UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08295
---------
New Providence Investment Trust
-------------------------------
(Exact name of registrant as specified in charter)
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Julian G. Winters
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 252-972-9922
------------
Date of fiscal year end: May 31
------
Date of reporting period: November 30, 2006
-----------------
Item 1. REPORTS TO STOCKHOLDERS.
Semi-Annual Report
WISDOM FUND
November 30, 2006
(Unaudited)
INSTITUTIONAL CLASS SHARES
INVESTOR CLASS SHARES
CLASS B SHARES
CLASS C SHARES
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Wisdom Fund (the "Fund"). This
report is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus. Mutual fund shares
are not deposits or obligations of, or guaranteed by, any depository
institution. Shares are not insured by the FDIC, Federal Reserve Board or any
other agency, and are subject to investment risks, including possible loss of
principal amount invested. Neither the Fund nor the Fund's distributor is a
bank.
Distributor: Capital Investment Group, Inc., 116 S. Franklin Street, Rocky
Mount, NC 27804, Phone 1-800-773-3863
- --------------------------------------------------------------------------------
Investment in the Fund is 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 at
www.nottinghamco.com or by calling Shareholder Services at 1-800-773-3863. The
prospectus should be read carefully before investing.
- --------------------------------------------------------------------------------
This Semi-Annual Report was first distributed to shareholders on or about
January 29, 2007.
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.
Fund Expense Example (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 Ending
Account Value Account Value Expenses Paid
Institutional Class Shares June 1, 2006 November 30, 2006 During Period*
- --------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,102.00 $7.43
- --------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before expenses) $1,000.00 $1,018.00 $7.13
- --------------------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
Investor Class Shares June 1, 2006 November 30, 2006 During Period*
- --------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,100.70 $8.74
- --------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before expenses) $1,000.00 $1,016.75 $8.39
- --------------------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
Class B Shares June 1, 2006 November 30, 2006 During Period*
- --------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,096.20 $12.66
- --------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before expenses) $1,000.00 $1,012.99 $12.16
- --------------------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
Class C Shares June 1, 2006 November 30, 2006 During Period*
- --------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,096.60 $12.67
- --------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before expenses) $1,000.00 $1,012.99 $12.16
- --------------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's six month expense ratio (1.41% for the
Institutional Class, 1.66% for the Investor Class, 2.41% for Class B and Class
C) multiplied by the average account value over the period, multiplied by 183
(the number of days in the most recent six months) divided by 365 (to reflect
the semi-annual period).
WISDOM FUND
Schedule of Investments
(Unaudited)
As of November 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- ---------------------------------------------------------------- ---------------------------------------------------------------
COMMON STOCKS - 99.04% Foods - 4.53%
u Cadbury Schweppes PLC 9,500 $ 394,345
Apparel - 1.14% * Dean Foods Company 2,000 85,640
Nike, Inc., Cl. B 3,600 $ 356,220 Sysco Corporation 8,666 310,676
------------ Whole Foods Market Inc. 3,000 146,400
WM Wrigley Jr. Company 6,800 356,592
Banks - 7.33% WM Wrigley Jr. Company, Cl. B 2,450 128,674
M & T Bank Corporation 2,030 240,839 -----------
Wells Fargo Company 58,444 2,059,567 1,422,327
------------ -----------
2,300,406
------------ Hand/Machine Tools - 0.58%
Beverages - 12.44% Kennametal Inc. 3,000 183,240
Anheuser-Busch Companies Inc. 10,700 508,357 -----------
u Cia de Bebidas das Americas 1,000 46,110
Coca-Cola Company 55,430 2,595,787 Health Care Products - 0.63%
u Diageo PLC 3,000 231,870 Johnson & Johnson 3,000 197,730
u Fomento Economico -----------
Mexicano SA de CV 2,000 210,500
PepsiCo Inc. 5,000 309,850 Health Care Services - 0.00%
------------ * Five Star Quality Care, Inc. 4 38
3,902,474 -----------
------------
Insurance - Multiline - 2.72%
Building Materials - 1.60% American International
American Standard Comp. Inc. 6,190 277,374 Group, Inc. 12,150 854,388
* USG Corp 4,000 222,920 -----------
------------
500,294 Insurance - Property & Casualty - 14.99%
Chemicals - 1.39% ------------ * Markel Corporation 5,400 2,417,850
The Sherwin-Williams Company 6,970 435,974 Wesco Financial Corporation 386 185,280
------------ White Mountains Ins. Group Ltd. 3,500 2,099,125
-----------
Commercial Services - 4.29% 4,702,255
H & R Block Inc. 1,000 24,000 Internet - 0.32% -----------
* Iron Mountain, Inc. 2,850 122,835 * Blue Nile Inc. 3,000 100,530
Moody's Corporation 13,410 931,727 -----------
* The Western Union Co. 11,770 268,356 Media - 6.54%
------------ * Comcast Corporation, Cl. A 9,500 384,370
1,346,918 Gannett Company, Inc. 4,298 255,817
------------ The Washington Post
Company, Cl. B 1,920 1,411,008
Cosmetics & Personal Care - 8.47% ----------
Procter & Gamble 42,295 2,655,703 2,051,195
------------
Miscellaneous Manufacturers - 0.56%
Diversified Financial Services - 7.82% General Electric Co 2,000 70,560
American Express Company 41,750 2,451,560 Tyco International Ltd. 3,500 106,015
------------ -----------
176,575
-----------
Electric - 3.69%
* Allegheny Energy, Inc. 17,900 794,044
FPL Group, Inc. 6,800 362,440 Oil & Gas - 2.86%
------------ Chesapeake Energy Corp. 6,000 204,180
1,156,484 ConocoPhillips 2,164 145,637
------------ u PetroChina Company Ltd. 3,000 384,300
* Superior Energy Services, Inc. 5,000 162,850
-----------
896,967
-----------
(Continued)
WISDOM FUND
Schedule of Investments
(Unaudited)
As of November 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Market Value
Shares (Note 1)
- ---------------------------------------------------------------- ---------------------------------------------------------
COMMON STOCKS - (Continued) Summary of Investments by Industry
% of Net
Packaging & Containers - 0.24% Industry Assets Market Value
Sealed Air Corporation 1,252 $ 74,507 ---------------------------------------------------------
------------ Apparel 1.14% $ 356,220
Banks 7.33% 2,300,406
Pharmaceuticals - 1.26% Beverages 12.44% 3,902,474
u Novartis AG 6,000 350,460 Building Materials 1.60% 500,294
u Sanofi-Aventis 1,000 44,010 Chemicals 1.39% 435,974
------------ Commercial Services 4.29% 1,346,918
394,470 Cosmetics & Personal Care 8.47% 2,655,703
------------ Diversified Financial Services 7.82% 2,451,560
Pipelines - 3.15% Electric 3.69% 1,156,484
Kinder Morgan, Inc. 9,400 986,530 Foods 4.53% 1,422,327
------------ Hand/Machine Tools 0.58% 183,240
Health Care Products 0.63% 197,730
Retail - 5.98% Health Care Services 0.00% 38
Costco Wholesale Corporation 6,500 339,690 Insurance - Multiline 2.72% 854,388
Home Depot Inc. 13,000 493,610 Insurance - Property & Casualty 14.99% 4,702,255
McDonald's Corporation 7,000 293,790 Internet 0.32% 100,530
Pier 1 Imports, Inc. 1,000 6,650 Media 6.54% 2,051,195
* Sonic Corp. 1,000 23,480 Miscellaneous Manufacturer 0.56% 176,575
Wal-Mart Stores, Inc. 10,100 465,610 Oil & Gas 2.86% 896,967
Yum! Brands, Inc. 4,150 253,938 Packaging & Containers 0.24% 74,507
------------ Pharmaceuticals 1.26% 394,470
1,876,768 Pipelines 3.15% 986,530
------------ Retail 5.98% 1,876,768
Software - 0.95% Software 0.95% 297,192
First Data Corporation 11,770 297,192 Textiles 5.31% 1,664,358
------------ Transportation 0.25% 77,920
--------------------------------------------------------
Textiles - 5.31% Total 99.04% $ 31,063,023
* Mohawk Industries, Inc. 21,495 1,664,358 ------------ ------------
------------
Transportation - 0.25%
United Parcel Service Inc. 1,000 77,920
------------
Total Common Stocks (Cost $23,442,519) 31,063,023
------------
Total Investments (Cost $23,442,519) - 99.04% $ 31,063,023
Other Assets less Liabilities - 0.96% 301,528
------------
Net Assets - 100.00% $ 31,364,551
============
* Non-income producing investment.
u American Depositary Receipt.
The following acronyms are used in this portfolio:
AG - Corporation Limited by Shares (German)
PLC - Public Limited Company (British)
SA de CV - Convertible Securities (Mexican)
See Notes to Financial Statements
WISDOM FUND
Statement of Assets and Liabilities
(Unaudited)
As of November 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments, at value (cost $23,442,519) ............................................................. $ 31,063,023
Receivables:
Investments sold ................................................................................ 370,854
Fund shares sold ................................................................................ 793
Dividends ....................................................................................... 60,641
Prepaid expenses:
Fund accounting fees (note 2) ................................................................... 4,500
Compliance services fees (note 2) ............................................................... 683
Other expenses .................................................................................. 31,491
------------
Total assets ......................................................................................... 31,531,985
------------
Liabilities:
Payables:
Fund shares repurchased ......................................................................... 28,736
Accrued expenses ..................................................................................... 54,838
Disbursements in excess of cash on demand deposit .................................................... 83,860
------------
Total liabilities .................................................................................... 167,434
------------
Net Assets ................................................................................................. $ 31,364,551
============
Net Assets Consist of:
Capital (par value and paid in surplus) .............................................................. $ 20,978,019
Accumulated net investment loss ...................................................................... (41,387)
Undistributed net realized gain on investments ....................................................... 2,807,415
Net unrealized appreciation on investments ........................................................... 7,620,504
------------
Total Net Assets ..................................................................................... $ 31,364,551
============
Institutional Class Shares Outstanding, no par value (unlimited shares authorized) ......................... 323,498
Net Assets - Institutional Class Shares .............................................................. $ 4,541,640
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ............................... $ 14.04
Investor Class Shares Outstanding, no par value (unlimited shares authorized) .............................. 512,785
Net Assets - Investor Class Shares (a) ............................................................... $ 7,118,382
Net Asset Value, Redemption Price Per Share .......................................................... $ 13.88
Maximum Offering Price Per Share (Net Asset Value / 0.9425) .......................................... $ 14.73
Class B Shares Outstanding, no par value (unlimited shares authorized) ..................................... 939,052
Net Assets - Class B Shares (a) ...................................................................... $ 12,514,550
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ............................... $ 13.33
Class C Shares Outstanding, no par value (unlimited shares authorized) ..................................... 536,673
Net Assets - Class C Shares (a) ...................................................................... $ 7,189,979
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ............................... $ 13.40
(a) Investor, Class B and Class C Shares have a contingent deferred sales charge (note 1).
See Notes to Financial Statements
WISDOM FUND
Statement of Operations
(Unaudited)
For the six month period ended November 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends ......................................................................................... $ 300,178
-----------
Total Income ...................................................................................... 300,178
-----------
Expenses:
Advisory fees (note 2) ............................................................................ 82,258
Administration fees (note 2) ...................................................................... 20,564
Transfer agent fees (note 2) ...................................................................... 18,491
Fund accounting fees (note 2) ..................................................................... 28,645
Compliance services fees (note 2) ................................................................. 3,875
Custody fees (note 2) ............................................................................. 5,095
Distribution and service fees - Investor Class Shares (note 3) .................................... 10,897
Distribution and service fees - Class B Shares (note 3) ........................................... 62,365
Distribution and service fees - Class C Shares (note 3) ........................................... 36,649
Legal fees ........................................................................................ 13,687
Audit and tax preparation fees .................................................................... 7,521
Registration and filing administration fees (note 2) .............................................. 14,063
Registration and filing expenses .................................................................. 14,138
Shareholder servicing expenses .................................................................... 4,764
Printing expenses ................................................................................. 4,262
Trustee fees and meeting expenses ................................................................. 3,009
Securities pricing fees ........................................................................... 3,259
Other operating expenses .......................................................................... 8,023
-----------
Total Expenses .................................................................................... 341,565
-----------
Net Investment Loss ..................................................................................... (41,387)
-----------
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions .................................................... 1,131,283
Change in unrealized appreciation on investments .................................................. 1,827,839
-----------
Realized and Unrealized Gain on Investments ............................................................. 2,959,122
-----------
Net Increase in Net Assets Resulting from Operations .................................................... $ 2,917,735
===========
See Notes to Financial Statements
WISDOM FUND
Statements of Changes in Net Assets
November 30, May 31,
For the six month period and fiscal year ended, 2006 (a) 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment (loss) income ............................................. $ (41,387) $ 166,169
Net realized gain from investment and foreign security transactions ...... 1,131,283 2,067,067
Change in unrealized appreciation on investments and
foreign currency transactions ........................................ 1,827,839 (1,358,157)
------------ ------------
Net Increase in Net Assets Resulting from Operations .......................... 2,917,735 875,079
------------ ------------
Distributions to Shareholders: (note 5)
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)
Investor Class Shares ................................................ -- (719,597)
Class B Shares ....................................................... -- (769,728)
Class C Shares ....................................................... -- (515,445)
------------ ------------
Decrease in Net Assets Resulting from Distributions ........................... -- (2,414,519)
------------ ------------
Capital Share Transactions: (note 6)
Institutional Class Shares
Shares sold .......................................................... 21,254 87,742
Reinvested dividends and distributions ............................... -- 256,342
Shares repurchased ................................................... (293,721) (918,118)
Investor Class Shares
Shares sold .......................................................... 133,790 783,538
Reinvested dividends and distributions ............................... -- 719,184
Shares repurchased ................................................... (4,776,736) (9,203,864)
Class B Shares
Shares sold .......................................................... 42,702 416,745
Reinvested dividends and distributions ............................... -- 806,990
Shares repurchased ................................................... (1,507,543) (2,438,592)
Class C Shares
Shares sold .......................................................... 61,053 741,413
Reinvested dividends and distributions ............................... -- 527,201
Shares repurchased ................................................... (1,497,151) (2,584,322)
------------ ------------
Decrease from Capital Share Transactions ...................................... (7,816,352) (10,805,741)
------------ ------------
Net Decrease in Net Assets .................................................... (4,898,617) (12,345,181)
------------ ------------
Net Assets:
Beginning of Period ...................................................... 36,263,168 48,608,349
------------ ------------
End of Period ............................................................ $ 31,364,551 $ 36,263,168
============ ============
Accumulated Net Investment Loss ............................................... $ (41,387) -
(a) Unaudited .................................................................
See Notes to Financial Statements
WISDOM FUND
Financial Highlights
Institutional Class Shares
May 31,
For a share outstanding during November 30, --------------------------------------------------------------
the six month period or fiscal year ended, 2006 (a) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 12.74 $ 13.16 $ 12.62 $ 11.12 $ 11.54 $ 10.80
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income (loss) 0.04 0.16 * 0.08 0.02 (0.03) (0.02)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 1.26 0.19 0.63 1.48 (0.39) 0.85
-------- -------- -------- -------- -------- --------
Total from Investment Operations 1.30 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 Period $ 14.04 $ 12.74 $ 13.16 $ 12.62 $ 11.12 $ 11.54
======== ======== ======== ======== ======== ========
Total return 10.20 % 2.63 % 5.65 % 13.49 % (3.64)% 7.78 %
Net Assets, End of Period (in thousands) $ 4,542 $ 4,386 $ 5,090 $ 4,811 $ 4,229 $ 3,925
Average Net Assets for the Period (in thousands) $ 4,370 $ 4,762 $ 4,953 $ 4,452 $ 3,862 $ 3,444
Ratios of:
Gross Expenses to Average Net Assets (c) 1.41 % (d) 1.28 % 1.23 % 1.29 % 1.67 % 3.19 %
Net Expenses to Average Net Assets (c) 1.41 % (d) 1.28 % 1.23 % 1.29 % 1.62 % 1.71 %
Net Investment Income (Loss)
to Average Net Assets 0.42 % (d) 1.05 % 0.60 % 0.14 % (0.25)% (0.17)%
Portfolio turnover rate 4.72 % 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
Investor Class Shares
May 31,
For a share outstanding during the November 30, ------------------------------------------------------------------
six month period or fiscal year ended, 2006 (a) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 12.62 $ 13.07 $ 12.57 $ 11.10 $ 11.56 $ 10.84
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment income (loss) 0.09 0.15 * 0.05 (0.01) (0.04) (0.04)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 1.17 0.17 0.62 1.48 (0.42) 0.85
-------- -------- -------- -------- -------- --------
Total from Investment Operations 1.26 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 Period $ 13.88 $ 12.62 $ 13.07 $ 12.57 $ 11.10 $ 11.56
-------- -------- -------- -------- -------- --------
Total return (b) 10.07 % 2.45 % 5.36 % 13.24 % (3.98)% 7.57 %
======== ======== ======== ======== ======== ========
Net Assets, End of Period (in thousands) $ 7,118 $ 11,061 $ 19,177 $ 19,789 $ 13,825 $2,740
Average Net Assets for the Period (in thousands) $ 8,694 $ 13,734 $ 20,625 $ 17,326 $ 8,861 $ 1,794
Ratios of:
Gross Expenses to Average Net Assets (c) 1.66 % (d) 1.53 % 1.48 % 1.54 % 1.91 % 3.39 %
Net Expenses to Average Net Assets (c) 1.66 % (d) 1.53 % 1.48 % 1.54 % 1.87 % 1.96 %
Net Investment Income (Loss)
to Average Net Assets 0.15 % (d) 0.81 % 0.34 % (0.11)% (0.53)% (0.48)%
Portfolio turnover rate 4.72 % 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
(a) Unaudited.
(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 any waivers and
reimbursements (net expense ratio).
(d) Annualized.
* No effect to net investment income due to reimbursement of $10,752 by Advisor
for certain trade errors.
See Notes to Financial Statements (Continued)
WISDOM FUND
Financial Highlights
Class B Shares
May 31,
For a share outstanding during the November 30, --------------------------------------------------------------
six month period or fiscal year ended, 2006 (a) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 12.16 $ 12.72 $ 12.33 $ 10.97 $ 11.50 $ 10.87
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment (loss) income (0.04) 0.00 * (0.05) (0.10) (0.10) (0.07)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 1.21 0.22 0.61 1.46 (0.43) 0.79
-------- -------- -------- -------- -------- --------
Total from Investment Operations 1.17 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 Period $ 13.33 $ 12.16 $ 12.72 $ 12.33 $ 10.97 $ 11.50
======== ======== ======== ======== ======== ========
Total return (b) 9.62 % 1.66 % 4.56 % 12.40 % (4.61)% 6.72 %
Net Assets, End of Period (in thousands) $ 12,515 $ 12,842 $ 14,660 $ 14,871 $ 12,796 $ 4,307
Average Net Assets for the Period (in thousands) $ 12,439 $ 13,845 $ 15,060 $ 14,097 $8,738 $ 2,146
Ratios of:
Gross Expenses to Average Net Assets (c) 2.41 % (d) 2.28 % 2.23 % 2.29 % 2.66 % 4.14 %
Net Expenses to Average Net Assets (c) 2.41 % (d) 2.28 % 2.23 % 2.29 % 2.62 % 2.71 %
Net Investment Income (Loss)
to Average Net Assets (0.58)% (d) 0.07 % (0.41)% (0.86)% (1.27)% (1.23)%
Portfolio turnover rate 4.72 % 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
Class C Shares
May 31,
For a share outstanding during the November 30, --------------------------------------------------------------
six-month period or fiscal year ended, 2006 (a) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 12.22 $ 12.78 $ 12.38 $ 11.01 $ 11.54 $ 10.91
-------- -------- -------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment (loss) income (0.04) 0.00 * (0.05) (0.09) (0.09) (0.10)
Net realized and unrealized gain (loss) on
investment and foreign currency translation 1.22 0.21 0.62 1.46 (0.44) 0.82
-------- -------- -------- -------- -------- --------
Total from Investment Operations 1.18 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 Period $ 13.40 $ 12.22 $ 12.78 $ 12.38 $ 11.01 $ 11.54
======== ======== ======== ======== ======== ========
Total return (b) 9.66 % 1.60 % 4.63 % 12.44 % (4.59)% 6.69 %
Net Assets, End of Period (in thousands) $ 7,190 $ 7,975 $ 9,681 $ 8,682 $ 5,635 $ 1,808
Average Net Assets for the Period (in thousands) $ 7,310 $ 9,139 $ 9,212 $ 6,972 $ 3,560 $ 1,274
Ratios of:
Gross Expenses to Average Net Assets (c) 2.41 % (d) 2.28 % 2.23 % 2.29 % 2.66 % 4.18 %
Net Expenses to Average Net Assets (c) 2.41 % (d) 2.28 % 2.23 % 2.29 % 2.62 % 2.71 %
Net Investment Income (Loss)
to Average Net Assets (0.57)% (d) 0.07 % (0.39)% (0.86)% (1.27)% (1.19)%
Portfolio turnover rate 4.72 % 19.03 % 41.99 % 20.41 % 9.28 % 6.78 %
(a) Unaudited.
(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 any waivers and
reimbursements (net expense ratio).
(d) Annualized.
* No effect to net investment income due to reimbursement of $10,752 by
Advisor for certain trade errors.
See Notes to Financial Statements
WISDOM FUND
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
The Wisdom Fund (the "Fund") is a and are in conformity with accounting
series fund. The Fund is part of the principles generally accepted in the
New Providence Investment Trust (the United States of America in the
"Trust"), which was organized as a investment company industry.
Massachusetts business trust and is
registered under the Investment Investment Valuation The Fund's
Company Act of 1940 (the "1940 Act"), investments in securities are carried
as amended, as an open-ended at value. Securities listed on an
management investment company. The exchange or quoted on a national
Fund is classified as a "diversified" market system are valued at the last
company as defined in the 1940 Act. sales price as of 4:00 p.m. Eastern
Time. Securities traded in the NASDAQ
The Wisdom Fund commenced operations over-the-counter market are generally
February 16, 1999. The investment valued at the NASDAQ Official Closing
objective of the Fund is to seek Price. Other securities traded in the
maximum total returns consisting of over-the-counter market and listed
any combination of capital securities for which no sale was
appreciation, realized and unrealized, reported on that date are valued at
and income under the constantly the most recent bid price. Securities
varying market conditions. and assets for which representative
market quotations are not readily
The Board of Trustees of the Trust available (e.g., if the exchange on
(the "Trustees") approved, on October which the portfolio security is
7, 1999, a plan to authorize two new principally traded closes early or if
classes of shares designated as Class trading of the particular portfolio
B Shares and Class C Shares. On security is halted during the day and
November 16, 1999, the Class B Shares does not resume prior to the Fund's
and Class C Shares became effective. net asset value calculation) or which
The Fund has an unlimited number of cannot be accurately valued using the
authorized shares, which are divided Fund's normal pricing procedures are
into four classes - Institutional valued at fair value as determined in
Class Shares, Investor Class Shares, good faith under policies approved by
Class B Shares and Class C Shares. the Trustees. Fair value pricing may
be used, for example, in situations
Each class of shares has equal rights where (i) a portfolio security is so
as to assets of the Fund, and the thinly traded that there have been no
classes are identical except for transactions for that security over an
differences in their sales charge extended period of time; (ii) the
structures and ongoing distribution exchange on which the portfolio
and service fees. Income, expenses security is principally traded closes
(other than distribution and service early; or (iii) trading of the
fees, which are not attributable to portfolio security is halted during
the Institutional Class Shares), and the day and does not resume prior to
realized and unrealized gains or the Fund's net asset value
losses on investments are allocated to calculation. A portfolio security's
each class of shares based upon its "fair value" price may differ from the
relative net assets. All classes have price next available for that
equal voting privileges, except where portfolio security using the Fund's
otherwise required by law or when the normal pricing procedures. Investment
Trustees determine that the matter to companies are valued at net asset
be voted on affects only the interests value. Instruments with maturities of
of the shareholders of a particular 60 days or less are valued at
class. The Fund's Investor Class, amortized cost, which approximates
Class B and Class C shares are sold market value.
without an initial sales charge;
however, they are subject to a Investment Transactions and Investment
contingent deferred sales charge. The Income Investment transactions are
Investor Class imposes a 1% contingent accounted for as of the date purchased
deferred sales charge for transactions or sold (trade date). Dividend income
over $1,000,000 on proceeds that are is recorded on the ex-dividend date.
redeemed within one year of the Certain dividends from foreign
purchase date. Class B shares are securities will be recorded as soon as
charged at a rate of 4% in the first the Trust is informed of the dividend
year and declining to 0% over a if such information is obtained
six-year period. Class C shares are subsequent to the ex-dividend date.
charged at a rate of 1% if redeemed Interest income is recorded on the
during the first year. The contingent accrual basis and includes
deferred sales charge is payable to amortization of discounts and
the Distributor of the Trust. Class B premiums. Gains and losses are
shares automatically convert into determined on the identified cost
Investor Class shares after eight basis, which is the same basis used
years. for federal income tax purposes.
The following accounting policies have Expenses The Fund bears expenses
been consistently followed by the Fund incurred specifically on its behalf as
well as a portion of general expenses,
which are allocated according to
methods approved annually by the
Trustees.
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
Dividend Distributions
The Fund may declare and distribute reimbursement to be made without
dividends from net investment income causing the total annual expense ratio
(if any) quarterly. Distributions from of the Fund to exceed 1.75%, as stated
capital gains (if any) are generally above. For the fiscal years ended
declared and distributed annually. The 2004, 2005 and 2006, there were no
Fund may also make a supplemental waived or reimbursed expenses.
distribution subsequent to the end of
its fiscal year. Dividends and Administrator
distributions to shareholders are The Fund pays a monthly administration
recorded on the ex-dividend date. fee to The Nottingham Company (the
"Administrator") based upon the
Estimates average daily net assets of the
The preparation of financial respective share class and calculated
statements in conformity with at the annual rates as shown in the
accounting principles generally schedule provided on the following
accepted in the United States of page. The Administrator also receives
America requires management to make a fee to procure and pay the custodian
estimates and assumptions that affect for the Fund, additional compensation
the amount of assets, liabilities, for fund accounting and recordkeeping
expenses and revenues reported in the service and additional compensation
financial statements. Actual results for certain costs involved with the
could differ from those estimates. daily valuation of securities and as
reimbursement for out-of-pocket
Federal Income Taxes expenses (which are immaterial in
No provision for income taxes is amount). A breakdown of these fees is
included in the accompanying financial provided in the table on the following
statements, as the Fund intends to page.
distribute to shareholders all taxable
investment income and realized gains Compliance Services
and otherwise complies with the The Nottingham Compliance Services,
requirements of Subchapter M of the LLC, a wholly owned affiliate of The
Internal Revenue Code applicable to Nottingham Company, provides services
regulated investment companies. which assists the Trust's Chief
Compliance Officer in monitoring and
2. Transactions with Affiliates testing the policies and procedures of
the Trust as required by Rule 38a-1 of
Advisor the Securities and Exchange
The Fund pays a monthly advisory fee Commission. It receives compensation
to Atlanta Investment Counsel, LLC for this service at an annual rate of
(the "Advisor") based upon the annual $7,750.
rate of 0.50% of the first $500
million of the Fund's average daily Transfer Agent
net assets and 0.40% of all assets North Carolina Shareholder Services,
over $500 million. LLC ("Transfer Agent") serves as
transfer, dividend paying, and
The Advisor currently intends to shareholder servicing agent for the
voluntarily waive all or a portion of Fund. It receives compensation for its
its fee and to reimburse expenses of services based upon a fee of $15 per
the Fund to limit total Fund operating shareholder per year, subject to a
expenses to a maximum of 1.75% of the minimum fee of $1,500 per month, plus
average daily net assets of the Fund's $500 per month for each additional
Institutional Class Shares, Investor class of shares.
Class Shares, Class B Shares and Class
C Shares, exclusive of interest, Distributor
taxes, brokerage fees and commissions, Capital Investment Group, Inc. (the
extraordinary expenses, and payments, "Distributor") serves as the Fund's
if any, under a Rule 12b-1 Plan. There principal underwriter and distributor.
can be no assurances that the The Distributor receives any sales
foregoing voluntary fee waivers or charges imposed on purchases of shares
reimbursements will continue. The Fund and re-allocates a portion of such
may, at a later date, reimburse the charges to dealers through whom the
Advisor for the management fees waived sale was made, if any. For the six
or limited, and/or other expenses month period ended November 30, 2006,
assumed and paid by the Advisor the Distributor retained sales charges
pursuant to the Expense Limitation in the amount of $483.
Agreement during any of the previous
three (3) fiscal years provided that Certain Trustees and officers of the
the Fund has reached a sufficient Trust are also officers of the
asset size to permit such Advisor or the Administrator.
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Accounting
Administration Fees (a) Custody Fees (b) Fund Asset Based Fees
Accounting Blue Sky
Annual Annual Fees Average Net Annual Administration
Average Net Assets Rate Average Net 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.
4. Purchases and Sales of Investment
3. Distribution and Service Fees Securities
The Trustees, including a majority of For the six month period ended
the Trustees who are not "interested November 30, 2006, the aggregate cost
persons" of the Trust as defined in of purchases and proceeds from sales
the 1940 Act, adopted distribution and of investment securities (excluding
service plans pursuant to Rule 12b-1 short-term securities) are shown in
of the 1940 Act (the "Plans") the table below:
applicable to the Investor Class
Shares, Class B Shares and Class C -----------------------------------------------------
Shares. The 1940 Act regulates the Proceeds from
manner in which a regulated investment Purchases of Securities Sales of Securities
company may assume costs of -----------------------------------------------------
distributing and promoting the sales $1,549,815 $9,157,768
of its shares and servicing of its -----------------------------------------------------
shareholder accounts. The Plan
provides that the Fund may incur There were no purchases or sales of
certain costs, which may not exceed long-term U.S. Government Obligations
0.25% per annum of the average daily during the six month period ended
net assets of the Investor Class November 30, 2006.
Shares or 1.00% per annum of the
average daily net assets of the Class 5. Federal Income Tax
B or Class C Shares for each year
elapsed subsequent to adoption of the The information in the tables below
Plans, for payment to the Distributor represent: (1) tax components of
and others for items such as capital, as of May 31, 2006 (2)
advertising expenses, selling unrealized appreciation or
expenses, commissions, travel, or depreciation of investments for
other expenses reasonably intended to federal income tax purposes, as of
result in sales of Investor Class November 30, 2006 and (3)
Shares, Class B Shares and Class C characterization of distributions for
Shares in the Fund or support federal income tax purposes for the
servicing of those classes' fiscal year ended May 31, 2006 and
shareholder accounts. The Fund 2005.
incurred $10,897, $62,365, and
$36,649, in distribution and service Other book tax differences in the
fees under the Plans with respect to current year primarily consist of post
Investor Class Shares, Class B Shares, October loss deferrals.
and Class C Shares, respectively, for
the six month period ended November
30, 2006.
- -----------------------------------------------------------------------------------------------------------------------------------
Table 1
Undistributed Ordinary Undistributed Long Accumulated Other Book to Tax Net Tax Appreciation
Income Term Gains Capital Losses Differences
- -----------------------------------------------------------------------------------------------------------------------------------
$ - $1,694,752 $ - $(18,620) $5,792,665
- -----------------------------------------------------------------------------------------------------------------------------------
The aggregate cost of investments and investment securities for federal
the composition of unrealized income tax purposes as of November 30,
appreciation and depreciation of 2006 are noted below.
- -----------------------------------------------------------------------------------------------------------------------------------
Table 2
Federal Tax Cost Aggregate Gross Unrealized Appreciation Aggregate Gross Unrealized Depreciation
- -----------------------------------------------------------------------------------------------------------------------------------
$23,442,519 $8,076,036 $(455,532)
- -----------------------------------------------------------------------------------------------------------------------------------
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
The amount of dividends and currency transactions, net investment
distributions from net investment losses and capital loss
income and net realized capital gains carry-forwards. Certain permanent
are determined in accordance with differences such as tax returns of
federal income tax regulations which capital and net investment losses, if
may differ from accounting principles any, would be re-classified against
generally accepted in the United capital. There were no distributions
States of America. These differences for the six month period ended
are due to differing treatments for November 30, 2006.
items such as net short-term gains,
deferral of wash sale losses, foreign
- -----------------------------------------------------------------------------------------------------------------------------------
Table 3 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
- -----------------------------------------------------------------------------------------------------------------------------------
6. Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Class Shares Investor Class Shares
For the six month period and
fiscal year ended, November 30, May 31, November 30, May 31,
2006 2006 (a) 2006 2006 (a)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in Capital Shares
Shares sold 1,626 6,705 10,422 59,691
Reinvested distributions - 20,094 - 56,833
Shares repurchased (22,306) (69,363) (374,413) (706,661)
Net Decrease in Capital Shares (20,680) (42,564) (363,991) (590,137)
Shares Outstanding, Beginning of Period 344,178 386,742 876,776 1,466,913
Shares Outstanding, End of Period 323,498 344,178 512,785 876,776
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares
For the six month period and November 30, May 31, November 30, May 31,
fiscal year ended, 2006 2006 (a) 2006 2006 (a)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in Capital Shares
Shares sold 3,446 33,286 4,837 58,972
Reinvested distributions - 65,959 - 42,878
Shares repurchased (120,729) (195,290) (120,717) (206,959)
Net Decrease in Capital Shares (117,283) (96,045) (115,880) (105,109)
Shares Outstanding, Beginning of Period 1,056,335 1,152,380 652,553 757,662
Shares Outstanding, End of Period 939,052 1,056,335 536,673 652,553
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Audited.
7. Change in Independent Registered or a reportable event, as such terms
Public Accounting Firm are defined in Item 304 of Regulation
S-K.
On July 19, 2005, the Board of
Trustees engaged Briggs, Bunting & Prior to this date, Deloitte & Touche
Dougherty, LLP ("BBD") as its new LLP ("Deloitte") served as the
independent registered public independent registered public
accounting firm. At no time preceding accounting firm for the Trust and
the engagement of BBD did the Fund issued reports on the Fund's financial
consult the firm regarding either (i) statements as of May 31, 2005 and
the application of accounting 2004. Such reports did not contain an
principles to a specified transaction, adverse opinion or a disclaimer of
either completed or proposed, or the opinion, nor were they qualified or
type of audit opinion that might be modified as to uncertainty, audit
rendered on the Fund's financial scope, or accounting principles.
statements, or (ii) any matter that
was either subject of a disagreement At no time preceding the removal of
Deloitte & Touche LLP were there any
disagreements with Deloitte & Touche
(Continued)
WISDOM FUND
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
LLP on any matter of accounting yet determined, management does not
principles or practices, financial expect FIN 48 to have a material
statement disclosure, or auditing impact on the financial statements.
scope or procedure, which
disagreements, if not resolved to the 9. Commitments and Contingencies
satisfaction of Deloitte & Touche LLP,
would have caused it to make reference Under the Trust's organizational
to the subject matter of the documents, its officers and Trustees
disagreements in connection with its are indemnified against certain
report. At no time preceding the liabilities arising out of the
removal of Deloitte & Touche LLP did performance of their duties to the
any of the events enumerated in Fund. In addition, in the normal
paragraphs (1)(v)(A) through (D) of course of business, the Trust entered
Item 304(a) of Regulation S-K occur. into contracts with its vendors, on
behalf of the Fund, and others that
8. New Accounting Pronouncements provide for general indemnifications.
The Fund's maximum exposure under
In September 2006, the Financial these arrangements is unknown, as this
Accounting Standards Board (FASB) would involve future claims that may
issued Statement on Financial be made against the Fund. The Fund
Accounting Standards (SFAS) No. 157, expects that risk of loss to be
"Fair Value Measurements." This remote.
standard establishes a single
authoritative definition of fair value
and sets out a framework for measuring
fair value and requires additional
disclosure about fair value
measurements. SFAS No. 157 applies to
fair value measurements already
required or permitted by existing
standards. SFAS No. 157 is effective
for financial statements issued for
fiscal years beginning after November
15, 2007 and interim periods within
those fiscal years. The changes to
current generally accepted accounting
principles from the application of
this Statement relate to the
definition of fair value, the methods
used to measure fair value, and the
expanded disclosures about fair value
measurements. As of November 30, 2006,
the Fund does not believe the adoption
of SFAS No. 157 will impact the
amounts reported in the financial
statements, however, additional
disclosures may be required about the
inputs used to develop the
measurements and the effect of certain
of the measurements reported on the
statement of changes in net assets for
a fiscal period.
On July 13, 2006, the Financial
Accounting Standards Board (FASB)
released FASB Interpretation No. 48
"Accounting for Uncertainty in Income
Taxes" (FIN 48). FIN 48 provides
guidance for how uncertain tax
positions should be recognized,
measured, presented and disclosed in
the financial statements. FIN 48
requires the evaluation of tax
positions taken or expected to be
taken in the course of preparing the
Fund's tax returns to determine
whether the tax positions are
"more-likely-than-not" of being
sustained by the applicable tax
authority. Tax positions not deemed to
meet the more-likely-than-not
threshold would be recorded as a tax
benefit or expense in the current
year. Adoption of FIN 48 is required
for fiscal years beginning after
December 15, 2006 and is to be applied
to all open tax years as of the
effective date. At this time,
management is evaluating the
implications of FIN 48. Although not
WISDOM FUND
Additional Information (Unaudited)
- --------------------------------------------------------------------------------
1. Renewal of Advisory Agreement coordination of services for the Fund
among the Fund's service providers,
Atlanta Investment Counsel, LLC and its efforts to promote the Fund,
("Investment Advisor") supervises the grow the Fund's assets, and assist in
investments of the Wisdom Fund the distribution of Fund shares. The
("Fund") pursuant to an Investment Board noted that the Trust's principal
Advisory Agreement. During the Fund's executive officer, principal financial
most recent fiscal half-year, the officer, president, treasurer, and
Investment Advisory Agreement came up chief compliance officer is an
for renewal. The Board unanimously employee of the Investment Advisor who
approved the renewal of the Investment serves the Trust without additional
Advisory Agreement for another year at compensation. After reviewing the
the Board's Annual Meeting on October foregoing information and further
24, 2006. information in the Investment Advisor
Memorandum (e.g., descriptions of the
At the meeting, Trust Counsel Investment Advisor's business, the
("Counsel") reviewed with the Board a Fund's and the Investment Advisor's
memorandum from Counsel dated October compliance programs, and the
12, 2006 and addressed to the Trustees Investment Advisor's Form ADV), the
that summarized the Board's fiduciary Board concluded that the nature,
duties and responsibilities in extent, and quality of the services
reviewing and approving the Investment provided by the Investment Advisor
Advisory Agreement for the Fund. were satisfactory and adequate for the
Counsel discussed with the Board's Fund.
independent trustees ("Independent
Trustees") the types of information In considering the investment
and factors that should be reviewed by performance of the Fund and the
the Board and their responsibilities Investment Advisor; in this regard,
in making an informed decision the Board compared the short and
regarding the approval of the long-term performance of the Fund with
continuation of the Investment the performance of its benchmark
Advisory Agreement. index, comparable funds with similar
objectives and size managed by other
The Investment Advisor then reviewed investment advisors, and comparable
with the Board its response to a peer group indices (e.g., Morningstar
memorandum from Counsel dated October category averages). The Board also
11, 2006 and addressed to the considered the consistency of the
Investment Advisor that contained Investment Advisor's management of the
information relating to the Fund with the Fund's investment
continuation of the Investment objective and policies. After
Advisory Agreement ("Investment reviewing the short and long-term
Advisor Memorandum"). The Investment investment performance of the Fund,
Advisor reviewed its Form ADV, the Investment Advisor's experience
experience, profitability with respect managing the Fund and whether the
to the Fund, financial strength, Investment Advisor manages other
financial capability, its personnel, advisory accounts, the Investment
its services to the Fund, comparative Advisor's historical investment
expense ratio information for other performance, and other factors, the
mutual funds with strategies similar Board concluded that the investment
to those of the Fund, and other performance of the Fund and the
information contained in its Investment Advisor were satisfactory.
Investment Advisor Memorandum.
In considering the costs of the
In deciding whether to approve the services to be provided and profits to
renewal of the Investment Advisory be realized by the Investment Advisor
Agreements between the Trust and the and its affiliates from the
Investment Advisor, with respect to relationship with the Fund; in this
the Fund, the Trustees considered regard, the Board considered the
numerous factors, including: Investment Advisor's staffing,
personnel, and methods of operating;
In considering the nature, extent, and the education and experience of the
quality of the services provided by Investment Advisor's personnel; the
the Investment Advisor; in this Investment Advisor's compliance
regard, the Board considered the policies and procedures; the financial
responsibilities the Investment condition of the Investment Advisor,
Advisor would have under its and the level of commitment to the
Investment Advisory Agreement. The Fund and the Investment Advisor by the
Board reviewed the services being principals of the Investment Advisor;
provided by the Investment Advisor to the asset levels of the Fund; and the
the Fund including, without overall expenses of the Fund,
limitation, the quality of its including certain prior fee waivers
investment advisory services since the and reimbursements by the Investment
Fund's inception (including research Advisor on behalf of the Fund and the
and recommendations with respect to nature and frequency of advisory fee
portfolio securities), its procedures payments. The Board reviewed the
for formulating investment financial statements for the
recommendations and assuring Investment Advisor and discussed the
compliance with the Fund's investment financial stability and profitability
objectives and limitations, its of the firm. The Board reviewed the
Fund's Expense Limitation Agreement
with the Investment Advisor, and
(Continued)
WISDOM FUND
Additional Information (Unaudited)
- --------------------------------------------------------------------------------
discussed the Investment Advisor's In considering brokerage and portfolio
prior fee waivers under the Expense transactions; in this regard, the
Limitation Agreement in detail, Board considered the Investment
including the nature and scope of cost Advisor's standards and performance in
allocation for such fees. utilizing those standards to seek best
execution for Fund portfolio
The Board considered potential transactions, including the use of
benefits for the Investment Advisor in alternative markets (e.g., direct
managing the Fund, including promotion purchases from issuers or underwriters
of the Investment Advisor's name, the or, as to equity securities, "third
ability for the Investment Advisor to market" for listed securities and
place small accounts into the Fund, principal market makers for
and the potential for the Investment over-the-counter securities). The
Advisor to generate soft dollars from Board noted that the Fund's fixed
certain of the Fund's trades that may income portfolio transactions are
benefit the Investment Advisor's other normally principal transactions
clients as well. The Board then executed in over-the-counter markets
compared the fees and expenses of the on a "net" basis. The Board also
Fund (including the management fee) to considered the anticipated portfolio
other funds comparable to the Fund in turnover rate for the Fund; the
terms of the type of fund, the style process by which evaluations are made
of investment management, the size of of the overall reasonableness of
the fund, and the nature of its commissions paid; the method and basis
investment strategy, among other for selecting and evaluating the
factors. The Board determined that the broker-dealers used; any anticipated
management fee was lower than allocation of portfolio business to
comparable funds and that, while the persons affiliated with the Investment
net expense ratio was higher than the Advisor; and the opportunities for the
industry average and comparable funds, Investment Advisor to recapture
the size of the Fund was much smaller brokerage or related fees (e.g. tender
than the industry average and offer fees, underwriting fees, etc.)
comparable funds. Following this and credit them against Fund expenses.
comparison and upon further After further review and discussion,
consideration and discussion of the the Board determined that the
foregoing, the Board concluded that Investment Adviser's practices
the fees to be paid to the Investment regarding brokerage and portfolio
Advisor by the Fund were fair and transactions were satisfactory.
reasonable in relation to the nature
and quality of the services to be In considering possible conflicts of
provided by the Investment Advisor. interest; in evaluating the
possibility for conflicts of interest,
In considering the extent to which the Board considered such matters as
economies of scale would be realized the experience and ability of the
as the Fund grows and whether advisory advisory personnel assigned to the
fee levels reflect these economies of Fund, which was currently a single
scale for the benefit of the Fund's individual; the basis of decisions to
investors; in this regard, the Board buy or sell securities for the Fund
considered that the Fund's fee and/or the Investment Advisor's other
arrangements with the Investment accounts should the Investment Advisor
Advisor involved both the management accumulate other accounts; the method
fee and an Expense Limitation for bunching of portfolio securities
Agreement. The Board noted that the transactions; and the substance and
Fund utilizes breakpoints in its administration of the Investment
advisory fee schedule and determined Advisor's code of ethics. Following
that the Fund's shareholders would further consideration and discussion,
benefit from economies of scale as the the Board indicated that the
Fund grows. The Board noted that the Investment Advisor's standards and
Fund's shareholders would receive practices relating to the
benefits from the Expense Limitation identification and mitigation of
Agreement if the Fund's assets were to potential conflicts of interests were
decrease or the Fund's expenses were satisfactory.
to increase beyond the cap set by the
Expense Limitation Agreement. The Based upon all of the foregoing
Board noted that the Fund's considerations, the Board, including a
shareholders benefited from economies majority of the Trust's Independent
of scale under the Fund's agreements Trustees, approved the renewal of the
with service providers other than the Investment Advisory Agreement for the
Investment Advisor. Following further Fund.
discussion of the Fund's asset levels,
expectations for growth, and levels of 2. Proxy Voting Policies and Voting
fees, the Board determined that, at Record
the Fund's current and projected asset
levels, the Fund's fee arrangements A copy of the Trust's Proxy Voting and
were fair and reasonable in relation Disclosure Policy and the Advisor's
to the nature and quality of the Proxy Voting and Disclosure Policy are
services to be provided by the included as Appendix B to the Fund's
Investment Advisor. Statement of Additional Information
and is available, without charge, upon
request, by calling 1-800-773-3863.
Information regarding how the Fund
voted proxies relating to portfolio
securities during the most recent
(Continued)
WISDOM FUND
Additional Information (Unaudited)
- --------------------------------------------------------------------------------
12-month period ended June 30 is
available (1) without charge, upon
request, by calling the Fund at the
number above and (2) on the SEC's
website at http://www.sec.gov.
3. Quarterly Portfolio Holdings
The Fund files its complete schedule
of portfolio holdings with the SEC for
the first and third quarters of each
fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the SEC's
website at http://www.sec.gov. You may
review and make copies at the SEC's
Public Reference Room in Washington,
D.C. You may also obtain copies after
paying a duplicating fee by writing
the SEC's Public Reference Section,
Washington, D.C. 20549-0102 or by
electronic request to
publicinfo@sec.gov, or is available,
without charge, upon request, by
calling the fund at 1-800-773-3863.
Information on the operation of the
Public Reference Room may be obtained
by calling the SEC at 202-942-8090.
Wisdom Fund
is a series of
The New Providence Investment Trust
For Shareholder Service Inquiries: For Investment Advisor Inquiries:
Documented: Documented:
NC Shareholder Services Atlanta Investment Counsel, LLC
116 South Franklin Street 717 Haddon Hall Road, NW
Post Office Drawer 4365 Suite 200
Rocky Mount, North Carolina 27803-0365 Atlanta, Georgia 30327
Toll-Free Telephone: Toll-Free Telephone:
1-800-773-3863 1-877-352-0020
World Wide Web @: World Wide Web @:
nottinghamco.com wisdomfund.com
Item 2. CODE OF ETHICS.
Not applicable.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
Item 6. SCHEDULE OF INVESTMENTS.
A copy of Schedule I - Investments in securities of
unaffiliated issuers as of the close of the reporting period
is included as part of the report to shareholders filed under
Item 1 of this Form.
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.
Not applicable.
Item 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
None.
Item 11. CONTROLS AND PROCEDURES.
(a) The Principal Executive Officer and the Principal Financial
Officer have concluded that the registrant's disclosure
controls and procedures are effective based on their
evaluation of the disclosure controls and procedures as of a
date within 90 days of the filing of this report.
(b) There were no changes in the registrant's internal control
over financial reporting that occurred during the registrant's
second fiscal quarter of the period covered by this report
that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over
financial reporting.
Item 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications required by Item 12.(a)(2) of Form N-CSR
are filed herewith as Exhibit 12.(a)(2).
(a)(3) Not applicable.
( b) Certifications required by Item 12.(b) of Form N-CSR are filed
herewith as Exhibit 12.(b).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
New Providence Investment Trust
By: (Signature and Title) /s/ C. Douglas Davenport
_________________________________________
C. Douglas Davenport
President, Treasurer, Principal Executive
Officer and Principal Financial Officer
Date: January 25, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: (Signature and Title) /s/ C. Douglas Davenport
_________________________________________
C. Douglas Davenport
President, Treasurer, Principal Executive
Officer and Principal Financial Officer
New Providence Investment Trust
Date: January 25, 2007