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 811-21587
Old Mutual Advisor Funds
(Exact name of registrant as specified in charter)
--------
4643 South Ulster Street, Suite 600
Denver, CO 80237
(Address of principal executive offices) (Zip code)
David J. Bullock
4643 South Ulster Street, Suite 600, Denver, CO 80237
(Name and address of agent for service)
Copies to:
- --------------------------------------------------------------------------------
Jay Baris, Esq. Andra Ozols
Kramer Levin Naftalis & Frankel LLP Old Mutual Capital, Inc
919 Third Avenue 4643 South Ulster Street, Suite 600
New York, New York 10022 Denver, CO 80237
(212) 715-9100 (888) 744-5050
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code: (888)-744-5050
Date of fiscal year end: December 31
Date of reporting period: December 31, 2005
Item 1. Reports to Stockholders.
[LOGO OMITTED] OLD MUTUAL
ADVISOR FUNDS
ANNUAL REPORT DECEMBER 31, 2005
Old Mutual Analytic
Defensive Equity Fund
<page>
OLD MUTUAL ADVISOR FUNDS
TABLE OF CONTENTS
About This Report .................................................................................................... 2
Message to Shareholders .............................................................................................. 3
Management Discussion of Fund Performance
Old Mutual Analytic Defensive Equity Fund
Class A (ANAEX), Class C (ANCEX), Class Z (ANDEX), Institutional Class (ANIEX) ............................. 4
Statement of Net Assets .............................................................................................. 6
Statement of Operations .............................................................................................. 12
Statement of Changes in Net Assets ................................................................................... 13
Financial Highlights ................................................................................................. 15
Notes to Financial Statements ........................................................................................ 16
Report of Independent Registered Public Accounting Firm .............................................................. 21
Notice to Shareholders ............................................................................................... 22
Proxy Voting and Portfolio Holdings .................................................................................. 23
Fund Expenses Example ................................................................................................ 24
Activities and Composition of the Board of Trustees and Officers of the Trust ........................................ 25
Considerations of the Board in Approving the Investment Advisory Agreement and the Sub-Advisory Agreement ............ 27
1
OLD MUTUAL ADVISOR FUNDS
ABOUT THIS REPORT
HISTORICAL RETURNS
All total returns mentioned in this report account for the change in the Old
Mutual Analytic Defensive Equity Fund's (the "Fund") per-share price and the
reinvestment of any dividends and capital gain distributions. If your account is
set up to receive Fund distributions in cash rather than reinvest them, your
actual return may differ from these figures. The Fund's performance results do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or on the redemption of Fund shares.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance results represent
past performance, and current performance may be higher or lower. Please call
toll-free 1-888-744-5050 or visit www.oldmutualcapital.com for performance
results current to the most recent month-end. On December 9, 2005, the Fund
acquired substantially all the assets and liabilities of the Analytic Defensive
Equity Fund, a series of The Advisors' Inner Circle Fund (the "Predecessor
Fund"). Analytic Investors, Inc., the Fund's Sub-Adviser, used substantially
similar strategies and policies to manage both funds. Performance in this report
for periods prior to December 9, 2005 is for the Predecessor Fund.
The since inception returns for periods less than a year have not been
annualized. Performance results for short periods of time may not be
representative of longer-term results. Performance without loads assumes that no
front-end or contingent deferred sales charge applied or the investment was not
redeemed. Performance with loads assumes that a front-end or contingent deferred
sales charge applied to the extent applicable. The Fund offers Class A, Class C,
Class Z and Institutional Class shares. Class A shares have a current maximum
up-front sales charge of 5.75% and are subject to an annual service fee of
0.25%. Class C shares are subject to aggregate annual distribution and service
fees of 1.00% and will be subject to a contingent deferred sales charge of 1.00%
if redeemed within the first 12 months of purchase. Class Z and Institutional
Class shares are only available to eligible shareholders. The returns may
reflect fee waivers and/or reimbursements in effect for the period; absent such
fee waivers and reimbursements, performance would have been lower.
FUND DATA
This report reflects views, opinions and portfolio holdings as of December 31,
2005, the end of the report period and are subject to change. The information is
not a complete analysis of every aspect of any sector, industry or security of
the Fund.
Opinions and forecasts regarding industries, companies and/or themes, and Fund
composition and holdings, are subject to change at any time based on market and
other conditions, and should not be construed as a recommendation of any
specific security or as investment advice. Percentage holdings as of December
31, 2005 are included in the Fund's Statement of Net Assets. There is no
assurance that the securities purchased remain in the Fund or that securities
sold have not been repurchased.
There are risks associated with mutual fund investing, including the risk of
loss of principal. There is no assurance that the investment process will
consistently lead to successful results. There are also risks associated with
small- and mid-cap investing, including limited product lines, less liquidity
and small market share. Investing in fixed income securities such as bonds
involves interest rate risk. When interest rates rise, the value of fixed income
securities generally decreases. High-yield bonds involve a greater risk of
default and price volatility than U.S. Government and other higher-quality
bonds.
Call options involve certain risks, such as limited gains and lack of liquidity
of the underlying securities, and are not suitable for all investors. There are
risks associated with selling short, including the risk that the Fund may have
to cover its short position at a higher price than the short price, resulting in
a loss. The Fund's loss on a short sale is potentially unlimited as a loss
occurs when the value of a security sold short increases. Derivatives are often
more volatile than other investments and may magnify the Fund's gains or losses.
The Fund could be negatively affected if the change in market value of its
securities fails to correlate with the value of the derivatives purchased or
sold.
COMPARATIVE INDEX
The comparative index discussed in this report is meant to provide a basis for
judging the Fund's performance against a specific security index. The index
shown accounts for both changes in security price and reinvestment of dividends
and distributions, but does not reflect the cost of managing a mutual fund,
including brokerage commissions, taxes or other expenses of investing. The Fund
may significantly differ in holdings and composition from the index. Individuals
cannot invest directly in an index.
o The unmanaged Standard & Poor's 500 (S&P 500) Index is a market
value-weighted index of large-cap common stocks considered representative
of the broad market.
Index returns and statistical data included in this report are provided by
Bloomberg and FactSet.
2
OLD MUTUAL ADVISOR FUNDS
MESSAGE TO SHAREHOLDERS
DEAR SHAREHOLDER:
It was a positive year for the Old Mutual Analytic Defensive Equity Fund
(formerly the Analytic Defensive Equity Fund, a series of The Advisors' Inner
Circle Fund) despite the relatively modest gains achieved in the overall market.
The Analytic Defensive Equity Fund outperformed the S&P 500 Index, the Fund's
benchmark, for the 12-month period ended December 31, 2005, and the Fund
achieved this performance while maintaining a low level of volatility in
relation to the broader market. We invite you to review the pages that follow
for a complete performance discussion.
As a market overview, stocks stumbled out of the starting gate and struggled to
gain momentum throughout 2005. Rising interest rates, skyrocketing oil prices,
worrisome federal deficits, two major hurricanes, a flattening yield curve and
economic uncertainty were all stiff headwinds for stocks to overcome in their
race to the finish. Fortunately, stronger equity performance in the fourth
quarter helped most of the major averages cross the finish line into positive
territory for the year. Moderating oil prices and an improved outlook regarding
the economic toll of Hurricane Katrina were largely responsible for the fall
rally in equities. However, as stocks approached year-end, they began to falter
amid new worries over weaker holiday retail spending and a yield curve that was
nearing inversion--a possible red flag signaling recessionary expectations. When
the final results were in, returns for the major averages were generally
positive, but the market's overall performance failed to shatter any records.
There were pockets of strength, particularly for many oil-related and other
energy companies, as well as for commodity-driven stocks. But even these
companies could not continue their strong run throughout the year, as they
paused to take a breather in the last months of the period.
Despite these uncertain and challenging market conditions, the Old Mutual
Analytic Defensive Equity Fund was able to turn in positive absolute and
relative performance for the period, as reflected on the pages that follow. On
another front, we made noteworthy strides to further our commitment to provide
enhanced benefits and service to shareholders.
Over the past year, we have expanded our operations and product offerings with
teams of experienced customer service and investment professionals. And we have
added the Old Mutual Analytic Defensive Equity Fund to the Old Mutual Advisor
Funds lineup to broaden access to key investment choices. Our ultimate goal is
to construct a world-class center of performance and service excellence, and
although no one can predict future performance, I am confident we are well on
our way to achieving that objective.
We thank you for your investment in the Old Mutual Advisor Funds.
Sincerely,
/S/ DAVID J. BULLOCK [PHOTO OMITTED]
DAVID J. BULLOCK
PRESIDENT
OLD MUTUAL ADVISOR FUNDS
3
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
MANAGEMENT DISCUSSION OF FUND PERFORMANCE (UNAUDITED)
Q. HOW DID THE FUND PERFORM RELATIVE TO ITS BENCHMARK?
A. The Old Mutual Analytic Defensive Equity Fund Class Z shares returned 15.36%
for the 12 months ended December 31, 2005, outperforming its benchmark, the
S&P 500 Index, which returned 4.91% for the period. Performance for all
share classes can be found on the following page.
Q. WHAT INVESTMENT ENVIRONMENT DID THE FUND FACE DURING THE PAST YEAR?
A. While large capitalization U.S. stocks faced a number of hardships in 2005,
record oil prices were certainly near the top of the list with respect to
investors' concerns. Rising oil prices dragged on stocks and ignited worries
over inflation. Given that consumers were paying significantly more to fuel
their vehicles and heat their homes, consumer spending and sentiment were
expected to falter. During the period, stocks also routinely wrestled with
speculation over the duration and extent of the Federal Reserve's campaign
to raise the federal funds rate. Periods of rising interest rates are
generally considered to be difficult for longer-duration assets,
particularly growth stocks. In the third quarter, Hurricanes Katrina and
Rita further rocked an already shaky market environment. The good news is
that the market exhibited amazing resiliency during this challenging period.
Q. WHICH MARKET FACTORS INFLUENCED THE FUND'S RELATIVE PERFORMANCE?
A. All three of the Fund's investment strategies -- equities, options and
global long-short overlay -- added value during the one-year period ended
December 31, 2005.
EQUITIES
Investor behavior observed during 2005 was quite consistent with that seen
over recent years. As a result, Analytic Investors, Inc.'s, ("Analytic"),
the Predecessor Fund's investment adviser and the Fund's investment
sub-adviser, equity investment process was effective. The equity strategy
benefited from long positions established based on certain growth
characteristics -- such as earnings-per-share growth -- and valuation
characteristics -- such as earning to price and cash flow to price. In
addition, companies with positive price momentum continued to perform well
in a generally positive equity market. Short positions based on observed
negative trends -- such as individual stocks' three-month total returns,
trading volume and high dividend yields -- also proved beneficial to the
Fund's relative returns. Positions taken based on a company's return on
assets and leverage negatively impacted results during period.
OPTIONS
Options experienced gains in 2005 as a result of the flat to moderately
rising equity market. Therefore, Fund performance was positively impacted by
its exposure to the options market.
ASSET OVERLAY
Each component of the long-short overlay added value to the Fund in 2005.
The equity portion of the asset allocation model had small gains. The fixed
income portfolio also helped performance relative to the benchmark, with
positive returns to both real interest rates and term structure. The
currency portion of the model contributed the most during the period as a
result of positive payoffs to interest differential and trade fundamental
factors.
Q. HOW DID THE PORTFOLIO'S COMPOSITION AFFECT FUND PERFORMANCE?
A. Among the best performing stocks held by the Fund during the period was an
overweight position in the rail transportation provider Norfolk Southern,
which exceeded expectations and nearly doubled its second quarter net profit
from a year ago as it set records for shipping coal and metals to meet power
plant demand. Another strong performer was an overweight position in utility
company TXU, which reported strong second quarter earnings as a result of a
restructuring program launched in 2004. An overweight position in Darden
Restaurants, the parent of certain restaurant chains, also proved successful
as it posted a better-than-expected rise in quarterly earnings and boosted
its profit outlook for the year.
A short position in office supply, technology product and furniture
retailer, OfficeMax, also benefited Fund performance as shares in the
company declined after it reported a deeper-than-expected loss for the third
quarter as a result of sluggish retail sales. A short position in auto parts
supplier Visteon, also helped as the stock price fell after the company
delayed its third-quarter financial statements and cautioned that it plans
to revise financial statements for the past three years.
Negatively impacting performance was an overweight position in hospital
operator HCA which fell after the company offered a weak second quarter
outlook. An overweight position in Brunswick, the maker of marine engines,
pleasure boats and other leisure goods also negatively impacted relative
performance after it cut its earnings targets, blaming the combined effects
of higher fuel prices, lower consumer confidence and Hurricane Katrina.
Finally, a short position in fast food specialty eatery Wendy's
International negatively impacted performance as the company's shares moved
higher after an activist shareholder with a 5.5% stake in the company
publicly pressed the company to cut costs and spin off assets.
Q. WHAT IS THE INVESTMENT OUTLOOK FOR THE LARGE CAPITALIZATION EQUITY MARKET?
A. Analytic's investment process is based on the belief that investor
preferences change, but change slowly over time. As a result, Analytic
continues to emphasize stocks with above average earnings-per-share growth
as these companies continue to outperform. In addition, the emphasis on
companies with attractive forecasted earnings and cash-flow-to-price ratios
continues, while companies with higher than average dividend yields are
deemphasized.
PERFORMANCE HIGHLIGHTS
o The Fund's Class Z shares returned 15.36% for the 12 months ended
December 31, 2005 outperforming its benchmark, the S&P 500 Index, which
returned 4.91% for the period.
o Equities, options and the asset overlay added value during the one
year period ended December 31, 2005 relative to the S&P 500 Index.
4
<page>
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND (UNAUDITED)
ASSET CLASS WEIGHTINGS
AS OF DECEMBER 31, 2005
[PIE CHART OMITTED, PLOT POINTS FOLLOWS]
CASH EQUIVALENTS (4%)
COMMON STOCK (91%)
U.S. TREASURY OBLIGATION (5%)
% of Total Portfolio Investments
TOTAL RETURN AS OF DECEMBER 31, 2005
- --------------------------------------------------------------------------------
1 Year 3 Year 5 Year 10 Year Since
Return Return Return Return Inception
- --------------------------------------------------------------------------------
Class A with load* N/A N/A N/A N/A 2.99%
- --------------------------------------------------------------------------------
Class A without load* N/A N/A N/A N/A 9.27%
- --------------------------------------------------------------------------------
Class C with load* N/A N/A N/A N/A 7.69%
- --------------------------------------------------------------------------------
Class C without load* N/A N/A N/A N/A 8.78%
- --------------------------------------------------------------------------------
Class Z+ 15.36% 16.00% 6.07% 10.47% 10.86%
- --------------------------------------------------------------------------------
Institutional Class* N/A N/A N/A N/A (0.63)%
- --------------------------------------------------------------------------------
S&P 500 Index+ 4.91% 14.39% 0.54% 9.07% 11.36%
- --------------------------------------------------------------------------------
Past performance is not a guarantee of future results. Information about these
performance results and the comparative index can be found on page 2.
* Class A and Class C shares commenced operations on March 31, 2005 and
Institutional Class shares commenced operations on December 9, 2005. On
December 9, 2005, the Old Mutual Analytic Defensive Equity Fund (the "Fund")
acquired substantially all of the assets and liabilities of the Analytic
Defensive Equity Fund (the "Predecessor Fund"), a series of The Advisors'
Inner Circle Fund. The Fund's Class Z is the successor class of the
Predecessor Fund's Institutional Class; the Fund's Institutional Class is new.
Since inception total returns are cumulative and have not been annualized.
+ Inception date July 1, 1978. Total returns are annualized.
FUND PERFORMANCE
[LINE CHART OMITTED, PLOT POINTS FOLLOWS]
ANALYTIC DEFENSIVE
EQUITY FUND, CLASS Z S&P 500 INDEX
12/31/95 10000 10000
12/31/96 11571 12296
12/31/97 13779 16398
12/31/98 17759 21084
12/31/99 21551 25521
12/31/00 20159 23198
12/31/01 19760 20440
12/31/02 17345 15923
12/31/03 21357 20491
12/31/04 23465 22720
12/31/05 $27069 $23836
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. The graph above compares
a $10,000 investment made in the Fund's Class Z shares on December 31, 1995 to
an investment made in an unmanaged securities index on that date. Performance
for the Fund's other shares will vary due to differences in sales charges and
expenses. The Fund's performance in this chart and the performance table assumes
reinvestment of dividends and capital gain distributions but does not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or on
the redemption of Fund shares.
5
<page>
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
As of December 31, 2005
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCK -- 106.6%
BASIC MATERIALS -- 4.0%
CHEMICALS-DIVERSIFIED -- 1.9%
Dow Chemical(D) 199,033 $ 8,722
-------------
8,722
- --------------------------------------------------------------------------------
CHEMICALS-SPECIALTY -- 0.2%
Eastman Chemical(D) 4,759 245
Hercules(D)* 47,406 536
-------------
781
- --------------------------------------------------------------------------------
CONTAINERS-METAL/GLASS -- 0.4%
Ball(D) 40,109 1,593
-------------
1,593
- --------------------------------------------------------------------------------
GOLD MINING -- 0.7%
Newmont Mining(C)* 62,477 3,336
-------------
3,336
- --------------------------------------------------------------------------------
RUBBER-TIRES -- 0.7%
Goodyear Tire & Rubber(D)* 175,905 3,057
-------------
3,057
- --------------------------------------------------------------------------------
STEEL-PRODUCERS -- 0.1%
United States Steel 6,214 299
-------------
299
-------------
TOTAL BASIC MATERIALS (COST $17,322) 17,788
-------------
- --------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 17.2%
AGRICULTURAL OPERATIONS -- 1.3%
Archer-Daniels-Midland(D) 242,965 5,991
-------------
5,991
- --------------------------------------------------------------------------------
APPAREL MANUFACTURERS -- 1.4%
VF 111,403 6,165
-------------
6,165
- --------------------------------------------------------------------------------
AUTO-MEDIUM & HEAVY DUTY TRUCKS -- 0.1%
Paccar(C) 5,939 411
-------------
411
- --------------------------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.1%
Johnson Controls(C) 6,867 501
-------------
501
- --------------------------------------------------------------------------------
BUILDING-RESIDENTIAL/COMMERCIAL -- 3.4%
DR Horton(D) 81,956 2,928
KB Home(C) 93,916 6,824
Lennar, Cl A(C) 53,155 3,244
Pulte Homes(C) 50,300 1,980
-------------
14,976
- --------------------------------------------------------------------------------
CABLE TV -- 0.4%
Comcast(D)* 69,443 1,803
-------------
1,803
- --------------------------------------------------------------------------------
E-COMMERCE/PRODUCTS -- 0.8%
Amazon.com(D)* 71,256 3,360
-------------
3,360
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
LEISURE & RECREATIONAL PRODUCTS -- 1.4%
Brunswick(D) 149,609 $ 6,083
-------------
6,083
- --------------------------------------------------------------------------------
MULTIMEDIA -- 2.5%
Meredith(C) 15,512 812
Walt Disney(D) 438,128 10,502
-------------
11,314
- --------------------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 0.3%
Nordstrom(C) 32,038 1,198
-------------
1,198
- --------------------------------------------------------------------------------
RETAIL-AUTOMOBILE -- 0.2%
AutoNation(D)* 49,937 1,085
-------------
1,085
- --------------------------------------------------------------------------------
RETAIL-BUILDING PRODUCTS -- 1.7%
Home Depot(D) 191,781 7,763
-------------
7,763
- --------------------------------------------------------------------------------
RETAIL-DISCOUNT -- 0.4%
Wal-Mart Stores 37,724 1,765
-------------
1,765
- --------------------------------------------------------------------------------
RETAIL-MAJOR DEPARTMENT STORE -- 1.0%
JC Penney(C) 78,826 4,383
-------------
4,383
- --------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 2.2%
Darden Restaurants(D) 248,151 9,648
-------------
9,648
-------------
TOTAL CONSUMER CYCLICAL (COST $73,711) 76,446
-------------
- --------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 6.3%
BEVERAGES-NON-ALCOHOLIC -- 0.7%
Coca-Cola(C) 6,877 277
Coca-Cola Enterprises(D) 101,729 1,950
Pepsi Bottling Group(C) 23,461 672
-------------
2,899
- --------------------------------------------------------------------------------
CONSUMER PRODUCTS-MISCELLANEOUS -- 3.0%
Clorox(D) 68,257 3,883
Fortune Brands(D) 125,797 9,815
-------------
13,698
- --------------------------------------------------------------------------------
FOOD-MEAT PRODUCTS -- 0.8%
Tyson Foods(C) 213,785 3,656
-------------
3,656
- --------------------------------------------------------------------------------
FOOD-WHOLESALE/DISTRIBUTION -- 0.3%
Supervalu(C) 35,431 1,151
-------------
1,151
- --------------------------------------------------------------------------------
6
<page>
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
As of December 31, 2005
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
TOBACCO -- 1.5%
Altria Group(C) 88,283 $ 6,596
-------------
6,596
-------------
TOTAL CONSUMER NON-CYCLICAL (COST $27,467) 28,000
-------------
- --------------------------------------------------------------------------------
ENERGY -- 9.8%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 1.8%
Devon Energy(D) 126,075 7,885
-------------
7,885
- --------------------------------------------------------------------------------
OIL COMPANIES-INTEGRATED -- 7.7%
Amerada Hess(D) 55,300 7,013
Chevron(D) 114,717 6,512
ConocoPhillips(D) 156,393 9,099
Exxon Mobil 184,438 10,360
Occidental Petroleum(C) 14,893 1,190
-------------
34,174
- --------------------------------------------------------------------------------
OIL REFINING & MARKETING -- 0.3%
Sunoco(C) 16,047 1,258
-------------
1,258
-------------
TOTAL ENERGY (COST $42,117) 43,317
-------------
- --------------------------------------------------------------------------------
FINANCIAL -- 24.6%
FINANCE-COMMERCIAL -- 0.8%
CIT Group(D) 67,536 3,497
-------------
3,497
- --------------------------------------------------------------------------------
FINANCE-CREDIT CARD -- 0.4%
Capital One Financial(D) 5,385 465
MBNA(C) 40,748 1,107
-------------
1,572
- --------------------------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER -- 3.3%
Citigroup(D) 119,001 5,775
JPMorgan Chase(C) 68,110 2,703
Lehman Brothers Holdings(C)* 46,571 5,969
-------------
14,447
- --------------------------------------------------------------------------------
FINANCE-MORTGAGE LOAN/BANKER -- 0.6%
Countrywide Financial(D) 82,270 2,813
-------------
2,813
- --------------------------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 0.7%
Cigna(D) 28,355 3,167
-------------
3,167
- --------------------------------------------------------------------------------
MULTI-LINE INSURANCE -- 8.6%
ACE(D)* 101,235 5,410
Allstate(D) 183,614 9,928
American International Group(D) 98,581 6,726
Loews(C)* 82,758 7,850
Metlife(C) 173,175 8,485
-------------
38,399
- --------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE -- 1.4%
St Paul Travelers(C) 137,893 6,160
-------------
6,160
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
REITS-OFFICE PROPERTY -- 0.1%
Equity Office Properties Trust(D) 21,792 $ 661
-------------
661
- --------------------------------------------------------------------------------
REITS-REGIONAL MALLS -- 1.2%
Simon Property Group(C) 70,157 5,376
-------------
5,376
- --------------------------------------------------------------------------------
REITS-STORAGE -- 0.1%
Public Storage(C) 4,004 271
-------------
271
- --------------------------------------------------------------------------------
S&L/THRIFTS-WESTERN US -- 0.8%
Washington Mutual 84,325 3,668
-------------
3,668
- --------------------------------------------------------------------------------
SUPER-REGIONAL BANKS-US -- 6.6%
Bank of America(D) 141,237 6,518
Wachovia 201,470 10,650
Wells Fargo 189,019 11,876
-------------
29,044
-------------
TOTAL FINANCIAL (COST $102,273) 109,075
-------------
- --------------------------------------------------------------------------------
HEALTH CARE -- 12.6%
DISPOSABLE MEDICAL PRODUCTS -- 1.0%
C.R. Bard(D) 66,697 4,397
-------------
4,397
- --------------------------------------------------------------------------------
HEALTH CARE COST CONTAINMENT -- 0.9%
McKesson(C) 76,541 3,949
-------------
3,949
- --------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.1%
Guidant(D) 10,273 665
-------------
665
- --------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES -- 0.2%
Laboratory Corp of America Holdings(C)*12,729 686
-------------
686
- --------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 4.0%
Becton Dickinson(D) 19,059 1,145
Johnson & Johnson(C)* 277,880 16,701
-------------
17,846
- --------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 0.4%
Amgen(D)* 22,865 1,803
-------------
1,803
- --------------------------------------------------------------------------------
MEDICAL-DRUGS -- 2.6%
Abbott Laboratories(D) 17,124 675
Forest Laboratories(D)* 19,909 810
Pfizer(C) 435,991 10,167
-------------
11,652
- --------------------------------------------------------------------------------
MEDICAL-HMO -- 0.2%
Humana(D)* 20,345 1,105
-------------
1,105
- --------------------------------------------------------------------------------
7
<page>
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
As of December 31, 2005
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
MEDICAL-HOSPITALS -- 0.3%
HCA(D) 24,654 $ 1,245
-------------
1,245
- --------------------------------------------------------------------------------
MEDICAL-WHOLESALE DRUG DISTRIBUTORS -- 2.8%
AmerisourceBergen(D) 47,508 1,967
Cardinal Health(D) 149,889 10,305
-------------
12,272
- --------------------------------------------------------------------------------
OPTICAL SUPPLIES -- 0.1%
Bausch & Lomb(D) 4,851 329
-------------
329
-------------
TOTAL HEALTH CARE (COST $55,033) 55,949
-------------
- --------------------------------------------------------------------------------
INDUSTRIAL -- 4.4%
AEROSPACE/DEFENSE -- 1.8%
Lockheed Martin(C) 116,731 7,428
Raytheon(C) 10,748 431
-------------
7,859
- --------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.8%
Eaton(D) 32,056 2,151
General Electric(D) 40,670 1,425
-------------
3,576
- --------------------------------------------------------------------------------
ELECTRONICS-MILITARY -- 0.2%
L-3 Communications Holdings(C) 14,228 1,058
-------------
1,058
- --------------------------------------------------------------------------------
ENGINES-INTERNAL COMBUSTION -- 0.5%
Cummins(D) 25,523 2,290
-------------
2,290
- --------------------------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 0.2%
Fisher Scientific International(D)* 17,496 1,082
-------------
1,082
- --------------------------------------------------------------------------------
TOOLS-HAND HELD -- 0.9%
Black & Decker(D) 43,915 3,819
-------------
3,819
-------------
TOTAL INDUSTRIAL (COST $18,657) 19,684
-------------
- --------------------------------------------------------------------------------
SERVICES -- 6.2%
COMMERCIAL SERVICES-FINANCE -- 2.1%
H&R Block(D) 380,350 9,338
-------------
9,338
- --------------------------------------------------------------------------------
COMPUTER SERVICES -- 1.7%
Affiliated Computer Services, Cl A(D)*125,960 7,454
-------------
7,454
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS/COMMERCIAL SERVICES -- 0.4%
Cendant(D) 103,972 1,793
-------------
1,793
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
TELEPHONE-INTEGRATED -- 2.0%
AT&T(C) 31,995 $ 784
Qwest Communications
International(C)* 321,250 1,815
Sprint Nextel(C) 255,746 5,974
Verizon Communications 12,514 377
-------------
8,950
- --------------------------------------------------------------------------------
TOTAL SERVICES (COST $27,141) 27,535
-------------
- --------------------------------------------------------------------------------
TECHNOLOGY -- 14.1%
APPLICATIONS SOFTWARE -- 1.3%
Microsoft(C) 212,702 5,562
-------------
5,562
- --------------------------------------------------------------------------------
COMPUTER AIDED DESIGN -- 0.2%
Autodesk(D) 18,223 783
-------------
783
- --------------------------------------------------------------------------------
COMPUTERS -- 3.2%
Hewlett-Packard(D) 219,081 6,272
International Business Machines(D) 98,196 8,072
-------------
14,344
- --------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.9%
NCR(C)* 115,796 3,930
-------------
3,930
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 5.4%
Freescale Semiconductor(D)* 145,991 3,675
Intel(C) 477,209 11,911
Nvidia(C)* 25,151 920
Texas Instruments(C) 227,820 7,306
-------------
23,812
- --------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 0.6%
Cisco Systems(D)* 164,039 2,808
-------------
2,808
- --------------------------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 0.1%
Lucent Technologies(C)* 147,273 392
-------------
392
- --------------------------------------------------------------------------------
WEB PORTALS/ISP -- 1.5%
Yahoo!* 176,069 6,898
-------------
6,898
- --------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 0.9%
Motorola(C) 172,747 3,902
-------------
3,902
-------------
TOTAL TECHNOLOGY (COST $56,995) 62,431
-------------
- --------------------------------------------------------------------------------
TRANSPORTATION -- 2.4%
TRANSPORT-RAIL -- 1.7%
CSX(D) 63,699 3,234
Norfolk Southern(C)* 62,528 2,803
Union Pacific 18,928 1,524
-------------
7,561
- --------------------------------------------------------------------------------
8
<page>
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
As of December 31, 2005
Shares/Face Market
Description Amount (000) Value (000)
- --------------------------------------------------------------------------------
RANSPORT-SERVICES -- 0.7%
FedEx(D) 11,139 $ 1,152
Ryder System(C) 49,913 2,047
-------------
3,199
-------------
TOTAL TRANSPORTATION (COST $9,049) 10,760
-------------
- --------------------------------------------------------------------------------
UTILITIES -- 5.0%
ELECTRIC-GENERATION -- 0.7%
AES(D)* 196,648 3,113
-------------
3,113
- --------------------------------------------------------------------------------
ELECTRIC-INTEGRATED -- 4.3%
Allegheny Energy(D)* 50,419 1,596
Centerpoint Energy(D) 321,653 4,133
CMS Energy(D)* 123,738 1,795
Edison International(D) 76,280 3,327
Public Service Enterprise Group(C) 7,065 459
TXU 154,770 7,768
-------------
19,078
-------------
TOTAL UTILITIES (COST $20,857) 22,191
-------------
TOTAL COMMON STOCK (COST $450,622) 473,176
-------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION -- 6.1%
U.S. Treasury Bills(A)(B)
3.708%, 02/23/06 $27,340 27,192
------------
TOTAL U.S. TREASURY OBLIGATION
(COST $27,190) 27,192
-------------
- --------------------------------------------------------------------------------
CASH EQUIVALENTS -- 4.6%
HighMark Diversified Money Market
Fund, 3.84%** 8,961,179 8,961
Union Bank of California Money
Market Fund, 3.34%** 11,270,502 11,271
-------------
TOTAL CASH EQUIVALENTS
(COST $20,232) 20,232
-------------
TOTAL INVESTMENTS (117.3%)
(COST $498,044) $ 520,600
-------------
- --------------------------------------------------------------------------------
SECURITIES SOLD SHORT -- (17.7)%
BASIC MATERIALS -- (2.1)%
BUILDING & CONSTRUCTION PRODUCTS-MISCELLANEOUS -- (0.9)%
Vulcan Materials (61,391) $ (4,159)
-------------
(4,159)
- --------------------------------------------------------------------------------
CHEMICALS-SPECIALTY -- (0.4)%
Ashland (29,844) (1,728)
-------------
(1,728)
- --------------------------------------------------------------------------------
FORESTRY -- (0.2)%
Weyerhaeuser (15,085) (1,001)
-------------
(1,001)
- --------------------------------------------------------------------------------
PAPER & RELATED PRODUCTS -- (0.3)%
MeadWestvaco (36,102) (1,012)
Temple-Inland (8,943) (401)
-------------
(1,413)
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
RUBBER-TIRES -- (0.3)%
Cooper Tire & Rubber (78,686) $ (1,206)
-------------
(1,206)
- --------------------------------------------------------------------------------
TOTAL BASIC MATERIALS (PROCEEDS $(9,561)) (9,507)
-------------
- --------------------------------------------------------------------------------
CONSUMER CYCLICAL -- (4.2)%
APPLIANCES -- (0.1)%
Maytag (1,662) (31)
Whirlpool (5,585) (468)
-------------
(499)
- --------------------------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- (0.6)%
Dana (108,026) (776)
Visteon (308,697) (1,932)
-------------
(2,708)
- --------------------------------------------------------------------------------
CASINO SERVICES -- (0.4)%
International Game Technology (55,101) (1,696)
-------------
(1,696)
- --------------------------------------------------------------------------------
PUBLISHING-NEWSPAPERS -- (0.1)%
New York Times, Cl A* (14,183) (375)
-------------
(375)
- --------------------------------------------------------------------------------
RETAIL-JEWELRY -- (0.8)%
Tiffany (90,661) (3,472)
-------------
(3,472)
- --------------------------------------------------------------------------------
RETAIL-OFFICE SUPPLIES -- (0.5)%
OfficeMax (85,229) (2,161)
-------------
(2,161)
- --------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- (1.2)%
Wendy's International (101,109) (5,587)
-------------
(5,587)
- --------------------------------------------------------------------------------
TELEVISION -- (0.5)%
Univision Communications, Cl A* (73,762) (2,168)
-------------
(2,168)
-------------
TOTAL CONSUMER CYCLICAL (PROCEEDS $(17,968)) (18,666)
-------------
- --------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- (0.6)%
OFFICE SUPPLIES & FORMS -- (0.6)%
Avery Dennison (45,419) (2,510)
-------------
(2,510)
-------------
TOTAL CONSUMER NON-CYCLICAL (PROCEEDS $(2,534)) (2,510)
-------------
- --------------------------------------------------------------------------------
ENERGY -- (2.0)%
INDEPENDENT POWER PRODUCER -- (0.2)%
Dynegy, Cl A* (139,316) (674)
-------------
(674)
- --------------------------------------------------------------------------------
PIPELINES -- (1.8)%
Kinder Morgan (88,327) (8,122)
-------------
(8,122)
-------------
TOTAL ENERGY (PROCEEDS $(8,343)) (8,796)
-------------
- --------------------------------------------------------------------------------
9
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
As of December 31, 2005
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
FINANCIAL -- (4.0)%
FINANCIAL GUARANTEE INSURANCE -- (1.1)%
MBIA (50,889) $ (3,062)
MGIC Investment (26,990) (1,776)
-------------
(4,838)
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT/ADVISORY SERVICES -- (0.6)%
Janus Capital Group (140,026) (2,609)
-------------
(2,609)
- --------------------------------------------------------------------------------
MULTI-LINE INSURANCE -- (1.3)%
XL Capital, Cl A (81,958) (5,522)
-------------
(5,522)
- --------------------------------------------------------------------------------
SUPER-REGIONAL BANKS-US -- (1.0)%
Fifth Third Bancorp (122,161) (4,608)
-------------
(4,608)
-------------
TOTAL FINANCIAL (PROCEEDS $(16,487)) (17,577)
-------------
- --------------------------------------------------------------------------------
HEALTH CARE -- (1.3)%
MEDICAL-DRUGS -- (1.0)%
Bristol-Myers Squibb (171,860) (3,949)
King Pharmaceuticals* (26,934) (456)
-------------
(4,405)
- --------------------------------------------------------------------------------
MEDICAL-HOSPITALS -- (0.3)%
Tenet Healthcare* (197,043) (1,509)
-------------
(1,509)
-------------
TOTAL HEALTH CARE (PROCEEDS $(6,333)) (5,914)
-------------
- --------------------------------------------------------------------------------
INDUSTRIAL -- (0.1)%
FILTRATION/SEPARATION PRODUCTS -- (0.1)%
Pall (14,543) (391)
-------------
(391)
-------------
TOTAL INDUSTRIAL (PROCEEDS $(455)) (391)
-------------
- --------------------------------------------------------------------------------
SERVICES -- (0.7)%
ADVERTISING AGENCIES -- (0.1)%
Interpublic Group* (42,274) (408)
-------------
(408)
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES-FINANCE -- (0.3)%
Paychex (28,910) (1,102)
-------------
(1,102)
- --------------------------------------------------------------------------------
COMPUTER SERVICES -- (0.1)%
Unisys* (70,641) (412)
-------------
(412)
- --------------------------------------------------------------------------------
TELEPHONE-INTEGRATED -- (0.2)%
CenturyTel (32,572) (1,080)
-------------
(1,080)
-------------
TOTAL SERVICES (PROCEEDS $(2,994)) (3,002)
-------------
- --------------------------------------------------------------------------------
TECHNOLOGY -- (2.0)%
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- (1.0)%
Applied Micro Circuits* (144,987) (373)
PMC-Sierra* (51,925) (400)
- --------------------------------------------------------------------------------
Market
Description Shares/Contracts Value (000)
- --------------------------------------------------------------------------------
TECHNOLOGY -- CONTINUED
QLogic* (70,282) $ (2,285)
Xilinx (60,893) (1,535)
-------------
(4,593)
- --------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- (0.1)%
Maxim Integrated Products (11,561) (419)
-------------
(419)
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- (0.1)%
Applied Materials (20,287) (364)
-------------
(364)
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- (0.6)%
Andrew* (35,511) (381)
Tellabs* (206,561) (2,252)
-------------
(2,633)
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- (0.2)%
CIENA* (169,681) (504)
JDS Uniphase* (220,549) (520)
-------------
(1,024)
-------------
TOTAL TECHNOLOGY (PROCEEDS $(9,237)) (9,033)
-------------
- --------------------------------------------------------------------------------
UTILITIES -- (0.7)%
ELECTRIC-INTEGRATED -- (0.5)%
Pinnacle West Capital (47,924) (1,981)
-------------
(1,981)
- --------------------------------------------------------------------------------
GAS-DISTRIBUTION -- (0.2)%
KeySpan (4,269) (153)
Peoples Energy (23,762) (833)
-------------
(986)
-------------
TOTAL UTILITIES (PROCEEDS $(2,977)) (2,967)
-------------
TOTAL SECURITIES SOLD SHORT (PROCEEDS $(76,889)) $ (78,363)
-------------
================================================================================
WRITTEN INDEX OPTION CONTRACTS -- (0.9)%
CBOE Dow Jones Utility Index,
January 2006, 420 Call (125) (16)
CBOE Oil Index,
January 2006, 550 Call (200) (47)
Morgan Stanley Consumer Index,
January 2006, 600 Call (300) (90)
Morgan Stanley Cyclical Index,
January 2006, 810 Call (225) (34)
PHLX Bank Index,
January 2006, 102.50 Call (1,725) (345)
PHLX Utility Index,
January 2006, 452.50 Call (425) (21)
S&P 500 Index,
January 2006, 1230 Call (1,325) (3,312)
S&P 500 Index,
January 2006, 1285 Call (850) (111)
-------------
(3,976)
-------------
TOTAL WRITTEN INDEX OPTION CONTRACTS
(PREMIUMS RECEIVED $(8,505) $ (3,976)
-------------
================================================================================
10
OLD MUTUAL ADVISOR FUNDS
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
As of December 31, 2005
Description Value (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 1.3%
Receivable for Fund Shares Sold $ 9,074
Payable for Fund Shares Redeemed (2,756)
Payable for Investment Advisory Fees (260)
Payable for Distribution and Service Fees (65)
Payable for Administration Fees (47)
Payable for Trustees' Fees (5)
Other Assets and Liabilities, Net (223)
-------------
TOTAL OTHER ASSETS AND LIABILITIES 5,718
-------------
NET ASSETS -- 100.0% $ 443,979
-------------
NET ASSETS:
Paid-in-capital ($0.001 par value) $ 436,396
Distributions in excess of net investment income (4,433)
Accumulated net realized loss on investments (13,741)
Unrealized appreciation on investments, securities
sold short and written option contracts 25,611
Unrealized appreciation on future contracts 436
Unrealized depreciation on forward foreign
currency contracts (290)
-------------
NET ASSETS $ 443,979
-------------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A
($129,959,941 / 10,122,365 SHARES) $12.84
-------------
MAXIMUM OFFERING
PRICE PER SHARE -- CLASS A
($12.85/94.25%) $13.62
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C+
($86,752,544 / 6,774,544 SHARES) $12.81
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS Z
($227,264,973 / 17,721,259 SHARES) $12.82
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INSTITUTIONAL CLASS
($2,013 / 157 SHARES) $12.82
* Non-income producing security.
** Rate shown is the 7-day effective yield as of December 31, 2005.
+ Class C shares have a contingent deferred sales charge. For a description
of all possible sales charges, please see the Fund's prospectus.
(A) -- The rate reported is the effective yield at time of purchase.
(B) -- All or a portion of this security has been pledged as collateral for
open future contracts.
(C) -- All or a portion of this security is held as collateral for securities
sold short.
(D) -- All or a portion of this security has been pledged for collateral on
open written option contracts.
Cl -- Class
REITs -- Real Estate Investment Trusts
Cost, proceeds and premiums received figures are shown with "000's" omitted.
- --------------------------------------------------------------------------------
The Fund had the following futures contracts open as of December 31, 2005.
UNREALIZED
NUMBER APPRECIATION
OF SETTLEMENT (DEPRECIATION)
CONTRACT DESCRIPTION CONTRACTS MONTH (000)
- ----------------- -------- --------- ----------
Amsterdam Index 552 January-06 $ 398
Australian 10 Yr Bond (268) March-06 (384)
CAC40 Index 1,015 January-06 205
Canadian 10 Yr 754 March-06 148
DAX Index (357) March-06 (1,227)
DJ Euro Stoxx 50 Index 179 March-06 129
Euro Bond 328 March-06 399
FTSE 100 Index 628 March-06 826
Hang Seng Index (302) January-06 905
IBEX 35 Plus Index 299 January-06 630
Japan 10 Yr Bond 73 March-06 473
Long GILT 10Yr (453) March-06 (854)
S&P 500 Index (93) March-06 439
S&P/MIB Index (109) March-06 (526)
S&P/TSE 60 Index (244) March-06 (208)
SPI 200 Index (538) March-06 (1,421)
Topix Index 301 March-06 1,337
US 10 Yr Note (1,111) March-06 (833)
---------
$ 436
---------
As of December 31, 2005, the Fund had the following forward foreign currency
contracts outstanding:
UNREALIZED
CURRENCY CURRENCY CONTRACT APPRECIATION/
MATURITY TO RECEIVE TO DELIVER VALUE (DEPRECIATION)
DATE (000) (000) (000) (000)
------------ ------------------------ --------------------- -------------- ------------------
3/15/06 AUD 124,000 USD 91,901 $90,727 $(1,175)
3/15/06 USD 92,302 CAD 107,000 91,817 485
3/15/06 USD 29,464 GBP 17,000 29,178 286
3/15/06 NZD 37,000 USD 25,360 25,032 (328)
3/15/06 USD 91,776 CHF 120,000 91,742 34
3/15/06 SEK 740,000 USD 93,349 93,515 165
3/15/06 NOK 620,000 USD 93,126 91,983 (1,143)
3/15/06 USD 91,570 JPY 10,700,000 91,505 65
3/15/06 USD 93,693 EUR 78,000 92,372 1,321
--------
$ (290)
---------
AUD -- Australian Dollar JPY -- Japanese Yen
CAD -- Canadian Dollar NOK -- Norwegian KronE
CHF -- Swiss Franc NZD -- New Zealand DollaR
GBP -- British Pound SEK -- Swedish Krona
EUR -- Euro USD -- U.S. Dollar
The accompanying notes are an integral part of the financial statements.
11
<page>
OLD MUTUAL ADVISOR FUNDS
STATEMENT OF OPERATIONS (000)
- ------------------------------------------------------------------------------------------------------------------------
------------------
OLD MUTUAL
ANALYTIC DEFENSIVE
EQUITY FUND
-------------------
Year Ended
12/31/05(1)
------------------
INVESTMENT INCOME:
Dividends $ 4,814
Interest 414
-----------
Total Investment Income 5,228
-----------
EXPENSES:
Investment Advisory fees 1,556
Administration fees 355
Distribution and Service fees
Class A(2) 73
Class C(2) 178
Trustees' fees 22
Dividends on securities sold short 650
Shareholder servicing fees 446
Transfer agent fees 136
Professional fees 114
Registration and SEC fees 75
Printing fees 65
Custodian fees 26
Insurance and other expenses 19
-----------
Total Expenses 3,715
-----------
Waiver of Investment Advisory Fees (123)
Fees Paid Indirectly(3) (68)
-----------
Net Expenses 3,524
-----------
NET INVESTMENT INCOME 1,704
-----------
Net Realized Gain from Investments (including securities sold short) 1,165
Net Realized Loss on Written Option Contracts (6,232)
Net Realized Gain on Futures Contracts 5,233
Net Realized Gain on Foreign Currency Transactions 1,928
Net Change in Unrealized Appreciation on Investments (including securities sold short) 14,279
Net Change in Unrealized Appreciation on Written Option Contracts 4,635
Net Change in Unrealized Depreciation on Futures Contracts (138)
Net Change in Unrealized Depreciation on Foreign Currency Translation (338)
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 20,532
-----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 22,236
-----------
(1) On December 9, 2005, the Old Mutual Analytic Defensive Equity Fund (the
"Fund") acquired substantially all of the assets and liabilities of the
Analytic Defensive Equity Fund (the "Predecessor Fund"), a series of The
Advisors' Inner Circle Fund. The operations of the Fund prior to the
acquisition were those of the Predecessor Fund.
(2) Class A and Class C shares commenced operations on March 31, 2005.
(3) See Note 3 in Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
12
<page>
OLD MUTUAL ADVISOR FUNDS
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
---------------------------------------------
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND(1)
---------------------------------------------
Year Ended 12/31/05 Year Ended 12/31/04
---------------------------------------------
INVESTMENT ACTIVITIES:
Net Investment Income $ 1,704 $ 375
Net Realized Gain from Investments (including securities sold short),
Written Option Contracts, Futures Contracts and Foreign Currency
Transactions 2,094 2,681
Net Change in Unrealized Appreciation on Investments (including
securities sold short), Written Option Contracts,
Futures Contracts and Foreign Currency Translation 18,438 1,840
-------- --------
Net Increase in Net Assets Resulting from Operations 22,236 4,896
-------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income
Class A (2,191) --
Class C (1,331) --
Class Z (5,290) (780)
Institutional Class -- --
Realized Capital Gains
Class A (2,788) --
Class C (1,852) --
Class Z (6,458) (1,583)
Institutional Class -- --
-------- --------
Total Dividends and Distributions (19,910) (2,363)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Class A(2)
Shares Issued 134,980 --
Shares Issued upon Reinvestment of Dividends and Distributions 2,925 --
Redemption Fees -- --
Shares Redeemed (4,611) --
-------- --------
Total Class A Transactions 133,294 --
-------- --------
Class C(2)
Shares Issued 90,979 --
Shares Issued upon Reinvestment of Dividends and Distributions 779 --
Shares Redeemed (2,623) --
-------- --------
Total Class C Transactions 89,135 --
-------- --------
Class Z(3)
Shares Issued 312,540 15,241
Shares Issued upon Reinvestment of Dividends and Distributions 11,591 2,289
Shares Redeemed (162,080) (7,585)
-------- --------
Total Class Z Transactions 162,051 9,945
-------- --------
Institutional Class(4)
Shares Issued 2 --
Shares Issued upon Reinvestment of Dividends and Distributions -- --
Shares Redeemed -- --
-------- --------
Total Institutional Class Transactions 2 --
-------- --------
Increase in Net Assets Derived from Capital Share Transactions 384,482 9,945
-------- --------
Total Increase in Net Assets 386,808 12,478
-------- --------
NET ASSETS:
Beginning of Year 57,171 44,693
-------- --------
End of Year $443,979 $ 57,171
-------- --------
Undistributed Income (Distributions
in excess of net investment income) $ (4,433) $ 747
-------- --------
(1) On December 9, 2005, the Old Mutual Analytic Defensive Equity Fund (the
"Fund") acquired substantially all of the assets and liabilities of the
Analytic Defensive Equity Fund (the "Predecessor Fund"), a series of The
Advisors' Inner Circle Fund. The operations of the Fund prior to the
acquisition were those of the Predecessor Fund.
(2) Class A and Class C shares commenced operations on March 31, 2005.
(3) The Fund's Class Z is the successor class of the Predecessor Fund's
Institutional Class; the Fund's Institutional Class is new. (4)Institutional
Class shares commenced operations on December 9, 2005.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
13
<page>
OLD MUTUAL ADVISOR FUNDS
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
--------------------------------------------
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND(1)
--------------------------------------------
Year Ended 12/31/05 Year Ended 12/31/04
-------------------------------------------
SHARES ISSUED AND REDEEMED:
Class A(2)
Shares Issued 10,244 --
Shares Issued upon Reinvestment of Dividends and Distributions 227 --
Shares Redeemed (349) --
------ ------
Total Class A Share Transactions 10,122 --
------ ------
Class C(2)
Shares Issued 6,911 --
Shares Issued upon Reinvestment of Dividends and Distributions 61 --
Shares Redeemed (197) --
------ ------
Total Class C Share Transactions 6,775 --
------ ------
Class Z(3)
Shares Issued 24,270 1,349
Shares Issued upon Reinvestment of Dividends and Distributions 895 198
Shares Redeemed (12,346) (670)
------ ------
Total Class Z Share Transactions 12,819 877
------ ------
Institutional Class(4)
Shares Issued -- --
Shares Issued upon Reinvestment of Dividends and Distributions -- --
Shares Redeemed -- --
------ ------
Total Institutional Class Share Transactions -- --
------ ------
Net Increase in Shares Outstanding 29,716 877
------ ------
(1) On December 9, 2005, the Old Mutual Analytic Defensive Equity Fund (the
"Fund") acquired substantially all of the assets and liabilities of the
Analytic Defensive Equity Fund (the "Predecessor Fund"), a series of The
Advisors' Inner Circle Fund. The operations of the Fund prior to the
acquisition were those of the Predecessor Fund.
(2) Class A and Class C shares commenced operations on March 31, 2005.
(3) The Fund's Class Z is the successor class of the Predecessor Fund's
Institutional Class; the Fund's Institutional Class is new.
(4) Institutional Class shares commenced operations on December 9, 2005.
Amounts designated as "--" are either 0 or have been rounded to 0.
The accompanying notes are an integral part of the financial statements.
14
<page>
OLD MUTUAL ADVISOR FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout Each Year or Period
OLD MUTUAL ANALYTIC
DEFENSIVE EQUITY FUND(1)
-------------------------------
-------------------------------
CLASS A CLASS C
PERIOD ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31,
2005(2) 2005(2)
------------- -------------
Net Asset Value, Beginning
of Year $ 12.30 $ 12.30
--------- --------
Income (Loss) from Investment
Operations:
Net Investment Income (Loss) 0.05* (0.01)*
Net Realized and Unrealized
Gain (Loss) 1.09* 1.09*
--------- --------
Total from Investment
Operations 1.14 1.08
--------- --------
Dividends and Distributions:
Net Investment Income (0.27) (0.24)
Net Realized Gain (0.33) (0.33)
--------- --------
Total Dividends and
Distributions (0.60) (0.57)
--------- --------
Net Asset Value,
End of Year $ 12.84 $ 12.81
--------- --------
Total Return+ 9.27% 8.78%
--------- --------
Ratios and Supplemental Data
Net Assets, End of Year
(Thousands) $129,960 $86,752
Ratio of Expenses to Average
Net Assets** (including
Dividend Expense) 1.85% 2.50%
Ratio of Expenses to Average
Net Assets** (excluding
Dividend Expense) 1.44% 2.15%
Ratio of Expenses to Average
Net Assets (excluding Waivers
and Fees Paid Indirectly;
including Dividend
Expense) 1.91% 2.57%
Ratio of Expenses to Average
Net Assets (excluding Fees
Paid Indirectly, including
Dividend Expense) 1.86% 2.51%
Ratio of Net Investment Income to
Average Net Assets 0.64% (0.09)%
Portfolio Turnover Rate+ 81% 81%
OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND(1)
----------------------------------------------------------------------------------------
INSTITUTIONAL
CLASS Z YEAR ENDED(3) CLASS
---------------------------------------------------------------------- PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2005 2004 2003 2002(6) 2001 2005(4)
------------ ----------- ------------ ------------- ------------ -------------
Net Asset Value, Beginning
of Year $ 11.66 $ 11.10 $ 9.09 $ 10.46 $ 10.80 $ 13.45
--------- ---------- -------- --------- --------- ---------
Income (Loss) from Investment
Operations:
Net Investment Income (Loss) 0.10* 0.09* 0.08* 0.09 0.08 --*
Net Realized and Unrealized
Gain (Loss) 1.69* 0.99* 2.01* (1.36) (0.30) (0.09)*
--------- ---------- -------- --------- --------- ---------
Total from Investment
Operations 1.79 1.08 2.09 (1.27) (0.22) (0.09)
--------- ---------- -------- --------- --------- ---------
Dividends and Distributions:
Net Investment Income (0.30) (0.19) (0.08) (0.10)5 (0.07) (0.21)
Net Realized Gain (0.33) (0.33) -- -- (0.05) (0.33)
--------- ---------- -------- --------- --------- ---------
Total Dividends and
Distributions (0.63) (0.52) (0.08) (0.10)5 (0.12) (0.54)
--------- ---------- -------- --------- --------- ---------
Net Asset Value,
End of Year $ 12.82 $ 11.66 $ 11.10 $ 9.09 $ 10.46 $ 12.82
--------- ---------- -------- --------- --------- ---------
Total Return+ 15.36% 9.87% 23.13% (12.22)% (1.98)% (0.63)%
--------- ---------- -------- --------- --------- ---------
Ratios and Supplemental Data
Net Assets, End of Year
(Thousands) $227,265 $57,171 $44,693 $35,131 $40,806 $ 2
Ratio of Expenses to Average
Net Assets** (including
Dividend Expense) 1.29% 1.17% 1.30% 1.09% 0.99% 1.15%
Ratio of Expenses to Average
Net Assets** (excluding
Dividend Expense) 1.05% 0.99% 0.99% 0.99% 0.99% 1.15%
Ratio of Expenses to Average
Net Assets (excluding Waivers
and Fees Paid Indirectly;
including Dividend
Expense) 1.37% 1.70% 2.27% 1.94% 1.69% 1.39%
Ratio of Expenses to Average
Net Assets (excluding Fees
Paid Indirectly, including
Dividend Expense) 1.32% 1.41% 1.71% 1.46% 0.99% 1.15%
Ratio of Net Investment Income to
Average Net Assets 0.78% 0.75% 0.79% 0.91% 0.71% 0.33%
Portfolio Turnover Rate+ 81% 152% 241% 233% 216% 81%
* Per share amounts for the year are calculated based on average outstanding
shares.
** Includes expense offset for fees paid indirectly.
+ Returns and portfolio turnover rates are for the period indicated and have
not been annualized. Total return would have been lower had certain
expenses not been waived by the Adviser during the year. Returns shown do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
(1) On December 9, 2005, the Old Mutual Analytic Defensive Equity Fund (the
"Fund") acquired substantially all of the assets and liabilities of the
Analytic Defensive Equity Fund (the "Predecessor Fund"), a series of The
Advisors' Inner Circle Fund. The operations of the Fund prior to the
acquisition were those of the Predecessor Fund.
(2) Commenced operations on March 31, 2005. All Ratios for the period have
been annualized.
(3) The Fund's Class Z is the successor class of the Predecessor Fund's
Institutional Class; the Fund's Institutional Class is new.
(4) Commenced operations on December 9, 2005. All Ratios for the period have
been annualized.
(5) Includes a return of capital of $(0.003).
(6) On June 24, 2002, Predecessor Fund acquired the assets of the UAM Analytic
Defensive Equity Fund, a series of the UAM Funds, Inc. II. The operations of
Predecessor Fund prior to acquisition were those of the UAM Analytic
Defensive Equity Fund.
Amounts designated as "_" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
15
<page>
OLD MUTUAL ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
As of December 31, 2005
1. ORGANIZATION
Old Mutual Advisor Funds (the "Trust"), a Delaware statutory trust effective May
26, 2004, is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end management investment company. The financial
statements herein are those of the Old Mutual Analytic Defensive Equity Fund
(the "Fund"), a series of the Trust. There are currently eight other active
funds within the Trust. Those funds are covered by separate prospectuses and
annual reports. Shareholders may purchase shares of the Fund through four
separate classes, Class A, Class C, Class Z and Institutional Class shares. All
classes have equal right as to earnings, assets and voting privileges, except
that each class may have different distribution costs, dividends, registration
costs and shareholder services costs and each class has exclusive voting rights
with respect to its distribution plan. The Fund is classified as a diversified
management investment company. The Fund's prospectus provides a description of
the Fund's investment objective, policies and investment strategies.
The Fund is a successor to the Analytic Defensive Equity Fund, a series of The
Advisors' Inner Circle Fund (the "Predecessor Fund"). The Predecessor Fund and
the Fund entered into an agreement and plan of reorganization dated as of
October 13, 2005. Under the plan of reorganization, the Predecessor Fund
transferred substantially all of its assets and liabilities to the Fund on
December 9, 2005. Each shareholder received a number of shares of the Fund equal
in dollar value to the Predecessor Fund as of December 9, 2005. The Fund has the
same investment objective and substantially the same risks, policies,
restrictions and limitations as the Predecessor Fund. The Fund has changed its
year end from December 31 to July 31 beginning with fiscal year 2006.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Fund.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The preparation
of financial statements, in conformity with accounting principles generally
accepted in the United States of America, requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
SECURITY VALUATION -- Investment securities of the Fund, including securities
sold short that are listed on a securities exchange, and for which market
quotations are readily available, are valued at the last quoted sales price at
the close of trading on the New York Stock Exchange ("NYSE") (normally 4:00
p.m., Eastern Time) each day that the NYSE is open. Investment securities of the
Fund that are quoted on a national market system are valued at the official
closing price, provided by NASDAQ or if there is none, at the last sales price.
The Fund uses pricing services to report the market value of securities in its
portfolio; if the pricing service is not able to provide a price, or the pricing
service quote of valuation is inaccurate or does not reflect the market value of
the security, prices may be obtained through market quotations from independent
broker/dealers. If market quotations from these sources are not readily
available (of which there were none as of December 31, 2005), securities are
valued in accordance with Fair Value Procedures established by the Board of
Trustees of the Trust (the "Board"). The Fund's Fair Value Procedures are
implemented through a Fair Value Committee (the "Committee") designated by the
Board. The valuation is assigned to Fair Valued Securities for purposes of
calculating a Fund's net asset value ("NAV"). Debt securities (other than
short-term obligations), including listed issues, are valued on the basis of
valuations furnished by a pricing service which utilizes electronic data
processing techniques to determine valuations for normal institutional size
trading units of debt securities, without exclusive reliance upon exchange or
over-the-counter prices. Short-term obligations with maturities of 60 days or
less may be valued at amortized cost, which approximates market value. Under
this valuation method, acquisition discounts and premiums are accreted and
amortized ratably to maturity and are included in interest income.
Foreign securities traded on foreign exchanges in the Western Hemisphere are
valued based upon quotations from the primary market in which they are traded,
and are translated from the local currency into U.S. dollars using current
exchange rates. In addition, if quotations are not readily available, or if the
values have been materially affected by events occurring after the closing of a
foreign market, assets may be valued by another method that the Board believes
accurately reflects fair value.
Foreign securities traded in countries outside the Western Hemisphere are fair
valued daily by utilizing the quotations of an independent pricing service,
unless the Fund's adviser determines that use of another valuation methodology
is appropriate. The pricing service uses statistical analyses and quantatative
models to adjust local prices using factors such as subsequent movement and
changes in the prices of indexes, securities and exchange rates in other markets
in determining fair value as of the time the Fund calculates its NAV.
OPTIONS AND FUTURES -- Options are valued at the last quoted sales price. If
there is no such reported sale on the valuation date, long positions are valued
at the most recent bid price, and short positions are valued at the most recent
ask price. Futures are valued at the settlement price established each day by
the board of exchange on which they are traded. The daily settlement prices for
financial futures are provided by an independent source.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Dividend income and distributions to shareholders are recognized on the
ex-dividend date; interest income is recognized on the accrual basis and
includes amortization of premiums and accretion of discounts on investments.
Non-cash dividends included in dividend income, if any, are recorded at the fair
market value of the security received. Costs used in determining realized
capital gains and losses on the sale of investment securities are those of the
specific securities sold adjusted for the accretion and amortization of
acquisition discounts and premiums during the respective holding periods, if
applicable.
DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income for the Fund
are declared and paid annually, if available. Dividends from net investment
income for the Predecessor Fund were declared and paid quarterly. Distributions
of net realized capital gains, for the Fund, are generally made to shareholders
annually, if available.
FOREIGN WITHHOLDING TAXES -- The Fund may be subject to taxes imposed by
countries in which it invests with respect to its investments in issuers
existing or operating in such countries. Such taxes are generally based on
income earned. The Fund accrues such taxes when the related income is earned.
FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts as hedges against specific transactions, fund positions or
anticipated fund positions. All commitments are "marked-to-market" daily at the
applicable foreign exchange rate, and any resulting unrealized gains or losses
are recorded accordingly. The Fund realizes gains and losses at the time the
forward contracts are extinguished. Unrealized gains or losses on outstanding
positions in forward foreign currency contracts held at the close of the period
are recognized as ordinary income or loss for Federal income tax purposes. The
Fund could be exposed to risk if the counterparties to the contracts are unable
to meet the terms of the contract and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar. Finally, the risk exists that
losses could exceed amounts disclosed on the Statement of Net Assets.
16
<page>
OLD MUTUAL ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
As of December 31, 2005
FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are converted into U.S.
dollars on the following basis:
(I) market value of investment securities, other assets and liabilities at
the current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at the
relevant rates of exchange prevailing on the respective dates of such
transactions.
The Fund does not isolate that portion of gains and losses on investment
securities that is due to changes in the foreign exchange rates from that which
is due to changes in market prices of such securities.
The Fund reports gains and losses on foreign currency related transactions as
components of realized gains for financial reporting purposes, whereas such
components are treated as ordinary income or loss for Federal income tax
purposes.
FUTURES CONTRACTS -- The Fund may utilize futures contracts primarily to hedge
against changes in security prices. Upon entering into a futures contract, the
Fund will deposit cash or securities for the initial margin with its custodian
or a third party broker in a segregated account. Subsequent payments, which are
dependent on the daily fluctuations in the value of the underlying instrument,
are made or received by the Fund each day (daily variation margin) and are
recorded as unrealized gains or losses until the contracts are closed. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of ) the closing transactions and
the Fund's basis in the contract. Risks of entering into futures contracts
include the possibility that a change in the value of the contract may not
correlate with the changes in the value of the underlying instruments. Second,
it is possible that a lack of liquidity for futures contracts could exist in the
secondary market, resulting in an inability to close a futures position prior to
its maturity date. Third, the purchase of a futures contract involves the risk
that the Fund could lose more than the original margin deposit required to
initiate the futures transaction.
OPTIONS -- The Fund may write or purchase financial options contracts primarily
to hedge against changes in security prices, or securities that the Fund intends
to purchase, against fluctuations in fair value caused by changes in prevailing
market interest rates. When the Fund writes or purchases an option, an amount
equal to the premium received or paid by the Fund is recorded as a liability or
an asset and is subsequently adjusted to the current market value of the option
written or purchased. Premiums received or paid from writing or purchasing
options which expire unexercised are treated by the Fund on the expiration date
as realized gains or losses. The difference between the premium and the amount
paid or received on effecting a closing purchase or sale transaction, including
brokerage commissions, is also treated as a realized gain or loss. If an option
is exercised, the premium paid or received is added to the cost of the purchase
or proceeds from the sale in determining whether the Fund has realized a gain or
a loss on investment transactions. The Fund as writer of an option, may have no
control over whether the underlying securities may be sold (call) or purchased
(put) and as a result bears the market risk of an unfavorable change in the
price of the security underlying the written option.
SHORT SALES -- As consistent with the Fund's investment objectives, the Fund may
engage in short sales that are "uncovered." Uncovered short sales are
transactions under which the Fund sells a security it does not own. To complete
such a transaction, the Fund must borrow the security to make delivery to the
buyer. The Fund then is obligated to replace the security borrowed by purchasing
the security at the market price at the time of the replacement. The price at
such time may be more or less than the price at which the security was sold by
the Fund. Until the security is replaced the Fund is required to pay the lender
amounts equal to any dividends or interest that accrue during the period of the
loan. To borrow the security, the Fund also may be required to pay a premium,
which would decrease proceeds of the security sold. The proceeds of the short
sale will be retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out. A gain, limited to the
price at which the Fund sells the security short, or a loss, unlimited in size,
will be recognized upon the close of a short sale.
Until the Fund closes its short position or replaces the borrowed security, the
Fund will: (a) maintain a segregated account containing cash or liquid
securities at such a level that (i) the amount deposited in the account plus the
amount deposited with the broker as collateral will equal the current value of
the security sold short; and (ii) the amount deposited in the segregated account
plus the amount deposited with the broker as collateral will not be less than
the market value of the security at the time the security was sold short, or (b)
otherwise cover the Fund's short positions.
OTHER -- Class specific expenses, such as 12b-1, distribution and service fees,
are borne by that class. Income, other expenses and realized and unrealized
gains and losses of the Fund are allocated to the respective class on the basis
of the relative net assets each day.
The Fund has an arrangement with the transfer agent, DST Systems, Inc., whereby
interest earned on uninvested cash balances is used to offset a portion of the
transfer agent expense. The transfer agent expenses shown in the Statement of
Operations are in total and do not reflect the expense reductions, if any.
The Fund imposes a 2% redemption/exchange fee on total redemption proceeds
(after applicable deferred sales charges) of any shareholder redeeming shares
(including redemption by exchange) of the Fund within 10 calendar days of their
purchase. The Fund charges the redemption/exchange fee to discourage market
timing by those shareholders initiating redemptions or exchanges to take
advantage of short-term market movements. The redemption fee will be imposed to
the extent that the number of Fund shares redeemed exceeds the number of Fund
shares that have been held for more than 10 calendar days. In determining how
long shares of the Fund have been held, shares held by the investor for the
longest period of time will be sold first. The Fund will retain the fee by
crediting them the capital. For the year ended December 31, 2005, there were $15
of redemption fees collected by the Fund.
3. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER TRANSACTIONS
WITH AFFILIATES
Old Mutual Capital, Inc. (the "Adviser") is an indirect, wholly owned subsidiary
of Old Mutual (US) Holdings Inc. ("OMUSH"), which is a wholly owned subsidiary
of Old Mutual plc., a London-Exchange listed international financial services
firm. The Fund and the Adviser are parties to an Investment Advisory Agreement
(the "Advisory Agreement"), under which, the Adviser is paid a monthly fee that
is calculated daily and paid monthly, at an annual rate based on the average
daily net assets of the Fund.
For its services to the Fund, the Adviser receives a management fee equal to
0.95% of the Fund's average daily net assets. In the interest of limiting
expenses of the Fund, the Adviser has entered into a separate expense limitation
agreement ("Expense Limitation Agreement") pursuant to which the Adviser has
agreed, in writing, to waive or limit its fees and
17
<page>
OLD MUTUAL ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
As of December 31, 2005
to assume other expenses of the Fund (excluding dividend expense) to the extent
necessary to limit the total annual expenses to a specified percentage of the
Fund's average daily net assets through December 31, 2007. The expense
limitations are as follows:
INSTITUTIONAL
FUND CLASS A CLASS C CLASS Z CLASS
- --------------------------------------------------------------------------------
Old Mutual Analytic
Defensive Equity Fund 1.45% 2.20% 1.20% 1.15%
Reimbursement by the Fund of the advisory fees waived and other expenses paid by
the Adviser pursuant to the Expense Limitation Agreement may be made at a later
date when the Fund has reached a sufficient asset size to permit reimbursement
to be made without causing the total annual expense rate of the Fund to exceed
the expense limitation. Consequently, no reimbursement by the Fund will be made
unless: (i) the Fund's assets exceed $75 million; (ii) the Fund's total annual
expense ratio is less than the expense limitation (excluding certain other
expenses such as brokerage commissions and extraordinary expenses); and (iii)
the payment of such reimbursement was approved by the Board on a quarterly
basis. Moreover, in accordance with the terms of an agreement with the Adviser,
whereby, to the extent that the Adviser reimburses advisory fees or absorbs
operating expenses of the Fund, the Adviser may seek payment of such amounts
within two fiscal years after the fiscal year in which fees were reimbursed or
absorbed, the actual expenses charged to the Fund may exceed these limits. At
December 31, 2005, pursuant to the above, the amount the Adviser may seek
reimbursement of previously waived and reimbursed fees for the Fund was $64,303.
Prior to December 9, 2005, Analytic Investors, Inc. ("Analytic") served as
investment adviser to the Predecessor Fund pursuant to an investment advisory
agreement with The Advisors' Inner Circle Fund and was paid a management fee
equal to 0.60% of the Fund's average daily net assets. For the period January 1,
2005, to December 9, 2005, Analytic was paid $1,249,352 by the Predecessor Fund
for its services. Prior to December 9, 2005, Analytic limited its advisory fees
to limit the total annual fund operating expenses (excluding dividend expense)
to 1.60%, 2.35% and 1.35% for the Class A, Class C and Institutional Class
shares, respectively, of the Predecessor Fund. Prior to April 1, 2005, Analytic
limited its advisory fees to limit the total annual operating expenses
(excluding dividend expense) to 0.99% for Institutional Class shares of the
Predecessor Fund. (The Fund's Class Z is the successor class of the Predecessor
Fund's Institutional Class; the Fund's Institutional Class is new.)
The Trust, on behalf of the Fund, and the Adviser have entered into a sub-
advisory agreement (the "Sub-Advisory Agreement") with Analytic. For the
services provided and expenses incurred pursuant to the Sub-Advisory Agreement
for the Fund, Analytic is entitled to receive from the Adviser a sub-advisory
fee with respect to the average daily net assets of such portion of the Fund,
which is computed and paid monthly at an annual rate equal 0.70% of the Fund's
daily net assets. Analytic is an affiliate of OMUSH.
The Trust and Old Mutual Fund Services (the "Administrator"), an indirect,
wholly owned subsidiary of Old Mutual plc., entered into the Administrative
Services Agreement (the "Administrative Agreement"), pursuant to which the
Administrator oversees the administration of the Trust's business and affairs,
including certain regulatory reporting and all necessary office space,
equipment, personnel and facilities, as well as services performed by various
third parties. Under the Administrative Agreement, the Administrator is entitled
to a fee from the Trust, which is calculated daily and paid monthly at an annual
rate of 0.123% of the average daily net assets of each series fund of the Trust,
including the Fund. The Administrative Agreement provides that the Administrator
will not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the matters to which the Administrative
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the Administrator in the performance of its
duties. The Administrative Agreement will continue in effect unless terminated
by either party upon not less than 90 days' prior written notice to the other
party.
The Administrator and SEI Investments Global Funds Services (the
"Sub-Administrator") entered into a Sub-Administrative Services Agreement (the
"Sub-Administrative Agreement"), pursuant to which the Sub-Administrator assists
the Administrator in connection with the administration of the business and
affairs of the Trust. SEI Investments Management Corporation ("SEI
Investments"), which is a wholly-owned subsidiary of SEI Investments Company,
owns all beneficial interest in the Sub-Administrator. Under the
Sub-Administrative Agreement, the Administrator pays the Sub-Administrator fees
at an annual rate calculated as follows: the greater sum (higher value) which
results from making the following calculations (A) a fee based on the average
daily net assets of the Trust, Old Mutual Advisor Funds II and Old Mutual
Insurance Series Fund of: (i) 0.0165% of the first $10 billion, plus (ii)
0.0125% of the next $10 billion, plus (iii) 0.010% of the excess over $20
billion and (B) a fee based on the aggregate number of funds of the Trust, Old
Mutual Advisor Funds II and Old Mutual Advisor Insurance Series Fund calculated
at the sum of between $50,000 and $60,000 per fund, depending on the total
number of funds. The Sub-Administrative Agreement provides that the
Sub-Administrator will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
the Sub-Administrative Agreement relates, except a loss resulting from willful
misfeasance, bad faith or negligence on the part of the Sub-Administrator in the
performance of its duties. The Sub-Administrative Agreement will continue in
effect until August 31, 2006, subject to certain termination provisions. After
this initial term, the Agreement will renew each year unless terminated by
either party upon not less than 90 days' prior written notice to the other
party.
From January 1, 2005 through December 9, 2005, the Sub-Administrator was
the administrator (the "Predecessor Administrator") and provided administrative
services to The Advisors' Inner Circle Fund (the "Predecessor Trust") under an
Administration Agreement (the "Former Administration Agreement"). Pursuant to
the Former Administration Agreement, the Predecessor Trust paid the Predecessor
Administrator an annual fee equal to the higher of $125,000 for one fund,
$250,000 for two funds, $350,000 for three funds, plus $75,000 per additional
fund, plus $20,000 per additional class or 0.12% of the first $250 million,
0.10% of the next $250 million, 0.08% of the next $250 million and 0.04% of any
amount above $750 million of the Predecessor Trust's average daily net assets.
From the time period January 1, 2005 through December 9, 2005, the Predecessor
Administrator was paid $321,863 by the Predecessor Fund.
Old Mutual Investment Partners (the "Distributor"), an indirect, wholly owned
subsidiary of OMUSH, and the Trust are parties to a distribution agreement (the
"Distribution Agreement"), pursuant to which the Distributor serves as principal
underwriter for the Trust's shares. The Distributor receives no compensation for
serving in such capacity, except as provided in separate Distribution Plans and
Service Plans.
The Distribution Agreement is renewable annually. The Distribution Agreement may
be terminated by the Distributor, by a majority vote of the Trustees who are not
"interested persons" (as defined in the 1940 Act) and have no financial interest
in the Distribution Agreement or by a majority vote of the outstanding
securities of the Trust upon not more than 60 days' written notice by either
party or upon assignment by the Distributor.
Prior to December 9, 2005, SEI Investments Distribution Co. served as
distributor of the Predecessor Fund and received $189,943 compensation for
serving in such a capacity.
18
<page>
OLD MUTUAL ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
As of December 31, 2005
The Trust has adopted a Distribution Plan for each of Class A and Class C shares
pursuant to Rule 12b-1 under the 1940 Act to enable the Class A and Class C
shares of the Fund to directly and indirectly bear certain expenses relating to
the distribution of such shares. The Trust has also adopted a Service Plan to
enable the Class A and Class C shares of the Fund to directly and indirectly
bear certain expenses relating to the shareholder servicing and/or personal
account maintenance of the holders of such shares. Each Distribution Plan and
Service Plan is a compensation plan, which means that they compensate the
Distributor, third-party broker-dealer or financial intermediary regardless of
the expenses actually incurred by such persons.
Pursuant to the Distribution Plan for Class A and Class C shares, the Fund will
pay to the Distributor a monthly fee at an annual aggregate rate not to exceed
(i) 0.25% of the average net asset value of the Class A shares of the Fund and
(ii) 0.75% of the average net asset value of the Class C shares of the Fund, as
determined at the close of each business day during the month, which is to
compensate the Distributor for services provided and expenses incurred by it in
connection with the offering and sale of Class A or Class C shares, which may
include, without limitation, the payment by the Distributor to investment
dealers of commissions on the sale of Class A or Class C shares, as set forth in
the then current prospectus or statement of additional information with respect
to Class A and Class C shares and interest and other financing costs.
The amount of such payments shall be determined by the Fund's disinterested
Trustees from time to time. Currently, Class A shares are not authorized to pay
distribution fees and Class C shares are authorized to pay the maximum amount of
distributor fees.
Pursuant to the Service Plan for Class A and Class C shares, the Fund will pay
to the Distributor or other third-party financial intermediaries a fee at an
annual aggregate rate not to exceed 0.25% of the average net asset value of
Class A and Class C shares, which is for maintaining or improving services
provided to shareholders by the Distributor and investment dealers, financial
institutions and 401(k) plan service providers. The amount of such payments
shall be determined by the Trust's disinterested Trustees from time to time.
Currently, both Class A and Class C shares are authorized to pay the maximum
amount of service fees.
The Distributor will prepare and deliver written reports
to the Board on a regular basis (at least quarterly) setting forth the payments
made pursuant to the Distribution Plans and the Service Plan, and the purposes
for which such expenditures were made, as well as any supplemental reports as
the Board may from time to time reasonably request.
Except to the extent that the Administrator, Sub-Administrator, Adviser or
Sub-Adviser may benefit through increased fees from an increase in the net
assets of the Trust which may have resulted in part from the expenditures, no
interested person of the Trust nor any Trustee of the Trust who is not an
"interested person" (as defined in the 1940 Act) of the Trust had a direct or
indirect financial interest in the operation of the Distribution or Service
Plans or any related agreement.
For the period from December 9, 2005 to December 31, 2005 the Distributor
received the following distribution fees:
DISTRIBUTION
SERVICE FEES FEES
-------------------- --------
CLASS A CLASS C CLASS C
------ ------- -------
Old Mutual Analytic
Defensive Equity Fund $17,785 $11,870 $35,610
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent of
the Fund. From time to time, the Fund may pay amounts to third parties that
provide sub-transfer agency and other administrative services relating to the
Fund to persons who beneficially own interests in the Fund.
Union Bank of California, N.A. serves as custodian for the Fund.
The Fund has entered into a shareholder servicing agreement with Old Mutual Fund
Services to provide shareholder support and other shareholder account-related
services. Old Mutual Fund Services has, in turn, contracted with Old Mutual
Shareholder Services, Inc. ("OMSS"), its wholly owned subsidiary, to assist in
the provision of those services. OMSS received no fees directly from the Fund.
The shareholder service fees are reviewed periodically and approved annually by
the Board.
Prior to December 9, 2005, the Predecessor Fund was able to direct certain fund
trades to brokers who paid a portion of the Predecessor Fund's expenses. Under
this arrangement, the Predecessor Fund had expenses reduced by $67,511, which
was used to pay administration expenses. The effect on the Fund's expense ratio,
as a percentage of the Fund's average daily net assets for the year ended
December 31, 2005 was 0.03%.
Officers and trustees of the Fund who are or were officers of the Adviser,
Administrator, Sub-Administrator and the Distributor received no compensation
from the Fund.
4. INTERFUND LENDING
Pursuant to resolutions adopted by the Boards of Trustees of each of Old Mutual
Advisor Funds, Old Mutual Advisor Funds II and Old Mutual Insurance Series Fund
(together, the "Trusts"), on behalf of each series portfolio of the Trusts (the
"Funds"), each of the Funds may lend an amount up to its prospectus-defined
limitations to other Funds. All such lending shall be conducted pursuant to the
exemptive order granted by the Securities and Exchange Commission ("SEC") on
August 12, 2003 to the Trusts.
The interest rate charged on the loan is the average of the overnight repurchase
agreement rate (highest rate available to the Funds from investments in
overnight repurchase agreements) and the bank loan rate (Federal Funds Rate plus
50 basis points). None of the Funds may borrow more than 10% of its assets.
The Fund had no outstanding borrowings or loans related to interfund lending at
any time during the period from December 9, 2005 to December 31, 2005. Prior to
December 9, 2005, the Predecessor Fund did not participate in interfund lending.
5. INVESTMENT TRANSACTIONS
The cost of securities purchased and the proceeds from securities sold and
matured, other than short-term investments and securities sold short, for the
Fund, for the year ended December 31, 2005 were as follows:
SALES AND
PURCHASES (000) MATURITIES (000)
--------------- ----------------
Old Mutual Analytic Defensive
Equity Fund $598,386 $200,808
Transactions in option contracts written in the Fund for the year ended December
31, 2005 were as follows:
NUMBER OF
CONTRACTS PREMIUMS
----------- ----------
Outstanding at December 31, 2004 300 $ 761,600
Options written 39,850 50,778,040
Options terminated in closing purchasing
transactions (33,375) (41,604,380)
Options expired (1,600) (1,430,702)
-------- -----------
Outstanding at December 31, 2005 5,175 $ 8,504,558
======== ===========
19
<page>
OLD MUTUAL ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS -- Concluded
- --------------------------------------------------------------------------------
As of December 31, 2005
6. FOREIGN HOLDINGS RISK
The Fund may invest in foreign securities. Investing in the securities of
foreign issuers involves special risks and considerations not typically
associated with investing in U.S. companies. These risks and considerations
include differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investment in foreign countries and potential restrictions on the
flow of international capital and currencies. Foreign issuers may also be
subject to less government regulation than U.S. companies. Moreover, the
dividends and interest payable on foreign securities may be subject to foreign
withholding taxes, thus reducing the net amount of income available for
distribution to the Fund's shareholders. Further, foreign securities often trade
with less frequency and volume than domestic securities and, therefore, may
exhibit greater price volatility. Changes in foreign exchange rates will affect,
favorably or unfavorably, the value of those securities which are denominated or
quoted in currencies other than the U.S. dollar.
7. FEDERAL TAX INFORMATION
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code and to
distribute substantially all of its taxable income and net capital gains.
Accordingly, no provision has been made for Federal income taxes.
Dividends from net investment income and distributions from net realized capital
gains are determined in accordance with U.S. Federal income tax regulations,
which may differ from those amounts determined under accounting principles
generally accepted in the United States of America. These book/tax differences
are either temporary or permanent in nature. To the extent these differences are
permanent, they are charged or credited to paid-in-capital or accumulated net
realized gain or undistributed net investment income, as appropriate, in the
period that the differences arise.
Permanent differences as of December 31, 2005, resulted in reclassification of
$1,928 to undistributed net investment income and $(1,928) to accumulated net
realized gain (loss). These differences were primarily attributable to the
reclassification of short sale dividend expenses and foreign exchange gain
(loss), and had no effect on net assets or NAV.
The tax character of dividends and distributions declared during the last two
years were as follows:
LONG
TERM
ORDINARY CAPITAL
INCOME GAINS TOTAL
(000) (000) (000)
------ ------- ----
Old Mutual Analytic Defensive Equity Fund
2005 $16,715 $3,195 $19,910
2004 780 1,583 2,363
As of December 31, 2005, the components of Distributable Earnings were as
follows:
POST
UNDISTRIBUTED POST OCTOBER OTHER
ORDINARY UNREALIZED OCTOBER CURRENCY TEMPORARY
INCOME APPRECIATION LOSSES LOSSES DIFFERENCES TOTAL
(000) (000) (000) (000) (000) (000)
---------- ------------ ------- -------- ----------- ----
Old Mutual Analytic Defensive Equity Fund $61 $24,705 $(8,614) $(4,784) $(3,785) $7,583
The Federal tax cost, aggregate gross unrealized appreciation and depreciation
of securities (excluding securities sold short and written option contracts)
held by the Fund at December 31, 2005 were as follows:
NET
FEDERAL UNREALIZED UNREALIZED UNREALIZED
TAX COST APPRECIATION DEPRECIATION APPRECIATION
(000) (000) (000) (000)
------- ----------- ------------ -------------
Old Mutual Analytic Defensive Equity Fund $499,095 $27,444 $(5,939) $21,505
20
<page>
OLD MUTUAL ADVISOR FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of the
Old Mutual Analytic Defensive Equity Fund:
In our opinion, the accompanying statement of net assets, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Old Mutual Analytic Defensive Equity Fund (the "Fund") at December 31, 2005, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the periods presented, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements 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 are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
March 1, 2006
21
<page>
OLD MUTUAL ADVISOR FUNDS
NOTICE TO SHAREHOLDERS (UNAUDITED)
- --------------------------------------------------------------------------------
For shareholders that do not have a December 31, 2005 tax year end, this notice
is for informational purposes only. For shareholders with a December 31, 2005
tax year end, please consult your tax advisor as to the pertinance of this
notice. For the fiscal year ended December 31, 2005, the Fund is designating the
following items with regard to distributions paid during the year.
QUALIFYING
NET FOR CORPORATE QUALIFYING
LONG TERM SHORT TERM INVESTMENT DIVIDENDS QUALIFYING U.S. QUALIFYING SHORT TERM
CAPITAL GAIN CAPITAL GAIN INCOME TOTAL RECEIVED DIVIDEND GOVERNMENT INTEREST CAPITAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DEDUCTION (1) INCOME (2) INTEREST(3) INCOME (4) GAIN (5)
------------- ------------- ------------- ------------- ------------ ---------- ---------- ---------- ----------
16.05% 39.52% 44.43% 100.00% 28.49% 27.79% 2.82% 11.07% 100.00%
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION AND ARE REFLECTED AS A PERCENTAGE OF ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS).
(2) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING DIVIDEND
INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF
2003 AND IS REFLECTED AS A PERCENTAGE OF ORDINARY INCOME DISTRIBUTIONS (THE
TOTAL OF SHORT TERM CAPITAL GAIN AND NET INVESTMENT INCOME DISTRIBUTIONS).
IT IS THE INTENTION OF EACH OF THE AFOREMENTIONED FUNDS TO DESIGNATE THE
MAXIMUM AMOUNT PERMITTED BY LAW.
(3) "U.S. GOVERNMENT INTEREST" REPRESENTS THE AMOUNT OF INTEREST THAT WAS
DERIVED FROM DIRECT U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE
FISCAL YEAR. THIS AMOUNT IS REFLECTED AS A PERCENTAGE OF TOTAL ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS). GENERALLY, INTEREST FROM DIRECT U.S.
GOVERNMENT OBLIGATIONS IS EXEMPT FROM STATE INCOME TAX. HOWEVER, FOR
SHAREHOLDERS OF THE OLD MUTUAL ANALYTIC DEFENSIVE EQUITY FUND WHO ARE
RESIDENTS OF CALIFORNIA, CONNECTICUT AND NEW YORK, THE STATUTORY THRESHHOLD
REQUIREMENTS WERE NOT SATISFIED TO PERMIT EXEMPTION OF THESE AMOUNTS FROM
STATE INCOME.
(4) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING INTEREST
INCOME" AS CREATED BY THE AMERICAN JOBS CREATION ACT OF 2004 AND IS
REFLECTED AS A PERCENTAGE OF NET INVESTMENT INCOME DISTRIBUTIONS THAT IS
EXEMPT FROM U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS.
(5) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING SHORT
TERM CAPITAL GAIN" AS CREATED BY THE AMERICAN JOBS CREATION ACT OF 2004 AND
IS REFLECTED AS A PERCENTAGE OF SHORT-TERM CAPITAL GAIN DISTRIBUTIONS THAT
IS EXEMPT FROM U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS.
22
OLD MUTUAL ADVISOR FUNDS
- --------------------------------------------------------------------------------
PROXY VOTING (UNAUDITED)
A description of the guidelines that the Trust's or the Fund's investment
adviser/sub-adviser use to vote proxies relating to portfolio securities is
available by request by calling toll-free 1.888.774.5050, at
www.oldmutualcapital.com or on the SEC's website at www.sec.gov.
Information about how the Fund voted proxies relating to portfolio securities
during the most recent 12-months ended June 30 is available at
www.oldmutualcapital.com or on the SEC's website at www.sec.gov.
PORTFOLIO HOLDINGS (UNAUDITED)
The Trust files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of its fiscal year on Form N-Q. The Trust's Forms N-Q
are available at www.sec.gov, or may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information about the Public Reference Room
may be obtained by calling 1-800-SEC-0330.
23
<page>
OLD MUTUAL ADVISOR FUNDS
FUND EXPENSES EXAMPLE (UNAUDITED)
EXAMPLE
As a shareholder of the Fund you may pay two types of fees: transaction fees and
fund-related fees. The Fund may charge transaction fees, including sales charges
(loads) on purchase payments; redemption fees; and exchange fees. The Fund also
incurs various ongoing expenses, including management fees, distribution and/or
service fees, and other fund expenses, which are indirectly paid by shareholders
and affect your investment return.
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. This Example is based on an investment of
$1,000 invested at the beginning of the period and held for the six-month period
ended December 31, 2005.
ACTUAL EXPENSES
The first line for each share class in the following table provides information
about actual account values and actual expenses. The Example includes, but is
not limited to, management fees, 12b-1 fees, fund accounting, custody and
transfer agent fees. However, the Example does not include client specific fees,
such as the $10.00 fee charged to IRA accounts, or the $10.00 fee charged for
wire redemptions. The Example also does not include portfolio trading
commissions and related trading expenses. You may use this information, 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 for the Fund under the heading entitled "Expenses Paid During
Six-Month Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line for each share class in the table provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year 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. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholders reports of the 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), redemption fees or exchange
fees. Therefore, this information 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.
ANNUALIZED EXPENSES
BEGINNING ENDING EXPENSE PAID
ACCOUNT ACCOUNT RATIOS DURING
VALUE VALUE FOR THE SIX SIX MONTH
7/1/05 12/31/05 MONTH PERIOD PERIOD*
- ---------------------------------------------------------------------------------------------------------------------------
Old Mutual Analytic Defensive Equity Fund - Class A
- ---------------------------------------------------------------------------------------------------------------------------
Actual Fund Return $1,000.00 $1,035.00 1.44% $7.39
Hypothetical 5% Return 1,000.00 1,017.95 1.44 7.32
- ---------------------------------------------------------------------------------------------------------------------------
Old Mutual Analytic Defensive Equity Fund - Class C
- ---------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,030.70 2.15 11.00
Hypothetical 5% Return 1,000.00 1,014.37 2.15 10.92
- ---------------------------------------------------------------------------------------------------------------------------
Old Mutual Analytic Defensive Equity Fund - Class Z
- ---------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,035.00 1.06 5.44
Hypothetical 5% Return 1,000.00 1,019.86 1.06 5.40
- ---------------------------------------------------------------------------------------------------------------------------
Old Mutual Analytic Defensive Equity Fund - Institutional Class**
- ---------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 994.70 1.15 0.63
Hypothetical 5% Return 1,000.00 1,002.11 1.15 0.63
*Expenses are equal to the Fund's annualized expense ratio (excluding Dividend
Expense and including Waivers and Fees Paid Indirectly) multiplied by the
average account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
**Class commenced operations on December 9, 2005. Expenses are equal to the
class annualized expense ratio multiplied by the average accounts value
over the period, multiplied by 23/365.
24
<page>
OLD MUTUAL ADVISOR FUNDS
ACTIVITIES AND COMPOSITION OF THE BOARD OF TRUSTEES AND
OFFICERS OF THE TRUST (UNAUDITED)
- --------------------------------------------------------------------------------
As of December 31, 2005
The management and affairs of the Trust are supervised by the Trustees under
the laws of the State of Delaware. The Trustees and executive officers of the
Trust and the principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. The address for each of the Trustees and executive officers of the
Trust is 4643 South Ulster Street, 6th Floor, Denver, CO 80237. Additional
Information about the Fund's Trustees and Officers is available in the Trust's
Statement of Additional Information ("SAI") which can be obtained without
charge by calling 1-888-744-5050 or by visiting www.oldmutualcapital.com.
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
FUNDS IN
TERM OF THE OLD MUTUAL
OFFICE* AND FUND COMPLEX
POSITION(S) HELD LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
NAME AND AGE WITH THE TRUST TIME SERVED DURING PAST FIVE YEARS BY TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
John R. Bartholdson Trustee Trustee Chief Financial Officer, 35 The Triumph Group, Inc.,
(Age: 61) since 2004 Triumph Group, Inc. Old Mutual Insurance
The (manufacturing). Series Fund, Old Mutual
Advisor Funds II, ING
Clarion Real Estate
Income Fund, and ING
Clarion Global Real
Estate Income Fund.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter W. Driver, Jr.** Trustee Trustee Chairman, King & Spalding 9 Total Systems
(Age: 60) since 2005 LLP (law firm). Services, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert M. Hamje Trustee Trustee Retired. President and Chief 9 TS&W/Claymore
(Age: 63) since 2004 Investment Officer, TRW Tax-Advantaged
Investment Management Balanced Fund and
Company (investment management), Old Mutual/ Claymore
1984-2003. Long-Short Fund.
- ------------------------------------------------------------------------------------------------------------------------------------
Jarrett B. Kling Trustee Trustee Managing Director, ING Clarion 9 Hirtle Callaghan Trust,
(Age: 62) since 2004 Real Estate Securities ING Clarion Real Estate
(investment adviser). Income Fund, ING Clarion
Global Real Estate Income
Fund, and ING Clarion.
- ------------------------------------------------------------------------------------------------------------------------------------
L. Kent Moore Chairman Trustee Partner, WillSource Enterprise, 9 TS&W/Claymore
(Age: 49) of the Board since 2004 LLC (oil and gas exploration Tax-Advantaged
and Trustee and production), 2005-present. Balanced Fund and
Managing Director, High Sierra Old Mutual/ Claymore
Energy, LP (holding company of Long Short Fund.
natural resource related businesses),
2004-2005. Portfolio Manager,
Janus Capital (money management),
2000- 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
David J. Bullock*** Trustee, Trustee, Director, President, and Chief 9 Old Mutual Capital, Inc.,
(Age: 50) President, President, Executive Officer, Old Mutual Old Mutual Investment
and Chief and Chief Capital, Inc., since 2004. Partners, Old Mutual Fund
Executive Executive Trustee and Chief Executive Services, and Old Mutual
Officer Officer Officer, Old Mutual Investment Shareholder Services,
since 2004 Partners; Trustee, Old Mutual Inc.
Fund Services; and Director, Old
Mutual Shareholder Services, Inc.,
since 2003. President, Old Mutual
Insurance Series Fund, since 2003.
Chief Executive Officer, President,
and Director, Liberty Ridge Capital,
Inc., 2003-October 2005. Chief
Operating Officer, Liberty Ridge
Capital, Inc., July 2003-March 2004.
President and Chief Executive
Officer, Transamerica Capital,
Inc., 1998-2003.
- ------------------------------------------------------------------------------------------------------------------------------------
* Trustee of the Trust until such time as his or her successor is duly elected
and appointed.
** Mr. Driver commenced service as a Trustee in May 2005. Effective January 20,
2006, he resigned as a Trustee. Effective January 23, 2006, the Board
appointed Mr. Driver an Advisory Trustee of the Trust, with no voting
rights.
*** Mr. Bullock is a Trustee who may be deemed to be an "interested person" of
the Trust, as that term is defined in the 1940 Act, because he is a
Director of the Advisor.
25
<page>
OLD MUTUAL ADVISOR FUNDS
ACTIVITIES AND COMPOSITION OF THE BOARD OF TRUSTEES AND
OFFICERS OF THE TRUST (UNAUDITED)
- --------------------------------------------------------------------------------
As of December 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF
OFFICE* AND
POSITION(S) HELD LENGTH OF
NAME AND AGE WITH THE TRUST TIME SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
Mark E. Black Treasurer, Since 2004 Chief Financial Officer, Chief Administrative Officer, Executive
(Age: 45) Chief Financial Vice President, and Treasurer, Old Mutual Capital, Inc., since
Officer, and July 2004. Chief Financial Officer and Chief Administrative
Controller Officer, Old Mutual Investment Partners, since 2004. Senior
Vice President and Chief Financial Officer, Transamerica Capital,
Inc., April 2000-June 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Andra C. Ozols Vice President Since 2005 Executive Vice President, Secretary, and General Counsel,
(Age: 44) and Secretary Old Mutual Capital, Inc., since July 2005. Executive Vice President
(2004 to May 2005), General Counsel and Secretary (2002 to May 2005 and
January 1998 to October 1998), and Vice President (2002 to 2004), ICON
Advisors, Inc. Director of ICON Management & Research Corporation
(2003 to May 2005). Executive Vice President (2004 to May 2005),
General Counsel and Secretary (2002 to May 2005) and Vice President
(2002 to 2004) of ICON Distributors, Inc. Executive Vice President and
Secretary of ICON Insurance Agency, Inc. (2004 to May 2005). Vice
President (1999 to 2002) and Assistant General Counsel (1998 to 2002),
Founders Asset Management LLC.
- ------------------------------------------------------------------------------------------------------------------------------------
James F. Lummanick Vice President Since 2005 Senior Vice President and Chief Compliance Officer, Old Mutual Capital,
(Age: 58) and Chief Inc., Old Mutual Investment Partners, Old Mutual Fund Services, Inc., and
Compliance Officer Old Mutual Shareholder Services, Inc., since 2005. Chief Compliance
Officer, Old Mutual Advisor Funds II and Old Mutual Insurance Series
Fund, since 2005. Senior Vice President and Director of Compliance,
Calamos Advisors LLC, 2004-2005. Vice President and Chief Compliance
Officer, Invesco Funds Group, Inc. 1996-2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth R. Naes Assistant Since 2005 Vice President, Old Mutual Fund Services, since August 2004. Senior Vice
(Age: 40) Treasurer President, Product Development, Transamerica Capital, Inc./AEGON USA,
April 1992-May 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Karen S. Proc Assistant Since 2005 Associate General Counsel, Old Mutual Capital, Inc., since October 2005.
(Age: 36) Secretary Associate General Counsel, Founders Asset Management LLC, 2002-2005.
Associate Attorney, Myer, Swanson, Adams & Wolf, P.C., 1998-2002.
- ------------------------------------------------------------------------------------------------------------------------------------
* Officer of the Trust until such time as his or her successor is duly elected
and qualified.
26
- --------------------------------------------------------------------------------
OLD MUTUAL ADVISOR FUNDS
CONSIDERATIONS OF THE BOARD IN APPROVING THE INVESTMENT ADVISORY AGREEMENT
AND THE SUB-ADVISORY AGREEMENT (UNAUDITED)
The Board approved the Investment Advisory Agreement and Sub-Advisory Agreement
(collectively, the "Agreements") for the Fund on May 11, 2005. In determining
whether it was appropriate to approve the Agreements, the Board requested
information, provided by the Adviser and Sub-Adviser, that it believed to be
reasonably necessary to reach its conclusion. The Board carefully evaluated this
information and was advised by the independent legal counsel with respect to its
deliberations. In considering the fairness and reasonableness of the agreements,
the Board reviewed numerous factors, with respect to the Fund separately,
including the following:
o the nature of the services to be provided under the Agreements;
o the requirements of the Fund for the services provided by the Adviser
and Sub-Adviser;
o the quality of the services expected to be provided;
o fees payable for the services;
o projected total expenses of the Fund;
o the commitment of the Adviser to cap certain Fund expenses through the
contractual deferral of advisory fees and/or reimbursement of expenses, and
the fact that the Adviser may seek payment of such deferred fees or
reimbursement of such absorbed expenses within two fiscal years after the
fiscal year in which fees were deferred or expenses were absorbed;
o the expected profitability of the Adviser and Sub-Adviser with respect to
their relationships with the Fund;
o soft-dollar and other service benefits received by the Adviser, including
sources of revenue to affiliates of the Adviser from the Fund through
administration fees and website services fees;
o the economies of scale available to the Administrator through the
Sub-Administrator;
o capabilities and financial condition of the Adviser and Sub-Adviser; and
o current economic and industry trends.
Current management fees were reviewed in the context of the Adviser's
anticipated profitability. In addition, the Board reviewed an analysis prepared
by the Adviser in consultation with an independent third party, comparing the
Fund's expected expense ratio and advisory fee with comparable mutual funds.
In particular, the Board compared the Fund's annual advisory fee (0.95%) to fees
charged to a customized peer group (selected with the consultation of Financial
Research Corporation, an independent consultant) of several mutual funds and
considered the fact that the fee was higher than some of those charged to
several funds in each peer group.
The Board reviewed the total expenses (after waiver or reimbursement and before
12b-1 distribution and/or service fees) of 1.55%, 2.30% and 1.30% for Class A,
Class C and Institutional Class shares of the Fund, respectively. The Board
considered the fact that the total expenses of 1.30% of the Fund's Institutional
Class shares (which do not pay 12b-1 distribution or service fees) were lower
than 102 funds in the peer group and higher than 561 funds in the peer group.
Subsequently, the Institutional Class of the Fund was renamed Class Z.
(Thereafter, the Adviser lowered the expense caps to 1.45%, 2.20% and 1.20% for
Class A, Class C and Class Z shares, respectively.)
The Trustees relied upon the Adviser's representation, based upon advice of an
independent consultant, that the peer group discussed above was fair,
reasonable, and a balanced presentation of a comparable peer group for the Fund.
The Board also reviewed a similar comparison with a broader universe of
comparable funds.
The Board reviewed additional information provided by the Adviser and
Sub-Adviser. Following extended discussions concerning this information, the
Board determined that the Agreements were consistent with the best interests of
the Fund and its shareholders. The Board, including all of the Trustees who were
not "interested persons" of the Fund, voting separately, unanimously approved
the Agreements on the basis of the foregoing review and discussions. The Board
concluded, among other things:
o the level of fees to be charged to the Fund was comparable to the fees
charged by other investment advisers and other investment sub-advisers to
other funds with similar investment strategies and therefore reasonable,
considering the additional services to be provided by the Adviser and
Sub-Adviser;
o the fact that the Adviser was willing voluntarily to defer its fees and
reimburse expenses to reduce Fund expenses indicated a high level of
commitment on the part of the Adviser;
o the Adviser and Sub-Adviser were experienced and possessed significant
experience in managing particular asset classes;
o the Adviser and Sub-Adviser demonstrated its commitment to providing
sufficient resources regarding its staffing and capabilities to manage the
Fund, including the retention of personnel with relevant portfolio
management experience; and
o the Adviser and Sub-Adviser appeared to have overall high quality in terms
of its personnel, operations, financial condition, investment management
capabilities, methodologies and performance.
27
This page is intentionally left blank.
OLD MUTUAL ADVISOR FUNDS
For More Information about the Old Mutual Advisor Funds, contact us:
By Telephone
Shareholder Services 888.744.5050
Investment Professionals 888.772.2888
By Mail
Old Mutual Advisor Funds
P.O. Box 219398
Kansas City, MO 64121-7250
In Person
Old Mutual Advisor Funds
4643 South Ulster Street, 6th Floor
Denver, CO 80237
On the Internet
www.oldmutualcapital.com
This annual report is intended for the information of Old Mutual Advisor Funds
shareholders, but may be used by prospective investors when preceded or
accompanied by a current prospectus. The Fund described in this report is part
of the Old Mutual Advisor Funds. Investors should carefully consider the
investment objectives, risks, share classes, charges and expenses before
investing. Please call toll-free 1.888.744.5050 for a free prospectus that
contains this and other important information. Please read the prospectus
carefully before investing.
Old Mutual Investment Partners, NASD Member Firm, distributor.
D-06-067 02/2006
Item 2. Code of Ethics.
(a) As of the end of the period covered by this report, the registrant has
adopted a code of ethics that applies to the registrant's principal executive
officer and principal financial officer, which can be found at
www.oldmutualcapital.com.
(c) During the period covered by this report, no amendments have been made to a
provision of the code of ethics that applies to the registrant's principal
executive officer or principal financial officer, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of Item 2
of Form N-CSR.
(d) During the period covered by this report, the registrant has not granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer or principal financial officer that
relates to one or more of the items set forth in paragraph (b) of Item 2 of Form
N-CSR.
(f)(1) A copy of the code of ethics is filed as an exhibit to this report,
pursuant to Item 12(a)(1) of Form N-CSR.
Item 3. Audit Committee Financial Expert.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one "audit committee financial expert" serving on its audit committee,
as that term is defined in paragraph (b) of Item 3 of Form N-CSR.
(a)(2) The audit committee financial expert is John R. Bartholdson who is
"independent" as defined in Form N-CSR Item 3(a)(2).
Item 4. Principal Accountant Fees and Services.
For each of the last two fiscal years, the aggregate fees for which
PricewaterhouseCoopers LLP (PwC) billed the registrant for services rendered to
the registrant were as follows:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2005 2004
- ------------------ ----------------------------------------------------- -----------------------------------------------------
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to services to and services to services to services to and services to
the service service the service service
registrant affiliates that affiliates that registrant affiliates that affiliates that
that were were did not require that were were did not require
pre-approved pre-approved pre-approval pre-approved pre-approved pre-approval
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(a) Audit
Fees(1)(2) 40,000 N/A N/A N/A 15,683 N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(b) Audit-
Related
Fees N/A N/A N/A N/A N/A N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(c) Tax Fees N/A N/A N/A N/A N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(d) All
Other
Fees N/A N/A N/A N/A N/A N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Notes:
(1) Audit fees include amounts related to the audit of the Fund's
annual financial statements and services normally provided by PwC in
connection with statutory and regulatory filings.
(2) Of the total fees paid, $36,667 were paid by Analytic Defensive Equity
Fund, a series of the Advisors' Inner Circle Fund
("AIC Analytic Fund"), which was aquired by the Old Mutual Analytic
Defensive Equity Fund on December 9, 2005. For 2004, all fees were paid
by AIC Analytic.
(3) Non-audit fees include amounts related to advisory services provided
for an analysis of expense classifications for the registrant and
advisory services provided for benchmarking and best practice study
results for Mutual Fund operations. [mark where this note applies]
(4) Includes fees for: examination of the design of SEI's Anti Money
Laundering Program framework; 404 Readiness Assistance for SEI; and
procedures related to the requirement to perform an independent audit
pursuant to Section 352 of the USA PATRIOT Act for the SEI Funds. [mark
where this note applies]
(e)(1) To the extent required by Section 10A of the Securities Exchange Act of
1934, the registrant's Audit Committee shall consider for preapproval
all permissible non-audit services that are proposed to be provided to
the registrant by its independent auditors and shall have preapproved
any such permissible non-audit services before they are provided to the
registrant. Such preapproval may be granted by one or more members of
the Audit Committee, so long as any such member's decision to
preapprove is presented to the full Audit Committee, solely for
information purposes, at its next scheduled meeting (e)(2) Percentage
of fees billed applicable to non-audit services pursuant to waiver of
pre-approval requirement were as follows:
---------------------------- ----------------- ----------------
2005 2004
---------------------------- ----------------- ----------------
---------------------------- ----------------- ----------------
Audit-Related Fees 0% 0%
---------------------------- ----------------- ----------------
---------------------------- ----------------- ----------------
Tax Fees 0% 0%
---------------------------- ----------------- ----------------
---------------------------- ----------------- ----------------
All Other Fees 0% 0%
---------------------------- ----------------- ----------------
(f) Not Applicable.
(g) The aggregate non-audit fees and services billed by PwC for the last
two fiscal years were $0 and $0 for 2005 and 2004, respectively.
(h) The registrant's Audit Committee has considered whether the provision
of non-audit services that were rendered to service affiliates which
were not pre-approved (not requiring pre-approval) is compatible with
maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end management investment companies.
Item 6. Schedule of Investments.
Schedule I is included under Item 1 of this report on Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Company and
Affiliated Purchasers.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may
recommend nominees to the trust's Board of Trustees.
Item 11. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of a date within 90 days of the filing of this report, the
registrant's principal executive officer and principal financial officer, or
persons performing similar functions, have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act
(17 CFR 270.30a-3(c))) are effectively designed to ensure that information
required to be disclosed by the registrant in the report is recorded, processed,
summarized, and reported within required time periods, and to ensure that
information required to be disclosed in the report is accumulated and
communicated to the registrant's management, including the registrant's
principal executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Items 12. Exhibits.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(a)(3) Not applicable.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Old Mutual Advisor Funds
/s/ David J. Bullock
- -------------------------------
David J. Bullock, President and
Principal Executive Officer
Date March 10, 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.
/s/ David J. Bullock
- -------------------------------
David J. Bullock, President and
Principal Executive Officer
Date March 10, 2006
/s/ Mark E. Black
- -------------------------------
Mark E. Black, Treasurer and
Principal Financial Officer
Date March 10, 2006