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 811-5098
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Albemarle Investment Trust
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(Exact name of registrant as specified in charter)
1272 Hendersonville Road, Asheville, North Carolina 28813
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(Address of principal executive offices) (Zip code)
John B. Kuhns, 1272 Hendersonville Road, Asheville, North Carolina 28813
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(Name and address of agent for service)
Registrant's telephone number, including area code: (828) 274-1542
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Date of fiscal year end: 8/31/03
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Date of reporting period: 2/28/03
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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[LOGO]
The
NORTH CAROLINA
TAX FREE BOND FUND
A NO-LOAD MUTUAL FUND
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SEMI-ANNUAL REPORT
February 28, 2003
(Unaudited)
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[LOGO]
BOYS, ARNOLD
& COMPANY, INC.
INVESTMENT ADVISOR
Post Office Drawer 5255
1272 Hendersonville Road
Asheville, North Carolina 28813-5255
1.800.286.8038
FUND ADMINISTRATOR
Integrated Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
1.800.841.0987
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To the Shareholders of The North Carolina Tax Free Bond Fund
We are pleased to provide our semiannual report for the six months ended
February 28, 2003.
Your Fund continued to perform well in a difficult economic and geopolitical
environment. The last six months remained quite volatile for all financial
markets including the bond market. However, bonds benefited from continued
concern over the economy and the threat of war with Iraq. These factors
contributed to a preservation mentality and within the investment arena, bonds
were the primary beneficiary.
For the six months ended February 28, 2003, the Fund's total return was 3.98%,
which includes income and capital appreciation, and is after all expenses. The
Fund's total return compares favorably to the Lehman Municipal Bond Index that
increased 3.36% and the average total return for the 25 North Carolina Municipal
Debt Funds which increased 3.1% as ranked by Lipper Analytical Services, Inc.
for the same time period. The Fund's net asset value on February 28, 2003 was
$11.45 per share and the tax free income paid for the period was $0.21 per
share.
The sluggish economic recovery has challenged government and municipal budgets
throughout the country and North Carolina is no exception. Although the State
has not yet achieved a balanced budget for 2003, it is one of the first to raise
taxes to narrow the budget gap. The bonds remain highly rated (AAA by Standard
and Poor's and AA1 by Moody's). We expect progress toward a balanced budget as
the State legislature continues to consider various initiatives, including a
lottery.
We remain vigilant in watching the economy. At present, we expect a
"muddle-through" recovery and believe that bonds are likely to provide positive
returns for the remainder of the fiscal year. Of course, rising interest rates
would negatively affect bond prices. Rising interest rates are a concern if the
economy accelerates faster than anticipated or inflation becomes a problem.
Municipal bonds offer investors one of the few remaining tax advantaged
investments and they remain attractive relative to Treasuries on a tax
equivalent basis. In addition, we believe that they offer relative safety and
stability during periods of stock market volatility. We encourage investors to
maintain a long-term perspective toward their investment in the Fund and to
consider a plan of regular investment through dollar cost averaging.
We appreciate your continued trust and support and we welcome your comments and
suggestions.
Sincerely,
John B. Kuhns Jon L. Vannice
THE NORTH CAROLINA TAX FREE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2003
(Unaudited)
ASSETS
Investment securities, at value (amortized cost $15,380,664) $ 16,633,760
Interest receivable 212,218
Other assets 8,198
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TOTAL ASSETS 16,854,176
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LIABILITIES
Dividends payable 7,878
Payable for capital shares redeemed 86,132
Payable to Advisor 496
Payable to Administrator 4,982
Other accrued expenses and liabilities 8,191
------------
TOTAL LIABILITIES 107,679
------------
NET ASSETS $ 16,746,497
============
NET ASSETS CONSIST OF
Paid-in capital $ 15,576,359
Accumulated net realized losses from security transactions (82,958)
Net unrealized appreciation on investments 1,253,096
------------
NET ASSETS $ 16,746,497
============
Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) 1,462,866
============
Net asset value, offering price and redemption price per share $ 11.45
============
See accompanying notes to financial statements.
THE NORTH CAROLINA TAX FREE BOND FUND
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 2003
(Unaudited)
INVESTMENT INCOME
Interest $ 374,080
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EXPENSES
Investment advisory fees 28,216
Shareholder servicing fees 20,154
Administration fees 12,092
Accounting services fees 12,000
Professional fees 7,310
Transfer agent fees 6,000
Custodian fees 5,727
Insurance expense 3,629
Pricing costs 3,124
Trustees' fees and expenses 3,083
Postage and supplies 2,332
Reports to shareholders 1,529
Registration fees 38
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TOTAL EXPENSES 105,234
Investment advisory fees waived (18,598)
Shareholder servicing fees waived (18,088)
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NET EXPENSES 68,548
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NET INVESTMENT INCOME 305,532
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REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions 31,057
Net change in unrealized appreciation/
depreciation on investments 296,560
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NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 327,617
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 633,149
============
See accompanying notes to financial statements.
THE NORTH CAROLINA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED
2003 AUGUST 31,
(UNAUDITED) 2002
------------ ------------
FROM OPERATIONS
Net investment income $ 305,532 $ 616,940
Net realized gains from security transactions 31,057 8,211
Net change in unrealized appreciation/depreciation on investments 296,560 168,406
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NET INCREASE IN NET ASSETS FROM OPERATIONS 633,149 793,557
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DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (305,532) (616,940)
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FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,192,834 2,432,249
Net asset value of shares issued in
reinvestment of distributions to shareholders 233,687 513,685
Payment for shares redeemed (750,878) (2,584,894)
------------ ------------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 675,643 361,040
------------ ------------
TOTAL INCREASE IN NET ASSETS 1,003,260 537,657
NET ASSETS
Beginning of period 15,743,237 15,205,580
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End of period $ 16,746,497 $ 15,743,237
============ ============
CAPITAL SHARE ACTIVITY
Shares sold 105,651 220,799
Shares issued in reinvestment of distributions to shareholders 20,626 46,672
Shares redeemed (66,355) (236,331)
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Net increase in shares outstanding 59,922 31,140
Shares outstanding, beginning of period 1,402,944 1,371,804
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Shares outstanding, end of period 1,462,866 1,402,944
============ ============
See accompanying notes to financial statements.
THE NORTH CAROLINA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios for a Share
Outstanding Throughout Each Period
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 2003 ------------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
-------- -------- -------- -------- -------- --------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 11.22 $ 11.08 $ 10.59 $ 10.43 $ 11.11 $ 10.63
-------- -------- -------- -------- -------- --------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income 0.21 0.44 0.46 0.46 0.44 0.45
Net realized and unrealized gains
(losses) on investments 0.23 0.14 0.49 0.17 (0.58) 0.48
-------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.44 0.58 0.95 0.63 (0.14) 0.93
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (0.21) (0.44) (0.46) (0.46) (0.44) (0.45)
From net realized gains
from security transactions -- -- -- (0.01) (0.10) --
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.21) (0.44) (0.46) (0.47) (0.54) (0.45)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD $ 11.45 $ 11.22 $ 11.08 $ 10.59 $ 10.43 $ 11.11
======== ======== ======== ======== ======== ========
TOTAL RETURN 3.98%(A) 5.37% 9.12% 6.30% (1.36%) 8.92%
======== ======== ======== ======== ======== ========
NET ASSETS AT END OF PERIOD (000'S) $ 16,746 $ 15,743 $ 15,206 $ 13,968 $ 13,908 $ 12,436
======== ======== ======== ======== ======== ========
RATIO OF EXPENSES TO AVERAGE NET ASSETS
Before expense reimbursements and waived fees 1.30%(B) 1.34% 1.32% 1.36% 1.41% 1.42%
After expense reimbursements and waived fees 0.85%(B) 0.85% 0.85% 0.85% 0.85% 0.83%
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 3.79%(B) 4.02% 4.22% 4.50% 4.08% 4.15%
PORTFOLIO TURNOVER RATE 7%(B) 8% 1% 19% 5% 36%
(A) Not annualized.
(B) Annualized.
See accompanying notes to financial statements.
THE NORTH CAROLINA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
February 28, 2003
(Unaudited)
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PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
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MUNICIPAL OBLIGATIONS -- 97.6%
Appalachian State University, North Carolina $ 150,000 5.90% 05/15/08 $ 161,682
Utility System Revenue
Asheville, North Carolina 150,000 5.50% 08/01/11 169,185
Water System Revenue
Buncombe County, North Carolina 500,000 5.00% 02/01/12 537,930
Certificate of Participation
Buncombe County, North Carolina 100,000 5.30% 03/01/08 112,206
Solid Waste System Special Obligation Revenue
Buncombe County, North Carolina 200,000 5.60% 03/01/11 223,766
Solid Watse System Special Obligation Revenue
Cabarrus County, North Carolina 250,000 5.40% 02/01/17 273,395
General Obligation
Charlotte - Mecklenberg Hospital Authority 170,000 6.00% 01/15/09 190,419
North Carolina Health Care System Revenue
Charlotte, North Carolina 250,000 5.25% 02/01/14 276,000
General Obligation
Charlotte, North Carolina 125,000 5.25% 02/01/15 137,760
General Obligation
Charlotte, North Carolina 125,000 6.10% 12/01/15 138,178
Law Enforcement Facilities Project Series A
Certificate of Participation
Charlotte, North Carolina 400,000 5.30% 04/01/08 437,432
Public Improvements
Charlotte, North Carolina 500,000 6.00% 06/01/20 598,399
Storm Water Revenue
Charlotte, North Carolina 300,000 5.25% 02/01/18 306,705
Water & Sewer General Obligation
Charlotte, North Carolina 400,000 5.60% 05/01/20 457,204
Water & Sewer General Obligation
Currituck County, North Carolina 300,000 5.40% 04/01/14 328,395
General Obligation
THE NORTH CAROLINA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
February 28, 2003
(Unaudited)
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PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
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MUNICIPAL OBLIGATIONS - CONTINUED
Duke University Hospital $ 500,000 5.25% 06/01/17 $ 512,430
Community Hospital Revenue
Durham, North Carolina 200,000 5.80% 02/01/12 219,172
General Obligation Revenue
Fayetteville, North Carolina 500,000 5.10% 03/01/15 564,035
Public Works Revenue
Gaston, North Carolina 600,000 5.50% 02/15/15 639,569
Memorial Hospital Project Revenue
Gastonia, North Carolina 100,000 5.70% 08/01/15 111,305
Police Station Project Certificate of Participation
Gastonia, North Carolina 200,000 5.50% 05/01/13 226,818
Street Improvements General Obligation
Gastonia, North Carolina 400,000 5.50% 05/01/16 450,396
Street Improvements General Obligation
Greensboro, North Carolina 500,000 5.00% 03/01/12 539,095
General Obligation Unlimited
High Point, North Carolina 100,000 5.60% 03/01/14 109,801
General Obligation
Lincolnton, North Carolina 200,000 5.38% 05/01/16 222,888
Enterprise System Revenue
Mecklenburg County, North Carolina 200,000 5.50% 04/01/11 213,610
Public Improvement General Obligation
Morganton, North Carolina 500,000 5.70% 06/01/13 555,780
Water & Sewer General Obligation Revenue
North Carolina Central University 200,000 5.80% 11/01/17 228,080
Housing System Revenue
North Carolina Housing Finance Agency 500,000 5.10% 07/01/17 522,025
Home Ownership Series 2-B Revenue
North Carolina Housing Finance Agency 390,000 5.45% 11/01/11 422,741
Home Ownership Series 6-B Revenue
North Carolina Housing Finance Agency 95,000 5.80% 07/01/13 99,489
Multifamily Series A Revenue
THE NORTH CAROLINA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
February 28, 2003
(Unaudited)
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PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
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MUNICIPAL OBLIGATIONS - CONTINUED
North Carolina Municipal Power Agency $ 250,000 5.13% 01/01/10 $ 276,833
Number 1 - Catawba Electric Reserve
North Carolina Municipal Power Agency 100,000 6.00% 01/01/09 116,544
Number 1 - Catawba Electric Revenue
North Carolina Municipal Power Agency 100,000 5.75% 01/01/15 100,455
Number 1 - Catawba Electric Revenue
North Carolina Municipal Power Agency 300,000 5.00% 01/01/15 305,634
Number 1 - Catawba Electric Revenue
North Carolina State 400,000 5.20% 06/01/14 443,036
Clean Water Series A General Obligation
North Carolina State 100,000 5.80% 06/01/16 107,881
Clean Water Series A General Obligation
North Carolina State 150,000 5.20% 03/01/11 167,112
General Obligation Series A
North Carolina State 250,000 5.20% 03/01/13 285,388
General Obligation Series A
North Carolina State University 500,000 5.13% 12/15/16 542,870
Centennial Campus Series B Revenue
Piedmont Triad Airport Authority 500,000 5.63% 07/01/14 566,080
North Carolina Series A Revenue
Piedmont Triad Airport Authority 200,000 5.88% 07/01/19 225,962
North Carolina Series A Revenue
Pitt County, North Carolina 500,000 5.25% 12/01/12 536,665
Memorial Hospital Revenue
Pitt County, North Carolina 100,000 5.50% 12/01/15 112,481
Memorial Hospital Revenue
Raleigh, North Carolina 500,000 5.25% 06/01/13 555,480
General Obligation
Union County, North Carolina 350,000 5.20% 03/01/10 391,160
General Obligation Series B
THE NORTH CAROLINA TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
February 28, 2003
(Unaudited)
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PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
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MUNICIPAL OBLIGATIONS - CONTINUED
University of North Carolina $ 500,000 5.40% 05/15/16 $ 577,329
General Obligation Revenue
University of North Carolina 200,000 5.00% 04/01/11 222,690
System Pool Revenue Series B
Wake Forest University 250,000 5.00% 11/01/17 263,458
Finance Agency Revenue
Wilmington, North Carolina 400,000 5.40% 06/01/13 449,376
Water & Sewer System Revenue
Winston-Salem, North Carolina 100,000 5.50% 06/01/12 109,999
General Obligation ------------
TOTAL MUNICIPAL OBLIGATIONS - 97.6% $ 16,342,323
CASH EQUIVALENTS -- 1.7%
Federated North Carolina Municipal Money Market Portfolio $ 291,437
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TOTAL VALUE OF INVESTMENT SECURITIES-- 99.3% (AMORTIZED COST $15,380,664) $ 16,633,760
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.7% 112,737
------------
NET ASSETS -- 100.0% $ 16,746,497
============
See accompanying notes to financial statements.
THE NORTH CAROLINA TAX FREE BOND FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 2003
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The North Carolina Tax Free Bond Fund (the Fund) is a no-load, non-diversified
series of Albemarle Investment Trust (the Trust), an open-end management
investment company registered under the Investment Company Act of 1940 and
organized in 1992 as a Massachusetts business trust. The Fund began operations
on January 13, 1993.
The investment objectives of the Fund are to provide current income exempt from
federal income taxes and from the personal income taxes of North Carolina, to
preserve capital and to protect the value of the portfolio against the effects
of inflation. The Fund invests primarily in municipal bonds, the interest on
which is exempt from federal income taxes and from the personal income taxes of
North Carolina and not subject to alternative minimum tax. The issuers'
abilities to meet their obligations may be affected by economic and legislative
developments in the state of North Carolina.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of trading of the New York Stock
Exchange (normally 4:00 p.m., Eastern Time). Municipal obligations are valued by
an independent pricing service which generally utilizes a computerized matrix
system with consideration given to security quality, maturity, coupon, call
features and the latest trading developments. On limited occasions, if the
valuation provided by the pricing service ignores certain market conditions
affecting the value of a security or the pricing service cannot provide a
valuation, the security is valued at fair value as determined in good faith in
accordance with consistently applied procedures established by and under the
general supervision of the Board of Trustees.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price per share and the redemption
price per share are equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Discounts and
premiums on securities purchased are amortized in accordance with income tax
regulations.
Distributions to shareholders -- Dividends arising from net investment income
are declared daily and paid on the last business day of each month. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. Income distributions and capital gain distributions are determined in
accordance with income tax regulations.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are determined on a specific identification basis. The Fund may
purchase securities on a when issued or delayed delivery basis. These
transactions involve a commitment by the Fund to purchase securities for a
predetermined price or yield with payment and delivery taking place more than
three days in the future, or after a period longer than the customary settlement
period for that type of security. No interest will be earned by the Fund on such
purchases until the securities are delivered; however, the market value may
change prior to delivery.
THE NORTH CAROLINA TAX FREE BOND FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 2003
(Unaudited)
Estimates -- 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
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which the Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund (but
not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The tax character of distributions paid for the years ended August 31, 2002 and
2001 was as follows:
2002 2001
---- ----
From tax-exempt income $616,940 $610,706
The following information is computed on a tax basis for each item as of August
31, 2002:
Gross unrealized appreciation $ 959,221
Gross unrealized depreciation (2,685)
----------
Net unrealized appreciation $ 956,536
Capital loss carryforwards (114,015)
----------
Accumulated earnings $ 842,521
----------
As of February 28, 2003, the Fund had capital loss carryforwards for federal
income tax purposes of $7,410 and $106,605, which will expire on August 31, 2008
and 2009, respectively. These capital loss carryforwards may be utilized in the
current and future years to offset net realized capital gains, if any, prior to
distributing such gains to shareholders.
2. INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales and maturities of investment
securities, other than short-term investments, amounted to $1,783,200 and
$540,000, respectively, for the six months ended February 28, 2003.
THE NORTH CAROLINA TAX FREE BOND FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 2003
(Unaudited)
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of Boys, Arnold & Company, Inc.
(the Advisor), or of Integrated Fund Services, Inc. (IFS), the administrative
services agent, shareholder servicing and transfer agent and accounting services
agent for the Fund.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by the Advisor under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement, the Fund
pays the Advisor an investment advisory fee, which is computed and accrued daily
and paid monthly, at an annual rate of 0.35% of the Fund's average daily net
assets. The Advisor currently intends to voluntarily waive its investment
advisory fees and/or reimburse expenses of the Fund to the extent necessary to
limit the total operating expenses of the Fund to 0.85% of its average daily net
assets. For the six months ended February 28, 2003, the Advisor waived $18,598
of its investment advisory fees.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement with the Trust, IFS supplies
non-investment related administrative and compliance services for the Fund. IFS
supervises the preparation of tax returns, reports to shareholders, reports to
and filings with the Securities and Exchange Commission and state securities
commissions, and materials for meetings of the Board of Trustees. For these
services, IFS receives a monthly fee based on the Fund's average daily net
assets, subject to a minimum monthly fee.
TRANSFER AGENT AGREEMENT
Under the terms of a Transfer, Dividend Disbursing, Shareholder Service and Plan
Agency Agreement with the Trust, IFS maintains the records of each shareholder's
account, answers shareholders' inquiries concerning their accounts, processes
purchases and redemptions of the Fund's shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
For these services, IFS receives a monthly fee based on the number of
shareholder accounts in the Fund, subject to a minimum monthly fee. In addition,
the Fund pays IFS out-of-pocket expenses including, but not limited to, postage
and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of an Accounting Services Agreement with the Trust, IFS
calculates the daily net asset value per share and maintains the financial books
and records of the Fund. For these services, IFS receives a monthly fee, based
on current asset levels, from the Fund. In addition, the Fund pays IFS certain
out-of-pocket expenses incurred by IFS in obtaining valuations of the Fund's
portfolio securities.
SHAREHOLDER SERVICING PLAN
Under the terms of a Shareholder Servicing Plan (the Plan), the Fund may incur
certain expenses for the compensation of persons providing ongoing services
and/or maintenance of the Fund's shareholder accounts, not otherwise required to
be provided by IFS. The basis for amounts paid under the Plan must be approved
by the Board of Trustees and may not exceed 0.25% of the Fund's average daily
net assets. For the six months ended February 28, 2003, the Fund incurred
$20,154 and the Advisor subsequently reimbursed $18,088 of shareholder servicing
fees under the Plan.
ITEM 2. CODE OF ETHICS. Not applicable to Semiannual Reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to Semiannual
Reports.
ITEMS 4-8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES. Not applicable to Semiannual Reports for the
period ended February 28, 2003.
ITEM 10. EXHIBITS. Certifications required by Item 10(b) of Form N-CSR are
filed herewith.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act (17
CFR 270.30a-2).]
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) Albemarle Investment Trust
-------------------------------------------------------------------
By (Signature and Title)
* /s/ John B. Kuhns
- -------------------
John B. Kuhns
President
Date: May 9, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)
* /s/ John B. Kuhns
- -------------------
John B. Kuhns
President
Date: May 9, 2003
By (Signature and Title)
* /s/ Jon L. Vannice
- --------------------
Jon L. Vannice
Vice President and Chief Financial Officer
Date: May 9, 2003
* Print the name and title of each signing officer under his or her signature.