectus contains this and other information about the Fund.
- --------------------------------------------------------------------------------
The fund has out-performed the Dow Jones Industrial Average and the Standard and
Poor 500 Index since our inception in February of 1999 and for the last 5 years
ending May 31, 2006. The fund underperformed those indices for the last one and
three year period. The main reason for the recent under-performance is the high
level of money market instruments held by the fund. The indices hold no cash. We
have held these short-term cash investments because Berkshire Hathaway holds
these investments also.
Many of our fund's holdings can be described as "businesses whose values went up
while their stock prices went down". This would include such well-known names in
the portfolio as Coca-Cola, Wal-Mart, Home Depot, Comcast, Washington Post,
Anheuser-Busch, William Wrigley and White Mountains Insurance.
Many of the giants of American industry are selling at historically low
valuations in today's market based on their P/E ratios. There are several
reasons for this. One reason that stands out is the capital flow out of the
above portfolio companies and into companies in the more popular sectors of the
market like energy, real estate, emerging market stocks and small cap stocks,
etc.
Wisdom Fund
Annual Report to Shareholders
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We believe that this a rare opportunity to acquire some great companies at very
reasonable prices. The companies will continue to grow their earnings and
investors will eventually come back to invest in them once again.
The fund's portfolio is comprised of companies with strong balance sheets and
managements that are flexible enough to deal with both favorable and hostile
business environments. While we can offer no prediction about where the market
is headed, we are very optimistic about the long-term prospects for the
companies in the fund.
We invest with a multi-year investment horizon rather focusing on the month or
quarter ahead.
The following are the major characteristics of our work. The fund's objective is
to invest as closely as possible to those of Berkshire Hathaway. The following
are the major characteristics of this work.
o We tend to buy what's out of favor rather than what's popular,
o We focus on the intrinsic value of companies and buy when we
are convinced we have a sufficient discount to intrinsic
value,
o We understand that beating the market requires having a
portfolio that looks quite different from the market and we
recognize that truly great investment ideas are rare. So we
invest heavily in our best ideas rather than hide behind the
"safety" of closet indexing,
o We are focused on avoiding permanent losses and on absolute
returns, rather than focusing on relative returns and
outperforming a benchmark,
o We invest with a multi-year time horizon rather than focusing
on the quarter ahead,
o We do not act solely on the work of Wall Street analysts,
o We do not attempt to predict the direction of interest rates,
the price of oil, the direction of the economy, etc...,
o We cast a wide net, seeking undervalued securities across all
industries, and types and sizes of companies, rather than
accepting artificial "style-box" limitations on market
capitalization or other criteria,
o We make our own decisions and are willing to be held
accountable for them rather than seek safety in whatever
everyone is buying or decision-making-by-committee,
o We admit all mistakes and seek to learn from them, rather than
credit for successes and attributing failures to bad luck,
o We buy the same publicly traded securities that Berkshire buys
and in the same percentages. We do so as soon as we learn of
Berkshire's purchases,
o When Berkshire buys a privately-held company, we purchase the
best publicly traded proxy (Mohawk Industries for Berkshire's
Shaw Industries for example),
o We sell when Berkshire sells. However, that occurs
infrequently. We sell the proxies for only 2 reasons:
valuation, and poor fundamental performance,
o And last, Buffett's style and ours does not limit the types of
securities we will buy. It just limits what we will pay for
them.
o Top ten holdings as of June 1: Coca-Cola-10%, American
Express-6.3%, Proctor & Gamble-7%, Wells Fargo-5.3%, Markel
Insurance-5.5%, White Mountains Insurance-5.2%, Allstate
Insurance-5.0%, Mohawk Industries-4.3%, Washington Post-4.3%
and Chubb Insurance-4%. Top ten holdings represent 52.6% of
the fund's portfolio.
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 (Unaudited)
For the period from February 16, 1999 (Date of Initial Public Investment) to May
31, 2006
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Wisdom Fund S&P 500 Performance Returns for the periods ended May 31, 2006
Institutional Class Total Return ----------------------------------------------------------------
Shares 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 2.63% 5.03% 5.04%
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 24,019 Investment Returns Inception* Investment
5/31/2003 29,082 20,591 ----------------------------------------------------------------
5/31/2004 33,005 24,365 Institutional Class Shares 43.15% $35,788
5/31/2005 34,871 26,372 ----------------------------------------------------------------
5/31/2006 35,788 28,649 S&P 500 Total Return Index 14.60% $28,649
----------------------------------------------------------------
*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 (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur ongoing costs, including management fees
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the 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.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example December 1, 2005 May 31, 2006 Period*
- ------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,002.70 $6.39
- ------------------------------------------------------------------------------------------------------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,018.55 $6.44
- ------------------------------------------------------------------------------------------------------------------
* Actual expenses are based on expenses incurred in the most recent six-month
period. The Fund's annualized six-month expense ratio is 1.28%. The values under
"Expenses Paid During Period" are equal to the annualized ratio multiplied by
the average account value over the period, multiplied by 182/365 (to reflect the
one-half year period.)
WISDOM FUND INVESTOR CLASS SHARES
Performance Update - $10,000 Investment (Unaudited)
For the period from February 16, 1999 (Date of Initial Public Investment) to May
31, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Wisdom Fund S&P 500 Total Performance Returns for the periods ended May 31, 2006
Investor Class Shares Total Return Index -----------------------------------------------------------------
--------------------- ------------------ Average Annual Total One Five Since
2/16/1999 $ 9,425 $ 10,000 Returns Year Year Inception*
5/31/1999 9,370 10,523 -----------------------------------------------------------------
5/31/2000 9,498 11,625 Investor Class Shares - No
5/31/2001 10,487 10,399 Sales Load 2.36% 4.76% 4.76%
5/31/2002 11,281 8,959 -----------------------------------------------------------------
5/31/2003 10,832 8,236 Investor Class Shares - 5.75%
5/31/2004 12,266 9,746 Maximum Sales Load (3.52)% 3.52% 3.91%
5/31/2005 12,924 10,549 -----------------------------------------------------------------
5/31/2006 13,229 11,460 Cumulative Total Since Final Value of $10,000
Investment Returns Inception* Investment
-----------------------------------------------------------------
Investor Class Shares - No
No Sales Load 40.36% $14,036
-----------------------------------------------------------------
Investor Class Shares - 5.75%
Maximum Sales Load 32.29% $13,229
-----------------------------------------------------------------
S&P 500 Total Return Index 14.60% $11,460
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*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 (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The 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 December 1, 2005 May 31, 2006 Period*
- --------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,001.42 $7.63
- --------------------------------------------------------------------------------------------------------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,017.30 $7.70
- --------------------------------------------------------------------------------------------------------------------
* Actual expenses are based on expenses incurred in the most recent six-month
period. The Fund's annualized six-month expense ratio is 1.53%. The values under
"Expenses Paid During Period" are equal to the annualized ratio multiplied by
the average account value over the period, multiplied by 182/365 (to reflect the
one-half year period.)
WISDOM FUND CLASS B SHARES
Performance Update - $10,000 Investment (Unaudited)
For the period from November 16, 1999 (Date of Initial Public Investment) to May
31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Wisdom Fund S&P 500 Performance Returns for the periods ended May 31, 2006
Class B Shares Total Return Index -----------------------------------------------------------------
-------------- ------------------ Average Annual Total One Five Since
11/16/1999 $ 10,000 $ 10,000 Returns Year Year Inception*
5/31/2000 9,815 10,070 -----------------------------------------------------------------
5/31/2001 10,757 9,007 Class B Shares -
5/31/2002 11,479 7,760 No Sales Charge 1.66% 3.99% 4.19%
5/31/2003 10,950 7,134 -----------------------------------------------------------------
5/31/2004 12,308 8,442 Class B Shares -
5/31/2005 12,869 9,137 Maximum Sales Charge (2.16)% 3.82% 4.19%
5/31/2006 13,084 9,926 -----------------------------------------------------------------
Cumulative Total Since Final Value of $10,000
Investment Returns Inception* Investment
-----------------------------------------------------------------
Class B Shares - 30.84% $13,084
No Sales Load
-----------------------------------------------------------------
S&P 500 Total Return Index (0.74)% $9,926
-----------------------------------------------------------------
*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 table above includes the maximum contingent
deferred sales charge ("CDSC") corresponding to the length of time that the
investment as 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 (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The 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 December 1, 2005 May 31, 2006 Period*
- ------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $997.80 $11.36
- ------------------------------------------------------------------------------------------------------------------------
Hypothetical (5%annual return beforeexpenses) $1,000.00 $1,013.56 $11.45
- ------------------------------------------------------------------------------------------------------------------------
* Actual expenses are based on expenses incurred in the most recent six-month
period. The Fund's annualized six-month expense ratio is 2.28%. The values under
"Expenses Paid During Period" are equal to the annualized ratio multiplied by
the average account value over the period, multiplied by 182/365 (to reflect the
one-half year period.)
WISDOM FUND CLASS C SHARES
Performance Update - $10,000 Investment (Unaudited)
For the period from November 16, 1999 (Date of Initial Public Investment) to May
31, 2006
- ----------------------------------------------------------------------------------------------------------------------------
Wisdom Fund S&P 500 Performance Returns for the periods ended May 31, 2006
Class C Shares Total Return Index ----------------------------------------------------------------
-------------- ------------------ Average Annual Total One Five Since
11/16/1999 $ 10,000 $ 10,000 Returns Year Year Inception*
5/31/2000 9,814 10,070 ----------------------------------------------------------------
5/31/2001 10,760 9,007 Class C Shares -
5/31/2002 11,480 7,760 No Sales Charge 1.60% 4.00% 4.20%
5/31/2003 10,953 7,134 ----------------------------------------------------------------
5/31/2004 12,316 8,442 Cumulative Total Since Final Value of $10,000
5/31/2005 12,886 9,137 Investment Returns Inception* Investment
5/31/2006 13,092 9,926 ----------------------------------------------------------------
Class C Shares 30.92% $13,092
----------------------------------------------------------------
S&P 500 Total Return Index (0.74)% $ 9,926
----------------------------------------------------------------
*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 (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The 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 December 1, 2005 May 31, 2006 Period*
- ------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $998.05 $11.36
- ------------------------------------------------------------------------------------------------------------------------
Hypothetical (5%annual return before expenses) $1,000.00 $1,013.56 $11.45
- ------------------------------------------------------------------------------------------------------------------------
* Actual expenses are based on expenses incurred in the most recent six-month
period. The Fund's annualized six-month expense ratio is 2.28%. The values under
"Expenses Paid During Period" are equal to the annualized ratio multiplied by
the average account value over the period, multiplied by 182/365 (to reflect the
one-half year period.)
WISDOM FUND
Schedule of Investments
As of May 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- --------------------------------------------------------------- ------------------------------------------------------------------
COMMON STOCKS - 98.35% Foods - 4.02%
u Cadbury Schweppes PLC 9,500 $ 366,130
Apparel - 0.80% * Dean Foods Company 2,000 71,400
Nike, Inc., Cl. B 3,600 $ 289,116 Sysco Corporation 8,666 265,006
----------- Whole Foods Market Inc. 3,000 195,000
WM Wrigley Jr. Company 9,800 448,056
Banks - 5.99% WM Wrigley Jr. Company, Cl. B 2,450 111,597
M & T Bank Corporation 2,030 233,653 -----------
Wells Fargo Company 29,222 1,939,464 1,457,189
----------- -----------
2,173,117 Hand/Machine Tools - 0.49%
----------- Kennametal Inc. 3,000 179,400
Beverages - 12.68% -----------
Anheuser-Busch
Companies, Inc. 10,700 488,348 Health Care Services - 0.00%
Coca-Cola Company 81,930 3,607,378 * Five Star Quality Care, Inc. 4 41
u Diageo PLC 3,000 198,570 -----------
PepsiCo Inc. 5,000 302,300
----------- Home Builders - 0.22%
4,596,596 * Champion Enterprises, Inc. 6,700 79,730
----------- -----------
Building Materials - 0.72%
American Standard Comp. Inc. 6,190 263,013 Housewares - 0.08%
----------- Lifetime Brands Inc. 1,000 27,700
-----------
Chemicals - 1.33%
The Sherwin-Williams Company 9,970 482,249 Insurance - Multiline - 7.92%
----------- American International
Group, Inc. 12,150 738,720
Commercial Services - 3.02% Hartford Financial Services
Aaron Rents, Inc. 6,000 162,000 Group Inc. 3,000 263,820
H & R Block Inc. 1,000 22,750 The Allstate Corporation 33,250 1,829,082
* Iron Mountain, Inc. 2,850 105,279 Torchmark Corp. 700 41,216
Moody's Corporation 14,410 753,643 -----------
The ServiceMaster Company 4,600 49,680 2,872,838
----------- -----------
1,093,352 Insurance - Property & Casualty - 16.31%
----------- * Markel Corporation 5,900 1,992,725
Computers - 0.16% * Philadelphia Consolidated
* Lexmark International, Inc., Cl. A 1,000 57,250 Holdings Corp. 7,500 248,625
----------- The Chubb Corporation 32,800 1,657,384
Wesco Financial Corporation 386 153,860
Cosmetics & Personal Care - 6.92% White Mountains Ins. Group Ltd. 3,500 1,863,960
Procter & Gamble 46,295 2,511,504 -----------
----------- 5,916,554
-----------
Diversified Financial Services - 6.26% Internet - 0.25%
American Express Company 41,750 2,269,530 * Blue Nile Inc. 3,000 89,700
----------- -----------
Electric - 4.87% Media - 6.04%
* Allegheny Energy, Inc. 15,400 561,638 * Comcast Corporation, Cl. A 12,500 401,625
Constellation Energy Group, Inc. 3,800 196,460 Gannett Company, Inc. 4,298 232,135
Duke Energy Corporation 12,500 352,750 The Washington Post
FPL Group, Inc. 11,800 469,994 Company, Cl. B 1,920 1,556,928
The Southern Company 5,800 185,426 -----------
----------- 2,190,688
1,766,268 -----------
-----------
(Continued)
WISDOM FUND
Schedule of Investments
As of May 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- ---------------------------------------------------------------- -----------------------------------------------------------------
COMMON STOCKS - (Continued) MONEY MARKET FUND - 1.68%
Merrimac Cash Series Trust
Miscellaneous Manufacturer - 0.26% Total Money Market (Cost $608,367) $ 608,367
Tyco International Ltd. 3,500 $ 94,885 ------------
-----------
Oil & Gas - 2.93% Total Investments
Canadian Natural Resources Ltd. 1,000 53,740 (Cost $30,527,556) - 100.16% $ 36,320,221
Chesapeake Energy Corp. 6,000 183,540 Liabilities in Excess of Other Assets - (0.16)% (57,053)
Cimarex Energy Co. 1,000 40,560 ------------
ConocoPhillips 2,164 136,960
Devon Energy Corp. 1,000 57,360 Net Assets - 100.00% $ 36,263,168
u PetroChina Company Ltd. 3,000 325,800 ============
* Superior Energy Services, Inc. 8,000 263,200
----------- * Non-income producing investment.
1,061,160 u American Depositary Receipt.
-----------
Packaging & Containers - 0.18%
Sealed Air Corporation 1,252 64,566 Summary of Investments by Industry
-----------
% of Net
Pipelines - 3.71% Industry Assets Market Value
Kinder Morgan, Inc. 13,400 1,346,432 ----------------------------------------------------------------
----------- Apparel 0.80% $ 289,116
Banks 5.99% 2,173,117
Retail - 6.94% Beverages 12.68% 4,596,596
* Chico's FAS, Inc. 3,600 107,892 Building Materials 0.72% 263,013
Costco Wholesale Corporation 6,500 344,045 Chemicals 1.33% 482,249
Home Depot Inc. 13,000 495,560 Commercial Services 3.02% 1,093,352
Lowe's Companies, Inc. 5,300 330,084 Computers 0.16% 57,250
McDonald's Corporation 7,000 232,190 Cosmetics & Personal Care 6.92% 2,511,504
OSI Restaurant Partners, Inc. 1,800 66,024 Diversified Financial Services 6.26% 2,269,530
Pier 1 Imports, Inc. 1,000 8,490 Electric 4.87% 1,766,268
The Gap, Inc. 10,000 182,000 Foods 4.02% 1,457,189
Wal-Mart Stores, Inc. 10,100 489,345 Hand/Machine Tools 0.49% 179,400
Yum! Brands, Inc. 5,150 259,560 Health Care Services 0.00% 41
----------- Home Builders 0.22% 79,730
2,515,190 Housewares 0.08% 27,700
----------- Insurance - Multiline 7.92% 2,872,838
Software - 1.88% Insurance - Property & Casualty 16.31% 5,916,554
First Data Corporation 14,770 681,045 Internet 0.25% 89,700
----------- Media 6.04% 2,190,688
Miscellaneous Manufacturer 0.26% 94,885
Textiles - 4.37% Money Market Fund 1.68% 608,367
* Mohawk Industries, Inc. 21,495 1,584,181 Mutual Fund 0.13% 48,560
----------- Oil & Gas 2.93% 1,061,160
Packaging & Containers 0.18% 64,566
Total Common Stocks (Cost $29,870,214) 35,663,294 Pipelines 3.71% 1,346,432
----------- Retail 6.94% 2,515,190
Software 1.88% 681,045
MUTUAL FUND - 0.13% Textiles 4.37% 1,584,181
Aberdeen Asia - Pacific Income Fund ----------------------------------------------------------------
(Cost $48,975) 8,000 48,560 Total 100.16% $ 36,320,221
-----------
See Notes to Financial Statements
WISDOM FUND
Statement of Assets and Liabilities
As of May 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments, at value (cost $30,527,556) .............................................................. $36,320,221
Receivables:
Fund shares sold ................................................................................. 9,177
Interest and dividends ........................................................................... 56,277
Prepaid expenses ...................................................................................... 41,616
-----------
Total assets .......................................................................................... 36,427,291
-----------
Liabilities:
Payables:
Fund shares repurchased .......................................................................... 99,699
Accrued expenses ...................................................................................... 64,424
-----------
Total liabilities ..................................................................................... 164,123
-----------
Net Assets .................................................................................................. $36,263,168
===========
Net Assets Consist of:
Capital (par value and paid in surplus) ............................................................... $28,794,371
Accumulated net realized gain on investments .......................................................... 1,676,132
Net unrealized appreciation on investments ............................................................ 5,792,665
-----------
Total Net Assets ...................................................................................... $36,263,168
===========
Institutional Class Shares Outstanding, no par value (unlimited shares authorized) .......................... 344,178
Net Assets - Institutional Class Shares ............................................................... $ 4,385,701
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ................................ $ 12.74
Investor Class Shares Outstanding, no par value (unlimited shares authorized) ............................... 876,776
Net Assets - Investor Class Shares .................................................................... $11,060,818
Net Asset Value, Redemption Price Per Share ........................................................... $ 12.62
Maximum Offering Price Per Share (100 / 97 of $12.62) ................................................. $ 13.01
Class B Shares Outstanding, no par value (unlimited shares authorized) ...................................... 1,056,335
Net Assets - Class B Shares ........................................................................... $12,841,744
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ................................ $ 12.16
Class C Shares Outstanding, no par value (unlimited shares authorized) ...................................... 652,553
Net Assets - Class C Shares ........................................................................... $ 7,974,905
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ................................ $ 12.22
See Notes to Financial Statements
WISDOM FUND
Statement of Operations
For the Year ended May 31, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Interest ............................................................................................... $ 53,033
Dividends .............................................................................................. 906,546
-----------
Total Income ........................................................................................... 959,579
-----------
Expenses:
Advisory fees (note 2) ................................................................................. 207,402
Administration fees (note 2) ........................................................................... 51,851
Transfer agent fees (note 2) ........................................................................... 44,271
Fund accounting fees (note 2) .......................................................................... 58,148
Compliance service fees (note 2) ....................................................................... 7,750
Custody fees (note 2) .................................................................................. 12,071
Distribution and service fees - Investor Class Shares (note 3) ......................................... 34,335
Distribution and service fees - Class B Shares (note 3) ................................................ 138,451
Distribution and service fees - Class C Shares (note 3) ................................................ 91,392
Legal fees ............................................................................................. 29,834
Audit and tax preparation fees ......................................................................... 15,761
Registration and filing administration fees (note 2) ................................................... 27,537
Registration and filing expenses ....................................................................... 29,491
Shareholder servicing expenses ......................................................................... 9,465
Printing expenses ...................................................................................... 8,398
Trustee fees and meeting expenses ...................................................................... 5,181
Securities pricing fees ................................................................................ 6,284
Other operating expenses ............................................................................... 15,788
-----------
Total Expenses ......................................................................................... 793,410
-----------
Net Investment Income ........................................................................................ 166,169
-----------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment and foreign securities transactions .................................. 2,024,908
Net realized gain from option transactions ............................................................. 31,407
Change in unrealized appreciation on investments and foreign currency translations ..................... (1,358,157
Payment from affiliate (note 2) ........................................................................ 10,752
-----------
Realized and Unrealized Gain on Investments .................................................................. 708,910
-----------
Net Increase in Net Assets Resulting from Operations ......................................................... $ 875,079
===========
See Notes to Financial Statements
WISDOM FUND
Statements of Changes in Net Assets
For the Fiscal Year ended May 31, 2006 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income $ 166,169 $ 2,119
Net realized gain from investment and foreign securities transactions 2,067,067 1,837,541
Change in unrealized appreciation on investments and
foreign currency translations (1,358,157) 616,822
-------------- ------------
Net Increase in Net Assets Resulting from Operations 875,079 2,456,482
-------------- ------------
Distributions to Shareholders: (note 6)
Net investment income
Institutional Class Shares (16,352) -
Investor Class Shares (52,684) -
Class B Shares (61,600) -
Class C Shares (36,656) -
Net realized gain from investment transactions
Institutional Class Shares (242,457) (66,528)
Investor Class Shares (719,597) (279,815)
Class B Shares (769,728) (209,450)
Class C Shares (515,445) (126,328)
-------------- ------------
Decrease in Net Assets Resulting from Distributions (2,414,519) (682,121)
-------------- ------------
Capital Share Transactions: (note 7)
Institutional Class Shares
Shares sold 87,742 229,150
Reinvested dividends and distributions 256,342 66,296
Shares repurchased (918,118) (225,257)
Investor Class Shares
Shares sold 783,538 3,663,038
Reinvested dividends and distributions 719,184 264,457
Shares repurchased (9,203,864) (5,337,005)
Class B Shares
Shares sold 416,745 1,093,890
Reinvested dividends and distributions 806,990 203,679
Shares repurchased (2,438,592) (1,984,011)
Class C Shares
Shares sold 741,413 1,818,621
Reinvested dividends and distributions 527,201 121,045
Shares repurchased (2,584,322) (1,232,810)
Decrease from Capital Share Transactions (10,805,741) (1,318,907)
-------------- ------------
Net (Decrease) Increase in Net Assets (12,345,181) 455,454
Net Assets:
Beginning of Year 48,608,349 48,152,895
-------------- ------------
End of Year $ 36,263,168 $ 48,608,349
============== ============
See Notes to Financial Statements
WISDOM FUND
Financial Highlights
Institutional Class Shares
For a share outstanding during
the fiscal year ended May 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 13.16 $ 12.62 $ 11.12 $ 11.54 $ 10.80
------- ------- ------- ------- -------
Income (Loss) from Investment Operations
Net investment income (loss) (a) 0.16 0.08 0.02 (0.03) (0.02)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 0.19 0.63 1.48 (0.39) 0.85
------- ------- ------- ------- -------
Total from Investment Operations 0.35 0.71 1.50 (0.42) 0.83
Less Distributions:
Dividends (from net investment income) (0.05) - - - -
Distributions (from capital gains) (0.72) (0.17) - - (0.09)
------- ------- ------- ------- -------
Total Distributions (0.77) (0.17) - - (0.09)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 12.74 $ 13.16 $ 12.62 $ 11.12 $ 11.54
======= ======= ======= ======= =======
Total return 2.63 % 5.65 % 13.49 % (3.64)% 7.78 %
Net Assets, End of Year (in thousands) $ 4,386 $ 5,090 $ 4,811 $ 4,229 $ 3,925
Average Net Assets for the Year (in thousands) $ 4,762 $ 4,953 $ 4,452 $ 3,862 $ 3,444
Ratios of:
Gross Expenses to Average Net Assets (c) 1.28 % 1.23 % 1.29 % 1.67 % 3.19 %
Net Expenses to Average Net Assets (c) 1.28 % 1.23 % 1.29 % 1.62 % 1.71 %
Net Investment Income (Loss) to Average Net Assets 1.05 % 0.60 % 0.14 % (0.25)% (0.17)%
Portfolio turnover rate 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
Investor Class Shares
For a share outstanding during
the fiscal year ended May 31, 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 13.07 $ 12.57 $ 11.10 $ 11.56 $ 10.84
-------- ------- ------- -------- -------
Income (Loss) from Investment Operations
Net investment income (loss) (a) 0.15 0.05 (0.01) (0.04) (0.04)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 0.17 0.62 1.48 (0.42) 0.85
-------- ------- ------- -------- -------
Total from Investment Operations 0.32 0.67 1.47 (0.46) 0.81
-------- ------- ------- -------- -------
Less Distributions:
Dividends (from net investment income) (0.05) - - - -
Distributions (from capital gains) (0.72) (0.17) - - (0.09)
-------- ------- ------- -------- -------
Total Distributions (0.77) (0.17) - - (0.09)
-------- ------- ------- -------- -------
Net Asset Value, End of Year $ 12.62 $ 13.07 $ 12.57 $ 11.10 $ 11.56
======== ======= ======== ======== =======
Total return (b) 2.45 % 5.36 % 13.24 % (3.98)% 7.57 %
Net Assets, End of Year (in thousands) $ 11,061 $19,177 $ 19,789 $ 13,825 $2,740
Average Net Assets for the Year (in thousands) $ 13,734 $20,625 $ 17,326 $ 8,861 $ 1,794
Ratios of:
Gross Expenses to Average Net Assets (c) 1.53 % 1.48 % 1.54 % 1.91 % 3.39 %
Net Expenses to Average Net Assets (c) 1.53 % 1.48 % 1.54 % 1.87 % 1.96 %
Net Investment Income (Loss) to Average Net Assets 0.81 % 0.34 % (0.11)% (0.53)% (0.48)%
Portfolio turnover rate 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
(a) No effect to net investment income due to reimbursement of $10,752 by
Advisor for certain trade errors.
(b) Total return does not reflect payment of a sales charge.
(c) The expense ratios listed reflect total expenses prior to any waivers
and reimbursements (gross expense ratio) and after waivers and
reimbursements (net expense ratio).
See Notes to Financial Statements
(Continued)
WISDOM FUND
Financial Highlights
Class B Shares
For a share outstanding during
the fiscal year ended May 31, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 12.72 $ 12.33 $ 10.97 $ 11.50 $ 10.87
------- ------- ------- ------- -------
Income (Loss) from Investment Operations
Net investment income (loss) (a) 0.00 (0.05) (0.10) (0.10) (0.07)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 0.22 0.61 1.46 (0.43) 0.79
------- ------- ------- ------- -------
Total from Investment Operations 0.22 0.56 1.36 (0.53) 0.72
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.06) - - - -
Distributions (from capital gains) (0.72) (0.17) - - (0.09)
------- ------- ------- ------- -------
Total Distributions (0.78) (0.17) - - (0.09)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 12.16 $ 12.72 $ 12.33 $ 10.97 $ 11.50
======= ======= ======= ======= =======
Total return (b) 1.66 % 4.56 % 12.40 % (4.61)% 6.72 %
Net Assets, End of Year (in thousands) $ 12,842 $ 14,660 $14,871 $ 12,796 $4,307
Average Net Assets for the Year (in thousands) $ 13,845 $ 15,060 $ 14,097 $8,738 $ 2,146
Ratios of:
Gross Expenses to Average Net Assets (c) 2.28 % 2.23 % 2.29 % 2.66 % 4.14 %
Net Expenses to Average Net Assets (c) 2.28 % 2.23 % 2.29 % 2.62 % 2.71 %
Net Investment Income (Loss) to Average Net Assets 0.07 % (0.41)% (0.86)% (1.27)% (1.23)%
Portfolio turnover rate 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
Class C Shares
For a share outstanding during
the fiscal year ended May 31, 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year $ 12.78 $ 12.38 $ 11.01 $ 11.54 $ 10.91
------- ------- ------- ------- -------
Income (Loss) from Investment Operations
Net investment income (loss) (a) 0.00 (0.05) (0.09) (0.09) (0.10)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 0.21 0.62 1.46 (0.44) 0.82
------- ------- ------- ------- -------
Total from Investment Operations 0.21 0.57 1.37 (0.53) 0.72
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.05) - - - -
Distributions (from capital gains) (0.72) (0.17) - - (0.09)
------- ------- ------- ------- -------
Total Distributions (0.77) (0.17) - - (0.09)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 12.22 $ 12.78 $ 12.38 $ 11.01 $ 11.54
======= ======= ======= ======= =======
Total return (b) 1.60 % 4.63 % 12.44 % (4.59)% 6.69 %
Net Assets, End of Year (in thousands) $ 7,975 $ 9,681 $ 8,682 $ 5,635 $ 1,808
Average Net Assets for the Year (in thousands) $ 9,139 $ 9,212 $ 6,972 $ 3,560 $ 1,274
Ratios of:
Gross Expenses to Average Net Assets (c) 2.28 % 2.23 % 2.29 % 2.66 % 4.18 %
Net Expenses to Average Net Assets (c) 2.28 % 2.23 % 2.29 % 2.62 % 2.71 %
Net Investment Income (Loss) to Average Net Assets 0.07 % (0.39)% (0.86)% (1.27)% (1.19)%
Portfolio turnover rate 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
(a) No effect to net investment income due to reimbursement of $10,752 by
Advisor for certain trade errors.
(b) Total return does not reflect payment of a sales charge.
(c) The expense ratios listed reflect total expenses prior to any waivers
and reimbursements (gross expense ratio) and after waivers and
reimbursements (net expense ratio).
See Notes to Financial Statements
WISDOM FUND
Notes to Financial Statements
___________________________________________________________________________________________________________________________
1. Organization and Significant Accounting Policies traded closes early or if trading of the particular
portfolio security is halted during the day and does not
The Wisdom Fund (the "Fund") is a series fund. The Fund is resume prior to the Fund's net asset value calculation) or
part of the New Providence Investment Trust (the "Trust"), which cannot be accurately valued using the Fund's normal
which was organized as a Massachusetts business trust and is pricing procedures are valued at fair value as determined in
registered under the Investment Company Act of 1940 (the good faith under policies approved by the Trustees. A
"1940 Act"), as amended, as an open-ended management portfolio security's "fair value" price may differ from the
investment company. The Fund is classified as a price next available for that portfolio security using the
"diversified" company as defined in the 1940 Act. Fund's normal pricing procedures. Investment companies are
valued at net asset value. Instruments with maturities of 60
The Wisdom Fund commenced operations February 16, 1999. The days or less are valued at amortized cost, which
investment objective of the Fund is to seek maximum total approximates market value.
returns consisting of any combination of capital
appreciation, realized and unrealized, and income under the Investment Transactions and Investment Income
constantly varying market conditions. Investment transactions are accounted for as of the date
purchased or sold (trade date). Dividend income is recorded
The Board of Trustees of the Trust (the "Trustees") on the ex-dividend date. Certain dividends from foreign
approved, on October 7, 1999, a plan to authorize two new securities will be recorded as soon as the Trust is informed
classes of shares designated as Class B Shares and Class C of the dividend if such information is obtained subsequent
Shares. On November 16, 1999, the Class B Shares and Class C to the ex-dividend date. Interest income is recorded on the
Shares became effective. The Fund has an unlimited number of accrual basis and includes amortization of discounts and
authorized shares, which are divided into four classes - premiums. Gains and losses are determined on the identified
Institutional Class Shares, Investor Class Shares, Class B cost basis, which is the same basis used for federal income
Shares and Class C Shares. tax purposes.
Each class of shares has equal rights as to assets of the Expenses
Fund, and the classes are identical except for differences The Fund bears expenses incurred specifically on its behalf
in their sales charge structures and ongoing distribution as well as a portion of general expenses, which are
and service fees. Income, expenses (other than distribution allocated according to methods approved annually by the
and service fees, which are not attributable to the Trustees.
Institutional Class Shares), and realized and unrealized
gains or losses on investments are allocated to each class Foreign Currency Translation
of shares based upon its relative net assets. All classes Portfolio securities and other assets and liabilities
have equal voting privileges, except where otherwise denominated in foreign currencies are translated into U.S.
required by law or when the Trustees determine that the dollars based on the exchange rate of such currencies
matter to be voted on affects only the interests of the against U.S. dollars on the date of valuation. Purchases and
shareholders of a particular class. sales of securities and income items denominated in foreign
currencies are translated into U.S. dollars at the exchange
The following accounting policies have been consistently rate in effect on the transaction date.
followed by the Fund and are in conformity with accounting
principles generally accepted in the United States of The Fund does not separately report the effect of changes in
America in the investment company industry. foreign exchange rates from changes in market prices on
securities held. Such changes are included in net realized
Investment Valuation and unrealized gain or loss from investments and foreign
The Fund's investments in securities are carried at value. currency transactions.
Securities listed on an exchange or quoted on a national
market system are valued at the last sales price as of 4:00 Realized foreign exchange gains or losses arise from sales
p.m. Eastern Time. Securities traded in the NASDAQ of foreign currencies, currency gains or losses realized
over-the-counter market are generally valued at the NASDAQ between the trade and settlement dates on securities
Official Closing Price. Other securities traded in the transactions and the difference between the recorded amounts
over-the-counter market and listed securities for which no of dividends, interest, and foreign
sale was reported on that date are valued at the most recent
bid price. Securities and assets for which representative
market quotations are not readily available (e.g., if the
exchange on which the portfolio security is principally
(Continued)
WISDOM FUND
Notes to Financial Statements
____________________________________________________________________________________________________________________________
withholding taxes, and the U.S. dollar equivalent of the The Advisor currently intends to voluntarily waive all or a
amounts actually received or paid. Net unrealized foreign portion of its fee and to reimburse expenses of the Fund to
exchange gains and losses arise from changes in foreign limit total Fund operating expenses to a maximum of 1.75% of
exchange rates on foreign denominated assets and liabilities the average daily net assets of the Fund's Institutional
other than investments in securities held at the end of the Class Shares, Investor Class Shares, Class B Shares and
reporting period. Class C Shares, exclusive of interest, taxes, brokerage fees
and commissions, extraordinary expenses, and payments, if
Dividend Distributions any, under a Rule 12b-1 Plan. There can be no assurances
The Fund may declare and distribute dividends from net that the foregoing voluntary fee waivers or reimbursements
investment income (if any) quarterly. Distributions from will continue. The Fund may, at a later date, reimburse the
capital gains (if any) are generally declared and Advisor for the management fees waived or limited, and/or
distributed annually. The Fund may also make a supplemental other expenses assumed and paid by the Advisor pursuant to
distribution subsequent to the end of its fiscal year. the Expense Limitation Agreement during any of the previous
three (3) fiscal years provided that the Fund has reached a
Estimates sufficient asset size to permit such reimbursement to be
The preparation of financial statements in conformity with made without causing the total annual expense ratio of the
accounting principles generally accepted in the United Fund to exceed 1.75%, as stated above. For the fiscal years
States of America requires management to make estimates and ended 2004, 2005 and 2006, there were no waived or
assumptions that affect the amount of assets, liabilities, reimbursed expenses.
expenses and revenues reported in the financial statements.
Actual results could differ from those estimates. During the fiscal year ended May 31, 2006, the Advisor
reimbursed the Fund $10,752 for certain trading errors.
Federal Income Taxes
No provision for income taxes is included in the Administrator
accompanying financial statements, as the Fund intends to The Fund pays a monthly administration fee to The Nottingham
distribute to shareholders all taxable investment income and Company (the "Administrator") based upon the average daily
realized gains and otherwise complies with the requirements net assets of the respective share class and calculated at
of Subchapter M of the Internal Revenue Code applicable to the annual rates as shown in the schedule provided on the
regulated investment companies. following page. The Administrator also receives a fee to
procure and pay the custodian for the Fund, additional
Indemnifications compensation for fund accounting and recordkeeping service
Under the Trust's organizational documents, its officers and and additional compensation for certain costs involved with
Trustees are indemnified against certain liabilities arising the daily valuation of securities and as reimbursement for
out of the performance of their duties to the Fund. In out-of-pocket expenses (which are immaterial in amount). A
addition, in the normal course of business, the Fund enters breakdown of these fees is provided on the following page.
into contracts with their vendors and others that provide
for general indemnifications. The Fund's maximum exposure Certain Trustees and officers of the Trust are also officers
under these arrangements is unknown, as this would involve of the Advisor or the Administrator.
future claims that may be made against the Fund. The Fund
expects the risk of loss to be remote. Compliance Services
The Nottingham Compliance Services, LLC, a wholly owned
2. Transactions with Affiliates affiliate of The Nottingham Company, provides services which
assists the Trust's Chief Compliance Officer in monitoring
Advisor and testing the policies and procedures of the Trust as
The Fund pays a monthly advisory fee to Atlanta Investment required by Rule 38a-1 of the Securities and Exchange
Counsel, LLC (the "Advisor") based upon the annual rate of Commission. It receives compensation for this service at an
0.50% of the first $500 million of the Fund's average daily annual rate of $7,750.
net assets and 0.40% of all assets over $500 million.
(Continued)
WISDOM FUND
Notes to Financial Statements
____________________________________________________________________________________________________________________________
Transfer Agent Distributor
North Carolina Shareholder Services, LLC ("Transfer Agent") Capital Investment Group, Inc. (the "Distributor") serves as
serves as transfer, dividend paying, and shareholder the Fund's principal underwriter and distributor. The
servicing agent for the Fund. It receives compensation for Distributor receives any sales charges imposed on purchases
its services based upon a fee of $15 per shareholder per of shares and re-allocates a portion of such charges to
year, subject to a minimum fee of $1,500 per month, plus dealers through whom the sale was made, if any. For the
$500 per month for each additional class of shares. fiscal year ended May 31, 2006, the Distributor retained
sales charges in the amount of $3,390.
- ----------------------------------------------------------------------------------------------------------------------------
Fund Accounting
Asset Based Fees
Administration Fees (a) Custody Fees (b) Fund
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 0.020% $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.
(b) Subject to a minimum fee of $400 per month.
3. Distribution and Service Fees 4. Purchases and Sales of Investment Securities
The Trustees, including a majority of the Trustees who are For the fiscal year ended May 31, 2006, the aggregate cost
not "interested persons" of the Trust as defined in the 1940 of purchases and proceeds from sales of investment
Act, adopted distribution and service plans pursuant to Rule securities (excluding short-term securities) are shown in
12b-1 of the 1940 Act (the "Plans") applicable to the the table below:
Investor Class Shares, Class B Shares and Class C Shares.
The 1940 Act regulates the manner in which a regulated ------------------------------------------------------------
investment company may assume costs of distributing and Proceeds from
promoting the sales of its shares and servicing of its Purchases of Securities Sales of Securities
shareholder accounts. The Plan provides that the Fund may ------------------------------------------------------------
incur certain costs, which may not exceed 0.25% per annum of $7,418,084 $14,204,049
the average daily net assets of the Investor Class Shares or ------------------------------------------------------------
1.00% per annum of the average daily net assets of the Class
B or Class C Shares for each year elapsed subsequent to There were no purchases or sales of long-term U.S.
adoption of the Plans, for payment to the Distributor and Government Obligations during the fiscal year ended May 31,
others for items such as advertising expenses, selling 2006.
expenses, commissions, travel, or other expenses reasonably
intended to result in sales of Investor Class Shares, Class 5. Options Written
B Shares and Class C Shares in the Fund or support servicing
of those classes' shareholder accounts. The Fund incurred ------------------------------------------------------------
$34,335, $138,451, and $91,392, in distribution and service
fees under the Plans with respect to Investor Class Shares, Option Contracts Written for the
Class B Shares, and Class C Shares, respectively, for the Fiscal Year ended Number of Premiums
fiscal year ended May 31, 2006. May 31, 2006. Contracts Received
------------------------------------------------------------
Options Outstanding,
Beginning of Year - $ -
------------------------------------------------------------
Options written 147 31,407
Options exercised (105) (26,076)
Options expired (42) (5,331)
------------------------------------------------------------
Options Outstanding,
End of Year - $ -
------------------------------------------------------------
(Continued)
WISDOM FUND
Notes to Financial Statements
____________________________________________________________________________________________________________________________
6. Federal Income Tax tax purposes for the fiscal year ended May 31, 2006 and
2005.
The information in the tables below represent: (1) tax
components of capital, (2) unrealized appreciation or Other book tax differences in the current year primarily
depreciation of investments for federal income tax purposes, consist of post October loss deferrals.
and (3) characterization of distributions for federal income
- ----------------------------------------------------------------------------------------------------------------------------
Undistributed Ordinary Undistributed Long Accumulated Other Book to Tax
Income Term Gains Capital Losses Differences Net Tax Appreciation
- ----------------------------------------------------------------------------------------------------------------------------
$ - $1,694,752 $ - $(18,620) $5,792,665
- ----------------------------------------------------------------------------------------------------------------------------
The aggregate cost of investments and the composition of
unrealized appreciation and depreciation of investment
securities for federal income tax purposes as of May 31,
2006 are noted below.
- ----------------------------------------------------------------------------------------------------------------------------
Federal Tax Cost Aggregate Gross Unrealized Appreciation Aggregate Gross Unrealized Depreciation
- ----------------------------------------------------------------------------------------------------------------------------
$30,527,556 $6,881,231 $(1,088,566)
- ----------------------------------------------------------------------------------------------------------------------------
The amount of dividends and distributions from net short-term gains, deferral of wash sale losses, foreign
investment income and net realized capital gains are currency transactions, net investment losses and capital
determined in accordance with federal income tax regulations loss carry-forwards. Certain permanent differences such as
which may differ from accounting principles generally tax returns of capital and net investment losses, if any,
accepted in the United States of America. These differences would be re-classified against capital.
are due to differing treatments for items such as net
- ----------------------------------------------------------------------------------------------------------------------------
Distributions from
For the fiscal year ended Ordinary Income Long-Term Capital Gains
- ----------------------------------------------------------------------------------------------------------------------------
May 31, 2006 $167,292 $2,247,227
- ----------------------------------------------------------------------------------------------------------------------------
May 31, 2005 $ - $682,121
- ----------------------------------------------------------------------------------------------------------------------------
As a result of the Fund's foreign currency transactions a decrease accumulated realized gain and $14 to decrease
reclassification adjustment of $11,748 has been made to paid-in-capital. This reclassification had no effect on the
increase undistributed net investment income, $11,734 to Fund's net asset value.
7. Capital Share Transactions
- ----------------------------------------------------------------------------------------------------------------------------
Institutional Class Investor Class
For the fiscal year ended May 31, 2006 2005 2006 2005
- ----------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares
Shares sold 6,705 18,062 59,691 289,599
Reinvested distributions 20,094 5,065 56,833 20,312
Shares repurchased (69,363) (17,562) (706,661) (417,343)
Net (Decrease) Increase in Capital Shares (42,564) 5,565 (590,137) (107,432)
Shares Outstanding, Beginning of Year 386,742 381,177 1,466,913 1,574,345
Shares Outstanding, End of Year 344,178 386,742 876,776 1,466,913
- ----------------------------------------------------------------------------------------------------------------------------
WISDOM FUND
Notes to Financial Statements
- ----------------------------------------------------------------------------------------------------------------------------
7. Capital Share Transactions
- ----------------------------------------------------------------------------------------------------------------------------
Class B Class C
For the fiscal year ended May 31, 2006 2005 2006 2005
- ----------------------------------------------------------------------------------------------------------------------------
Transactions in Fund Shares
Shares sold 33,286 8,251 58,972 145,631
Reinvested distributions 65,959 16,025 42,878 9,479
Shares repurchased (195,290) (158,165) (206,959) (98,651)
Net (Decrease) Increase in Capital Shares (96,045) (53,889) (105,109) 56,459
Shares Outstanding, Beginning of Year 1,152,380 1,206,269 757,662 701,203
Shares Outstanding, End of Year 1,056,335 1,152,380 652,553 757,662
- ----------------------------------------------------------------------------------------------------------------------------
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, 2005 and 2004. 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 no 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.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of
New Providence Investment Trust
and the Shareholders of the Wisdom Fund
We have audited the accompanying statement of assets and liabilities of the
Wisdom Fund, a series of shares of the New Providence Investment Trust,
including the schedule of investments, as of May 31, 2006, and the related
statement of operations, the statement of changes in net assets and the
financial highlights for 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 audit. The statement of changes in net assets
for the year ended May 31, 2005 and the financial highlights for each of the
four years ended May 31, 2005 were audited by other auditors whose report dated
July 8, 2005 expressed an unqualified opinion on such financial statement and
financial highlights.
We conducted our audit 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of May 31, 2006 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides 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 the
Wisdom Fund as of May 31, 2006, the results of its operations, the changes in
its net assets and its financial highlights for year then ended, in conformity
with accounting principles generally accepted in the United States of America.
/s/ BRIGGS, BUNTING & DOUGHERTY, LLP
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
June 23, 2006
WISDOM FUND
Additional Information (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------
1. Proxy Voting Policies and Voting Record 3. Information about Trustees and Officers
A copy of the Trust's Proxy Voting and Disclosure Policy and The business and affairs of the Fund and the Trust are
the Advisor's Proxy Voting and Disclosure Policy are managed under the direction of the Trustees. Information
included as Appendix B to the Fund's Statement of Additional concerning the Trustee and officers of the Trust and Fund is
Information and is available, without charge, upon request, set forth below. Generally, each Trustee and officer serves
by calling 1-800-773-3863. Information regarding how the an indefinite term or until certain circumstances such as
Fund voted proxies relating to portfolio securities during their resignation, death, or otherwise as specified in the
the most recent 12-month period ended June 30 is available Trust's organizational documents. Any Trustee may be removed
(1) without charge, upon request, by calling the Fund at the at a meeting of shareholders by a vote meeting the
number above and (2) on the SEC's website at requirements of the Trust's organizational documents. The
http://www.sec.gov. Statement of Additional Information of the Fund includes
additional information about the Trustee and officers and is
2. Quarterly Portfolio Holdings available, without charge, upon request by calling the Fund
toll-free at 1-800-773-3863. The address of each Trustee and
The Fund files its complete schedule of portfolio holdings officer, unless otherwise indicated below, is 116 South
with the SEC for the first and third quarters of each fiscal Franklin Street, Rocky Mount, North Carolina 27804. The
year on Form N-Q. The Fund's Forms N-Q are available on the Trustee received aggregate compensation of $3,000 during the
SEC's website at http://www.sec.gov. You may review and make fiscal year ended May 31, 2006 from the Fund for his
copies at the SEC's Public Reference Room in Washington, services to the Fund and Trust. The officers did not receive
D.C. You may also obtain copies after paying a duplicating compensation from the Fund for their services to the Fund
fee by writing the SEC's Public Reference Section, and Trust.
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.
- ------------------------------------------------------------------------------------------------------------------------------------
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, 74 Trustee Since Retired; Previously, President 1 Independent Trustee - Gardner
1997 of Brinson Investment Co. Lewis Investment Trust for the
(personal investments) and three series of that trust; The
President of Brinson Chevrolet, Nottingham Investment Trust II
Inc. (auto 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; 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, 55 President, Since President (since 1998) of n/a n/a
Atlanta Investment Counsel, Treasurer, 2003 Atlanta Investment Counsel,
LLC Principal LLC (Adviser of the Fund);
3717 Haddon Hall Road, NW Executive previously, stockbroker at
Suite 200 Officer, Lehman Brothers
Atlanta, GA 30327 and
Principal
Financial
Officer
- ------------------------------------------------------------------------------------------------------------------------------------
WISDOM FUND
Additional Information (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------------
Tracey L. Hendricks, 38 Assistant Since Vice President of Financial n/a n/a
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
- ------------------------------------------------------------------------------------------------------------------------------------
Julian G. Winters, 37 Secretary Since Vice President-Compliance n/a n/a
and 2004 Administration (since 1998) of
Assistant The Nottingham Company
Treasurer
- ------------------------------------------------------------------------------------------------------------------------------------
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.
(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 fiscal years
ended May 31, 2005 and May 31, 2006 are reflected in the table below.
These amounts represent aggregate fees billed by the registrant's former
independent accountant, Deloitte & Touche LLP ("Former Accountant"), for
the fiscal year ended May 31, 2005 and Briggs, Bunting & Dougherty, LLP
for the fiscal year ended May 31, 2006 ("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 2005 2006
- -------------------------------------------------------------------------------
Wisdom Fund $ 14,000 $13,500
- -------------------------------------------------------------------------------
(b) Audit-Related Fees - There were no additional fees billed in the fiscal
years ended May 31, 2005 or 2006 for assurance and related services by
the Former Accountant or 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 Former Accountant and 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 and assistance with distribution
calculations.
- -------------------------------------------------------------------------------
Fund 2005 2006
- -------------------------------------------------------------------------------
Wisdom Fund $ 5,000 $1,500
- -------------------------------------------------------------------------------
(d) All Other Fees -There were no other fees billed by the Former Accountant
or 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
Former Accountant and 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) Aggregate non-audit fees billed by the Former Accountant and Accountant,
to the registrant for services rendered during the fiscal years ended May
31, 2005 and 2006 were $5,000 and $1,500, respectively. There were no
non-audit fees billed by Former Accountant or Accountant for services
rendered to the registrant's investment advisers, or any other entity
controlling, controlled by, or under common control with the registrant's
investment advisers.
(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 18, 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: July 18, 2006