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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 811-05685
---------------------------------------
Williamsburg Investment Trust
----------------------------------------------------------------------
(Exact name of registrant as specified in charter)
135 Merchant Street Cincinnati, Ohio 45246
----------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
W. Lee H. Dunham, Esq.
Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (513) 587-3400
-----------------------
Date of fiscal year end: March 31, 2003
--------------------
Date of reporting period: March 31, 2003
--------------------
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.
================================================================================
THE
JAMESTOWN
FUNDS
NO-LOAD FUNDS
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
THE JAMESTOWN INTERNATIONAL EQUITY FUND
ANNUAL REPORT
MARCH 31, 2003
Investment Advisor
LOWE, BROCKENBROUGH & COMPANY, INC.
RICHMOND, VIRGINIA
================================================================================
LETTER TO SHAREHOLDERS MAY 15, 2003
================================================================================
Dear Fellow Shareholders:
We are pleased to enclose for your review the audited Annual Report of the
Jamestown Funds for the year ended March 31, 2003.
THE JAMESTOWN BALANCED FUND
For the fiscal year ended March 31, 2003, the Jamestown Balanced Fund had a
negative return of -10.06%. This return compares favorably with the return for
the Lipper Balanced Fund Index of -12.85%. The Lehman Intermediate Bond Index
had a return of 11.72% for the past twelve months as interest rates continued to
decline. The S&P 500 fell 24.76% during the past fiscal year, with the
technology and utility sectors leading the way on the downside. The economic
recovery has proven moderate to date and investors have struggled with corporate
fraud, accounting irregularities, the threat of terrorism, and the war in Iraq.
Against this backdrop, investors sought safer havens, selling stocks in favor of
bonds and cash. More recently, however, corporate profits have begun to recover
and the equity market is beginning to discount the improving environment. The
Federal Reserve continues to add significant liquidity to the economic system
and there is the prospect of further fiscal stimulus.
Relative to the Lipper Balanced Index, the Jamestown Balanced Fund benefited
from good stock and bond selection over the past year. The Fund's bias toward
high quality securities helped the Fund avoid the poor performing corporate
bonds that were hurt by the corporate and accounting scandals. In the equity
portion of the Fund, good stock selection in the Healthcare and Technology
sectors benefited the Fund on a relative basis. The Fund profited from
overweight positions in the stocks of Health Maintenance Organizations (HMOs).
The Fund's Technology holdings held up better in a difficult market due to an
underweight in semiconductor and telecommunication equipment companies that were
hit particularly hard in the down equity market.
At the end of March 2003, the Jamestown Balanced Fund had 1.9% in cash, 41.5% in
fixed income, and 56.6% in equities. In the equity portion of the Fund, we have
added positions in more cyclical areas, such as Industrials and Consumer
Cyclicals, in a belief that the economy continues to gradually improve. The
Consumer Cyclical positions have been focused in the media area where it appears
spending that was held back due to the war in Iraq is gradually coming back to
the market. The fixed income portion of the Fund has a duration about 10% below
the Lehman Intermediate Government Corporate Index. The Fund is overweighted in
corporates, mortgages, and agencies at the expense of Treasury securities.
The Jamestown Balanced Fund returned -8.73% on an annualized basis for the three
years ending March 31, 2003, compared to -5.52% return for the Lipper Balanced
Index. For the ten year period, the Fund generated a return of 6.80% versus
6.84% for the comparable Lipper Balanced Index.
The total assets of your fund were over $65 million as of March 31, 2003.
THE JAMESTOWN EQUITY FUND
For the fiscal year ended March 31, 2003, the Jamestown Equity Fund declined in
value -21.15%. The Large Cap Core Index fell -23.73%, while the S&P 500 dropped
- -24.76%. For the past fiscal year, the Technology, Communication Services, and
Utility sectors were the dominant culprits on the downside. Valuations on
equities have been compressed dramatically during the past three years and
appear reasonable in a period of low interest rates and inflation. Even in a
slowly recovering economy where revenue growth will be modest, companies are
delivering improved earnings growth. Pervasive cost cutting has made companies
more efficient and productivity is substantially higher. There will still be
headwinds as there is excess capacity across many industries and little pricing
power.
The Jamestown Equity Fund outperformed the S&P 500 over the past year due to a
modest cash position throughout the year combined with good stock selection
relative to the Index. Stock selection in the Healthcare and Technology sectors
benefited the Fund on a relative basis. The Fund profited from overweight
positions in the stocks of Health Maintenance Organizations (HMOs). The Fund's
Technology holdings held up better in a difficult market due to an underweight
in Semiconductor and telecommunication equipment companies that were hit
particularly hard in the down equity market.
In the Jamestown Equity Fund, we have added positions in more cyclical areas,
such as Industrials and Consumer Cyclicals, in a belief that the economy
continues to gradually improve. The Consumer Cyclical
2
positions have been focused in the media area where it appears spending that was
held back due to the war in Iraq is gradually coming back to the market. While
we believe that the economy will continue to gradually improve, we are focused
on companies that can grow earnings in a moderate growth environment.
The Jamestown Equity Fund returned -16.93% on an annualized basis for the past
three years versus -16.08% for the Lipper Large Cap Core Index. For the ten-year
period, the Jamestown Equity Fund returned 6.33% compared to 7.25% for the
Lipper Large Cap Core Index.
The Jamestown Equity Fund had $38.6 million in assets as of March 31, 2003.
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ended March 31, 2003, The Jamestown Tax Exempt Virginia Fund
had a total return of 8.24% compared to 8.63% for the Lipper Intermediate
Municipal Fund Index. As compared to a year ago, municipal yields moved
significantly lower and the yield curve is now much steeper. As of March 31,
2003, The Jamestown Tax Exempt Virginia Fund had an average effective maturity
of 4.9 years and a SEC yield of 2.86%.
We have positioned the Jamestown Tax Exempt Virginia Fund defensively in
anticipation of interest rates rising when the economy recovers. This defensive
strategy caused the fund to slightly underperform relative to the Lipper
Intermediate Municipal Index. Despite the absolute low yield levels, the
combined set of current conditions: an unusually steep yield curve; record-high
municipal yields as a percentage of Treasury yields; and painfully low yields on
cash, argue for putting some cash to work in municipals.
The Jamestown Tax Exempt Virginia Fund returned 6.72% on an annualized basis for
the three years ended March 31, 2003, versus 6.99% for the comparable Lipper
Intermediate Municipal Fund Index. For the five-year period, The Jamestown Tax
Exempt Virginia Fund generated an annualized return of 5.00%, as compared to the
5.16% return for the Lipper Intermediate Municipal Fund Index.
The total assets of The Jamestown Tax Exempt Virginia Fund were over $36 million
as of March 31, 2003.
THE JAMESTOWN INTERNATIONAL EQUITY FUND
For the year ended March 31, 2003, the Jamestown International Equity Fund had a
return of -29.18% compared to -23.23% for the Morgan Stanley EAFE Index. During
the past year, slow economic growth and decelerating earnings growth pressured
global equity markets. Particularly hard hit were companies in technology and
telecommunications that benefited from the global telecom and information
technology build-out experienced globally over the previous five years. In the
past year, the Jamestown International Fund was hurt by overweight positions in
Telecommunications Services and Consumer Cyclical stocks that faired poorly in
the market downturn.
The Jamestown International Equity Fund returned -7.07% on an annualized basis
for the past three years versus a return of -5.32% for the Morgan Stanley EAFE
Index. Since inception in 1996, the Jamestown International Equity Fund fell
- -3.35% annually, while the EAFE Index declined -3.03%
The Fund had over $21 million in total net assets as of March 31, 2003.
Thank you for your continued confidence in The Jamestown Funds.
Sincerely,
/s/ Charles M. Caravati, III
Charles M. Caravati, III, CFA
President
Jamestown Balanced Fund
Jamestown Equity Fund
Jamestown International Equity Fund
/s/ Beth Ann Gustafson
Beth Ann Gustafson, CFA
President
Jamestown Tax Exempt Virginia Fund
3
THE JAMESTOWN BALANCED FUND
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Balanced Fund, the Standard & Poor's 500 Index and the Consumer Price Index
For the 10 Year Period Ended March 31, 2003
[GRAPHIC OMITTED]
THE JAMESTOWN BALANCED FUND: STANDARD & POOR'S 500 INDEX: CONSUMER PRICE INDEX:
---------------------------- ---------------------------- ---------------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
03/31/93 10,000 03/31/93 10,000 03/31/93 10,000
06/30/93 -0.26% 9,974 06/30/93 0.48% 10,048 06/30/93 0.60% 10,060
09/30/93 2.49% 10,222 09/30/93 2.58% 10,307 09/30/93 0.40% 10,100
12/31/93 0.32% 10,255 12/31/93 2.32% 10,546 12/31/93 0.70% 10,171
03/31/94 -1.58% 10,093 03/31/94 -3.79% 10,147 03/31/94 0.50% 10,222
06/30/94 0.91% 10,185 06/30/94 0.42% 10,189 06/30/94 0.60% 10,283
09/30/94 1.64% 10,352 09/30/94 4.88% 10,687 09/30/94 0.90% 10,376
12/31/94 -0.83% 10,266 12/31/94 -0.02% 10,684 12/31/94 0.60% 10,438
03/31/95 8.67% 11,156 03/31/95 9.74% 11,725 03/31/95 0.80% 10,522
06/30/95 7.60% 12,004 06/30/95 9.55% 12,844 06/30/95 0.90% 10,617
09/30/95 5.50% 12,664 09/30/95 7.95% 13,865 09/30/95 0.40% 10,660
12/31/95 4.75% 13,266 12/31/95 6.02% 14,700 12/31/95 0.50% 10,713
03/31/96 3.27% 13,699 03/31/96 5.37% 15,489 03/31/96 0.80% 10,799
06/30/96 3.05% 14,117 06/30/96 4.49% 16,184 06/30/96 1.10% 10,918
09/30/96 2.41% 14,458 09/30/96 3.09% 16,684 09/30/96 0.44% 10,966
12/31/96 6.21% 15,355 12/31/96 8.34% 18,075 12/31/96 0.82% 11,056
03/31/97 0.18% 15,383 03/31/97 2.68% 18,560 03/31/97 0.69% 11,133
06/30/97 11.31% 17,123 06/30/97 17.46% 21,800 06/30/97 0.19% 11,154
09/30/97 4.97% 17,974 09/30/97 7.49% 23,433 09/30/97 0.44% 11,203
12/31/97 2.43% 18,411 12/31/97 2.87% 24,106 12/31/97 0.62% 11,272
03/31/98 10.65% 20,371 03/31/98 13.95% 27,468 03/31/98 0.12% 11,286
06/30/98 0.53% 20,479 06/30/98 3.30% 28,375 06/30/98 0.56% 11,349
09/30/98 -8.80% 18,677 09/30/98 -9.95% 25,553 09/30/98 0.42% 11,397
12/31/98 16.58% 21,774 12/31/98 21.30% 30,995 12/31/98 0.42% 11,445
03/31/99 0.63% 21,911 03/31/99 4.98% 32,539 03/31/99 0.24% 11,472
06/30/99 3.09% 22,588 06/30/99 7.05% 34,833 06/30/99 0.91% 11,577
09/30/99 -2.84% 21,946 09/30/99 -6.24% 32,658 09/30/99 0.54% 11,639
12/31/99 10.59% 24,271 12/31/99 14.88% 37,517 12/31/99 0.78% 11,730
03/31/00 4.63% 25,394 03/31/00 2.29% 38,377 03/31/00 0.95% 11,841
06/30/00 1.38% 25,745 06/30/00 -2.66% 37,356 06/30/00 1.00% 11,960
09/30/00 -2.92% 24,993 09/30/00 -0.97% 36,994 09/30/00 0.76% 12,051
12/31/00 -2.06% 24,478 12/31/01 -7.81% 34,105 12/31/00 0.75% 12,141
03/31/01 -9.38% 22,182 03/31/01 -11.86% 30,060 03/31/01 0.98% 12,260
06/30/01 1.00% 22,404 06/30/01 5.85% 31,819 06/30/01 1.08% 12,392
09/30/01 -9.49% 20,278 09/30/01 -14.68% 27,148 09/30/01 -0.11% 12,379
12/31/01 7.10% 21,718 12/31/01 10.69% 30,049 12/31/01 -0.06% 12,371
03/31/02 -1.15% 21,468 03/31/02 0.27% 30,132 03/31/02 0.23% 12,400
06/30/02 -4.44% 20,515 06/30/02 -13.40% 26,094 06/30/02 1.12% 12,539
09/30/02 -7.39% 18,999 09/30/02 -17.28% 21,585 09/30/02 0.50% 12,601
12/31/02 2.41% 19,456 12/31/02 8.44% 23,407 12/31/02 0.33% 12,643
03/31/03 -0.76% 19,309 03/31/03 -3.15% 22,670 03/31/03 0.99% 12,768
Past performance is not predictive of future performance.
-------------------------------------
The Jamestown Balanced Fund
Average Annual Total Returns(a)
(for years ended March 31, 2003)
1 Year 5 Years 10 Years
(10.06)% (1.07)% 6.80%
-------------------------------------
THE JAMESTOWN EQUITY FUND
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
For the 10 Year Period Ended March 31, 2003
[GRAPHIC OMITTED]
THE JAMESTOWN EQUITY FUND: STANDARD & POOR'S 500 INDEX: CONSUMER PRICE INDEX:
-------------------------- ---------------------------- ---------------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
03/31/93 10,000 03/31/93 10,000 03/31/93 10,000
06/30/93 -1.00% 9,900 06/30/93 0.48% 10,048 06/30/93 0.60% 10,060
09/30/93 1.85% 10,083 09/30/93 2.58% 10,307 09/30/93 0.40% 10,100
12/31/93 0.67% 10,151 12/31/93 2.32% 10,546 12/31/93 0.70% 10,171
03/31/94 -0.82% 10,067 03/31/94 -3.79% 10,147 03/31/94 0.50% 10,222
06/30/94 1.64% 10,232 06/30/94 0.42% 10,189 06/30/94 0.60% 10,283
09/30/94 1.70% 10,405 09/30/94 4.88% 10,687 09/30/94 0.90% 10,376
12/31/94 -1.35% 10,264 12/31/94 -0.02% 10,684 12/31/94 0.60% 10,438
03/31/95 10.17% 11,308 03/31/95 9.74% 11,725 03/31/95 0.80% 10,522
06/30/95 8.46% 12,264 06/30/95 9.55% 12,844 06/30/95 0.90% 10,617
09/30/95 6.80% 13,098 09/30/95 7.95% 13,865 09/30/95 0.40% 10,660
12/31/95 5.22% 13,782 12/31/95 6.02% 14,700 12/31/95 0.50% 10,713
03/31/96 5.03% 14,475 03/31/96 5.37% 15,489 03/31/96 0.80% 10,799
06/30/96 4.05% 15,060 06/30/96 4.49% 16,184 06/30/96 1.10% 10,918
09/30/96 2.74% 15,474 09/30/96 3.09% 16,684 09/30/96 0.44% 10,966
12/31/96 7.83% 16,685 12/31/96 8.34% 18,075 12/31/96 0.82% 11,056
03/31/97 0.00% 16,685 03/31/97 2.68% 18,560 03/31/97 0.69% 11,133
06/30/97 15.33% 19,242 06/30/97 17.46% 21,800 06/30/97 0.19% 11,154
09/30/97 5.99% 20,394 09/30/97 7.49% 23,433 09/30/97 0.44% 11,203
12/31/97 2.70% 20,944 12/31/97 2.87% 24,106 12/31/97 0.62% 11,272
03/31/98 14.51% 23,983 03/31/98 13.95% 27,468 03/31/98 0.12% 11,286
06/30/98 -0.15% 23,947 06/30/98 3.30% 28,375 06/30/98 0.56% 11,349
09/30/98 -14.56% 20,461 09/30/98 -9.95% 25,553 09/30/98 0.42% 11,397
12/31/98 26.90% 25,965 12/31/98 21.30% 30,995 12/31/98 0.42% 11,445
03/31/99 0.06% 25,980 03/31/99 4.98% 32,539 03/31/99 0.24% 11,472
06/30/99 5.45% 27,395 06/30/99 7.05% 34,833 06/30/99 0.91% 11,577
09/30/99 -4.62% 26,129 09/30/99 -6.24% 32,658 09/30/99 0.54% 11,639
12/31/99 15.92% 30,288 12/31/99 14.88% 37,517 12/31/99 0.78% 11,730
03/31/00 6.39% 32,225 03/31/00 2.29% 38,377 03/31/00 0.95% 11,841
06/30/00 1.65% 32,757 06/30/00 -2.66% 37,356 06/30/00 1.00% 11,960
09/30/00 -5.56% 30,937 09/30/00 -0.97% 36,994 09/30/00 0.76% 12,051
12/31/01 -3.78% 29,769 12/31/00 -7.81% 34,105 12/31/00 0.75% 12,141
03/31/01 -15.01% 25,299 03/31/01 -11.86% 30,060 03/31/01 0.98% 12,260
06/30/01 1.35% 25,641 06/30/01 5.85% 31,819 06/30/01 1.08% 12,392
09/30/01 -16.33% 21,454 09/30/01 -14.68% 27,148 09/30/01 -0.11% 12,379
12/31/01 11.31% 23,880 12/31/01 10.69% 30,049 12/31/01 -0.06% 12,371
03/31/02 -1.92% 23,422 03/31/02 0.27% 30,132 03/31/02 0.23% 12,400
06/30/02 -8.48% 21,435 06/30/02 -13.40% 26,094 06/30/02 1.12% 12,539
09/30/02 -14.65% 18,295 09/30/02 -17.28% 21,585 09/30/02 0.50% 12,601
12/31/02 3.25% 18,890 12/31/02 8.44% 23,407 12/31/02 0.33% 12,643
03/31/03 -2.23% 18,468 03/31/03 -3.15% 22,670 03/31/03 0.99% 12,768
Past performance is not predictive of future performance.
-------------------------------------
The Jamestown Equity Fund
Average Annual Total Returns(a)
(for years ended March 31, 2003)
1 Year 5 Years 10 Years
(21.15)% (5.09)% 6.33%
-------------------------------------
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
4
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
Comparison of the Change in Value of a $10,000 Investment in The
Jamestown Tax Exempt Virginia Fund, the Lipper Intermediate Municipal
Fund Index and the Lehman Municipal Bond Index For the Period From
Inception* Through March 31, 2003
[GRAPHIC OMITTED]
LEHMAN MUNICIPAL BOND INDEX: THE JAMESTOWN TAX EXEMPT LIPPER INTERMEDIATE MUNICIPAL FUND INDEX
---------------------------- ------------------------ ----------------------------------------
VIRGINIA FUND:
--------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
09/01/93 10,000 09/01/93 10,000 09/01/93 10,000
09/30/93 1.14% 10,114 09/30/93 1.20% 10,120 09/30/93 1.14% 10,114
12/31/93 1.41% 10,256 12/31/93 1.54% 10,275 12/31/93 1.18% 10,234
03/31/94 -5.49% 9,693 03/31/94 -4.35% 9,828 03/31/94 -3.89% 9,836
06/30/94 1.11% 9,801 06/30/94 0.79% 9,906 06/30/94 0.92% 9,927
09/30/94 0.68% 9,868 09/30/94 0.72% 9,978 09/30/94 0.59% 9,985
12/31/94 -1.44% 9,726 12/31/94 -0.80% 9,898 12/31/94 -1.12% 9,873
03/31/95 7.07% 10,414 03/31/95 4.73% 10,366 03/31/95 4.98% 10,365
06/30/95 2.41% 10,665 06/30/95 2.21% 10,596 06/30/95 2.25% 10,597
09/30/95 2.87% 10,971 09/30/95 1.98% 10,806 09/30/95 2.40% 10,852
12/31/95 4.13% 11,424 12/31/95 2.78% 11,106 12/31/95 2.68% 11,143
03/31/96 -1.20% 11,287 03/31/96 -0.59% 11,041 03/31/96 -0.54% 11,082
06/30/96 0.76% 11,372 06/30/96 0.63% 11,110 06/30/96 0.44% 11,131
09/30/96 2.29% 11,633 09/30/96 1.65% 11,293 09/30/96 1.83% 11,336
12/31/96 2.55% 11,929 12/31/96 2.15% 11,536 12/31/96 2.20% 11,586
03/31/97 -0.24% 11,901 03/31/97 -0.10% 11,525 03/31/97 -0.02% 11,583
06/30/97 3.44% 12,310 06/30/97 2.69% 11,835 06/30/97 2.64% 11,889
09/30/97 3.02% 12,682 09/30/97 2.12% 12,086 09/30/97 2.45% 12,181
12/31/97 2.71% 13,026 12/31/97 2.20% 12,352 12/31/97 2.16% 12,443
03/31/98 1.15% 13,175 03/31/98 0.78% 12,448 03/31/98 0.96% 12,562
06/30/98 1.52% 13,376 06/30/98 1.18% 12,594 06/30/98 1.22% 12,715
09/30/98 3.07% 13,786 09/30/98 2.95% 12,966 09/30/98 2.78% 13,068
12/31/98 0.60% 13,869 12/31/98 0.41% 13,019 12/31/98 0.57% 13,142
03/31/99 0.89% 13,993 03/31/99 0.32% 13,060 03/31/99 0.56% 13,216
06/30/99 -1.77% 13,745 06/30/99 -1.54% 12,859 06/30/99 -1.67% 12,994
09/30/99 -0.40% 13,690 09/30/99 -0.06% 12,852 09/30/99 0.06% 13,002
12/31/99 -0.78% 13,583 12/31/99 -0.46% 12,793 12/31/99 -0.31% 12,962
03/31/00 2.92% 13,980 03/31/00 2.14% 13,066 03/31/00 1.76% 13,190
06/30/00 1.51% 14,191 06/30/00 1.11% 13,211 06/30/00 1.21% 13,350
09/30/00 2.42% 14,534 09/30/00 2.02% 13,478 09/30/00 2.09% 13,629
12/31/00 4.37% 15,169 12/31/00 3.44% 13,942 12/31/00 3.35% 14,086
03/31/01 2.23% 15,508 03/31/01 2.12% 14,238 03/31/01 2.26% 14,404
06/30/01 0.66% 15,610 06/30/01 0.47% 14,305 06/30/01 0.74% 14,511
09/30/01 2.80% 16,047 09/30/01 2.29% 14,633 09/30/01 2.59% 14,887
12/31/01 -0.61% 15,949 12/31/01 -0.49% 14,562 12/31/01 -0.84% 14,762
03/31/02 0.94% 16,099 03/31/02 0.77% 14,674 03/31/02 0.72% 14,868
06/30/02 3.66% 16,688 06/30/02 3.14% 15,134 06/30/02 3.54% 15,394
09/30/02 4.75% 17,481 09/30/02 4.15% 15,762 09/30/02 3.87% 15,990
12/31/02 -0.07% 17,469 12/31/02 0.09% 15,775 12/31/02 0.02% 15,993
03/31/03 1.21% 17,680 03/31/03 0.68% 15,883 03/31/03 0.99% 16,151
Past performance is not predictive of future performance.
-------------------------------------
The Jamestown Tax Exempt Virginia Fund
Average Annual Total Returns(a)
(for periods ended March 31, 2003)
1 Year 5 Years Since Inception*
8.24% 5.00% 4.95%
-------------------------------------
*Initial public offering of shares was September 1, 1993.
THE JAMESTOWN INTERNATIONAL EQUITY FUND
Comparison of the Change in Value of a $10,000 Investment in The Jamestown
International Equity Fund and the Morgan Stanley EAFE Index
For the Period From Inception* Through March 31, 2003
[GRAPHIC OMITTED]
JAMESTOWN INTERNATIONAL EQUITY FUND EUROPE, AUSTRALIA AND FAR EAST
----------------------------------- ------------------------------
INDEX (EAFE INDEX)
------------------
QUARTERLY QUARTERLY
DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ -------
04/16/96 10,000 04/30/96 10,000
06/30/96 -1.80% 9,820 06/30/96 -1.29% 9,871
09/30/96 -2.86% 9,539 09/30/96 -0.12% 9,859
12/31/96 2.41% 9,769 12/31/96 1.59% 10,016
03/31/97 0.83% 9,850 03/31/97 -1.56% 9,860
06/30/97 15.80% 11,407 06/30/97 12.97% 11,138
09/30/97 4.32% 11,899 09/30/97 -0.71% 11,059
12/31/97 -7.69% 10,984 12/31/97 -7.83% 10,193
03/31/98 16.28% 12,773 03/31/98 14.71% 11,693
06/30/98 4.68% 13,370 06/30/98 1.06% 11,817
09/30/98 -13.79% 11,527 09/30/98 -14.21% 10,138
12/31/98 18.11% 13,615 12/31/98 20.66% 12,232
03/31/99 1.94% 13,879 03/31/99 1.39% 12,402
06/30/99 4.40% 14,490 06/30/99 2.54% 12,717
09/30/99 6.04% 15,366 09/30/99 4.40% 13,277
12/31/99 23.70% 19,008 12/31/99 16.99% 15,532
03/31/00 1.75% 19,341 03/31/00 -0.10% 15,517
06/30/00 -8.58% 17,682 06/30/00 -3.96% 14,902
09/30/00 -8.12% 16,245 09/30/00 -8.06% 13,701
12/31/00 -6.88% 15,128 12/31/00 -2.69% 13,333
03/31/01 -14.72% 12,902 03/31/01 -13.74% 11,501
06/30/01 -3.22% 12,486 06/30/01 -1.05% 11,380
09/30/01 -18.06% 10,231 09/30/01 -14.00% 9,787
12/31/01 7.54% 11,003 12/31/01 6.97% 10,469
03/31/02 1.24% 11,139 03/31/02 0.51% 10,522
06/30/02 -4.45% 10,643 06/30/02 -2.12% 10,299
09/30/02 -21.45% 8,360 09/30/02 -19.74% 8,267
12/31/02 5.04% 8,782 12/31/02 6.45% 8,800
03/31/03 -10.17% 7,889 03/31/03 -8.21% 8,078
Past performance is not predictive of future performance.
-------------------------------------
The Jamestown International Equity Fund
Average Annual Total Returns(a)
(for periods ended March 31, 2003)
1 Year 5 Years Since Inception*
(29.18)% (9.19)% (3.35)%
-------------------------------------
*Initial public offering of shares was April 16, 1996.
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
5
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2003
=================================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost ........................ $ 60,117,137 $ 38,332,253 $ 32,817,828 $ 24,895,833
============ ============ ============ ============
At value (Note 1) .......................... $ 64,533,492 $ 38,181,631 $ 35,004,859 $ 20,427,846
Cash .......................................... -- -- -- 739,367
Cash denominated in
foreign currency (Note 5) .................. -- -- -- 8,722
Dividends and interest receivable ............. 373,920 18,728 464,771 121,737
Receivable for securities sold ................ 525,894 445,866 1,000,000 66,220
Receivable for capital shares sold ............ 578 9,854 -- --
Other assets .................................. 7,825 12,599 13,543 6,614
------------ ------------ ------------ ------------
TOTAL ASSETS ............................... 65,441,709 38,668,678 36,483,173 21,370,506
------------ ------------ ------------ ------------
LIABILITIES
Dividends payable ............................. 27,873 -- 30,900 4,005
Payable for securities purchased .............. -- -- -- 16,625
Payable for capital shares redeemed ........... 19,828 23,700 13,129 1,350
Accrued investment advisory fees (Note 3) ..... 36,006 21,273 11,089 8,821
Accrued administration fees (Note 3) .......... 7,100 4,600 4,500 3,600
Other accrued expenses ........................ 11,576 -- -- 27,354
Net unrealized depreciation on forward foreign
currency exchange contracts (Note 6) ....... -- -- -- 461
------------ ------------ ------------ ------------
TOTAL LIABILITIES .......................... 102,383 49,573 59,618 62,216
------------ ------------ ------------ ------------
NET ASSETS ....................................... $ 65,339,326 $ 38,619,105 $ 36,423,555 $ 21,308,290
============ ============ ============ ============
Net assets consist of:
Paid-in capital ............................... $ 61,886,377 $ 40,052,740 $ 34,449,229 $ 47,075,420
Undistributed net investment income (loss) .... (165,113) 2,044 19,091 11,085
Accumulated net realized losses from
security transactions ...................... (798,293) (1,285,057) (231,796) (21,317,117)
Net unrealized appreciation (depreciation)
on investments ............................. 4,416,355 (150,622) 2,187,031 (4,467,987)
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies -- -- -- 6,889
------------ ------------ ------------ ------------
Net assets ....................................... $ 65,339,326 $ 38,619,105 $ 36,423,555 $ 21,308,290
============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ................................. 4,747,354 2,668,914 3,447,831 3,378,986
============ ============ ============ ============
Net asset value, offering price and redemption
price per share(a) ............................ $ 13.76 $ 14.47 $ 10.56 $ 6.31
============ ============ ============ ============
(a) For The Jamestown International Equity Fund, redemption price varies based
on length of time held (Note 1).
See accompanying notes to financial statements.
6
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2003
========================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ............................ $ 522,682 $ 492,669 $ 4,428 $ 683,315
Foreign withholding taxes on dividends -- -- -- (59,605)
Interest ............................. 1,817,989 8,908 1,599,205 508
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ........... 2,340,671 501,577 1,603,633 624,218
------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) .... 509,382 287,371 146,854 315,531
Administration fees (Note 3) ......... 96,943 61,418 52,138 61,128
Custodian fees ....................... 14,790 8,502 6,993 87,345
Professional fees .................... 16,369 13,565 11,465 14,569
Trustees' fees and expenses .......... 12,487 12,487 12,487 12,487
Registration fees .................... 12,544 12,813 1,716 13,016
Pricing costs ........................ 10,409 1,274 6,222 11,439
Postage and supplies ................. 6,985 6,588 7,495 5,487
Insurance expense .................... 4,922 4,375 3,281 3,828
Printing of shareholder reports ...... 4,367 5,633 2,334 3,839
Other expenses ....................... 14,471 10,597 6,189 6,351
------------ ------------ ------------ ------------
TOTAL EXPENSES .................... 703,669 424,623 257,174 535,020
Fees waived by the Adviser (Note 3) .. -- -- (3,851) (99,587)
Expenses reimbursed through a directed
brokerage arrangement (Note 4) .... (24,000) (33,000) -- --
------------ ------------ ------------ ------------
NET EXPENSES ...................... 679,669 391,623 253,323 435,433
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ................... 1,661,002 109,954 1,350,310 188,785
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (Note 5)
Net realized losses from:
Security transactions ............. (671,793) (1,201,020) (7,053) (7,146,038)
Foreign currency transactions ..... -- -- -- (10,037)
Net change in unrealized appreciation/
depreciation on:
Investments ....................... (10,418,304) (10,210,917) 1,510,441 (4,190,992)
Foreign currency translation ...... -- -- -- 6,942
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES ............... (11,090,097) (11,411,937) 1,503,388 (11,340,125)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS ........... $ (9,429,095) $(11,301,983) $ 2,853,698 $(11,151,340)
============ ============ ============ ============
See accompanying notes to financial statements.
7
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
==========================================================================================================================
JAMESTOWN JAMESTOWN
BALANCED FUND EQUITY FUND
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .......................... $ 1,661,002 $ 2,043,006 $ 109,954 $ 175,896
Net realized gains (losses) on:
Security transactions ....................... (671,793) 1,308,563 (1,201,020) (64,227)
Option contracts written .................... -- 249,735 -- 176,363
Net change in unrealized appreciation/
depreciation on investments ................. (10,418,304) (7,073,997) (10,210,917) (4,796,287)
-------------- -------------- -------------- --------------
Net decrease in net assets from operations ........ (9,429,095) (3,472,693) (11,301,983) (4,508,255)
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ..................... (1,721,820) (2,164,245) (109,812) (173,994)
From net realized gains from
security transactions ....................... -- (1,420,487) -- --
-------------- -------------- -------------- --------------
Decrease in net assets from distributions
to shareholders ................................ (1,721,820) (3,584,732) (109,812) (173,994)
-------------- -------------- -------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 4,755,793 4,813,624 3,042,443 4,602,756
Net asset value of shares issued in reinvestment
of distributions to shareholders ............ 1,593,060 3,389,464 100,905 159,933
Payments for shares redeemed ................... (26,682,823) (13,654,430) (7,919,618) (6,187,646)
-------------- -------------- -------------- --------------
Net decrease in net assets from
capital share transactions ..................... (20,333,970) (5,451,342) (4,776,270) (1,424,957)
-------------- -------------- -------------- --------------
TOTAL DECREASE IN NET ASSETS ...................... (31,484,885) (12,508,767) (16,188,065) (6,107,206)
NET ASSETS
Beginning of year .............................. 96,824,211 109,332,978 54,807,170 60,914,376
-------------- -------------- -------------- --------------
End of year .................................... $ 65,339,326 $ 96,824,211 $ 38,619,105 $ 54,807,170
============== ============== ============== ==============
UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) ....................... $ (165,113) $ (104,295) $ 2,044 $ 1,902
============== ============== ============== ==============
CAPITAL SHARE ACTIVITY
Sold ........................................... 338,173 296,174 200,878 241,508
Reinvested ..................................... 113,232 214,105 6,884 9,010
Redeemed ....................................... (1,885,393) (844,741) (517,825) (326,078)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding ............. (1,433,988) (334,462) (310,063) (75,560)
Shares outstanding, beginning of year .......... 6,181,342 6,515,804 2,978,977 3,054,537
-------------- -------------- -------------- --------------
Shares outstanding, end of year ................ 4,747,354 6,181,342 2,668,914 2,978,977
============== ============== ============== ==============
See accompanying notes to financial statements.
8
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
==================================================================================================================
JAMESTOWN TAX EXEMPT JAMESTOWN
VIRGINIA FUND INTERNATIONAL EQUITY FUND
------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2003 2002 2003 2002
- ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .......................... $ 1,350,310 $ 1,254,016 $ 188,785 $ 64,049
Net realized gains (losses) from:
Security transactions ....................... (7,053) 144,681 (7,146,038) (14,171,079)
Foreign currency transactions ............... -- -- (10,037) 387,959
Net change in unrealized appreciation/
depreciation on:
Investments ................................. 1,510,441 (488,624) (4,190,992) 6,479,102
Foreign currency translation ................ -- -- 6,942 (302,987)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from operations ................................ 2,853,698 910,073 (11,151,340) (7,542,956)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ..................... (1,349,803) (1,242,501) (167,663) (270,326)
From return of capital ......................... -- -- -- (413,143)
------------ ------------ ------------ ------------
Decrease in net assets from distributions
to shareholders ................................ (1,349,803) (1,242,501) (167,663) (683,469)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 5,125,030 4,986,905 4,946,712 58,278,627
Net asset value of shares issued in reinvestment
of distributions to shareholders ............ 949,605 833,236 163,658 654,623
Proceeds from redemption fees collected ........ -- -- 40,984 25,467
Payments for shares redeemed ................... (5,051,117) (1,773,927) (16,545,962) (66,374,651)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
capital share transactions ..................... 1,023,518 4,046,214 (11,394,608) (7,415,934)
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ..................................... 2,527,413 3,713,786 (22,713,611) (15,642,359)
NET ASSETS
Beginning of year .............................. 33,896,142 30,182,356 44,021,901 59,664,260
------------ ------------ ------------ ------------
End of year .................................... $ 36,423,555 $ 33,896,142 $ 21,308,290 $ 44,021,901
============ ============ ============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME .............................. $ 19,091 $ 18,584 $ 11,085 $ --
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ........................................... 491,355 487,720 652,404 6,229,458
Reinvested ..................................... 90,745 81,557 25,936 74,730
Redeemed ....................................... (483,184) (174,104) (2,204,031) (7,051,499)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding .. 98,916 395,173 (1,525,691) (747,311)
Shares outstanding, beginning of year .......... 3,348,915 2,953,742 4,904,677 5,651,988
------------ ------------ ------------ ------------
Shares outstanding, end of year ................ 3,447,831 3,348,915 3,378,986 4,904,677
============ ============ ============ ============
See accompanying notes to financial statements.
9
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
----------------------------------------------------------------------
2003 2002(a) 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 15.66 $ 16.78 $ 19.83 $ 18.12 $ 17.38
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ..................... 0.31 0.32 0.35 0.35 0.34
Net realized and unrealized gains
(losses) on investments ................ (1.88) (0.86) (2.82) 2.49 0.95
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. (1.57) (0.54) (2.47) 2.84 1.29
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ...... (0.33) (0.35) (0.35) (0.35) (0.34)
Distributions from net realized gains ..... -- (0.23) (0.23) (0.78) (0.21)
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (0.33) (0.58) (0.58) (1.13) (0.55)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 13.76 $ 15.66 $ 16.78 $ 19.83 $ 18.12
========== ========== ========== ========== ==========
Total return ................................. (10.06%) (3.22%) (12.65%) 15.90% 7.56%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 65,339 $ 96,824 $ 109,333 $ 128,201 $ 112,804
========== ========== ========== ========== ==========
Ratio of gross expenses to average net assets 0.90% 0.86% 0.87% 0.88% 0.88%
Ratio of net expenses to average net assets(b) 0.87% 0.83% 0.85% 0.86% 0.86%
Ratio of net investment income to
average net assets ........................ 2.12% 1.97% 1.84% 1.85% 1.95%
Portfolio turnover rate ...................... 38% 62% 64% 62% 69%
(a) As required, effective April 1, 2001, the Fund adopted new provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premiums on debt securities and began recording paydown gains
and losses as adjustments to interest income. Had the Fund not adopted
these new provisions, the net investment income per share would have been
$0.34 and the ratio of net investment income to average net assets would
have been 2.07%. Per share data and ratios for periods prior to April 1,
2001 have not been restated to reflect this change in presentation.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
10
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
----------------------------------------------------------------------
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 18.40 $ 19.94 $ 26.02 $ 21.76 $ 20.16
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) .............. 0.04 0.06 (0.00) 0.03 0.07
Net realized and unrealized gains
(losses) on investments ................ (3.93) (1.54) (5.51) 5.18 1.60
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. (3.89) (1.48) (5.51) 5.21 1.67
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ...... (0.04) (0.06) -- (0.03) (0.07)
Distributions from net realized gains ..... -- -- (0.57) (0.92) --
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (0.04) (0.06) (0.57) (0.95) (0.07)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 14.47 $ 18.40 $ 19.94 $ 26.02 $ 21.76
========== ========== ========== ========== ==========
Total return ................................. (21.15%) (7.42%) (21.49%) 24.04% 8.33%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 38,619 $ 54,807 $ 60,914 $ 77,809 $ 63,416
========== ========== ========== ========== ==========
Ratio of gross expenses to average net assets 0.96% 0.90% 0.90% 0.91% 0.92%
Ratio of net expenses to average net assets(a) 0.89% 0.86% 0.88% 0.88% 0.89%
Ratio of net investment income
(loss) to average net assets .............. 0.25% 0.31% (0.01%) 0.14% 0.35%
Portfolio turnover rate ...................... 60% 89% 83% 67% 66%
(a) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
11
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
----------------------------------------------------------------------
2003 2002(a) 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 10.12 $ 10.22 $ 9.79 $ 10.22 $ 10.16
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ..................... 0.38 0.41 0.43 0.42 0.43
Net realized and unrealized gains
(losses) on investments ................ 0.44 (0.10) 0.43 (0.42) 0.07
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. 0.82 0.31 0.86 0.00 0.50
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ...... (0.38) (0.41) (0.43) (0.42) (0.43)
Distributions from net realized gains ..... -- -- -- (0.01) (0.01)
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (0.38) (0.41) (0.43) (0.43) (0.44)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 10.56 $ 10.12 $ 10.22 $ 9.79 $ 10.22
========== ========== ========== ========== ==========
Total return ................................. 8.24% 3.04% 8.97% 0.04% 4.92%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 36,424 $ 33,896 $ 30,182 $ 29,138 $ 25,626
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets(b) 0.69% 0.68% 0.68% 0.69% 0.73%
Ratio of net investment income to
average net assets ........................ 3.68% 4.02% 4.31% 4.27% 4.17%
Portfolio turnover rate ...................... 28% 27% 47% 47% 31%
(a) As required, effective April 1, 2001, the Fund adopted new provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began
accreting market discount on debt securities. Had the Fund not adopted this
new provision, the ratio of net investment income to average net assets
would have been 3.98%. Per share data and ratios for periods prior to April
1, 2001 have not been restated to reflect this change in presentation.
(b) Absent investment advisory fees waived by the Adviser, the ratio of
expenses to average net assets would have been 0.70% and 0.88% for the
years ended March 31, 2003 and 1998, respectively.
See accompanying notes to financial statements.
12
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
----------------------------------------------------------------------
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 8.98 $ 10.56 $ 17.99 $ 13.63 $ 12.61
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) .............. 0.06 0.01 (0.03) (0.00) 0.05
Net realized and unrealized gains (losses)
on investments and foreign currencies .. (2.69) (1.47) (5.48) 5.19 1.04
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. (2.63) (1.46) (5.51) 5.19 1.09
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ...... (0.05) (0.05) (0.05) (0.04) (0.07)
Return of capital ......................... -- (0.08) -- -- --
Distributions from net realized gains ..... -- -- (1.87) (0.79) --
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (0.05) (0.13) (1.92) (0.83) (0.07)
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ...... 0.01 0.01 -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 6.31 $ 8.98 $ 10.56 $ 17.99 $ 13.63
========== ========== ========== ========== ==========
Total return ................................. (29.18%) (13.66%) (33.29%) 39.35% 8.67%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 21,308 $ 44,022 $ 59,664 $ 85,849 $ 54,019
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets(a) 1.38% 1.38% 1.41% 1.56% 1.51%
Ratio of net investment income (loss)
to average net assets ..................... 0.60% 0.12% (0.24%) (0.01%) 0.38%
Portfolio turnover rate ...................... 56% 80% 48% 52% 39%
(a) Absent investment advisory fees waived by the Adviser, the ratio of
expenses to average net assets would have been 1.70% and 1.51% for the
years ended March 31, 2003 and 2002, respectively.
See accompanying notes to financial statements.
13
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (individually, a Fund,
and, collectively, the Funds) are each a no-load series of the Williamsburg
Investment Trust (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940. The Trust was organized as
a Massachusetts business trust on July 18, 1988.
The Jamestown Balanced Fund's investment objectives are long-term growth of
capital and income through investment in a balanced portfolio of equity and
fixed income securities. Capital protection and low volatility are important
investment goals.
The Jamestown Equity Fund's investment objective is long-term growth of capital
through investment in a diversified portfolio composed primarily of common
stocks. Current income is incidental to this objective and may not be
significant.
The Jamestown Tax Exempt Virginia Fund's investment objectives are to provide
current income exempt from federal income taxes and from the personal income
taxes of Virginia, to preserve capital, to limit credit risk and to take
advantage of opportunities to increase and enhance the value of your investment.
The Jamestown International Equity Fund's investment objective is to achieve
superior total returns through investment in equity securities of issuers
located outside the United States of America.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price. Securities traded on a national or foreign stock exchange are valued
based upon the closing price on the principal exchange where the security is
traded. It is expected that fixed income securities will ordinarily be traded in
the over-the-counter market, and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service. If a pricing service cannot provide a valuation, securities
will be valued in good faith at fair value using methods consistent with those
determined by the Board of Trustees. Foreign securities are translated from the
local currency into U.S. dollars using currency exchange rates supplied by a
quotation service.
14
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Repurchase agreements -- The Funds may enter into joint repurchase agreements
with each other and with other funds within the Trust. The joint repurchase
agreement, which is collateralized by U.S. Government obligations, is valued at
cost which, together with accrued interest, approximates market. At the time the
Funds enter into the joint repurchase agreement, the seller agrees that the
value of the underlying securities, including accrued interest, will at all
times be equal to or exceed the face amount of the repurchase agreement. In
addition, each Fund actively monitors and seeks additional collateral, as
needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share, except that shares
of The Jamestown International Equity Fund are subject to a redemption fee of 2%
if redeemed within 90 days of the date of purchase. For the years ended March
31, 2003 and 2002, proceeds from redemption fees total $40,984 and $25,467,
respectively.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on fixed income
securities purchased are amortized using the interest method.
Distributions to shareholders -- Dividends arising from net investment income,
if any, are declared and paid quarterly to shareholders of The Jamestown
Balanced Fund, The Jamestown Equity Fund and The Jamestown International Equity
Fund and are declared daily and paid monthly to shareholders of The Jamestown
Tax Exempt Virginia Fund. 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. The amount of distributions from
net investment income and net realized gains are determined in accordance with
federal income tax regulations which may differ from accounting principles
generally accepted in the United States of America. These "book/tax" differences
are either temporary or permanent in nature and are primarily due to losses
deferred due to wash sales and treatment for foreign currency transactions.
The tax character of distributions paid during the years ended March 31, 2003
and 2002 was as follows:
- -------------------------------------------------------------------------------------------------------------
YEAR EXEMPT-
ENDED ORDINARY RETURN OF LONG-TERM INTEREST TOTAL
MARCH 31, INCOME CAPITAL CAPITAL GAINS DIVIDENDS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------
Jamestown 2003 $ 1,721,820 $ -- $ -- $ -- $ 1,721,820
Balanced Fund 2002 $ 2,164,245 $ -- $ 1,420,487 $ -- $ 3,584,732
- -------------------------------------------------------------------------------------------------------------
Jamestown 2003 $ 109,812 $ -- $ -- $ -- $ 109,812
Equity Fund 2002 $ 173,994 $ -- $ -- $ -- $ 173,994
- -------------------------------------------------------------------------------------------------------------
Jamestown
Tax Exempt 2003 $ -- $ -- $ -- $ 1,349,803 $ 1,349,803
Virginia Fund 2002 $ -- $ -- $ -- $ 1,242,501 $ 1,242,501
- -------------------------------------------------------------------------------------------------------------
Jamestown
International 2003 $ 167,663 $ -- $ -- $ -- $ 167,663
Equity Fund 2002 $ 270,326 $ 413,143 $ -- $ -- $ 683,469
- -------------------------------------------------------------------------------------------------------------
15
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
Securities traded on a "to-be-announced" basis -- The Jamestown Balanced Fund
occasionally trades securities on a "to-be-announced" (TBA) basis. In a TBA
transaction, the Fund has committed to purchase securities for which all
specific information is not yet known at the time of the trade, particularly the
face amount in mortgage-backed securities transactions. Securities purchased on
a TBA basis are not settled until they are delivered to the Fund, normally 15 to
45 days later. These transactions are subject to market fluctuations and their
current value is determined in the same manner as for other portfolio
securities.
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 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 each 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 a 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 each 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 distributable earnings at March 31, 2003 was as follows:
- -----------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN JAMESTOWN JAMESTOWN
BALANCED EQUITY TAX EXEMPT INTERNATIONAL
FUND FUND VIRGINIA FUND EQUITY FUND
- -----------------------------------------------------------------------------------------------------
Undistributed Ordinary Income ........ $ 2,835 $ 2,044 $ -- $ 11,075
Capital Loss Carryforwards ........... (24,709) (27,179) (205,762) (18,753,295)
Post-October Losses .................. (523,622) (1,192,554) (16,799) (1,775,049)
Unrealized Appreciation (Depreciation) 4,003,944 (192,085) 2,196,887 (5,249,861)
Other Losses ......................... (5,499) (23,861) -- --
------------ ------------ ------------ ------------
Total Distributable Earnings ......... $ 3,452,949 $ (1,433,635) $ 1,974,326 $(25,767,130)
============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------
16
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
As of March 31, 2003, the Funds had the following capital loss carryforwards for
federal income tax purposes. These capital loss carryforwards may be utilized in
future years to offset net realized capital gains, if any, prior to distribution
to shareholders.
- --------------------------------------------------------------------------------
EXPIRES
AMOUNT MARCH 31,
- --------------------------------------------------------------------------------
Jamestown Balanced Fund $ 24,709 2011
- --------------------------------------------------------------------------------
Jamestown Equity Fund $ 27,179 2010
- --------------------------------------------------------------------------------
Jamestown Tax Exempt Virginia Fund $ 205,762 2010
- --------------------------------------------------------------------------------
Jamestown International Equity Fund $ 4,874,363 2010
13,878,932 2011
------------
$ 18,753,295
============
- --------------------------------------------------------------------------------
In addition, The Jamestown Balanced Fund, The Jamestown Equity Fund, The
Jamestown Tax Exempt Virginia Fund and International Equity Fund had net
realized capital losses of $523,622, $1,192,554, $16,799 and $1,775,049,
respectively, during the period November 1, 2002 through March 31, 2003, which
are treated for federal income tax purposes as arising during the Fund's tax
year ending March 31, 2004. These capital loss carryforwards and "post-October"
losses may be utilized in future years to offset net realized capital gains
prior to distributing such gains to shareholders.
The following information is based upon the federal income tax cost of
investment securities as of March 31, 2003:
- ---------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN JAMESTOWN JAMESTOWN
BALANCED EQUITY TAX EXEMPT INTERNATIONAL
FUND FUND VIRGINIA FUND EQUITY FUND
- ---------------------------------------------------------------------------------------------------------
Gross unrealized appreciation ............ $ 7,420,638 $ 3,619,303 $ 2,202,913 $ 459,609
Gross unrealized depreciation ............ (3,416,694) (3,811,388) (6,026) (5,716,369)
------------ ------------ ------------ ------------
Net unrealized appreciation (depreciation) $ 4,003,944 $ (192,085) $ 2,196,887 $ (5,256,760)
============ ============ ============ ============
Federal income tax cost .................. $ 60,529,548 $ 38,373,716 $ 32,807,972 $ 25,684,606
============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the Funds is due to certain timing differences
in the recognition of capital gains or losses under income tax regulations and
accounting principles generally accepted in the United States of America.
17
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. INVESTMENT TRANSACTIONS
Investment transactions, other than short-term investments, were as follows for
the year ended March 31, 2003:
- ----------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN JAMESTOWN JAMESTOWN
BALANCED EQUITY TAX EXEMPT INTERNATIONAL
FUND FUND VIRGINIA FUND EQUITY FUND
- ----------------------------------------------------------------------------------------------
Purchases of investment securities $ 29,010,803 $ 24,823,998 $ 10,098,136 $ 17,398,006
============ ============ ============ ============
Proceeds from sales and maturities
of investment securities ...... $ 46,163,710 $ 26,595,603 $ 10,055,417 $ 29,202,922
============ ============ ============ ============
- ----------------------------------------------------------------------------------------------
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
The Funds' investments are managed by Lowe, Brockenbrough & Company, Inc. (the
Adviser), under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Jamestown Balanced Fund pays the Adviser a
fee, which is computed and accrued daily and paid monthly, at an annual rate of
..65% on its average daily net assets up to $250 million, .60% on the next $250
million of such net assets and .55% on such net assets in excess of $500
million. The Jamestown Equity Fund pays the Adviser a fee at an annual rate of
..65% on its average daily net assets up to $500 million and .55% on such net
assets in excess of $500 million. The Jamestown Tax Exempt Virginia Fund pays
the Adviser a fee at an annual rate of .40% on its average daily net assets up
to $250 million, .35% on the next $250 million of such net assets and .30% on
such net assets in excess of $500 million. The Jamestown International Equity
Fund pays the Adviser a fee at an annual rate of 1.00% on its average daily net
assets. Certain Trustees and officers of the Trust are also officers of the
Adviser.
The Adviser currently intends to limit the total operating expenses of The
Jamestown Tax Exempt Virginia Fund and The Jamestown International Equity Fund
to 0.69% and 1.38%, respectively, of each Fund's average daily net assets.
Accordingly, the Adviser voluntarily waived $3,851 and $99,587, respectively, of
such Funds' investment advisory fees during the year ended March 31, 2003.
The Adviser retains Oechsle International Advisors, LLC (Oechsle) to provide The
Jamestown International Equity Fund with a continuous program of supervision of
the Fund's assets, including the composition of its portfolio, and to furnish
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities, pursuant to the terms of a Sub-Advisory
Agreement. Under the Sub-Advisory Agreement, the Adviser, not the Fund, pays
Oechsle a fee in the amount of one-half of the monthly advisory fee received by
the Adviser, net of any investment advisory fee waivers.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Ultimus Fund Solutions, LLC (Ultimus), Ultimus provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services
18
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
for the Funds. For these services, Ultimus receives a monthly fee from each of
The Jamestown Balanced Fund, The Jamestown Equity Fund and The Jamestown Tax
Exempt Virginia Fund at an annual rate of .15% on its respective average daily
net assets up to $25 million; .125% on the next $25 million of such net assets;
and .10% on such net assets in excess of $50 million. From The Jamestown
International Equity Fund, Ultimus receives a monthly fee at an annual rate of
..20% on its average daily net assets up to $25 million; .175% on the next $25
million of such net assets; and .15% on such net assets in excess of $50
million. In addition, each Fund pays out-of-pocket expenses including, but not
limited to, postage, supplies and costs of pricing the Funds' portfolio
securities. Certain officers of the Trust are also officers of Ultimus, or of
Ultimus Fund Distributors, LLC, the principal underwriter of each Fund's shares
and an affiliate of Ultimus.
4. DIRECTED BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of The Jamestown Balanced Fund
and The Jamestown Equity Fund, each Fund's custodian fees and a portion of other
operating expenses have been paid through an arrangement with a third-party
broker-dealer who is compensated through commission trades. Payment of expenses
by the broker-dealer is based on a percentage of commissions earned. Expenses
reimbursed through the directed brokerage arrangement totaled $24,000 and
$33,000 for The Jamestown Balanced Fund and The Jamestown Equity Fund,
respectively, for the year ended March 31, 2003.
5. FOREIGN CURRENCY TRANSLATION
With respect to The Jamestown International Equity Fund, amounts denominated in
or expected to settle in foreign currencies are translated into U.S. dollars
based on exchange rates on the following basis:
A. The market values of investment securities and other assets and liabilities
are translated at the closing rate of exchange each day.
B. Purchases and sales of investment securities and income and expenses are
translated at the rate of exchange prevailing on the respective dates of
such transactions.
C. The Fund does not isolate that portion of the results of operations caused
by changes in foreign exchange rates on investments from those caused by
changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gains or losses on investments.
Reported net realized foreign exchange gains or losses arise from 1) purchases
and sales of foreign currencies, 2) currency gains or losses realized between
the trade and settlement dates on securities transactions and 3) the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Reported net unrealized foreign exchange gains and
losses arise from changes in the value of assets and liabilities, other than
investment securities, resulting from changes in exchange rates.
19
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Jamestown International Equity Fund enters into forward foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The Fund may
enter into these contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific transactions or portfolio positions. The objective of the Fund's
foreign currency hedging transactions is to reduce risk that the U.S. dollar
value of the Fund's securities denominated in foreign currency will decline in
value due to changes in foreign currency exchange rates. All foreign currency
exchange contracts are "marked-to-market" daily at the applicable translation
rates resulting in unrealized gains or losses. Realized and unrealized gains or
losses are included in the Fund's Statement of Assets and Liabilities and
Statement of Operations. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar.
As of March 31, 2003, The Jamestown International Equity Fund had forward
foreign currency exchange contracts outstanding as follows:
- ------------------------------------------------------------------------
NET UNREALIZED
SETTLEMENT TO RECEIVE INITIAL MARKET APPRECIATION
DATE (TO DELIVER) VALUE VALUE (DEPRECIATION)
- ------------------------------------------------------------------------
Contracts To Sell .
4/1/03 ......... (8,551) EUR $ 9,153 $ 9,330 $ (177)
4/2/03 ......... (31,584) EUR 33,969 34,464 (495)
4/3/03 ......... (20,551) EUR 22,392 22,422 (30)
-------- -------- --------
Total sell contracts 65,514 66,216 (702)
-------- -------- --------
Contracts To Buy ..
4/1/03 ......... 11,723 EUR (12,550) (12,793) 243
4/1/03 ......... 40,403 THB (943) (942) (1)
4/2/03 ......... 33,554 THB (781) (782) 1
4/3/03 ......... 90,379 THB (2,109) (2,107) (2)
-------- -------- --------
Total buy contracts (16,383) (16,624) 241
-------- -------- --------
Net contracts ..... $ 49,131 $ 49,592 $ (461)
======== ======== ========
- ------------------------------------------------------------------------
EUR - Euro Dollar
THB - Thailand Baht
20
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS -- 56.3% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.5%
29,800 Darden Restaurants, Inc. ....................... $ 531,930
12,900 Gannett Company, Inc. .......................... 908,547
35,000 Home Depot, Inc. ............................... 852,600
52,000 Mattel, Inc. ................................... 1,170,000
33,000 Target Corporation ............................. 965,580
19,800 Viacom, Inc. - Class B (a) ..................... 723,096
8,000 Wal-Mart Stores, Inc. .......................... 416,240
------------
5,567,993
------------
CONSUMER STAPLES -- 4.8%
11,000 Anheuser-Busch Companies, Inc. ................. 512,710
8,600 Hershey Foods Corporation ...................... 538,876
17,000 Kimberly-Clark Corporation ..................... 772,820
24,400 PepsiCo, Inc. .................................. 976,000
12,800 SYSCO Corporation .............................. 325,632
3,126,038
ENERGY -- 4.1%
20,000 Anadarko Petroleum Corporation ................. 910,000
16,000 ChevronTexaco Corporation ...................... 1,034,400
24,000 Noble Drilling Corporation (a) ................. 754,080
------------
2,698,480
------------
FINANCIALS -- 10.5%
10,000 American International Group, Inc. ............. 494,500
15,000 Bank of America Corporation .................... 1,002,600
25,000 Capital One Financial Corporation .............. 750,250
31,000 Citigroup, Inc. ................................ 1,067,950
18,000 Fannie Mae ..................................... 1,176,300
5,000 Freddie Mac .................................... 265,500
16,000 Principal Financial Group, Inc. ................ 434,240
25,000 Prudential Financial, Inc. ..................... 731,250
21,000 Wells Fargo & Company .......................... 944,790
------------
6,867,380
------------
HEALTHCARE -- 9.6%
17,500 AmerisourceBergen Corporation .................. 918,750
20,000 Anthem, Inc. (a) ............................... 1,325,000
16,800 Johnson & Johnson .............................. 972,216
12,000 Medtronic, Inc. ................................ 541,440
47,000 Pfizer, Inc. ................................... 1,464,520
7,300 WellPoint Health Networks, Inc. (a) ............ 560,275
13,000 Wyeth .......................................... 491,660
------------
6,273,861
------------
INDUSTRIALS -- 8.5%
80,000 Cendant Corporation (a) ........................ 1,016,000
23,700 First Data Corporation ......................... 877,137
14,000 General Dynamics Corporation ................... 770,980
30,000 General Electric Company ....................... 765,000
10,100 ITT Industries, Inc. ........................... 539,441
21
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 56.3% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 8.5% (Continued)
63,000 Norfolk Southern Corporation ................... $ 1,169,280
7,000 United Technologies Corporation ................ 404,460
------------
5,542,298
------------
INFORMATION TECHNOLOGY -- 8.9%
27,000 Accenture Ltd. - Class A (a) ................... 418,500
23,000 Affiliated Computer Services, Inc. (a) ......... 1,017,980
60,000 Cisco Systems, Inc. (a) ........................ 774,000
15,300 Dell Computer Corporation (a) .................. 417,843
10,000 Electronic Arts, Inc. (a) ...................... 586,400
34,000 Microsoft Corporation .......................... 823,140
15,900 Qualcomm, Inc. ................................. 573,354
21,900 SunGard Data Systems, Inc. (a) ................. 466,470
18,000 Symantec Corporation (a) ....................... 705,240
------------
5,782,927
------------
MATERIALS -- 1.4%
45,000 Pactiv Corporation (a) ......................... 913,500
------------
TOTAL COMMON STOCKS (Cost $34,833,477) ......... $ 36,772,477
------------
================================================================================
PAR
VALUE U.S. TREASURY OBLIGATIONS -- 3.8% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 3.4%
$1,000,000 6.75%, due 05/15/2005 .......................... $ 1,107,695
1,000,000 7.00%, due 07/15/2006 .......................... 1,153,086
------------
2,260,781
------------
U.S. TREASURY INFLATION-PROTECTION NOTES - 0.4%
235,069 3.375%, due 01/15/2007 ......................... 258,650
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $2,261,511) $ 2,519,431
------------
================================================================================
PAR
VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS-- 11.8% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK -- 0.8%
$ 500,000 4.125%, due 01/14/2005 ......................... $ 521,564
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-- 3.2%
1,500,000 6.625%, due 09/15/2009 ......................... 1,765,600
300,000 5.125%, due 07/15/2012 ......................... 320,773
------------
2,086,373
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-- 7.8%
2,000,000 7.00%, due 07/15/2005 .......................... 2,233,868
250,000 3.125%, due 08/15/2005 ......................... 251,453
22
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR
VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS-- 11.8%(Continued) VALUE
- --------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-- 7.8% (Continued)
$1,000,000 6.00%, due 12/15/2005 .......................... $ 1,104,860
1,250,000 7.25%, due 01/15/2010 .......................... 1,517,619
------------
5,107,800
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $6,792,658) .............................. $ 7,715,737
------------
================================================================================
PAR
VALUE MORTGAGE-BACKED SECURITIES -- 4.5% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 1.9%
$ 279,751 Pool #1471, 7.00%, due 03/01/2008 .............. $ 297,421
175,000 Pool #1655, 6.50%, due 10/01/2008 .............. 185,290
488,972 Pool #E00616, 6.00%, due 01/01/2014 ............ 510,895
206,360 Pool #E90624, 6.00%, due 08/01/2017 ............ 215,613
------------
1,209,219
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 2.2%
273,708 Series #93-18-PJ, 6.50%, due 12/01/2007 ........ 284,646
770,535 Pool #380512, 6.15%, due 08/01/2008 ............ 850,240
296,846 Pool #489757, 6.00%, due 04/01/2029 ............ 308,146
------------
1,443,032
------------
GOVERNMENT NATIONAL MORTAGE ASSOCIATION -- 0.4%
255,014 Pool #781344, 6.50%, due 10/01/2031 ............ 268,117
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $2,752,928) .............................. $ 2,920,368
------------
================================================================================
PAR
VALUE ASSET-BACKED SECURITIES-- 0.8% VALUE
- --------------------------------------------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION -- 0.0%
$ 10,361 Series #98-1-A1, 1.89%, adjustable
rate, due 01/25/2007 ......................... $ 10,340
------------
OTHER ASSET-BACKED SECURITIES -- 0.8%
500,000 MBNA Master Credit Card Trust #98-J-A,
5.25%, due 02/15/2006 ........................ 508,998
------------
TOTAL ASSET-BACKED SECURITIES (Cost $494,702) .. $ 519,338
------------
================================================================================
PAR
VALUE CORPORATE BONDS -- 20.0% VALUE
- --------------------------------------------------------------------------------
$ 250,000 Alcoa, Inc.,
6.50%, due 06/01/2011 ........................ $ 279,832
500,000 American Home Products Corporation,
7.90%, due 02/15/2005 ........................ 551,130
23
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR
VALUE CORPORATE BONDS -- 20.0% (Continued) VALUE
- --------------------------------------------------------------------------------
$ 249,000 Anheuser-Busch Companies, Inc.,
5.375%, due 09/15/2008 ....................... $ 272,493
325,000 BB&T Corporation,
6.50%, due 08/01/2011 ........................ 369,779
300,000 Boeing Capital Corporation,
7.10%, due 09/27/2005 ........................ 326,819
450,000 Burlington Resources, Inc.,
6.68%, due 02/15/2011 ........................ 509,865
265,000 Cardinal Health, Inc.,
6.25%, due 07/15/2008 ........................ 299,367
200,000 Citigroup, Inc.,
5.00%, due 03/06/2007 ........................ 214,829
500,000 Conoco, Inc.,
5.90%, due 04/15/2004 ........................ 522,416
250,000 CVS Corporation,
5.625%, due 03/15/2006 ....................... 272,203
500,000 Deutsche Telekom AG,
8.50%, due 06/15/2010 ........................ 586,730
500,000 Donaldson Lufkin Jenrette, Inc.,
6.875%, due 11/01/2005 ....................... 548,386
345,000 Dover Corporation,
6.50%, due 02/15/2011 ........................ 386,843
390,000 Duke Realty L.P., Medium Term Notes,
6.75%, due 05/30/2008 ........................ 432,173
875,000 ERP Operating L.P.,
6.65%, due 11/15/2003 ........................ 899,317
500,000 FPL Group Capital, Inc.,
7.375%, due 06/01/2009 ....................... 576,617
500,000 General Motors Corporation,
6.125%, due 08/28/2007 ....................... 512,754
350,000 Goldman Sachs Group,
6.65%, due 05/15/2009 ........................ 396,092
300,000 GTE Northwest, Inc.,
6.30%, due 06/01/2010 ........................ 330,310
425,000 Household Financial Company,
6.40%, due 06/17/2008 ........................ 472,906
95,000 Illinois Tool Works, Inc.,
5.75%, due 03/01/2009 ........................ 105,098
300,000 J.P. Morgan Chase & Company,
6.75%, due 02/01/2011 ........................ 332,263
205,000 Manitoba (Province of), Medium Term Notes,
5.50%, due 10/01/2008 ........................ 228,136
309,000 Marsh & McClennan Companies, Inc.,
6.625%, due 06/15/2004 ....................... 327,421
260,000 May Department Stores Company,
5.95%, due 11/01/2008 ........................ 281,980
350,000 Morgan Stanley Dean Witter & Company,
6.75%, due 04/15/2011 ........................ 391,726
24
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR
VALUE CORPORATE BONDS -- 20.0% (Continued) VALUE
- --------------------------------------------------------------------------------
$ 575,000 National City Corporation,
7.20%, due 05/15/2005 ........................ $ 634,471
375,000 PepsiCo, Inc.,
4.50%, due 09/15/2004 ........................ 390,549
250,000 Pharmacia Corporation,
5.75%, due 12/01/2005 ........................ 272,840
225,000 ProLogis Trust,
7.00%, due 10/01/2003 ........................ 230,258
400,000 SBC Communciations, Inc., Medium Term Notes,
6.875%, due 08/15/2006 ....................... 450,382
300,000 SunTrust Banks, Inc.,
6.00%, due 01/01/2028 ........................ 328,036
300,000 Union Camp Corporation,
6.50%, due 11/15/2007 ........................ 332,781
------------
TOTAL CORPORATE BONDS (Cost $11,980,684) ....... $ 13,066,802
------------
================================================================================
PAR
VALUE MUNICIPAL DEBT SECURITITES-- 0.4% VALUE
- --------------------------------------------------------------------------------
$ 230,000 Virginia State Residential Authority,
Infrastructure, Revenue,
5.90%, due 05/01/2011 (Cost $234,422) ........ $ 252,584
------------
================================================================================
PAR
VALUE SHORT-TERM CORPORATE NOTES-- 1.2% VALUE
- --------------------------------------------------------------------------------
$ 499,625 American Family Financial Services Demand Note . $ 499,625
50,367 U.S. Bank N.A. Demand Note ..................... 50,367
216,763 Wisconsin Corporate Central Credit Union Demand Note 216,763
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $766,755) $ 766,755
------------
TOTAL INVESTMENTS AT VALUE-- 98.8%
(Cost $60,117,137) ............................. $ 64,533,492
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.2% ... 805,834
------------
NET ASSETS-- 100.0% ............................ $ 65,339,326
============
(a) Non-income producing security.
See accompanying notes to financial statements.
25
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS -- 95.4% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 14.9%
30,000 Darden Restaurants, Inc. ....................... $ 535,500
13,200 Gannett Company, Inc. .......................... 929,676
36,000 Home Depot, Inc. ............................... 876,960
53,000 Mattel, Inc. ................................... 1,192,500
35,000 Target Corporation ............................. 1,024,100
20,400 Viacom, Inc. - Class B (a) ..................... 745,008
8,445 Wal-Mart Stores, Inc. .......................... 439,393
------------
5,743,137
------------
CONSUMER STAPLES -- 8.3%
12,100 Anheuser-Busch Companies, Inc. ................. 563,981
8,800 Hershey Foods Corporation ...................... 551,408
17,000 Kimberly-Clark Corporation ..................... 772,820
24,900 PepsiCo, Inc. .................................. 996,000
11,800 SYSCO Corporation .............................. 300,192
------------
3,184,401
------------
ENERGY -- 7.2%
21,000 Anadarko Petroleum Corporation ................. 955,500
16,000 ChevronTexaco Corporation ...................... 1,034,400
25,000 Noble Drilling Corporation (a) ................. 785,500
------------
2,775,400
------------
FINANCIAL -- 16.8%
16,000 Bank of America Corporation .................... 1,069,440
25,500 Capital One Financial Corporation .............. 765,255
32,000 Citigroup, Inc. ................................ 1,102,400
14,000 Fannie Mae ..................................... 914,900
10,110 Freddie Mac .................................... 536,841
16,190 Principal Financial Group, Inc. ................ 439,397
25,000 Prudential Financial, Inc. ..................... 731,250
21,000 Wells Fargo & Company .......................... 944,790
------------
6,504,273
------------
HEALTHCARE -- 16.4%
18,000 AmerisourceBergen Corporation .................. 945,000
19,900 Anthem, Inc. (a) ............................... 1,318,375
17,200 Johnson & Johnson .............................. 995,364
12,000 Medtronic, Inc. ................................ 541,440
48,000 Pfizer, Inc. ................................... 1,495,680
7,300 WellPoint Health Networks, Inc. (a) ............ 560,275
13,000 Wyeth .......................................... 491,660
------------
6,347,794
------------
INDUSTRIALS -- 14.1%
75,000 Cendant Corporation (a) ........................ 952,500
24,400 First Data Corporation ......................... 903,044
14,000 General Dynamics Corporation ................... 770,980
27,539 General Electric Company ....................... 702,244
10,300 ITT Industries, Inc. ........................... 550,123
63,000 Norfolk Southern Corporation ................... 1,169,280
7,000 United Technologies Corporation ................ 404,460
------------
5,452,631
------------
26
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.4% (Continued) VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 15.2%
26,000 Accenture Ltd. - Class A (a) ................... $ 403,000
24,000 Affiliated Computer Services, Inc. (a) ......... 1,062,240
61,000 Cisco Systems, Inc. (a) ........................ 786,900
16,300 Dell Computer Corporation (a) .................. 445,153
10,050 Electronic Arts, Inc. (a) ...................... 589,332
33,000 Microsoft Corporation .......................... 798,930
16,200 Qualcomm, Inc. ................................. 584,172
21,800 SunGard Data Systems, Inc. (a) ................. 464,340
18,500 Symantec Corporation (a) ....................... 724,830
------------
5,858,897
------------
MATERIALS -- 2.5%
47,000 Pactiv Corporation (a) ......................... 954,100
------------
TOTAL COMMON STOCKS (Cost $36,971,255) ......... $ 36,820,633
------------
================================================================================
PAR VALUE SHORT-TERM CORPORATE NOTES-- 3.5% VALUE
- --------------------------------------------------------------------------------
$ 522,722 American Family Financial Services Demand Note . $ 522,722
572,744 U.S. Bank N.A. Demand Note ..................... 572,744
265,532 Wisconsin Corporate Central Credit Union
Variable Demand Note ......................... 265,532
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $1,360,998) $ 1,360,998
------------
TOTAL INVESTMENTS AT VALUE-- 98.9%
(Cost $38,332,253) ............................. $ 38,181,631
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.1% ... 437,474
------------
NET ASSETS-- 100.0% ............................ $ 38,619,105
============
(a) Non-income producing security.
See accompanying notes to financial statements.
27
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 94.1% VALUE
- --------------------------------------------------------------------------------
Alexandria, Virginia, GO,
$1,000,000 5.00%, due 06/15/2011 ........................ $ 1,112,740
Arlington Co., Virginia, GO,
990,000 5.40%, due 06/01/2014 ........................ 1,075,219
Chesapeake Bay Bridge and Tunnel, Commonwealth,
Virginia, Revenue,
1,000,000 5.70%, due 07/01/2008, prerefunded
07/01/2005 @ 102 ............................. 1,114,750
Chesapeake, Virginia, GO,
1,000,000 5.50%, due 05/01/2011 ........................ 1,093,050
Chesterfield Co., Virginia, GO,
85,000 6.25%, due 07/15/2005 ........................ 88,315
1,000,000 4.75%, due 01/01/2013 ........................ 1,061,660
Fredericksburg, Virginia, Industrial Dev.
Authority, Revenue,
1,000,000 1.17%, weekly floating rate, due 10/01/2025 .. 1,000,000
Hampton, Virginia, GO,
1,000,000 5.50%, due 02/01/2012 ........................ 1,130,330
Hanover Co., Virginia, GO,
1,000,000 5.125%, due 07/15/2013 ....................... 1,094,070
Hanover Co., Virginia, Industrial Dev.
Authority, Revenue,
1,000,000 6.50%, due 08/15/2009 ........................ 1,193,530
Henrico Co., Virginia, Economic Dev.
Authority, Revenue,
1,000,000 5.50%, due 11/01/2008 ........................ 1,148,660
Medical College of Virginia Hospitals
Authority, Revenue,
700,000 5.00%, due 07/01/2013 ........................ 749,224
Newport News, Virginia, GO,
1,000,000 5.625%, due 07/01/2014, prerefunded
07/01/2005 @ 102 ............................. 1,112,860
Norfolk, Virginia, GO,
500,000 5.25%, due 06/01/2008, partially prerefunded
06/01/2004 @ 101 ............................. 527,205
300,000 5.75%, due 06/01/2011, prerefunded
06/01/2005 @ 101 ............................. 330,837
Norfolk, Virginia, Industrial Dev. Authority,
Revenue,
1,000,000 6.50%, due 11/01/2013 ........................ 1,089,640
Norfolk, Virginia, Water, Revenue,
1,000,000 5.00%, due 11/01/2016 ........................ 1,071,260
Pamunkey, Virginia, Regional Jail Authority,
Jail Facility, Revenue,
1,000,000 5.70%, due 07/01/2010 ........................ 1,136,970
Portsmouth, Virginia, GO,
800,000 5.00%, due 08/01/2017 ........................ 847,960
Prince William Co., Virginia, Park Authority,
Revenue,
250,000 6.10%, due 10/15/2004, escrowed to maturity .. 268,240
Richmond, Virginia, Convention Center Authority,
Hotel Tax, Revenue,
550,000 5.50%, due 06/15/2008 ........................ 617,617
Richmond, Virginia, GO,
1,000,000 5.45%, due 01/15/2008 ........................ 1,131,600
Richmond, Virginia, Industrial Dev. Authority,
Government Facilities, Revenue,
1,010,000 4.75%, due 07/15/2010 ........................ 1,107,505
Riverside, Virginia, Regional Jail Authority,
Revenue,
455,000 5.625%, due 07/01/2007 ....................... 504,299
Roanoke, Virginia, GO,
1,000,000 5.00%, due 08/01/2009 ........................ 1,106,640
28
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 94.1% (Continued) VALUE
- --------------------------------------------------------------------------------
Southeastern Public Service Authority,
Virginia, Revenue,
$1,000,000 5.00%, due 07/01/2015 ........................ $ 1,103,180
Suffolk, Virginia, GO,
350,000 5.80%, due 06/01/2011 ........................ 392,900
1,000,000 5.00%, due 12/01/2015 ........................ 1,074,850
University of Virginia, Revenue,
1,000,000 5.25%, due 06/01/2012 ........................ 1,108,030
Upper Occoquan, Virginia, Sewer Authority, Revenue,
700,000 5.00%, due 07/01/2015 ........................ 751,072
Virginia Beach, Virginia, GO,
1,000,000 5.25%, due 08/01/2010 ........................ 1,115,700
Virginia College Building Authority, Educational
Facilities, Revenue,
1,000,000 5.55%, due 11/01/2019, optional tender
11/01/2004 ................................... 1,063,840
Virginia Commonwealth Transportation Board, Revenue,
850,000 7.25%, due 05/15/2020 ........................ 1,013,378
Virginia Residential Authority, Revenue,
500,000 5.50%, due 05/01/2017 ........................ 555,590
Virginia State, GO,
1,000,000 5.375%, due 06/01/2003 ....................... 1,007,180
Virginia State Housing Dev. Authority,
Multi-Family, Revenue,
150,000 6.60%, due 11/01/2012 ........................ 156,298
150,000 6.30%, due 11/01/2015 ........................ 158,009
Virginia State Public Building Authority, Revenue,
900,000 6.00%, due 08/01/2003 ........................ 911,700
Virginia State Public School Authority, Revenue,
1,000,000 5.25%, due 08/01/2009 ........................ 1,133,670
------------
TOTAL VIRGINIA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (Cost $32,072,547) ..... $ 34,259,578
------------
================================================================================
SHARES MONEY MARKET -- 2.0% VALUE
- --------------------------------------------------------------------------------
745,281 First American Tax Free Obligation Fund -
Class S (Cost $745,281) ...................... $ 745,281
------------
TOTAL INVESTMENTS AT VALUE-- 96.1%
(Cost $32,817,828) ............................. $ 35,004,859
OTHER ASSETS IN EXCESS OF LIABILITIES-- 3.9% ... 1,418,696
------------
NET ASSETS-- 100.0% ............................ $ 36,423,555
============
See accompanying notes to financial statements.
29
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS -- 95.8% VALUE
- --------------------------------------------------------------------------------
AUSTRALIA -- 2.1%
80,252 BHP Billiton Ltd. .............................. $ 450,046
------------
FINLAND -- 0.6%
9,509 Nokia OYJ - Series A(a) ........................ 131,363
------------
FRANCE -- 13.8%
10,574 Accor SA ....................................... 292,151
6,262 Aventis SA ..................................... 274,895
11,903 Carrefour SA ................................... 450,833
9,573 France Telecom SA .............................. 195,237
4,139 L'Oreal SA ..................................... 250,665
2,195 Pernod-Ricard SA ............................... 187,064
4,258 Pinault-Printemps-Redoute SA ................... 219,028
6,034 Sanofi-Synthelabo SA ........................... 303,602
10,220 Suez SA ........................................ 118,769
3,920 Total Fina Elf SA .............................. 496,190
6,788 Valeo SA ....................................... 149,697
------------
2,938,131
------------
GERMANY -- 1.3%
8,369 Volkswagon AG .................................. 267,118
------------
HONG KONG -- 2.3%
138,500 China Mobile (Hong Kong) Ltd.(a) ............... 274,356
43,000 Sun Hung Kai Properties Ltd. ................... 206,194
------------
480,550
------------
INDIA -- 0.2%
733 Infosys Technologies Ltd. - ADR ................ 44,970
------------
ITALY -- 9.7%
40,962 ENI SpA ........................................ 547,100
148,504 IntesaBci SpA .................................. 330,577
91,131 Mediaset SpA ................................... 692,118
123,200 Telecom Italia Mobile (T.I.M) SpA .............. 502,790
------------
2,072,585
------------
JAPAN -- 18.1%
42,000 Bridgestone Corporation ........................ 493,389
13,000 Canon, Inc. .................................... 453,871
64 East Japan Railway Company ..................... 279,575
12,500 Honda Motor Company Ltd. ....................... 416,386
9,000 Ito-Yokado Company Ltd. ........................ 242,874
8,100 JFE Holdings, Inc.(a) .......................... 102,462
34,000 Matsushita Electric Industrial Company Ltd. .... 290,454
90,000 Nissan Motor Company Ltd. (a) .................. 599,595
11,000 Nomura Holdings, Inc. .......................... 114,564
3,900 Orix Corporation ............................... 200,624
7,100 Pioneer Corporation ............................ 147,592
30
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.8% (Continued) VALUE
- --------------------------------------------------------------------------------
JAPAN-- 18.1% (Continued)
2,740 Rohm Company ................................... $ 296,922
6,900 Shin-Etsu Chemical Company Ltd. ................ 213,552
------------
3,851,860
------------
KOREA --- 3.2%
4,706 Kookmin Bank - ADR ............................. 108,238
10,147 KT Corporation - ADR ........................... 174,224
1,345 Samsung Electronics Company Ltd. ............... 304,500
6,344 SK Telecom Company Ltd. - ADR .................. 86,405
------------
673,367
------------
MEXICO -- 0.9%
6,702 Telefonos De Mexico SA - ADR ................... 199,183
------------
NETHERLANDS-- 9.7%
27,515 Aegon NV ....................................... 206,568
18,654 Fortis ......................................... 240,803
2,248 Gucci Group NV - ADR ........................... 214,257
5,994 Heineken NV .................................... 222,317
45,994 Koninklijke (Royal) KPN NV (a) ................. 295,109
4,040 Unilever NV - CVA .............................. 240,481
21,241 VNU NV ......................................... 539,588
9,420 Wolters Kluwer NV .............................. 105,875
------------
2,064,998
------------
SINGAPORE -- 1.3%
47,000 United Overseas Bank Ltd. ...................... 274,254
------------
SPAIN -- 2.0%
2,871 Acerinox SA .................................... 103,352
35,620 Telefonica SA (a) .............................. 333,103
------------
436,455
------------
SWEDEN -- 2.8%
50,022 Nordea AB ...................................... 220,643
144,769 Telefonaktiebolaget LM Ericsson (a) ............ 90,492
103,117 TeliaSonera AB ................................. 295,525
------------
606,660
------------
SWITZERLAND -- 1.9%
5,828 Adecco SA ...................................... 161,931
6,299 Novartis AG .................................... 233,279
------------
395,210
------------
THAILAND -- 0.1%
16,100 Bangkok Bank Public Company Ltd. (a) ........... 24,027
------------
UNITED KINGDOM -- 25.8%
16,244 Astrazeneca PLC ................................ 554,603
32,822 BaA PLC ........................................ 244,615
106,718 Bae Systems PLC ................................ 188,926
58,843 British Sky Broadcasting Group PLC (a) ......... 582,709
32,621 Diageo PLC ..................................... 334,382
31
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.8% (Continued) VALUE
- --------------------------------------------------------------------------------
UNITED KINGDOM-- 25.8% (Continued)
12,017 GlaxoSmithKline PLC ............................ $ 211,411
49,114 HSBC Holdings PLC .............................. 504,608
25,832 Imperial Tobacco PLC ........................... 410,355
115,636 Kingfisher PLC ................................. 419,937
63,669 Marks & Spencer Group PLC ...................... 284,304
15,561 Next PLC ....................................... 208,947
2,094 Reckitt Benckiser PLC .......................... 34,324
69,170 Reed Elsevier PLC .............................. 493,094
15,968 Royal Bank of Scotland Group PLC ............... 359,415
12,417 Six Continents PLC ............................. 118,252
303,512 Vodafone Group PLC ............................. 542,113
------------
5,491,995
------------
TOTAL COMMON STOCK (Cost $24,895,833) .......... $ 20,402,772
------------
================================================================================
SHARES RIGHTS -- 0.1% VALUE
- --------------------------------------------------------------------------------
FRANCE -- 0.1%
6,383 France Telecom SA (Cost $0) .................... $ 25,074
------------
TOTAL INVESTMENT AT VALUE-- 95.9%
(Cost $24,895,833) ............................. $ 20,427,846
OTHER ASSETS IN EXCESS OF LIABILITES-- 4.1% .... 880,444
------------
NET ASSETS-- 100.0% ............................ $ 21,308,290
============
(a) Non-income producing security.
See accompanying notes to financial statements.
32
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund (each a series of The
Williamsburg Investment Trust), including the portfolios of investments, as of
March 31, 2003, and the related statements of operations for the year then
ended, and the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 2003 by correspondence with the
custodian and brokers. Where brokers have not replied to our confirmation
requests, we have carried out other appropriate auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial positions of
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Tax Exempt
Virginia Fund and The Jamestown International Equity Fund as of March 31, 2003,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended, in conformity
with accounting principles generally accepted in the United States of America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 2003
33
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED)
================================================================================
Overall responsibility for management of the Funds rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Funds to actively supervise its day-to-day
operations. The officers have been elected for an annual term. The following are
the Trustees and executive officers of the Funds:
Position Held Length of
Trustee Address Age with the Trust Time Served
- -----------------------------------------------------------------------------------------------------------------------------
*Charles M. Caravati, Jr. 931 Broad Street Road 66 Chairman and Trustee Since June 1991
Manakin-Sabot, VA
- -----------------------------------------------------------------------------------------------------------------------------
*Austin Brockenbrough III 1802 Bayberry Court, Suite 400 66 Trustee and Vice President Since September 1988
Richmond, VA
- -----------------------------------------------------------------------------------------------------------------------------
*John T. Bruce 800 Main Street 49 Trustee Since September 1988
Lynchburg, VA
- -----------------------------------------------------------------------------------------------------------------------------
J. Finley Lee 200 Westminster Drive 63 Trustee Since September 1988
Chapel Hill, NC
- -----------------------------------------------------------------------------------------------------------------------------
*Richard Mitchell 150 Government Street 53 Trustee Since June 1991
Mobile, AL
- -----------------------------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 63 Trustee Since March 1993
Richmond, VA
- -----------------------------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintoport Boulevard 43 Trustee Since March 1993
Saraland, AL
- -----------------------------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 70 Trustee Since July 1997
Richmond, VA
- -----------------------------------------------------------------------------------------------------------------------------
Samuel B. Witt III 2300 Clarendon Boulevard 67 Trustee Since November 1988
Suite 407, Arlington, VA
- -----------------------------------------------------------------------------------------------------------------------------
Charles M. Caravati III 1802 Bayberry Court, Suite 400 38 President, Jamestown Since January 1996
Richmond, VA Balanced Fund, Equity
Fund and International
Equity Fund
- -----------------------------------------------------------------------------------------------------------------------------
Beth Ann Gustafson 1802 Bayberry Court, Suite 400 44 President, Jamestown Tax Since March 1995
Richmond, VA Exempt Virginia Fund
- -----------------------------------------------------------------------------------------------------------------------------
Lawrence B. Whitlock, Jr. 1802 Bayberry Court, Suite 400 55 Vice President, Jamestown Since February 2002
Richmond, VA Balanced Fund and Equity
Fund
- -----------------------------------------------------------------------------------------------------------------------------
Connie R. Taylor 1802 Bayberry Court, Suite 400 53 Vice President, Jamestown Since March 1993
Richmond, VA Balanced Fund and Equity
Fund
- -----------------------------------------------------------------------------------------------------------------------------
Pamela C. Simms 1802 Bayberry Court, Suite 400 42 Vice President, Jamestown Since February 2003
Richmond, VA Tax Exempt Virginia Fund
- -----------------------------------------------------------------------------------------------------------------------------
Robert G. Dorsey 135 Merchant Street, Suite 230 46 Vice President Since November 2000
Cincinnati, OH
- -----------------------------------------------------------------------------------------------------------------------------
Mark J. Seger 135 Merchant Street, Suite 230 41 Treasurer Since November 2000
Cincinnati, OH
- -----------------------------------------------------------------------------------------------------------------------------
John F. Splain 135 Merchant Street, Suite 230 46 Secretary Since November 2000
Cincinnati, OH
- -----------------------------------------------------------------------------------------------------------------------------
*Messrs. Bruce, Brockenbrough, Caravati and Mitchell are "interested persons" of
the Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati III.
Each Trustee oversees ten portfolios of the Trust, including the Funds. The
principal occupations of the Trustees and executive officers of the Fund during
the past five years and public directorships held by the Trustees are set forth
below:
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
34
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED)
================================================================================
Austin Brockenbrough III is President and Managing Director of the Adviser. He
is a member of the Board of Directors of Tredegar Industries, Inc. (a plastics
manufacturer) and Wilkinson O'Grady & Co., Inc. (a global asset manager). In
addition, he is a member of the Board of Trustees for the University of
Richmond.
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
J. Finley Lee is a financial consultant and the Julian Price Professor Emeritus
at the University of North Carolina. In addition, he is a member of the Board of
Trustees of the Albemarle Investment Trust (a registered investment company).
Richard Mitchell is a Principal of T. Leavell & Associates, Inc. (an investment
advisory firm).
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (a manufacturer of polymers and chemicals).
Harris V. Morrissette is President of Marshall Biscuit Co., Inc. He is a member
of the Board of Directors of BancTrust Financial Group, Inc. (a bank holding
company) and EnergySouth, Inc. In addition, he is Chairman of Azalea Aviation,
Inc. (an airplane fueling company).
Erwin H. Will, Jr. is retired. Until December 31, 2001, he was the Managing
Director of Equities of Virginia Retirement System.
Samuel B. Witt III is Senior Vice President and General Counsel of Stateside
Associates, Inc. He is also a member of the Board of Directors of The Swiss
Helvetia Fund, Inc. (a closed-end investment company).
Charles M. Caravati III is a Managing Director of the Adviser.
Beth Ann Gustafson is Vice President and a Portfolio Manager of the Adviser.
Lawrence B. Whitlock, Jr. is a Managing Director of the Adviser.
Connie R. Taylor is an Administrator of the Adviser.
Pamela C. Simms is an Administrator of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC. Prior to March 1999, he was President of
Countrywide Fund Services, Inc. (a mutual fund services company).
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distribuors, LLC. Prior to March 1999, he was First Vice President of
Countrywide Fund Services, Inc.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President and
Secretary of Countrywide Fund Services, Inc. and affiliated companies.
Additional information about members of the Board of Directors and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-866-738-1126.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, The Jamestown Tax Exempt Virginia
Fund designates its respective dividends paid from net investment income during
the year ended March 31, 2003 as "exempt-interest dividends."
35
================================================================================
THE JAMESTOWN FUNDS
INVESTMENT ADVISOR
Lowe, Brockenbrough & Company, Inc.
1802 Bayberry Court
Suite 400
Richmond, Virginia 23226
www.jamestownfunds.com
ADMINISTRATOR
Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
(Toll-Free) 1-866-738-1126
INDEPENDENT AUDITORS
Tait, Weller & Baker
1818 Market Street, Suite 2400
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
================================================================================
================================================================================
THE DAVENPORT EQUITY FUND
INVESTMENT ADVISER
Davenport & Company LLC
One James Center
901 East Cary Street
Richmond, Virginia 23219-4037
ADMINISTRATOR ------------
Ultimus Fund Solutions, LLC DAVENPORT
P.O. Box 46707 EQUITY FUND
Cincinnati, Ohio 45246-0707 ------------
1-800-281-3217
CUSTODIAN
U.S. Bank
425 Walnut Street ANNUAL REPORT
Cincinnati, Ohio 45202 MARCH 31, 2003
INDEPENDENT AUDITORS
Tait, Weller & Baker
1818 Market Street, Suite 2400
Philadelphia, Pennsylvania 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt III
OFFICERS
Joseph L. Antrim III, President
Coleman Wortham III, Vice President
J. Lee Keiger III, Vice President
John P. Ackerly IV, Vice President
================================================================================
LETTER TO SHAREHOLDERS MARCH 31, 2003
================================================================================
The Dow Jones Industrial Average gained 5% in the first three days of trading in
January, the best start to a year in history. It soon gave way as the threat of
war, terrorist attacks and a slumping economy weighed on investors. The war
began and the reality of a longer engagement took hold, pressuring the market.
The quarter ended with the S&P 500 returning -3.1%, the NASDAQ +0.6% and the Dow
Jones Industrial Average -3.6%. The performance of the Davenport Equity Fund*
vs. the S&P 500 for the periods ended March 31, 2003 was:
Since Inception
3 Year 5 Year (1/15/98)
QTR 1 Year (annualized) (annualized) (annualized)
----------------------------------------------------------------------
DAVPX -3.55% -20.66% -12.05% -3.23% -1.08%
S&P 500 -3.15% -24.76% -16.09% -3.77% -0.79%
The last three-year period has been one of the worst markets in most investor's
memory. Those that over indulged in the "New Economy" of the late 1990's and
embraced the new investment tenets promising richer rewards have suffered far
worse than investors who maintained a balance between risk and return. At
Davenport, our investment philosophy has remained consistent since we began
managing our own profit sharing plan in 1975: preserve capital by investing in
quality companies that trade at attractive valuation levels while remaining well
diversified across all major sectors of the market.
Our goal has always been to build a solid performance record while incurring
less risk than the market. We are pleased that your fund and by extension our
retirement plan have done well versus our main benchmark, the S&P 500. Your
portfolio's defensive position has mitigated much of the market's downturn.
Being over weighted in consumer staples (food and beverage companies), energy,
and the health care sectors while being under weighted in technology and
telecommunications has helped preserve capital. While investing in companies
that are not as dependent on the economy has helped our relative performance, we
have begun to selectively position the portfolio to be more offensive to take
advantage of the eventual upturn in the market. Later in this letter we have
highlighted the recent purchases we have made for future growth. Like you, we
look forward to the day when we are able to boast about absolute performance as
well as relative performance.
INVESTMENT POSTULATES
Euclid was a Greek mathematician who lived in the third century B.C. and taught
in Egypt. He is credited with authoring history's most definitive geometry text
- - The Elements.
Euclid believed that there were five "Postulates" or cornerstones, to the study
of geometry. His "First Postulate" stated simply that it is possible to draw a
straight line from any point to another point. This allows the equally simple
deduction that a straight line is the shortest route between two points. One of
his "Common Notions," and he had many, was that things which were equal to the
same thing are equal to each other. This Notion laid the groundwork for
mathematics to proceed as a deductive science.
1
Just what does all of this have to do with the stock market? Possibly nothing,
but it is seductive to think of the stock market in a similar way--as a science
that can be systematized by Postulates and Common Notions. Certainly many have
tried to explain the irrational behavior of individual stocks and the collective
behavior of the market. None, however, have consistently succeeded. There have
been no Euclids in the world of investments.
So are there any postulates when it comes to stocks? Probably not. Successful
investors, it seems to us, understand that investing is not a science like
mathematics and geometry. They understand that investment success proceeds
through common sense, some degree of technical knowledge, and luck. The last of
these three, luck, is perhaps the most perplexing.
We believe investors can improve their luck, in some measure at least, by
stacking odds in their favor. Here are some of the "odds stacking" lessons
experience has taught us. Nurture your common sense, learn the basics, and don't
expect instant gratification. Humility is important because it allows investors
to admit mistakes early before they become devastating. Diversification is
important since we all make mistakes. Curiosity is important because it leads us
to think outside of the crowd. Health is important because we need to live long
enough to enjoy the fruits of our labor. Cynicism is important because it steers
us away from those gurus with a "postulate" for every season.
Just as there is timelessness to Euclid's study of geometry, there is a similar
timelessness to common sense investing. Most successful investors aren't
concerned with the direction of the market. There is nothing they can do about
it anyway. It is important to avoid big losses. How do you do that? Admit
mistakes and move on. Even if you are an excellent investor you will probably be
wrong four times out of ten. Common sense tells us that the damage created by
mistakes should be controlled.
These have been the toughest years that any of us can remember. Though not a
"postulate", it is perhaps a "common notion" that good markets follow bad
markets. Another "common notion" is that if you don't own stocks, you won't
benefit when they go up. Therefore (and even Euclid would, hopefully, endorse
this logic), now is the time to own stocks. Q.E.D.*
*Q. E. D. - "quod erat demonstrandum", or "which was to be demonstrated (or
proved)".
RECENT PURCHASES
During the quarter we continued to focus our purchases on market leaders with
strong financials and solid management. We are confident that companies like
Dell Computer, Intel, Cisco, EOG Resources, and CarMax will continue to shape
and define their business.
We have long admired Dell Computer as the preeminent direct marketer of computer
systems. With the stock tumbling 50% from its peak three years ago and its 2003
earnings expected to increase over 50% from that same period, we felt the
shares, selling at nearly half their normal relative valuation level, were
attractive. We expect sales to increase with an upturn in information technology
spending due in part to the aging of computers as well as the increase of demand
for wireless enabled computers and laptops. Dell is also making inroads in the
server, printer, and storage markets.
Like Dell, the need to upgrade aging computers, the desire for wireless
capability, and the necessity to improve network security requiring newer chips,
bodes well for Intel. The company's relentless thirst to dominate their
2
business is evidenced by their mission statement, "to be the preeminent building
block supplier to the worldwide Internet economy."
All technology stocks have suffered in the downturn, but the true leaders like
Dell, Intel, and Cisco have been able to increase their market share and
solidify their position by investing heavily on research and development.
Cisco's $20 billion cash horde (larger than the market value of any of its
competitors), no debt and strong cash flow allowed the company last year to
invest 17% of their revenues into R&D. Another sign of management strength at
Cisco is the fact that despite significant price erosion and revenue decline,
the company's gross margins have actually increased.
The companies mentioned thus far have all experienced a significant price
decline and weakened demand for their products. In contrast, EOG, a natural gas
exploration and production company, has enjoyed a 192% increase in the price of
its product without a significant increase in its stock price. On a longer-term
basis we believe that natural gas prices will be higher than expected: demand
continues to grow 2-3% a year, production has declined, and inventory levels are
close to record lows. EOG stands out among its peer group with its strong
balance sheet, high return on equity, strong cash flow growth, and healthy
increases in production and reserves.
CarMax also stands out in its sector as the only dominant franchise in the used
car business. We added to our position on recent weakness based on what we
believe was investor overreaction to a temporary slow down in earnings growth.
Much of the disappointment had to do with one-time expenses, strong comparisons
and cold weather that resulted in 137 store days of sales disruptions. In our
view, the long-term growth prospects of CarMax are intact and we expect them to
open approximately thirty stores in the next five years.
THE CLOSING BELL
For three years, the market has declined and "investors" have fled it with
various rationales for having bought high and sold low, "I am getting older and
need more bonds," "the environment is different," or "I will get back in later."
Every bear market brings with it the questions "Will it ever recover and what
will drive it higher?" This pessimistic view has resulted in a record amount of
cash sitting on the sidelines, which after inflation, is losing money. The
market's potential for recovery was evident in late March (as well as October
and July 2002) as the S&P 500 increased 11.4% in 7 days led by manic buying and
short covering. With interest rates and valuation levels down significantly from
March 2000, stocks are more attractive than they have been in quite some time.
While no one knows when stocks will recover, we will remain patient and
comforted knowing that we own stocks in over forty great companies selling at
reasonable valuation levels that are well diversified across all major sectors
of the market.
Sincerely,
Davenport & Company, LLC
* Performance is historical and not representative nor a guarantee of future
results. The investment and principle value of an investment will
fluctuate. An investor's shares, when redeemed, may be worth more or less
than their original cost.
3
PERFORMANCE INFORMATION
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE DAVENPORT EQUITY FUND AND THE STANDARD & POOR'S 500 INDEX
[GRAPHIC OMITTED]
THE DAVENPORT EQUITY FUND STANDARD & POOR'S 500 INDEX:
------------------------- ----------------------------
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ -------
01/15/98 10,000 01/15/98 10,000
03/31/98 11.40% 11,140 03/31/98 16.25% 11,625
06/30/98 1.39% 11,295 06/30/98 3.30% 12,009
09/30/98 -11.91% 9,950 09/30/98 -9.95% 10,815
12/31/98 15.78% 11,520 12/31/98 21.30% 13,118
03/31/99 4.95% 12,090 03/31/99 4.98% 13,771
06/30/99 5.12% 12,709 06/30/99 7.05% 14,742
09/30/99 -6.21% 11,920 09/30/99 -6.24% 13,822
12/31/99 11.75% 13,320 12/31/99 14.88% 15,878
03/31/00 4.31% 13,894 03/31/00 2.29% 16,242
06/30/00 -3.15% 13,457 06/30/00 -2.66% 15,811
09/30/00 -0.94% 13,330 09/30/00 -0.97% 15,658
12/31/00 -0.78% 13,226 12/31/00 -7.82% 14,432
03/31/01 -12.44% 11,580 03/31/01 -11.86% 12,721
06/30/01 3.33% 11,966 06/30/01 5.85% 13,466
09/30/01 -10.26% 10,738 09/30/01 -14.68% 11,489
12/31/01 9.02% 11,707 12/31/01 10.69% 12,717
03/31/02 1.78% 11,915 03/31/02 0.27% 12,752
06/30/02 -8.41% 10,913 06/30/02 -13.40% 11,044
09/30/02 -14.89% 9,288 09/30/02 -17.28% 9,136
12/31/02 5.52% 9,801 12/31/02 8.44% 9,906
03/31/03 -3.55% 9,453 03/31/03 -3.15% 9,594
Past performance is not predictive of future performance.
- ----------------------------------------
| THE DAVENPORT EQUITY FUND |
| AVERAGE ANNUAL TOTAL RETURNS (a) |
| (FOR PERIODS ENDED MARCH 31, 2003) |
| 1 YEAR 5 YEARS SINCE INCEPTION* |
| (20.66%) (3.23%) (1.08%) |
- ----------------------------------------
* Initial public offering of shares was January 15, 1998.
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
4
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2003
================================================================================
ASSETS
Investments in securities:
At acquisition cost .................................... $ 83,446,178
============
At market value (Note 1) ............................... $ 76,356,146
Dividends and interest receivable ......................... 67,644
Receivable for capital shares sold ........................ 157,719
Other assets .............................................. 6,901
------------
TOTAL ASSETS ........................................... 76,588,410
------------
LIABILITIES
Dividends payable ......................................... 4,078
Payable for capital shares redeemed ....................... 47,071
Accrued investment advisory fees (Note 3) ................. 50,036
Accrued administration fees (Note 3) ...................... 10,800
Other accrued expenses .................................... 2,940
------------
TOTAL LIABILITIES ...................................... 114,925
------------
NET ASSETS ................................................... $ 76,473,485
============
Net assets consist of:
Paid-in capital .............................................. $ 91,694,528
Undistributed net investment income .......................... 6,333
Accumulated net realized losses from security transactions ... (8,137,344)
Net unrealized depreciation on investments ................... (7,090,032)
------------
Net assets ................................................... $ 76,473,485
============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ................ 8,282,072
============
Net asset value, offering price and redemption price
per share (Note 1) ........................................ $ 9.23
============
See accompanying notes to financial statements.
5
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2003
================================================================================
INVESTMENT INCOME
Dividends ................................................ $ 1,246,705
Interest ................................................. 10,254
------------
TOTAL INVESTMENT INCOME ............................... 1,256,959
------------
EXPENSES
Investment advisory fees (Note 3) ........................ 568,812
Administration fees (Note 3) ............................. 127,046
Custodian fees ........................................... 14,759
Professional fees ........................................ 13,815
Trustees' fees and expenses .............................. 12,563
Printing of shareholder reports .......................... 12,358
Registration fees ........................................ 9,506
Postage and supplies ..................................... 8,127
Insurance expense ........................................ 4,922
Other expenses ........................................... 17,262
------------
TOTAL EXPENSES ........................................ 789,170
------------
NET INVESTMENT INCOME ....................................... 467,789
------------
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
Net realized losses from security transactions ........... (6,068,163)
Net change in unrealized appreciation/depreciation
on investments ........................................ (12,278,655)
------------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS ........... (18,346,818)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS .................. $(17,879,029)
============
See accompanying notes to financial statements.
6
THE DAVENPORT EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
===========================================================================================
YEAR YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2003 2002
- -------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................................. $ 467,789 $ 264,626
Net realized losses from security transactions ........ (6,068,163) (1,914,754)
Net change in unrealized appreciation/
depreciation on investments ........................ (12,278,655) 3,753,826
------------ ------------
Net increase (decrease) in net assets from operations .... (17,879,029) 2,103,698
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ...................... (483,955) (254,233)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............................. 20,775,106 17,832,797
Net asset value of shares issued in reinvestment
of distributions to shareholders ................... 461,181 242,102
Payments for shares redeemed .......................... (8,914,951) (7,569,094)
------------ ------------
Net increase in net assets from capital share transactions 12,321,336 10,505,805
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .................. (6,041,648) 12,355,270
NET ASSETS
Beginning of year ..................................... 82,515,133 70,159,863
------------ ------------
End of year ........................................... $ 76,473,485 $ 82,515,133
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME ...................... $ 6,333 $ 22,499
============ ============
CAPITAL SHARE ACTIVITY
Sold .................................................. 2,086,119 1,535,017
Reinvested ............................................ 47,857 21,342
Redeemed .............................................. (897,541) (654,348)
------------ ------------
Net increase in shares outstanding .................... 1,236,435 902,011
Shares outstanding at beginning of year ............... 7,045,637 6,143,626
------------ ------------
Shares outstanding at end of year ..................... 8,282,072 7,045,637
============ ============
See accompanying notes to financial statements.
7
THE DAVENPORT EQUITY FUND
FINANCIAL HIGHLIGHTS
=========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -------------------------------------------------------------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ...... $ 11.71 $ 11.42 $ 13.75 $ 12.01 $ 11.14
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income .................. 0.06 0.04 0.05 0.04 0.06
Net realized and unrealized gains
(losses) on investments ............. (2.48) 0.29 (2.34) 1.75 0.88
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... (2.42) 0.33 (2.29) 1.79 0.94
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ... (0.06) (0.04) (0.04) (0.05) (0.06)
Distributions from net realized gains .. -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (0.06) (0.04) (0.04) (0.05) (0.07)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............ $ 9.23 $ 11.71 $ 11.42 $ 13.75 $ 12.01
========== ========== ========== ========== ==========
Total return .............................. (20.66%) 2.89% (16.65%) 14.93% 8.53%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ......... $ 76,473 $ 82,515 $ 70,160 $ 77,626 $ 56,358
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets 1.04% 1.02% 1.00% 1.01% 1.14%
Ratio of net investment income to
average net assets ..................... 0.62% 0.35% 0.36% 0.35% 0.64%
Portfolio turnover rate ................... 18% 13% 25% 17% 15%
See accompanying notes to financial statements.
8
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS -- 95.3% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 9.1%
93,731 CarMax, Inc. (a) ............................... $ 1,365,661
76,798 Fox Entertainment Group, Inc. (a) .............. 2,048,203
27,830 Harrah's Entertainment, Inc. (a) ............... 993,531
128,665 Liberty Media Corporation (a) .................. 1,251,910
78,174 Walt Disney Company (The) ...................... 1,330,521
------------
6,989,826
------------
CONSUMER STAPLES -- 10.4%
56,463 Anheuser-Busch Companies, Inc. ................. 2,631,740
23,886 Coca-Cola Company .............................. 966,905
97,226 SYSCO Corporation .............................. 2,473,429
62,402 Walgreen Company ............................... 1,839,611
------------
7,911,685
------------
ENERGY -- 9.4%
24,236 BP Amoco PLC - ADR ............................. 935,267
17,942 ChevronTexaco Corporation ...................... 1,159,950
25,643 EOG Resources, Inc. ............................ 1,014,437
47,776 Exxon Mobil Corporation ........................ 1,669,771
34,732 Murphy Oil Corporation ......................... 1,534,113
23,886 Schlumberger Limited ........................... 907,907
------------
7,221,445
------------
FINANCIALS -- 21.0%
44,886 American Express Company ....................... 1,491,562
36,485 American International Group, Inc. ............. 1,804,183
26,267 Bank of America Corporation .................... 1,755,686
52,646 BB&T Corporation ............................... 1,654,664
636 Berkshire Hathaway, Inc. - Class B (a) ......... 1,359,132
33,869 Capital One Financial Corporation .............. 1,016,409
41,148 FleetBoston Financial Corporation .............. 982,614
33,356 Jefferson-Pilot Corporation .................... 1,283,539
12,484 Markel Corporation (a) ......................... 2,792,671
36,397 SunTrust Banks, Inc. ........................... 1,916,302
------------
16,056,762
------------
HEALTHCARE -- 18.2%
27,000 AMERIGROUP Corporation (a) ..................... 790,020
48,754 Amgen, Inc. (a) ................................ 2,805,793
22,801 Anthem, Inc. (a) ............................... 1,510,566
46,265 Johnson & Johnson .............................. 2,677,355
31,722 Merck & Company, Inc. .......................... 1,737,731
50,292 Pfizer, Inc. ................................... 1,567,099
39,276 Wyeth .......................................... 1,485,418
27,631 Zimmer Holdings, Inc. (a) ...................... 1,343,696
------------
13,917,678
------------
9
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.3% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 11.1%
31,197 Avery Dennison Corporation ..................... $ 1,830,328
31,062 Emerson Electric Company ....................... 1,408,662
21,803 General Dynamics Corporation ................... 1,200,691
42,894 General Electric Company ....................... 1,093,797
17,095 Northrop Grumman Corporation ................... 1,466,751
124,360 Tredegar Corporation ........................... 1,486,102
------------
8,486,331
------------
INFORMATION TECHNOLOGY -- 10.9%
97,826 Cisco Systems, Inc. (a) ........................ 1,261,956
27,700 Dell Computer Corporation (a) .................. 756,487
49,676 Hewlett-Packard Company ........................ 772,462
95,988 Intel Corporation .............................. 1,562,685
23,170 International Business Machines Corporation .... 1,817,223
89,080 Microsoft Corporation .......................... 2,156,627
------------
8,327,440
------------
MATERIALS -- 1.5%
41,486 Dow Chemical Company (The) ..................... 1,145,428
------------
TELECOMMUNICATIONS SERVICES -- 1.2%
46,341 SBC Communications, Inc. ....................... 929,601
------------
UTILITIES -- 2.5%
34,608 Dominion Resources, Inc. ....................... 1,916,245
------------
TOTAL COMMON STOCKS (Cost $79,992,708) ......... $ 72,902,441
------------
================================================================================
PAR VALUE U.S. TREASURY OBLIGATIONS-- 1.0% VALUE
- --------------------------------------------------------------------------------
$ 750,000 U.S. Treasury Bill, due 06/05/2003
(Cost $748,254) .............................. $ 748,489
------------
================================================================================
SHARES MONEY MARKETS -- 3.5% VALUE
- --------------------------------------------------------------------------------
2,705,216 First American Treasury Obligation Fund -
Class S (Cost $2,705,216) .................... $ 2,705,216
------------
TOTAL INVESTMENTS AT VALUE-- 99.8%
(Cost $83,446,178) ............................. $ 76,356,146
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.2% ... 117,339
------------
NET ASSETS-- 100.0% ............................ $ 76,473,485
============
(a) Non-income producing security.
See accompanying notes to financial statements.
10
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Davenport Equity Fund (the Fund) is a no-load, diversified series of the
Williamsburg Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940. The Trust was
organized as a Massachusetts business trust on July 18, 1988. The Fund began
operations on January 15, 1998.
The Fund's investment objective is long term growth of capital through
investment in a diversified portfolio of common stocks. Current income is
incidental to this objective and may not be significant.
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 the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price. Securities traded on a national stock exchange are valued based upon
the closing price on the principal exchange where the security is traded.
Repurchase agreements -- The Fund may enter into joint repurchase agreements
with other funds within the Trust. The joint repurchase agreement, which is
collateralized by U.S. Government obligations, is valued at cost which, together
with accrued interest, approximates market. At the time the Fund enters into the
joint repurchase agreement, the seller agrees that the value of the underlying
securities, including accrued interest, will at all times be equal to or exceed
the face amount of the repurchase agreement. In addition, the Fund actively
monitors and seeks additional collateral, as needed.
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 and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are determined on a specific identification basis.
Distributions to Shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of the Fund. 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. The amount of distributions from net investment income and net realized
gains are determined in accordance with federal income tax regulations which may
differ from accounting principles generally accepted in the United States of
America. There were no differences between the book basis and tax basis of
distributions for the years ended March 31, 2003 and 2002.
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 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 a 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.
11
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributable earnings at March 31, 2003 was as follows:
- --------------------------------------------------------------------------------
Undistributed Ordinary Income ............................... $ 6,333
Capital Loss Carryforwards .................................. (7,096,541)
Other Losses ................................................ (1,040,803)
Unrealized Depreciation ..................................... (7,090,032)
------------
Total Distributable Earnings ................................ $(15,221,043)
============
- --------------------------------------------------------------------------------
As of March 31, 2003, the Fund had the following capital loss carryforwards for
federal income tax purposes.
- --------------------------------------------------------------------------------
Expires
Amount March 31,
- --------------------------------------------------------------------------------
Davenport Equity Fund $ 2,030,329 2010
5,066,212 2011
------------
$ 7,096,541
============
- --------------------------------------------------------------------------------
In addition, the Fund had net realized capital losses of $1,040,803 during the
period November 1, 2002 through March 31, 2003, which are treated for federal
income tax purposes as arising during the Fund's tax year ending March 31, 2004.
These capital loss carryforwards and "post-October" losses may be utilized in
future years to offset net realized capital gains, if any, prior to distributing
such gains to shareholders.
The following information is based upon the federal income tax cost of
investment securities of $83,446,178 as of March 31, 2003:
- --------------------------------------------------------------------------------
Gross unrealized appreciation ............................... $ 6,322,199
Gross unrealized depreciation ............................... (13,412,231)
------------
Net unrealized depreciation ................................. $ (7,090,032)
============
- --------------------------------------------------------------------------------
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2003, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $25,080,469 and $12,803,131, respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Davenport & Company LLC (the Adviser)
under the terms of an Investment Advisory Agreement. Under the Investment
Advisory Agreement, the Fund pays the Adviser a fee, which is computed and
accrued daily and paid monthly, at an annual rate of .75% of its average daily
net assets. Certain officers of the Trust are also officers of the Adviser.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Ultimus Fund Solutions, LLC (Ultimus), Ultimus provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Fund. For these services, Ultimus receives a monthly fee from
the Fund at an annual rate of .15% on its average daily net assets up to $25
million; .125% on the next $25 million of such net assets; and .10% on such net
assets in excess of $50 million, plus a shareholder recordkeeping fee at the
annual rate of $10 per shareholder account in excess of 1,000. In addition, the
Fund pays out-of-pocket expenses including, but not limited to, postage,
supplies and costs of pricing the Fund's portfolio securities. Certain officers
of the Trust are also officers of Ultimus, or of Ultimus Fund Distributors, LLC,
the principal underwriter of the Fund's shares and an affiliate of Ultimus.
12
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statement of assets and liabilities of The
Davenport Equity Fund (a series of The Williamsburg Investment Trust), including
the portfolio of investments, as of March 31, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 2003 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Davenport Equity Fund as of March 31, 2003, 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 five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 2003
13
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED)
================================================================================
Overall responsibility for management of the Fund rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Fund to actively supervise its day-to-day
operations. The officers have been elected for an annual term. The following are
the Trustees and executive officers of the Fund:
Position Held Length of
Trustee Address Age with the Trust Time Served
- ------------------------------------------------------------------------------------------------------------------------------------
*Charles M. Caravati, Jr. 931 Broad Street Road, Manakin-Sabot, VA 66 Chairman and Trustee Since June 1991
*Austin Brockenbrough III 1802 Bayberry Court, Suite 400, Richmond, VA 66 Trustee Since September 1988
*John T. Bruce 800 Main Street, Lynchburg, VA 49 Trustee Since September 1988
J. Finley Lee 105 Gristmill Lane, Chapel Hill, NC 63 Trustee Since September 1988
*Richard Mitchell 150 Government Street, Mobile, AL 53 Trustee Since June 1991
Richard L. Morrill University of Richmond, Richmond, VA 63 Trustee Since March 1993
Harris V. Morrissette 100 Jacintoport Boulevard, Saraland, AL 43 Trustee Since March 1993
Erwin H. Will, Jr. 47 Willway Avenue, Richmond, VA 70 Trustee Since July 1997
Samuel B. Witt III 2300 Clarendon Boulevard, Suite 407, Arlington, VA 67 Trustee Since November 1988
Joseph L. Antrim III One James Center, 901 E. Cary Street, Richmond, VA 57 President Since November 1997
John P. Ackerly IV One James Center, 901 E. Cary Street, Richmond, VA 39 Vice President Since November 1997
J. Lee Keiger III One James Center, 901 E. Cary Street, Richmond, VA 48 Vice President Since November 1997
Coleman Wortham III One James Center, 901 E. Cary Street, Richmond, VA 57 Vice President Since November 1997
Robert G. Dorsey 135 Merchant Street, Suite 230, Cincinnati, OH 46 Vice President Since November 2000
Mark J. Seger 135 Merchant Street, Suite 230, Cincinnati, OH 41 Treasurer Since November 2000
John F. Splain 135 Merchant Street, Suite 230, Cincinnati, OH 46 Secretary Since November 2000
*Messrs. Bruce, Brockenbrough, Caravati and Mitchell are "interested persons" of
the Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati III, an
officer of The Jamestown Funds, which are other portfolios of the Trust.
Each Trustee oversees ten portfolios of the Trust, including the Fund. The
principal occupations of the Trustees and executive officers of the Fund during
the past five years and public directorships held by the Trustees are set forth
below:
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of Lowe,
Brockenbrough & Company, Inc. (an investment advisory firm). He is a member of
the Board of Directors of Tredegar Industries, Inc. (a plastics manufacturer)
and Wilkinson O'Grady & Co., Inc. (a global asset manager). In addition, he is a
member of the Board of Trustees for the University of Richmond.
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
J. Finley Lee is a financial consultant and the Julian Price Professor Emeritus
at the University of North Carolina. In addition, he is a member of the Board of
Trustees of the Albemarle Investment Trust (a registered investment company).
Richard Mitchell is a Principal of T. Leavell & Associates, Inc. (an investment
advisory firm).
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation.
14
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
Harris V. Morrissette is President of Marshall Biscuit Co., Inc. He is a member
of the Board of Directors of South Alabama Bancorporation, Inc. and EnergySouth,
Inc. In addition, he is Chairman of Azalea Aviation, Inc. (an airplane fueling
company).
Erwin H. Will, Jr. is the retired Managing Director of Equities of Virginia
Retirement System.
Samuel B. Witt III is Senior Vice President and General Counsel of Stateside
Associates, Inc. He is also a member of the Board of Directors of The Swiss
Helvetia Fund, Inc. (a closed-end investment company).
Joseph L. Antrim III is Executive Vice President of the Adviser.
John P. Ackerly IV is Vice President and Portfolio Manager of the Adviser.
J. Lee Keiger III is First Vice President and Chief Financial Officer of the
Adviser.
Coleman Wortham III is President and Chief Executive Officer of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC. Prior to March 1999, he was President of
Countrywide Fund Services, Inc. (a mutual fund services company).
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President of
Countrywide Fund Services, Inc.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President and
Secretary of Countrywide Fund Services, Inc. and affiliated companies.
Additional information about members of the Board of Directors and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-800-281-3217.
15
================================================================================
[GRAPHIC OMITTED]
THE
FLIPPIN, BRUCE & PORTER
FUNDS
------------------------------
FBP CONTRARIAN EQUITY FUND
FBP CONTRARIAN BALANCED FUND
ANNUAL REPORT
MARCH 31, 2003
NO-LOAD FUNDS
================================================================================
LETTER TO SHAREHOLDERS MAY 16, 2003
================================================================================
The fiscal year ending March 31, 2003 was marked by weak economic conditions and
uncertainty with regard to war, terrorism and a host of other issues. Stocks
returned a negative 24.76%, as measured by the S&P 500. Bonds provided low
double-digit positive returns as longer term interest rates continued to
decline.
The FBP Contrarian Balanced and Equity Funds declined 16.16% and 26.61%
respectively. There were few bright spots in the marketplace and most stocks and
indices declined. In hindsight, we had the Funds positioned for an improving
economic and stock market environment that did not unfold as we expected.
Consumer discretionary, industrial and technology issues were particularly hard
hit. However, the overall weak market provided the opportunity to purchase a
number of new companies for the portfolio that have already helped improve
returns or that we believe will reward us in the future. Watson Pharmaceutical,
CVS, Best Buy, Sears, Monsanto, and American International Group are some
examples. Not visible are the companies we decided to avoid, thus missing a
number of very poor performers. Over the past year many companies have appeared
to be attractive when their valuations were viewed against other companies or
historical measures. Fortunately, upon thorough review and examination we passed
on many companies that later experienced more serious financial flexibility,
legal or management issues.
Longer term we are pleased with how we have protected your assets in this poor
environment. Since the bear market began in March 2000, your Funds have compared
very favorably to the S&P 500 on a cumulative basis, declining 3.06% and 14.12%
for the Balanced and Equity Fund versus a negative 40.95% for the S&P for the
three-year period ending 3/31/03.
We believe the worst is now behind us, with stocks having reached their lows
last October and briefly testing these levels this past March. Why do we believe
things should improve now? There are a number of reasons including a combination
of low interest rates, stable consumer spending, an accommodative Federal
Reserve, potential tax cuts, lower energy prices and several years of corporate
restructuring that have set the stage for gradually improving corporate profits.
Better than expected earnings reports from this past quarter were an indication
of this potential. Obviously, headwinds and problems will appear along the way,
but we expect more positives than negatives going forward. Changing expectations
can have a powerful effect on security prices. Expectations have become very low
after three years of bad news, so there is much room for improvement. Also,
there is a lack of attractive investment alternatives. Cash and other fixed
income yields are historically low. In our opinion, once stocks begin to perform
better, the potential exists for sustained support for gradually rising stock
prices. From the end of March through the writing of the letter, stocks have
shown a nice recovery with the S&P 500 rising about 12% and the equities in your
Funds appreciating similarly.
COMPARATIVE CHARTS
Performance for each Fund is compared on the next page to the most appropriate
broad-based index, the S&P 500, an unmanaged index of 500 large common stocks.
Over time, this index has outpaced the FBP Contrarian Balanced Fund which
maintains at least 25% in bonds. Balanced funds have the growth potential to
outpace inflation, but
1
they will typically lag a 100% stock index over the long term because of the
bond portion of their portfolios. However, the advantage of a bond portion is
that it can make the return and principal of a balanced fund more stable than a
portfolio completely invested in stocks. Results are also compared to the
Consumer Price Index, a measure of inflation.
Please visit our website at www.fbpinc.com for information on our firm,
philosophy, investment process and most importantly, our people. We are very
proud of our experienced, dedicated and stable staff. As always, we thank you
for your continued confidence and investment in The Flippin, Bruce & Porter
Funds.
/s/ John T. Bruce
John T. Bruce, CFA
Vice President-Portfolio Manager
2
FBP CONTRARIAN EQUITY FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FBP CONTRARIAN
EQUITY FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
FBP CONTRARIAN EQUITY FUND: STANDARD & POOR'S 500 INDEX: CONSUMER PRICE INDEX:
--------------------------- ---------------------------- ---------------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
07/31/93 10,000 07/31/93 10,000 07/31/93 10,000
09/30/93 3.05% 10,305 09/30/93 2.99% 10,299 09/30/93 0.40% 10,040
12/31/93 1.99% 10,510 12/31/93 2.32% 10,538 12/31/93 0.70% 10,110
03/31/94 -1.92% 10,308 03/31/94 -3.79% 10,139 03/31/94 0.50% 10,161
06/30/94 0.69% 10,379 06/30/94 0.42% 10,181 06/30/94 0.60% 10,222
09/30/94 7.34% 11,141 09/30/94 4.88% 10,678 09/30/94 0.90% 10,314
12/31/94 -1.30% 10,996 12/31/94 -0.02% 10,676 12/31/94 0.60% 10,376
03/31/95 6.42% 11,702 03/31/95 9.74% 11,716 03/31/95 0.80% 10,460
06/30/95 9.37% 12,798 06/30/95 9.55% 12,834 06/30/95 0.90% 10,554
09/30/95 8.53% 13,890 09/30/95 7.95% 13,854 09/30/95 0.40% 10,596
12/31/95 3.24% 14,340 12/31/95 6.02% 14,688 12/31/95 0.50% 10,649
03/31/96 5.71% 15,158 03/31/96 5.37% 15,477 03/31/96 0.80% 10,735
06/30/96 4.54% 15,846 06/30/96 4.49% 16,171 06/30/96 1.10% 10,853
09/30/96 2.42% 16,229 09/30/96 3.09% 16,671 09/30/96 0.44% 10,901
12/31/96 8.47% 17,604 12/31/96 8.34% 18,061 12/31/96 0.82% 10,991
03/31/97 1.30% 17,833 03/31/97 2.68% 18,545 03/31/97 0.70% 11,068
06/30/97 13.93% 20,318 06/30/97 17.46% 21,783 06/30/97 0.19% 11,088
09/30/97 9.47% 22,241 09/30/97 7.49% 23,414 09/30/97 0.44% 11,137
12/31/97 -0.73% 22,079 12/31/97 2.87% 24,086 12/31/97 0.62% 11,206
03/31/98 12.19% 24,770 03/31/98 13.95% 27,446 03/31/98 0.12% 11,220
06/30/98 -0.35% 24,684 06/30/98 3.30% 28,353 06/30/98 0.56% 11,282
09/30/98 -15.36% 20,893 09/30/98 -9.95% 25,532 09/30/98 0.42% 11,330
12/31/98 24.61% 26,035 12/31/98 21.30% 30,970 12/31/98 0.42% 11,378
03/31/99 2.51% 26,688 03/31/99 4.98% 32,513 03/31/99 0.24% 11,405
06/30/99 13.47% 30,283 06/30/99 7.05% 34,805 06/30/99 0.91% 11,509
09/30/99 -13.16% 26,296 09/30/99 -6.24% 32,631 09/30/99 0.54% 11,571
12/31/99 2.69% 27,005 12/31/99 14.88% 37,487 12/31/99 0.78% 11,662
03/31/00 -6.51% 25,246 03/31/00 2.29% 38,346 03/31/00 0.95% 11,772
06/30/00 -3.59% 24,339 06/30/00 -2.66% 37,328 06/30/00 1.00% 11,890
09/30/00 4.01% 25,313 09/30/00 -0.97% 36,966 09/30/00 0.76% 11,980
12/31/00 4.64% 26,487 12/31/00 -7.81% 34,079 12/31/00 0.75% 12,070
03/31/01 2.15% 27,057 03/31/01 -11.86% 30,037 03/31/01 0.98% 12,189
06/30/01 7.42% 29,064 06/30/01 5.85% 31,795 06/30/01 1.08% 12,320
09/30/01 -12.12% 25,541 09/30/01 -14.68% 27,128 09/30/01 -0.11% 12,307
12/31/01 15.51% 29,502 12/31/01 10.69% 30,026 12/31/01 -0.06% 12,299
03/31/02 0.14% 29,543 03/31/02 0.27% 30,109 03/31/02 0.23% 12,328
06/30/02 -12.74% 25,779 06/30/02 -13.40% 26,074 06/30/02 1.12% 12,466
09/30/02 -16.85% 21,437 09/30/02 -17.28% 21,568 09/30/02 0.50% 12,528
12/31/02 7.75% 23,098 12/31/02 8.44% 23,389 12/31/02 0.33% 12,569
03/31/03 -6.14% 21,681 03/31/03 -3.15% 22,652 03/31/03 0.99% 12,694
Past performance is not predictive of future performance.
- ----------------------------------------
| FBP CONTRARIAN EQUITY FUND |
| AVERAGE ANNUAL TOTAL RETURNS (a) |
| (FOR PERIODS ENDED MARCH 31, 2003) |
| |
| 1 YEAR 5 YEARS SINCE INCEPTION* |
| (26.61%) (2.63%) 8.33% |
- ----------------------------------------
*Initial public offering of shares was July 30, 1993.
FBP CONTRARIAN BALANCED FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FBP CONTRARIAN
BALANCED FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
FBP CONTRARIAN BALANCED FUND: STANDARD & POOR'S 500 INDEX: CONSUMER PRICE INDEX:
----------------------------- ---------------------------- ---------------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
03/31/92 10,000 03/31/92 10,000 03/31/92 10,000
06/30/92 1.80% 10,180 06/30/92 1.90% 10,190 06/30/92 0.80% 10,080
09/30/92 0.89% 10,271 09/30/92 3.15% 10,511 09/30/92 0.70% 10,151
12/31/92 5.82% 10,869 12/31/92 5.03% 11,040 12/31/92 0.80% 10,232
03/31/93 3.75% 11,276 03/31/93 4.36% 11,521 03/31/93 0.90% 10,325
06/30/93 0.74% 11,360 06/30/93 0.48% 11,576 06/30/93 0.60% 10,387
09/30/93 4.13% 11,829 09/30/93 2.58% 11,875 09/30/93 0.40% 10,428
12/31/93 1.04% 11,952 12/31/93 2.32% 12,150 12/31/93 0.70% 10,501
03/31/94 -2.00% 11,713 03/31/94 -3.79% 11,690 03/31/94 0.50% 10,554
06/30/94 0.12% 11,728 06/30/94 0.42% 11,739 06/30/94 0.60% 10,617
09/30/94 4.83% 12,294 09/30/94 4.88% 12,312 09/30/94 0.90% 10,713
12/31/94 -0.97% 12,175 12/31/94 -0.02% 12,309 12/31/94 0.60% 10,777
03/31/95 6.35% 12,948 03/31/95 9.74% 13,508 03/31/95 0.80% 10,864
06/30/95 7.70% 13,944 06/30/95 9.55% 14,798 06/30/95 0.90% 10,962
09/30/95 6.43% 14,841 09/30/95 7.95% 15,974 09/30/95 0.40% 11,006
12/31/95 3.10% 15,301 12/31/95 6.02% 16,936 12/31/95 0.50% 11,061
03/31/96 3.96% 15,908 03/31/96 5.37% 17,845 03/31/96 0.80% 11,150
06/30/96 3.40% 16,448 06/30/96 4.49% 18,646 06/30/96 1.10% 11,273
09/30/96 1.70% 16,728 09/30/96 3.09% 19,222 09/30/96 0.44% 11,322
12/31/96 6.62% 17,835 12/31/96 8.34% 20,824 12/31/96 0.82% 11,415
03/31/97 0.92% 17,999 03/31/97 2.68% 21,383 03/31/97 0.70% 11,495
06/30/97 11.41% 20,052 06/30/97 17.46% 25,116 06/30/97 0.19% 11,517
09/30/97 7.62% 21,580 09/30/97 7.49% 26,997 09/30/97 0.44% 11,567
12/31/97 -0.30% 21,515 12/31/97 2.87% 27,772 12/31/97 0.62% 11,639
03/31/98 8.94% 23,438 03/31/98 13.95% 31,646 03/31/98 0.12% 11,653
06/30/98 0.90% 23,650 06/30/98 3.30% 32,691 06/30/98 0.56% 11,718
09/30/98 -10.04% 21,276 09/30/98 -9.95% 29,439 09/30/98 0.42% 11,768
12/31/98 16.44% 24,772 12/31/98 21.30% 35,709 12/31/98 0.42% 11,817
03/31/99 2.88% 25,486 03/31/99 4.98% 37,488 03/31/99 0.24% 11,845
06/30/99 8.78% 27,723 06/30/99 7.05% 40,131 06/30/99 0.91% 11,953
09/30/99 -9.14% 25,191 09/30/99 -6.24% 37,625 09/30/99 0.54% 12,018
12/31/99 3.57% 26,089 12/31/99 14.88% 43,223 12/31/99 0.78% 12,112
03/31/00 -4.14% 25,009 03/31/00 2.29% 44,214 03/31/00 0.95% 12,227
06/30/00 -3.07% 24,242 06/30/00 -2.66% 43,040 06/30/00 1.00% 12,349
09/30/00 4.03% 25,219 09/30/00 -0.97% 42,623 09/30/00 0.76% 12,443
12/31/00 4.54% 26,364 12/31/00 -7.81% 39,294 12/31/00 0.75% 12,536
03/31/01 1.82% 26,844 03/31/01 -11.86% 34,633 03/31/01 0.98% 12,659
06/30/01 5.04% 28,197 06/30/01 5.85% 36,660 06/30/01 1.08% 12,796
09/30/01 -6.91% 26,250 09/30/01 -14.68% 31,279 09/30/01 -0.11% 12,782
12/31/01 10.40% 28,980 12/31/01 10.69% 34,621 12/31/01 -0.06% 12,774
03/31/02 -0.21% 28,919 03/31/02 0.27% 34,716 03/31/02 0.23% 12,803
06/30/02 -8.71% 23,410 06/30/02 -13.40% 26,095 06/30/02 1.12% 12,540
09/30/02 -10.78% 20,887 09/30/02 -17.28% 21,586 09/30/02 0.50% 12,602
12/31/02 6.15% 22,171 12/31/02 8.44% 23,408 12/31/02 0.33% 12,644
03/31/03 -3.03% 21,499 03/31/03 -3.15% 22,670 03/31/03 0.99% 12,769
Past performance is not predictive of future performance.
- ----------------------------------------
| FBP CONTRARIAN BALANCED FUND |
| AVERAGE ANNUAL TOTAL RETURNS (a) |
| (FOR PERIODS ENDED MARCH 31, 2003) |
| |
| 1 YEAR 5 YEARS 10 YEARS |
| (16.16%) 0.68% 7.95% |
- ----------------------------------------
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
3
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS-- 99.0% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 14.8%
22,500 Applebee's International, Inc. .................. $ 630,900
35,000 Best Buy Company, Inc. (a) ...................... 943,950
65,000 Circuit City Stores - Circuit City Group ........ 338,000
18,000 CVS Corporation ................................. 429,300
44,000 Dana Corporation ................................ 310,640
85,000 Dillard's, Inc. ................................. 1,098,200
6,600 Eastman Kodak Company ........................... 195,360
47,000 May Department Stores Company ................... 934,830
30,000 Monsanto Company ................................ 492,000
23,000 Sears, Roebuck & Company ........................ 555,450
12,000 Wal-Mart Stores, Inc. ........................... 624,360
13,000 Whirlpool Corporation ........................... 637,390
------------
7,190,380
------------
CONSUMER STAPLES -- 6.2%
33,000 Altria Group, Inc. .............................. 988,680
59,850 Archer-Daniels-Midland Company .................. 646,380
35,000 Kroger Company (The) (a) ........................ 460,250
59,600 SUPERVALU, Inc. ................................. 923,800
------------
3,019,110
------------
ENERGY -- 5.5%
22,000 Kerr-McGee Corporation .......................... 893,420
52,000 Marathon Oil Corporation ........................ 1,246,440
14,000 Schlumberger, Limited ........................... 532,140
------------
2,672,000
------------
FINANCIALS -- 29.3%
29,000 American Express Company ........................ 963,670
6,000 American International Group .................... 296,700
30,000 Bank of America Corporation ..................... 2,005,200
33,000 Bank One Corporation ............................ 1,142,460
45,000 Citigroup, Inc. ................................. 1,550,250
22,000 Freddie Mac ..................................... 1,168,200
13,000 Jefferson Pilot Corporation ..................... 500,240
50,000 J.P. Morgan Chase & Company ..................... 1,185,500
40,000 Saint Paul Companies, Inc. ...................... 1,272,000
7,000 SLM Corporation ................................. 776,440
65,000 Travelers Property Casualty Corporation - Class B 917,150
76,000 Unumprovident Corporation ....................... 744,800
50,000 Wachovia Corporation ............................ 1,703,500
------------
14,226,110
------------
HEALTH CARE -- 8.6%
46,000 Bristol-Myers Squibb Company .................... 971,980
24,000 Johnson & Johnson ............................... 1,388,880
20,000 Merck & Company, Inc. ........................... 1,095,600
25,000 Watson Pharmaceuticals, Inc. (a) ................ 719,250
------------
4,175,710
------------
4
FBP CONTRARIAN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.0% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 14.5%
125,000 Cendant Corporation (a) ......................... $ 1,587,500
19,000 FedEx Corporation (b) ........................... 1,046,330
43,000 General Electric Company ........................ 1,096,500
53,000 Trinity Industries, Inc. ........................ 912,660
81,000 Tyco International, Limited ..................... 1,041,660
15,000 Union Pacific Corporation ....................... 825,000
25,000 Waste Management, Inc. .......................... 529,500
------------
7,039,150
------------
INFORMATION TECHNOLOGY -- 12.3%
35,000 Agilent Technologies, Inc. (a) (b) .............. 460,250
7,000 Electronic Data Systems Corporation ............. 123,200
30,000 Harris Corporation .............................. 833,100
72,950 Hewlett-Packard Company ......................... 1,134,373
25,000 International Business Machines Corporation ..... 1,960,750
56,000 Microsoft Corporation ........................... 1,355,760
47,500 Novell, Inc. (a) ................................ 102,125
------------
5,969,558
------------
MATERIALS -- 4.5%
20,000 Dow Chemical Company ............................ 552,200
40,000 Engelhard Corporation ........................... 856,800
35,000 Great Lakes Chemical Corporation ................ 777,000
------------
2,186,000
------------
TELECOMMUNICATION SERVICES -- 3.3%
45,000 Verizon Communications, Inc. .................... 1,590,750
------------
TOTAL COMMON STOCKS (Cost $48,916,224) .......... $ 48,068,768
------------
================================================================================
PAR
VALUE SHORT-TERM CORPORATE NOTES-- 1.6% VALUE
- --------------------------------------------------------------------------------
$ 63,809 American Family Financial Services Demand Note .. $ 63,809
637,134 U.S. Bank N.A. Demand Note ...................... 637,134
57,328 Wisconsin Corporate Central Credit Union
Variable Demand Note ............................ 57,328
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $758,271) $ 758,271
------------
TOTAL INVESTMENTS AT VALUE-- 100.6%
(Cost $49,674,495) .............................. $ 48,827,039
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.6)% .. (274,910)
------------
NET ASSETS-- 100.0% ............................. $ 48,552,129
============
(a) Non-income producing security.
(b) Security covers a call option.
See accompanying notes to financial statements.
5
FBP CONTRARIAN EQUITY FUND
SCHEDULE OF OPEN OPTION CONTRACTS
MARCH 31, 2003
================================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- --------------------------------------------------------------------------------
25 Agilent Technologies, Inc.,
5/17/2003 at $20 ............. $ 375 $ 5,407
25 Agilent Technologies, Inc.,
1/17/2004 at $25 ............. -- 5,952
50 FedEx Corporation,
4/19/2003 at $60 ............. 1,000 14,139
-------- ----------
$ 1,375 $ 25,498
======== ==========
See accompanying notes to financial statements.
6
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS -- 67.6% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 10.5%
13,500 Applebee's International, Inc. .................. $ 378,540
20,000 Best Buy Company, Inc. (a) ...................... 539,400
42,000 Circuit City Stores - Circuit City Group ........ 218,400
13,500 CVS Corporation ................................. 321,975
28,000 Dana Corporation ................................ 197,680
49,000 Dillard's, Inc. ................................. 633,080
8,000 Eastman Kodak Company ........................... 236,800
25,000 May Department Stores Company ................... 497,250
17,000 Monsanto Company ................................ 278,800
15,000 Sears, Roebuck & Company ........................ 362,250
9,500 Wal-Mart Stores, Inc. ........................... 494,285
10,000 Whirlpool Corporation ........................... 490,300
------------
4,648,760
------------
CONSUMER STAPLES -- 4.0%
18,000 Altria Group, Inc. .............................. 539,280
40,000 Archer-Daniels-Midland Company .................. 432,000
20,000 Kroger Company (The) (a) ........................ 263,000
33,900 SUPERVALU, Inc. ................................. 525,450
------------
1,759,730
------------
ENERGY -- 3.7%
14,000 Kerr-McGee Corporation .......................... 568,540
33,000 Marathon Oil Corporation ........................ 791,010
7,700 Schlumberger, Limited ........................... 292,677
------------
1,652,227
------------
FINANCIALS -- 20.3%
18,000 American Express Company ........................ 598,140
6,200 American International Group .................... 306,590
20,000 Bank of America Corporation ..................... 1,336,800
18,000 Bank One Corporation ............................ 623,160
30,000 Citigroup, Inc. ................................. 1,033,500
12,000 Freddie Mac ..................................... 637,200
8,500 Jefferson Pilot Corporation ..................... 327,080
34,000 J.P. Morgan Chase & Company ..................... 806,140
24,000 Saint Paul Companies, Inc. ...................... 763,200
5,500 SLM Corporation ................................. 610,060
42,000 Travelers Property Casualty Corporation - Class B 592,620
42,500 Unumprovident Corporation ....................... 416,500
28,000 Wachovia Corporation ............................ 953,960
------------
9,004,950
------------
HEALTHCARE -- 5.5%
22,000 Bristol-Myers Squibb Company .................... 464,860
15,000 Johnson & Johnson ............................... 868,050
11,000 Merck & Company, Inc. ........................... 602,580
17,000 Watson Pharmaceuticals, Inc. (a) ................ 489,090
------------
2,424,580
------------
7
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 67.6% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 9.5%
75,000 Cendant Corporation (a) ......................... $ 952,500
12,000 FedEx Corporation (b) ........................... 660,840
26,000 General Electric Company ........................ 663,000
29,000 Trinity Industries, Inc. ........................ 499,380
45,000 Tyco International, Limited ..................... 578,700
8,000 Union Pacific Corporation ....................... 440,000
20,000 Waste Management, Inc. .......................... 423,600
------------
4,218,020
------------
INFORMATION TECHNOLOGY -- 7.9%
23,000 Agilent Technologies, Inc. (a) (b) .............. 302,450
6,500 Electronic Data Systems Corporation ............. 114,400
16,000 Harris Corporation .............................. 444,320
50,500 Hewlett-Packard Company ......................... 785,275
14,000 International Business Machines Corporation ..... 1,098,020
30,000 Microsoft Corporation ........................... 726,300
25,000 Novell, Inc. (a) ................................ 53,750
------------
3,524,515
------------
MATERIALS -- 4.0%
18,000 Dow Chemical Company ............................ 496,980
39,000 Englehard Company ............................... 835,380
19,900 Great Lakes Chemical Corporation ................ 441,780
------------
1,774,140
------------
TELECOMMUNICATION SERVICES -- 2.2%
27,000 Verizon Communications, Inc. .................... 954,450
------------
TOTAL COMMON STOCKS (Cost $25,305,317) .......... $ 29,961,372
------------
================================================================================
SHARES EXCHANGE TRADED FUNDS -- 0.6% VALUE
- --------------------------------------------------------------------------------
6,000 iShares Russell 1000 Value Index Fund
(Cost $336,300) ................................. $ 260,400
------------
8
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS-- 8.0% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES-- 2.3%
$ 500,000 3.875%, due 7/31/2003 ......................... $ 504,590
500,000 3.00%, due 2/29/2004 .......................... 508,340
------------
1,012,930
------------
FEDERAL HOME LOAN BANK -- 2.3%
1,000,000 7.00%, due 7/2/2009 ........................... 1,013,334
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-- 1.1%
500,000 4.05%, due 11/30/2004 ......................... 502,261
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-- 2.3%
500,000 3.05%, due 12/12/2005 ......................... 504,618
500,000 4.10%, due 1/18/2006 .......................... 503,377
------------
1,007,995
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $3,513,294) ............................... $ 3,536,520
------------
================================================================================
PAR VALUE CORPORATE BONDS -- 20.1% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 8.3%
Allstate Corporation,
$ 500,000 7.875%, due 5/1/2005 .......................... $ 558,632
Aon Corporation,
500,000 6.90%, due 7/1/2004 ........................... 524,799
Bankers Trust New York Corporation,
750,000 7.375%, due 5/1/2008 .......................... 868,491
CIT Group, Inc.,
500,000 5.625%, 5/17/2004 ............................. 516,915
Northern Trust Company,
1,000,000 7.10%, due 8/1/2009 ........................... 1,183,529
------------
3,652,366
------------
INDUSTRIAL -- 6.9%
Berkshire Hathaway, Inc.,
500,000 9.75%, due 1/15/2018 .......................... 512,880
Gap, Inc.,
500,000 5.625%, due 5/1/2003 .......................... 500,625
Georgia Pacific Corporation,
500,000 9.875%, due 11/1/2021 ......................... 450,000
Raychem Corporation,
1,000,000 7.20%, due 10/15/2008 ......................... 990,000
Ryder System, Inc.,
560,000 6.60%, due 11/15/2005 ......................... 608,394
------------
3,061,899
------------
9
FBP CONTRARIAN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 20.1% (Continued) VALUE
- --------------------------------------------------------------------------------
UTILITIES -- 4.9%
AT&T Broadband Corporation,
$ 481,000 9.455%, 11/15/2022 ............................ $ 605,394
AT&T Corporation,
30,000 8.625%, due 12/1/2031 ......................... 31,050
El Paso Natural Gas Company,
500,000 6.75%, due 11/15/2003 ......................... 492,500
Ohio Power Company,
1,000,000 6.75%, due 7/1/2004 ........................... 1,052,299
------------
2,181,243
------------
TOTAL CORPORATE BONDS (Cost $8,336,770) ......... $ 8,895,508
------------
================================================================================
PAR VALUE SHORT-TERM CORPORATE NOTES-- 3.9% VALUE
- --------------------------------------------------------------------------------
$1,271,780 American Family Financial Services Demand Note .. $ 1,271,780
358,437 U.S. Bank N.A. Demand Note ...................... 358,437
116,872 Wisconsin Corporate Central Credit Union
Variable Demand Note ............................ 116,872
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $1,747,089) $ 1,747,089
------------
TOTAL INVESTMENTS AT VALUE-- 100.2%
(Cost $39,238,770) .............................. $ 44,400,889
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.2)% .. (67,597)
------------
NET ASSETS-- 100.0% ............................. $ 44,333,292
============
(a) Non-income producing security.
(b) Security covers a call option.
See accompanying notes to financial statements.
FBP CONTRARIAN BALANCED FUND
SCHEDULE OF OPEN OPTION CONTRACTS
MARCH 31, 2003
================================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- --------------------------------------------------------------------------------
25 Agilent Technologies, Inc.,
5/17/2003 at $20 ............. $ 375 $ 5,407
25 Agilent Technologies, Inc.,
1/17/2004 at $25 ............. -- 5,952
30 FedEx Corporation,
4/19/2003 at $60 ............. 600 8,492
-------- ----------
$ 975 $ 19,851
======== ==========
See accompanying notes to financial statements.
10
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2003
=============================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- ---------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost .................................. $ 49,674,495 $ 39,238,770
============ ============
At value (Note 1) .................................... $ 48,827,039 $ 44,400,889
Dividends and interest receivable ....................... 100,030 311,747
Receivable for capital shares sold ...................... 3,264 16,724
Other assets ............................................ 5,824 3,985
------------ ------------
TOTAL ASSETS ......................................... 48,936,157 44,733,345
------------ ------------
LIABILITIES
Dividends payable ....................................... 33,060 25,957
Payable for investment securities purchased ............. 302,326 312,404
Payable for capital shares redeemed ..................... 805 20,317
Accrued investment advisory fees (Note 3) ............... 28,950 26,429
Accrued administration fees (Note 3) .................... 5,700 5,200
Other accrued expenses and liabilities .................. 11,812 8,771
Covered call options, at value (Notes 1 and 4)
(premiums received $25,498 and $19,851, respectively) 1,375 975
------------ ------------
TOTAL LIABILITIES .................................... 384,028 400,053
------------ ------------
NET ASSETS ................................................. $ 48,552,129 $ 44,333,292
============ ============
Net assets consist of:
Paid-in capital ......................................... $ 51,988,044 $ 39,773,877
Undistributed net investment income ..................... 5,251 20,407
Accumulated net realized losses from
security transactions ................................ (2,617,833) (641,987)
Net unrealized appreciation (depreciation) on investments (823,333) 5,180,995
------------ ------------
Net assets ................................................. $ 48,552,129 $ 44,333,292
============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ... 2,835,831 3,066,583
============ ============
Net asset value, offering price and redemption
price per share (Note 1) ................................ $ 17.12 $ 14.46
============ ============
See accompanying notes to financial statements.
11
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2003
================================================================================
FBP FBP
CONTRARIAN CONTRARIAN
EQUITY BALANCED
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ..................................... $ 27,749 $ 929,536
Dividends .................................... 1,099,176 633,421
------------ ------------
TOTAL INVESTMENT INCOME ................... 1,126,925 1,562,957
------------ ------------
EXPENSES
Investment advisory fees (Note 3) ............ 382,258 330,463
Administration fees (Note 3) ................. 73,302 65,138
Professional fees ............................ 13,765 14,819
Postage and supplies ......................... 16,497 12,003
Trustees' fees and expenses .................. 12,563 12,563
Custodian fees ............................... 11,263 7,744
Registration fees ............................ 9,437 6,335
Printing of shareholder reports .............. 7,244 4,670
Insurance expense ............................ 4,375 4,375
Other expenses ............................... 15,877 15,341
------------ ------------
TOTAL EXPENSES ............................ 546,581 473,451
------------ ------------
NET INVESTMENT INCOME ........................... 580,344 1,089,506
------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized losses on security transactions . (2,365,361) (710,015)
Net realized gains on option contracts written 100,944 70,053
Net change in unrealized appreciation/
depreciation on investments ............... (15,708,256) (9,024,208)
------------ ------------
NET REALIZED AND UNREALIZED LOSSES
ON INVESTMENTS ............................... (17,972,673) (9,664,170)
------------ ------------
NET DECREASE IN NET ASSETS
FROM OPERATIONS .............................. $(17,392,329) $ (8,574,664)
============ ============
See accompanying notes to financial statements.
12
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
=============================================================================================================
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
---------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................. $ 580,344 $ 469,924 $ 1,089,506 $ 1,136,311
Net realized gains (losses) on:
Security transactions .............. (2,365,361) 973,649 (710,015) 1,446,524
Option contracts written ........... 100,944 9,240 70,053 13,860
Net change in unrealized appreciation/
depreciation on investments ........ (15,708,256) 3,844,999 (9,024,208) 1,200,706
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from operations ....................... (17,392,329) 5,297,812 (8,574,664) 3,797,401
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............ (580,586) (472,216) (1,128,186) (1,123,595)
From net realized gains ............... -- -- -- (1,462,422)
------------ ------------ ------------ ------------
Decrease in net assets from
distributions to shareholders ......... (580,586) (472,216) (1,128,186) (2,586,017)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............. 19,331,027 10,592,130 3,084,060 2,295,326
Net asset value of shares issued
in reinvestment of distributions
to shareholders .................... 447,881 364,221 1,037,813 2,488,605
Payments for shares redeemed .......... (15,910,461) (8,075,278) (2,894,644) (3,282,393)
------------ ------------ ------------ ------------
Net increase in net assets from
capital share transactions ............ 3,868,447 2,881,073 1,227,229 1,501,538
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ......................... (14,104,468) 7,706,669 (8,475,621) 2,712,922
NET ASSETS
Beginning of year ..................... 62,656,597 54,949,928 52,808,913 50,095,991
------------ ------------ ------------ ------------
End of year ........................... $ 48,552,129 $ 62,656,597 $ 44,333,292 $ 52,808,913
============ ============ ============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME ..................... $ 5,251 $ 5,493 $ 20,407 $ 59,087
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................. 1,001,736 470,709 199,584 128,926
Reinvested ............................ 24,745 16,117 69,712 142,272
Redeemed .............................. (846,273) (353,689) (189,091) (187,328)
------------ ------------ ------------ ------------
Net increase in shares outstanding .... 180,208 133,137 80,205 83,870
Shares outstanding at beginning of year 2,655,623 2,522,486 2,986,378 2,902,508
------------ ------------ ------------ ------------
Shares outstanding at end of year ..... 2,835,831 2,655,623 3,066,583 2,986,378
============ ============ ============ ============
See accompanying notes to financial statements.
13
FBP CONTRARIAN EQUITY FUND
FINANCIAL HIGHLIGHTS
===========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ---------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ........ $ 23.59 $ 21.78 $ 20.82 $ 22.57 $ 21.45
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income .................... 0.20 0.18 0.25 0.18 0.13
Net realized and unrealized gains (losses)
on investments ........................ (6.47) 1.81 1.22 (1.38) 1.50
---------- ---------- ---------- ---------- ----------
Total from investment operations ............ (6.27) 1.99 1.47 (1.20) 1.63
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ..... (0.20) (0.18) (0.25) (0.18) (0.13)
Distributions from net realized gains .... -- -- (0.26) (0.37) (0.38)
---------- ---------- ---------- ---------- ----------
Total distributions ......................... (0.20) (0.18) (0.51) (0.55) (0.51)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .............. $ 17.12 $ 23.59 $ 21.78 $ 20.82 $ 22.57
========== ========== ========== ========== ==========
Total return ................................ (26.61%) 9.19% 7.17% (5.40%) 7.74%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ........... $ 48,552 $ 62,657 $ 54,950 $ 55,791 $ 44,978
========== ========== ========== ========== ==========
Ratio of expenses to average net assets ..... 1.00% 0.97% 0.98% 1.04% 1.08%
Ratio of net investment income to
average net assets ....................... 1.06% 0.80% 1.18% 0.83% 0.63%
Portfolio turnover rate ..................... 12% 15% 26% 20% 18%
See accompanying notes to financial statements.
14
FBP CONTRARIAN BALANCED FUND
FINANCIAL HIGHLIGHTS
===========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ---------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2003 2002(a) 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ........ $ 17.68 $ 17.26 $ 17.70 $ 19.36 $ 19.08
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income .................... 0.36 0.39 0.44 0.40 0.39
Net realized and unrealized gains (losses)
on investments ........................ (3.21) 0.92 0.81 (0.74) 1.21
---------- ---------- ---------- ---------- ----------
Total from investment operations ............ (2.85) 1.31 1.25 (0.34) 1.60
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ..... (0.37) (0.39) (0.44) (0.40) (0.39)
Distributions from net realized gains .... -- (0.50) (1.25) (0.92) (0.93)
---------- ---------- ---------- ---------- ----------
Total distributions ......................... (0.37) (0.89) (1.69) (1.32) (1.32)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .............. $ 14.46 $ 17.68 $ 17.26 $ 17.70 $ 19.36
========== ========== ========== ========== ==========
Total return ................................ (16.16%) 7.73% 7.34% (1.87%) 8.74%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ........... $ 44,333 $ 52,809 $ 50,096 $ 59,673 $ 64,963
========== ========== ========== ========== ==========
Ratio of expenses to average net assets ..... 1.00% 0.98% 0.99% 1.02% 1.04%
Ratio of net investment income to
average net assets ....................... 2.31% 2.20%(a) 2.43% 2.11% 2.05%
Portfolio turnover rate ..................... 21% 20% 13% 31% 25%
(a) As required, effective April 1, 2001, the Fund has adopted new provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premiums on debt securities as adjustments to interest income.
Had the Fund not adopted these new provisions, the ratio of net investment
income to average net assets would have been 2.17% at March 31, 2002. Per
share data and ratios for periods prior to April 1, 2001 have not been
restated to reflect this change in presentation.
See accompanying notes to financial statements.
15
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund (the Funds)
are no-load, diversified series of the Williamsburg Investment Trust (the
Trust), an open-end management investment company registered under the
Investment Company Act of 1940. The Trust was organized as a Massachusetts
business trust on July 18, 1988.
The FBP Contrarian Equity Fund seeks long term growth of capital through
investment in a diversified portfolio comprised primarily of equity securities,
with current income as a secondary objective.
The FBP Contrarian Balanced Fund seeks long term capital appreciation and
current income through investment in a balanced portfolio of equity and fixed
income securities assuming a moderate level of investment risk.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price. Securities traded on a national stock exchange are valued based upon
the closing price on the principal exchange where the security is traded. It is
expected that fixed income securities will ordinarily be traded in the
over-the-counter market, and common stocks will ordinarily be traded on a
national securities exchange, but may also be traded in the over-the-counter
market. When market quotations are not readily available, fixed income
securities may be valued on the basis of prices provided by an independent
pricing service.
Repurchase agreements -- The Funds may enter into joint repurchase agreements
with other funds within the Trust. The joint repurchase agreement, which is
collateralized by U.S. Government obligations, is valued at cost which, together
with accrued interest, approximates market value. At the time the Funds enter
into the joint repurchase agreement, the Funds take possession of the underlying
securities and the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the face
amount of the repurchase agreement. In addition, each Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on fixed income
securities purchased are amortized using the interest method.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of each Fund. 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. The amount of distributions from net investment income and net realized
gains are determined in accordance with federal income tax regulations which may
differ from accounting principles generally accepted in the United States of
America. These "book/tax" differences are either temporary or permanent in
nature.
The tax character of distributions paid during the years ended March 31, 2003
and 2002 was as follows:
- --------------------------------------------------------------------------------
Year
Ended Ordinary Long-Term Total
March 31, Income Capital Gains Distributions
- --------------------------------------------------------------------------------
FBP Contrarian Equity Fund 2003 $ 580,586 $ -- $ 580,586
2002 $ 472,216 $ -- $ 472,216
- --------------------------------------------------------------------------------
FBP Contrarian Balanced Fund 2003 $ 1,128,186 $ -- $ 1,128,186
2002 $ 1,123,595 $ 1,462,422 $ 2,586,017
- --------------------------------------------------------------------------------
16
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
Options transactions -- The Funds may write covered call options for which
premiums are received and are recorded as liabilities, and are subsequently
valued daily at the closing prices on their primary exchanges. Premiums received
from writing options which expire are treated as realized gains. Premiums
received from writing options which are exercised increase the proceeds used to
calculate the realized gain or loss on the sale of the security. If a closing
purchase transaction is used to terminate the Funds' obligation on a call, a
gain or loss will be realized, depending upon whether the price of the closing
purchase transaction is more or less than the premium previously received on the
call written.
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 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 each 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 a 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 each 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 distributable earnings at March 31, 2003 were as follows:
- --------------------------------------------------------------------------------
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
- --------------------------------------------------------------------------------
Undistributed Ordinary Income ................ $ 5,251 $ 7,644
Capital Loss Carryforwards ................... (1,746,285) (356,837)
Other Losses ................................. (871,548) (288,995)
Unrealized Appreciation (Depreciation) ....... (823,333) 5,197,603
------------ ------------
Total Distributable Earnings ................. $ (3,435,915) $ 4,559,415
============ ============
- --------------------------------------------------------------------------------
As of March 31, 2003, the Funds had the following capital loss carryforwards for
federal income tax purposes. These capital loss carryforwards may be utilized in
future years to offset net realized capital gains, if any, prior to distribution
to shareholders.
- --------------------------------------------------------------------------------
EXPIRES
AMOUNT MARCH 31,
- --------------------------------------------------------------------------------
FBP Contrarian Equity Fund $ 353,416 2010
1,392,869 2011
-----------
$ 1,746,285
===========
- --------------------------------------------------------------------------------
FBP Contrarian Balanced Fund $ 356,837 2011
===========
- --------------------------------------------------------------------------------
In addition, the FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund
had net realized capital losses of $871,548 and $289,098, respectively during
the period November 1, 2002 through March 31, 2003, which are treated for
federal income tax purposes as arising during the Funds' tax year ending March
31, 2004. These "post-October" losses may be utilized in future years to offset
net realized capital gains prior to distributing such gains to shareholders.
17
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The following information is based upon the federal income tax cost of
investment securities as of March 31, 2003:
- --------------------------------------------------------------------------------
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
- --------------------------------------------------------------------------------
Gross unrealized appreciation ................ $ 8,559,778 $ 9,537,340
Gross unrealized depreciation ................ (9,383,111) (4,339,737)
------------ ------------
Net unrealized appreciation (depreciation) ... $ (823,333) $ 5,197,603
============ ============
Federal income tax cost ...................... $ 49,648,997 $ 39,202,311
============ ============
- --------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the FBP Contrarian Balanced Fund is due to
certain differences in the recognition of capital gains and losses under income
tax regulations and accounting principles generally accepted in the United
States of America.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2003, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $12,555,644 and $6,489,911, respectively, for the FBP Contrarian
Equity Fund and $10,732,232 and $9,303,288, respectively, for the FBP Contrarian
Balanced Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by Flippin, Bruce & Porter, Inc. (the
Advisor) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, each Fund pays the Advisor a fee, which is
computed and accrued daily and paid monthly, at an annual rate of .70% on its
average daily net assets up to $250 million; .65% on the next $250 million of
such net assets; and .50% on such net assets in excess of $500 million. Certain
Trustees and officers of the Trust are also officers of the Advisor.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement between the Trust and
Ultimus Fund Solutions, LLC (Ultimus), Ultimus provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, Ultimus receives a monthly fee from
each Fund at an annual rate of .15% on its average daily net assets up to $25
million; .125% on the next $25 million of such net assets; and .10% on such net
assets in excess of $50 million. In addition, each Fund pays out-of-pocket
expenses including, but not limited to, postage, supplies and costs of pricing
the Funds' portfolio securities. Certain officers of the Trust are also officers
of Ultimus, or of Ultimus Fund Distributors, LLC, the principal underwriter of
each Funds' shares.
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31, 2003
is as follows:
- -----------------------------------------------------------------------------------------
FBP CONTRARIAN FBP CONTRARIAN
EQUITY FUND BALANCED FUND
----------------------------------------------
OPTION OPTION OPTION OPTION
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------------------
Options outstanding at beginning of year 310 $ 100,943 230 $ 70,052
Options written ........................ 100 25,498 80 19,851
Options expired ........................ (310) (100,943) (230) (70,052)
--------- --------- --------- ---------
Options outstanding at end of year ..... 100 $ 25,498 80 $ 19,851
========= ========= ========= =========
- -----------------------------------------------------------------------------------------
18
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
the FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund, (each a
series of The Williamsburg Investment Trust), including the portfolios of
investments, as of March 31, 2003, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 2003 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
FBP Contrarian Equity Fund and the FBP Contrarian Balanced Fund as of March 31,
2003, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and their
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 2003
19
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED)
================================================================================
Overall responsibility for management of the Funds rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Funds to actively supervise its day-to-day
operations. The officers have been elected for an annual term. The following are
the Trustees and executive officers of the Funds:
POSITION HELD LENGTH OF
TRUSTEE ADDRESS AGE WITH THE TRUST TIME SERVED
- ------------------------------------------------------------------------------------------------------------------
*Charles M. Caravati, Jr. 931 Broad Street Road 66 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- ------------------------------------------------------------------------------------------------------------------
*Austin Brockenbrough III 1802 Bayberry Court, Suite 400 66 Trustee Since
Richmond, VA September 1988
- ------------------------------------------------------------------------------------------------------------------
*John T. Bruce 800 Main Street 50 Trustee and Since
Lynchburg, VA Vice President September 1988
- ------------------------------------------------------------------------------------------------------------------
J. Finley Lee 200 Westminster Drive 63 Trustee Since
Chapel Hill, NC September 1988
- ------------------------------------------------------------------------------------------------------------------
*Richard Mitchell 150 Government Street 53 Trustee Since
Mobile, AL June 1991
- ------------------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 63 Trustee Since
Richmond, VA March 1993
- ------------------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintoport Boulevard 43 Trustee Since
Saraland, AL March 1993
- ------------------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 70 Trustee Since
Richmond, VA July 1997
- ------------------------------------------------------------------------------------------------------------------
Samuel B. Witt III 2300 Clarendon Boulevard, Suite 407 67 Trustee Since
Arlington, VA November 1988
- ------------------------------------------------------------------------------------------------------------------
John M. Flippin 800 Main Street 61 President Since
Lynchburg, VA September 1998
- ------------------------------------------------------------------------------------------------------------------
R. Gregory Porter III 800 Main Street 61 Vice President Since
Lynchburg, VA September 1998
- ------------------------------------------------------------------------------------------------------------------
Robert G. Dorsey 135 Merchant Street, Suite 230 46 Vice President Since
Cincinnati, OH November 2000
- ------------------------------------------------------------------------------------------------------------------
Mark J. Seger 135 Merchant Street, Suite 230 41 Treasurer Since
Cincinnati, OH November 2000
- ------------------------------------------------------------------------------------------------------------------
John F. Splain 135 Merchant Street, Suite 230 46 Secretary Since
Cincinnati, OH November 2000
- ------------------------------------------------------------------------------------------------------------------
*Messrs. Bruce, Brockenbrough, Caravati and Mitchell are "interested persons" of
the Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati III, an
officer of The Jamesown Funds, which are other portfolios of the Trust.
Each Trustee oversees ten portfolios of the Trust, including the Funds. The
principal occupations of the Trustees and executive officers of the Funds during
the past five years and public directorships held by the Trustees are set forth
below:
20
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of Lowe,
Brockenbrough & Company, Inc. (an investment advisory firm). He is a member of
the Board of Directors of Tredegar Industries, Inc. (a plastics manufacturer)
and Wilkinson O'Grady & Co., Inc. (a global asset manager). In addition, he is a
member of the Board of Trustees for the University of Richmond.
John T. Bruce is a Principal of the Adviser.
J. Finley Lee is a financial consultant and the Julian Price Professor Emeritus
at the University of North Carolina. In addition, he is a member of the Board of
Trustees of the Albemarle Investment Trust (a registered investment company).
Richard Mitchell is a Principal of T. Leavell & Associates, Inc. (an investment
advisory firm).
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (a manufacturer of polymers and chemicals).
Harris V. Morrissette is President of Marshall Biscuit Co., Inc. He is a member
of the Board of Directors of BancTrust Financial Group, Inc. (a bank holding
company) and EnergySouth, Inc. In addition, he is Chairman of Azalea Aviation,
Inc. (an airplane fueling company).
Erwin H. Will, Jr. is retired. Until December 31, 2001, he was the Managing
Director of Equities of Virginia Retirement System.
Samuel B. Witt III is Senior Vice President and General Counsel of Stateside
Associates, Inc. He is also a member of the Board of Directors of The Swiss
Helvetia Fund, Inc. (a closed-end investment company).
John M. Flippin is a Principal of the Adviser.
R. Gregory Porter III is a Pricipal of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC. Prior to March 1999, he was President of
Countrywide Fund Services, Inc. (a mutual fund services company).
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President of
Countrywide Fund Services, Inc.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President and
Secretary of Countrywide Fund Services, Inc. and affiliated companies.
Additional information about members of the Board of Directors and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-866-738-1127.
21
================================================================================
[GRAPHIC OMITTED]
THE
FLIPPIN, BRUCE & PORTER
FUNDS
------------------------------
INVESTMENT ADVISOR
Flippin, Bruce & Porter, Inc.
800 Main Street, Second Floor
P.O. Box 6138
Lynchburg, Virginia 24505
TOLL-FREE 1-800-327-9375
WWW.FBPINC.COM
ADMINISTRATOR
Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
TOLL-FREE 1-866-738-1127
CUSTODIAN
U.S. Bank
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT AUDITORS
Tait, Weller & Baker
1818 Market Street, Suite 2400
Philadelphia, PA 19103
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
OFFICERS
John M. Flippin, President
John T. Bruce, Vice President
and Portfolio Manager
R. Gregory Porter, III, Vice President
TRUSTEES
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard Mitchell
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
================================================================================
==================================================
| |
| THE |
| GOVERNMENT STREET |
| FUNDS |
| |
| |
| No-Load Mutual Funds |
| |
| |
| Annual Report |
| March 31, 2003 |
| |
==================================================
T. Leavell & Associates, Inc.
------------------
INVESTMENT ADVISER
------------------
Founded 1979
==================================================
| |
| The Government Street Equity Fund |
| The Government Street Bond Fund |
| The Alabama Tax Free Bond Fund |
| |
==================================================
LETTER FROM THE PRESIDENT APRIL 25, 2003
================================================================================
Dear Fellow Shareholders:
We are enclosing for your review the audited Annual Reports of The Government
Street Funds for the year ended March 31, 2003.
THE GOVERNMENT STREET EQUITY FUND
- ---------------------------------
This year marks the fourth consecutive year in which The Government Street
Equity Fund (GSEF), with a return of -24.47% for the 12 months ended March 31,
2003, has outperformed the S&P 500 Index, which returned -24.76% during the same
period. In addition, the Fund has outperformed both the S&P 500 Index and the
Lipper Large Capitalization Core Index for the 3 and 5 year time periods ended
March 31, 2003.
The GSEF is designed to provide a core investment in an investor's common
stock portfolio. We believe that the S&P 500 Index is representative of the
general market performance of common stocks, and it serves as the Fund's
benchmark for relative performance. The Fund seeks to exceed the performance of
the Index through a process of quantified stock selection while controlling risk
with broad diversification. At March 31, 2003, the GSEF held 136 stocks
representing approximately 70 industry categories and many more sub-industry
classifications. Although the Fund's absolute performance during its fiscal year
is disappointing, on a relative basis it performed exactly as it is designed to
do.
Having said this, however, we are keenly aware that investors who have
experienced the erosion of the value of their stock portfolios over the past
three years may not be impressed or reassured by relative return comparisons.
During extended periods of market decline (such as we have experienced since
March, 2000) investors are inclined to focus on absolute returns (rather than on
relative ones). As a result, many investors are tempted to abandon the stock
market in favor of financial instruments that are certain to provide at least
some level of positive investment return - short term U.S. Treasury Obligations,
Certificates of Deposit and Money Market Funds.
For those who give in to this temptation, there is the greater risk of
depriving themselves of the opportunity to participate in the market's recovery
and the ability to recoup market losses. This has not been the case for
shareholders of The Government Street Equity Fund. In fact, during the twelve
months ended March 31, 2003 there were net additions to The Government Street
Equity Fund of over $9 million. We are pleased and gratified by that show of
confidence in the Fund.
As we have shared with our clients over the years, we do not pretend to be
able to predict what will happen with financial markets. Yet, the conditions
that currently exist in America - low interest rates, affordable energy,
continuing productivity increases (without inflation), broad access to
homeownership - are very favorable for a growing economy and for positive stock
market returns. In addition, the successful resolution of the War in Iraq and
the lowering of tensions related to the threat of terrorism have reduced
investor anxiety and uncertainty. All signs point to the enactment
2
of a tax bill that is likely to have a positive impact on the economy. Taken
together, all of these things give us a high degree of confidence that an
investment in the U.S. stock market will be rewarded in the years to come.
THE GOVERNMENT STREET BOND FUND
- -------------------------------
Market interest rates continued to decline during the year ended March 31,
2003, reaching levels that have not been experienced in more than 40 years. As a
result, the bond market had another strong year in 2002 and outperformed stocks
for the third consecutive year.
The Government Street Bond Fund profited from that environment and achieved
a return of 9.36% for its fiscal year ended March 31, 2003. This return lagged
both the Lehman Aggregate Index and the Lehman Government Corporate Intermediate
Bond Index whose returns were 11.69% and 11.74%, respectively, for the same
period. This underperformance was due in part to the Fund's lack of
participation in two sectors of the Aggregate Index that performed extremely
well. The best performing sector was collateralized mortgage-backed securities
which achieved a return of 16.31% during the twelve months ended March 31, 2003.
Although this sector represented only 2.3% of the Index, the Fund's total lack
of exposure to the sector detracted from its relative performance. The Aggregate
Index also benefited from a strong rally in the long end of the treasury curve
where the Fund had no representation. This is reflected in the comparison of the
duration of the Fund's treasury component (2.9 years) to the duration of the
treasuries in the Index (5.9 years).
Going forward, the outlook for fixed income investments over the next few
months remains uncertain. If the economy falters, with the federal funds rate
standing at 1.25% there is little room left for the Federal Reserve Board to
maneuver. Yet, bond prices are extremely vulnerable to declines if interest
rates were to rise as sharply as they have fallen since early 2001. Despite this
uncertainty, investors in The Government Street Bond Fund, with its emphasis on
credit quality and on maintaining an intermediate term average maturity, should
be well positioned for either event.
For the year ended March 31, 2003, The Government Street Bond Fund's ratio
of net investment income to average net assets was 4.62%. The Fund's average
maturity was 3.9 years. Net assets of the Fund at March 31, 2003 were
$58,664,573; net asset value was $21.55; and the ratio of expenses to average
net assets was 0.71%.
THE ALABAMA TAX FREE BOND FUND
- ------------------------------
The Alabama Tax Free Bond Fund achieved a total return of 8.67% for the
twelve months ended March 31, 2003. This return, consistent with the Fund's
intermediate term objective, compared favorably with the 8.63% return of the
Lipper Intermediate Term Municipal Bond Index. The Fund was a beneficiary of the
general decline in market interest rates during the year which drove municipal
bond prices higher.
Municipal bonds currently are an inexpensive sector within the fixed income
market. For example, the yield on a "AAA" rated ten year municipal bond is now
providing over 90% of the yield on a ten year Treasury (com-
3
pared with an average of 77% of that yield over the last ten years). However,
the risk of an increase in interest rates also faces the municipal market. This
means that shorter-term bonds become more important as an investment strategy,
because bond prices will be falling as their yields rise. Investors in The
Alabama Tax Free Bond Fund should be comforted both by the intermediate term
average maturity (6.7 years) of the Fund's portfolio and by its emphasis on
quality - more than two-thirds of the bonds held by the Fund were rated "AAA" at
year-end. Net assets of the Fund were $34,728,552; and the net asset value was
$10.89.
The Alabama Tax Free Bond Fund continues to provide an attractive option
for investors who are seeking income which is sheltered from Federal and Alabama
income taxes.
Thank you for your continued confidence in The Government Street Funds.
Please call us if we can be of further service to you.
Very truly yours,
/s/ Thomas W. Leavell /s/ Richard Mitchell
Thomas W. Leavell Richard Mitchell
President President
T. Leavell & Associates, Inc. The Government Street Funds
4
THE GOVERNMENT STREET EQUITY FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Equity Fund, the Standard & Poor's 500 Index and the Consumer Price Index
[GRAPHIC OMITTED]
THE GOVERNMENT STREET EQUITY FUND: STANDARD & POOR'S 500 INDEX: CONSUMER PRICE INDEX:
--------------------------------- ---------------------------- ---------------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
03/31/93 0.35% 10,000 03/31/93 4.36% 10,000 03/31/93 0.90% 10,000
06/30/93 -1.52% 9,848 06/30/93 0.48% 10,048 06/30/93 0.60% 10,060
09/30/93 2.48% 10,092 09/30/93 2.58% 10,308 09/30/93 0.40% 10,100
12/31/93 1.86% 10,280 12/31/93 2.32% 10,547 12/31/93 0.70% 10,171
03/31/94 -3.03% 9,969 03/31/94 -3.79% 10,147 03/31/94 0.50% 10,222
06/30/94 -3.00% 9,670 06/30/94 0.42% 10,190 06/30/94 0.60% 10,283
09/30/94 5.37% 10,189 09/30/94 4.88% 10,687 09/30/94 0.90% 10,376
12/31/94 -1.91% 9,994 12/31/94 -0.02% 10,685 12/31/94 0.60% 10,438
03/31/95 6.75% 10,668 03/31/95 9.74% 11,725 03/31/95 0.80% 10,522
06/30/95 7.18% 11,435 06/30/95 9.55% 12,845 06/30/95 0.90% 10,617
09/30/95 6.05% 12,126 09/30/95 7.95% 13,866 09/30/95 0.40% 10,660
12/31/95 5.01% 12,734 12/31/95 6.02% 14,700 12/31/95 0.50% 10,713
03/31/96 5.53% 13,438 03/31/96 5.37% 15,489 03/31/96 0.80% 10,799
06/30/96 2.87% 13,824 06/30/96 4.49% 16,185 06/30/96 1.10% 10,918
09/30/96 5.17% 14,539 09/30/96 3.09% 16,685 09/30/96 0.44% 10,966
12/31/96 6.40% 15,470 12/31/96 8.34% 18,076 12/31/96 0.82% 11,056
03/31/97 1.59% 15,715 03/31/97 2.68% 18,560 03/31/97 0.69% 11,133
06/30/97 16.58% 18,321 06/30/97 17.46% 21,801 06/30/97 0.19% 11,154
09/30/97 6.15% 19,448 09/30/97 7.49% 23,433 09/30/97 0.44% 11,203
12/31/97 1.69% 19,776 12/31/97 2.87% 24,106 12/31/97 0.62% 11,272
03/31/98 10.70% 21,892 03/31/98 13.95% 27,469 03/31/98 0.12% 11,286
06/30/98 1.63% 22,250 06/30/98 3.30% 28,376 06/30/98 0.56% 11,349
09/30/98 -9.05% 20,237 09/30/98 -9.95% 25,553 09/30/98 0.42% 11,397
12/31/98 20.92% 24,470 12/31/98 21.30% 30,996 12/31/98 0.42% 11,445
03/31/99 2.72% 25,135 03/31/99 4.98% 32,540 03/31/99 0.24% 11,473
06/30/99 7.69% 27,069 06/30/99 7.05% 34,834 06/30/99 0.91% 11,577
09/30/99 -6.56% 25,292 09/30/99 -6.24% 32,659 09/30/99 0.54% 11,640
12/31/99 13.88% 28,803 12/31/99 14.88% 37,518 12/31/99 0.78% 11,730
03/31/00 4.66% 30,145 03/31/00 2.29% 38,378 03/31/00 0.95% 11,842
06/30/00 -1.94% 29,560 06/30/00 -2.66% 37,357 06/30/00 1.00% 11,960
09/30/00 -0.37% 29,449 09/30/00 -0.97% 36,995 09/30/00 0.76% 12,051
12/31/00 -5.94% 27,699 12/31/00 -7.81% 34,106 12/31/01 0.75% 12,141
03/31/01 -13.60% 23,932 03/31/01 -11.86% 30,061 03/31/01 0.98% 12,260
06/30/01 4.18% 24,933 06/30/01 5.85% 31,820 06/30/01 1.08% 12,393
09/30/01 -13.10% 21,667 09/30/01 -14.68% 27,149 09/30/01 -0.11% 12,379
12/31/01 11.22% 24,098 12/31/01 10.69% 30,050 12/31/01 -0.06% 12,372
03/31/02 0.70% 24,266 03/31/02 0.27% 30,133 03/31/02 0.23% 12,400
06/30/02 -13.17% 21,070 06/30/02 -13.40% 26,095 06/30/02 1.12% 12,539
09/30/02 -15.90% 17,720 09/30/02 -17.28% 21,586 09/30/02 0.50% 12,602
12/31/02 7.03% 18,966 12/31/02 8.44% 23,408 12/31/02 0.33% 12,643
03/31/03 -3.36% 18,329 03/31/03 -3.15% 22,670 03/31/03 0.99% 12,769
Past performance is not predictive of future performance.
- ----------------------------------------
| The Government Street Equity Fund |
| Average Annual Total Returns (a) |
| (for periods ended March 31, 2003) |
| |
| 1 Year 5 Years 10 Years |
| (24.47%) (3.49%) 6.24% |
- ----------------------------------------
THE GOVERNMENT STREET BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Bond Fund, the Lehman Government/Corporate Intermediate Bond Index and
the 90-Day Treasury Bill Index
[GRAPHIC OMITTED]
THE GOVERNMENT STREET BOND FUND: LEHMAN GOVERNMENT/ 90 DAY TREASURY BILL INDEX:
-------------------------------- ------------------ ---------------------------
CORPORATE INTERMEDIATE BOND INDEX:
---------------------------------
QTRLY QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ ------- ---- ------ -------
03/31/93 4.28% 10,000 03/31/93 3.98% 10,000 03/31/93 0.78% 10,000
06/30/93 1.99% 10,199 06/30/93 2.16% 10,216 06/30/93 0.77% 10,077
09/30/93 2.48% 10,452 09/30/93 2.26% 10,447 09/30/93 0.82% 10,160
12/31/93 -0.18% 10,433 12/31/93 0.17% 10,465 12/31/93 0.78% 10,239
03/31/94 -2.38% 10,185 03/31/94 -2.03% 10,252 03/31/94 0.77% 10,318
06/30/94 -0.72% 10,112 06/30/94 -0.60% 10,191 06/30/94 0.96% 10,417
09/30/94 0.70% 10,183 09/30/94 0.82% 10,274 09/30/94 1.08% 10,529
12/31/94 -0.30% 10,153 12/31/94 -0.11% 10,263 12/31/94 1.33% 10,669
03/31/95 4.46% 10,606 03/31/95 4.39% 10,714 03/31/95 1.50% 10,828
06/30/95 5.24% 11,161 06/30/95 5.00% 11,249 06/30/95 1.50% 10,991
09/30/95 1.44% 11,322 09/30/95 1.66% 11,435 09/30/95 1.42% 11,148
12/31/95 3.54% 11,722 12/31/95 3.52% 11,837 12/31/95 1.47% 11,312
03/31/96 -0.99% 11,606 03/31/96 -0.83% 11,738 03/31/96 1.23% 11,451
06/30/96 0.61% 11,677 06/30/96 0.63% 11,812 06/30/96 1.29% 11,599
09/30/96 1.73% 11,879 09/30/96 1.78% 12,023 09/30/96 1.38% 11,759
12/31/96 2.30% 12,152 12/31/96 2.45% 12,317 12/31/96 1.30% 11,912
03/31/97 -0.10% 12,140 03/31/97 -0.11% 12,304 03/31/97 1.28% 12,064
06/30/97 2.90% 12,492 06/30/97 2.95% 12,667 06/30/97 1.36% 12,228
09/30/97 2.76% 12,836 09/30/97 2.70% 13,009 09/30/97 1.34% 12,392
12/31/97 2.09% 13,104 12/31/97 2.14% 13,287 12/31/97 1.25% 12,547
03/31/98 1.55% 13,307 03/31/98 1.56% 13,494 03/31/98 1.30% 12,711
06/30/98 1.87% 13,556 06/30/98 1.88% 13,748 06/30/98 1.29% 12,875
09/30/98 3.77% 14,067 09/30/98 4.49% 14,365 09/30/98 1.42% 13,057
12/31/98 0.07% 14,077 12/31/98 0.29% 14,407 12/31/98 1.13% 13,204
03/31/99 -0.39% 14,022 03/31/99 -0.19% 14,380 03/31/99 1.06% 13,343
06/30/99 -1.24% 13,848 06/30/99 -0.40% 14,322 06/30/99 1.20% 13,503
09/30/99 0.67% 13,942 09/30/99 0.92% 14,454 09/30/99 1.27% 13,674
12/31/99 -0.05% 13,934 12/31/99 0.05% 14,461 12/31/99 1.25% 13,844
03/31/00 1.31% 14,116 03/31/00 1.50% 14,678 03/31/00 1.40% 14,037
06/30/00 1.64% 14,348 06/30/00 1.69% 14,926 06/30/00 1.52% 14,250
09/30/00 3.09% 14,791 09/30/00 2.88% 15,356 09/30/00 1.51% 14,465
12/31/00 3.86% 15,362 12/31/00 3.70% 15,924 12/31/00 1.63% 14,700
03/31/01 3.14% 15,845 03/31/01 3.40% 16,465 03/31/01 1.51% 14,921
06/30/01 0.54% 15,931 06/30/01 0.67% 16,576 06/30/01 1.12% 15,089
09/30/01 4.29% 16,614 09/30/01 4.61% 17,340 09/30/01 1.08% 15,252
12/31/01 -0.06% 16,605 12/31/01 0.09% 17,356 12/31/01 0.64% 15,349
03/31/02 0.08% 16,618 03/31/02 -0.23% 17,316 03/31/02 0.43% 15,415
06/30/02 3.02% 17,120 06/30/02 3.55% 17,930 06/30/02 0.43% 15,481
09/30/02 3.62% 17,739 09/30/02 4.53% 18,742 09/30/02 0.43% 15,548
12/31/02 1.40% 17,988 12/31/02 1.69% 19,058 12/31/02 0.39% 15,609
03/31/03 1.03% 18,173 03/31/03 1.50% 19,344 03/31/03 0.30% 15,655
Past performance is not predictive of future performance.
- ----------------------------------------
| The Government Street Bond Fund |
| Average Annual Total Returns (a) |
| (for periods ended March 31, 2003) |
| |
| 1 Year 5 Years 10 Years |
| 9.36% 6.43% 6.16% |
- ----------------------------------------
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
5
THE ALABAMA TAX FREE BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Alabama Tax
Free Bond Fund, the Lehman 7-Year G.O. Municipal Bond Index, the Lehman 3-Year
Municipal Bond Index and the Lipper Intermediate Municipal Fund Index
[GRAPHIC OMITTED]
THE ALABAMA TAX FREE BOND FUND: LEHMAN 3-YEAR MUNICIPAL BOND INDEX:
------------------------------- -----------------------------------
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ -------
03/31/93 0.96% 10,000 03/31/93 1.68% 10,000
06/30/93 2.81% 10,281 06/30/93 1.50% 10,150
09/30/93 2.79% 10,568 09/30/93 1.42% 10,294
12/31/93 1.05% 10,678 12/31/93 1.14% 10,411
03/31/94 -3.17% 10,340 03/31/94 -1.34% 10,272
06/30/94 0.63% 10,406 06/30/94 1.09% 10,384
09/30/94 0.54% 10,462 09/30/94 0.93% 10,481
12/31/94 -1.17% 10,339 12/31/94 0.01% 10,482
03/31/95 4.67% 10,822 03/31/95 2.81% 10,776
06/30/95 2.68% 11,112 06/30/95 2.12% 11,004
09/30/95 2.14% 11,350 09/30/95 2.14% 11,239
12/31/95 2.41% 11,623 12/31/95 1.54% 11,411
03/31/96 -0.36% 11,582 03/31/96 0.56% 11,475
06/30/96 0.26% 11,612 06/30/96 0.81% 11,568
09/30/96 1.68% 11,807 09/30/96 1.32% 11,721
12/31/96 2.16% 12,062 12/31/96 1.68% 11,918
03/31/97 -0.31% 12,024 03/31/97 0.41% 11,967
06/30/97 2.45% 12,319 06/30/97 1.85% 12,188
09/30/97 2.03% 12,569 09/30/97 1.71% 12,397
12/31/97 2.02% 12,824 12/31/97 1.42% 12,573
03/31/98 0.74% 12,919 03/31/98 1.03% 12,702
06/30/98 1.15% 13,068 06/30/98 1.13% 12,846
09/30/98 2.59% 13,406 09/30/98 1.98% 13,100
12/31/98 0.57% 13,482 12/31/98 0.97% 13,227
03/31/99 0.36% 13,530 03/31/99 1.11% 13,374
06/30/99 -1.63% 13,309 06/30/99 -0.44% 13,315
09/30/99 0.30% 13,349 09/30/99 1.00% 13,448
12/31/99 0.00% 13,349 12/31/99 0.29% 13,487
03/31/00 1.71% 13,577 03/31/00 1.01% 13,623
06/30/00 1.21% 13,741 06/30/00 1.39% 13,813
09/30/00 1.89% 14,001 09/30/00 1.61% 14,035
12/31/00 3.15% 14,443 12/31/00 2.09% 14,328
03/31/01 2.20% 14,760 03/31/01 2.62% 14,704
06/30/01 0.47% 14,829 06/30/01 1.21% 14,882
09/30/01 2.27% 15,166 09/30/01 2.37% 15,235
12/31/01 -0.61% 15,073 12/31/01 0.24% 15,271
03/31/02 0.47% 15,144 03/31/02 0.51% 15,349
06/30/02 3.39% 15,657 06/30/02 2.94% 15,800
09/30/02 3.88% 16,265 09/30/02 2.23% 16,151
12/31/02 0.47% 16,341 12/31/02 0.91% 16,299
03/31/03 0.70% 16,456 03/31/03 0.84% 16,436
LEHMAN 7-YEAR G.O.MUNICIPAL LIPPER INTERMEDIATE MUNICIPAL
--------------------------- -----------------------------
BOND INDEX: FUND INDEX
----------- ----------
QTRLY QTRLY
DATE RETURN BALANCE DATE RETURN BALANCE
---- ------ ------- ---- ------ -------
03/31/93 2.55% 10,000 03/31/93 2.64% 10,000
06/30/93 2.85% 10,285 06/30/93 2.51% 10,251
09/30/93 2.93% 10,586 09/30/93 2.90% 10,549
12/31/93 1.36% 10,730 12/31/93 1.18% 10,673
03/31/94 -4.33% 10,266 03/31/94 -3.89% 10,258
06/30/94 1.38% 10,407 06/30/94 0.92% 10,353
09/30/94 0.77% 10,488 09/30/94 0.59% 10,414
12/31/94 -1.00% 10,383 12/31/94 -1.12% 10,298
03/31/95 5.42% 10,945 03/31/95 4.98% 10,810
06/30/95 2.69% 11,239 06/30/95 2.25% 11,053
09/30/95 3.29% 11,609 09/30/95 2.40% 11,318
12/31/95 2.46% 11,895 12/31/95 2.68% 11,622
03/31/96 -0.21% 11,870 03/31/96 -0.54% 11,558
06/30/96 0.29% 11,904 06/30/96 0.44% 11,610
09/30/96 1.88% 12,128 09/30/96 1.83% 11,823
12/31/96 2.57% 12,440 12/31/96 2.20% 12,083
03/31/97 -0.15% 12,421 03/31/97 -0.02% 12,080
06/30/97 2.78% 12,766 06/30/97 2.64% 12,400
09/30/97 2.67% 13,107 09/30/97 2.45% 12,704
12/31/97 2.19% 13,394 12/31/97 2.16% 12,978
03/31/98 1.15% 13,548 03/31/98 0.96% 13,102
06/30/98 1.12% 13,700 06/30/98 1.22% 13,261
09/30/98 3.34% 14,157 09/30/98 2.78% 13,629
12/31/98 0.63% 14,247 12/31/98 0.57% 13,707
03/31/99 0.79% 14,359 03/31/99 0.56% 13,783
06/30/99 -1.64% 14,124 06/30/99 -1.67% 13,553
09/30/99 0.80% 14,237 09/30/99 0.06% 13,561
12/31/99 -0.09% 14,224 12/31/99 -0.31% 13,519
03/31/00 1.51% 14,439 03/31/00 1.76% 13,757
06/30/00 1.66% 14,678 06/30/00 1.21% 13,923
09/30/00 2.25% 15,009 09/30/00 2.09% 14,214
12/31/00 3.37% 15,514 12/31/00 3.35% 14,691
03/31/01 2.57% 15,913 03/31/01 2.26% 15,023
06/30/01 0.73% 16,029 06/30/01 0.74% 15,134
09/30/01 2.75% 16,470 09/30/01 2.59% 15,526
12/31/01 -0.93% 16,317 12/31/01 -0.84% 15,396
03/31/02 0.95% 16,472 03/31/02 0.72% 15,506
06/30/02 4.26% 17,174 06/30/02 3.54% 16,055
09/30/02 4.36% 17,922 09/30/02 3.87% 16,676
12/31/02 0.13% 17,946 12/31/02 0.02% 16,680
03/31/03 1.36% 18,190 03/31/03 0.99% 16,882
Past performance is not predictive of future performance.
- ----------------------------------------
| The Alabama Tax Free Bond Fund |
| Average Annual Total Returns (a) |
| (for periods ended March 31, 2003) |
| |
| 1 Year 5 Years 10 Years |
| 8.67% 4.96% 5.11% |
- ----------------------------------------
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
6
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2003
=============================================================================================
GOVERNMENT GOVERNMENT ALABAMA
STREET STREET TAX FREE
EQUITY BOND BOND
FUND FUND FUND
- ---------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost .................... $ 81,511,156 $ 56,181,522 $ 32,967,953
============ ============ ============
At value (Note 1) ...................... $ 87,766,613 $ 59,188,652 $ 35,021,081
Dividends and interest receivable ......... 131,457 652,931 396,698
Receivable for capital shares sold ........ 3,160 100 --
Other assets .............................. 3,966 2,354 1,604
------------ ------------ ------------
TOTAL ASSETS ........................... 87,905,196 59,844,037 35,419,383
------------ ------------ ------------
LIABILITIES
Dividends payable ......................... 3,953 14,533 26,994
Payable for investment securities purchased -- 1,074,380 635,030
Payable for capital shares redeemed ....... 7,108 59,509 8,625
Accrued investment advisory fees (Note 3) . 44,521 24,956 10,305
Accrued administration fees (Note 3) ...... 8,900 3,700 4,200
Other accrued expenses .................... 3,535 2,386 5,677
------------ ------------ ------------
TOTAL LIABILITIES ...................... 68,017 1,179,464 690,831
------------ ------------ ------------
NET ASSETS ................................ $ 87,837,179 $ 58,664,573 $ 34,728,552
============ ============ ============
Net assets consist of:
Paid-in capital ........................... $ 84,543,046 $ 57,130,468 $ 32,887,586
Undistributed net investment income (loss) 3,698 (672,701) 33,776
Accumulated net realized losses
from security transactions ............. (2,965,022) (800,324) (245,938)
Net unrealized appreciation
on investments ......................... 6,255,457 3,007,130 2,053,128
------------ ------------ ------------
Net assets ................................ $ 87,837,179 $ 58,664,573 $ 34,728,552
============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) .......................... 2,573,385 2,721,791 3,187,645
============ ============ ============
Net asset value, offering price and
redemption price per share (Note 1) .... $ 34.13 $ 21.55 $ 10.89
============ ============ ============
See accompanying notes to financial statements.
7
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2003
==========================================================================================
GOVERNMENT GOVERNMENT ALABAMA
STREET STREET TAX FREE
EQUITY BOND BOND
FUND FUND FUND
- ------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ............................. $ 57,403 $ 3,036,800 $ 1,463,198
Dividends ............................ 1,380,956 -- 8,188
------------ ------------ ------------
TOTAL INVESTMENT INCOME ........... 1,438,359 3,036,800 1,471,386
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) .... 550,064 284,643 117,359
Administration fees (Note 3) ......... 110,291 42,681 48,154
Professional fees .................... 13,565 13,565 11,465
Trustees' fees and expenses .......... 12,487 12,487 12,487
Custodian fees ....................... 14,973 11,025 5,627
Pricing costs ........................ 4,104 10,025 16,058
Postage and supplies ................. 8,334 8,166 6,784
Printing of shareholder reports ...... 7,493 3,810 3,338
Insurance expense .................... 5,742 4,375 3,281
Registration fees .................... 3,110 2,786 1,907
Other expenses ....................... 7,957 12,680 5,257
------------ ------------ ------------
TOTAL EXPENSES .................... 738,120 406,243 231,717
Fees waived by the Adviser (Note 3) .. -- -- (13,765)
------------ ------------ ------------
NET EXPENSES ...................... 738,120 406,243 217,952
------------ ------------ ------------
NET INVESTMENT INCOME ................... 700,239 2,630,557 1,253,434
------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses)
from security transactions ........ (2,223,200) 121,101 603
Net change in unrealized appreciation/
depreciation on investments ....... (25,347,255) 2,318,872 1,523,364
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS .............. (27,570,455) 2,439,973 1,523,967
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS ............... $(26,870,216) $ 5,070,530 $ 2,777,401
============ ============ ============
See accompanying notes to financial statements.
8
THE GOVERNMENT STREET FUNDS
THE ALABAMA TAX FREE BOND FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================================
GOVERNMENT STREET GOVERNMENT STREET
EQUITY FUND BOND FUND
-----------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................ $ 700,239 $ 462,886 $ 2,630,557 $ 2,617,238
Net realized gains (losses) from
security transactions ............. (2,223,200) (435,006) 121,101 (11,251)
Net change in unrealized appreciation/
depreciation on investments ....... (25,347,255) 1,370,223 2,318,872 (192,422)
-------------- -------------- -------------- --------------
Net increase (decrease)
in net assets from operations ........ (26,870,216) 1,398,103 5,070,530 2,413,565
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ........... (706,615) (458,503) (2,956,335) (2,838,825)
-------------- -------------- -------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............ 17,382,051 18,667,794 6,717,233 9,467,270
Net asset value of shares issued in
reinvestment of distributions
to shareholders ................... 690,021 449,835 2,799,416 2,669,150
Payments for shares redeemed ......... (8,358,649) (9,867,501) (6,654,729) (7,202,487)
-------------- -------------- -------------- --------------
Net increase in net assets from
capital share transactions ........... 9,713,423 9,250,128 2,861,920 4,933,933
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ........................ (17,863,408) 10,189,728 4,976,115 4,508,673
NET ASSETS
Beginning of year .................... 105,700,587 95,510,859 53,688,458 49,179,785
-------------- -------------- -------------- --------------
End of year .......................... $ 87,837,179 $ 105,700,587 $ 58,664,573 $ 53,688,458
============== ============== ============== ==============
UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) ............. $ 3,698 $ 10,074 $ (672,701) $ (346,923)
============== ============== ============== ==============
CAPITAL SHARE ACTIVITY
Sold ................................. 463,686 414,359 314,578 449,373
Reinvested ........................... 19,604 10,185 130,931 126,981
Redeemed ............................. (230,214) (220,346) (310,972) (342,610)
-------------- -------------- -------------- --------------
Net increase in shares outstanding ... 253,076 204,198 134,537 233,744
Shares outstanding, beginning of year 2,320,309 2,116,111 2,587,254 2,353,510
-------------- -------------- -------------- --------------
Shares outstanding, end of year ...... 2,573,385 2,320,309 2,721,791 2,587,254
============== ============== ============== ==============
==============================================================================
ALABAMA TAX FREE
BOND FUND
---------------------------------
YEAR YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2003 2002
- ------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................ $ 1,253,434 $ 1,196,141
Net realized gains (losses) from
security transactions ............. 603 (2,316)
Net change in unrealized appreciation/
depreciation on investments ....... 1,523,364 (482,278)
-------------- --------------
Net increase (decrease)
in net assets from operations ........ 2,777,401 711,547
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ........... (1,246,713) (1,190,607)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............ 3,565,649 5,283,250
Net asset value of shares issued in
reinvestment of distributions
to shareholders ................... 880,193 976,448
Payments for shares redeemed ......... (2,851,419) (2,267,886)
-------------- --------------
Net increase in net assets from
capital share transactions ........... 1,594,423 3,991,812
-------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ........................ 3,125,111 3,512,752
NET ASSETS
Beginning of year .................... 31,603,441 28,090,689
-------------- --------------
End of year .......................... $ 34,728,552 $ 31,603,441
============== ==============
UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) ............. $ 33,776 $ 27,055
============== ==============
CAPITAL SHARE ACTIVITY
Sold ................................. 332,470 499,453
Reinvested ........................... 81,647 92,663
Redeemed ............................. (265,360) (215,589)
-------------- --------------
Net increase in shares outstanding ... 148,757 376,527
Shares outstanding, beginning of year 3,038,888 2,662,361
-------------- --------------
Shares outstanding, end of year ...... 3,187,645 3,038,888
============== ==============
See accompanying notes to financial statements.
9
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 45.55 $ 45.14 $ 57.07 $ 48.10 $ 43.79
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................ 0.28 0.21 0.19 0.18 0.27
Net realized and unrealized
gains (losses) on investments ..... (11.42) 0.41 (11.93) 9.39 6.01
---------- ---------- ---------- ---------- ----------
Total from investment operations ........ (11.14) 0.62 (11.74) 9.57 6.28
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net
investment income ................. (0.28) (0.21) (0.19) (0.18) (0.27)
Distributions from net realized gains -- -- -- (0.42) (1.70)
---------- ---------- ---------- ---------- ----------
Total distributions ..................... (0.28) (0.21) (0.19) (0.60) (1.97)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .......... $ 34.13 $ 45.55 $ 45.14 $ 57.07 $ 48.10
========== ========== ========== ========== ==========
Total return ............................ (24.47%) 1.38% (20.61%) 19.93% 14.81%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ....... $ 87,837 $ 105,701 $ 95,511 $ 116,447 $ 90,707
========== ========== ========== ========== ==========
Ratio of expenses to average net assets . 0.81% 0.80% 0.80% 0.83% 0.85%
Ratio of net investment income
to average net assets ................ 0.76% 0.47% 0.36% 0.35% 0.61%
Portfolio turnover rate ................. 12% 17% 11% 17% 22%
See accompanying notes to financial statements.
10
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2003 2002(a) 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 20.75 $ 20.90 $ 19.79 $ 20.90 $ 21.06
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................ 0.99 1.07 1.23 1.23 1.27
Net realized and unrealized
gains (losses) on investments ..... 0.92 (0.06) 1.11 (1.11) (0.16)
---------- ---------- ---------- ---------- ----------
Total from investment operations ........ 1.91 1.01 2.34 0.12 1.11
---------- ---------- ---------- ---------- ----------
Dividends from net investment income .... (1.11) (1.16) (1.23) (1.23) (1.27)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .......... $ 21.55 $ 20.75 $ 20.90 $ 19.79 $ 20.90
========== ========== ========== ========== ==========
Total return ............................ 9.36% 4.88% 12.25% 0.67% 5.38%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ....... $ 58,665 $ 53,688 $ 49,180 $ 45,156 $ 43,041
========== ========== ========== ========== ==========
Ratio of expenses to average net assets . 0.71% 0.70% 0.69% 0.70% 0.73%
Ratio of net investment income
to average net assets ................ 4.62% 5.06% 6.12% 6.12% 6.01%
Portfolio turnover rate ................. 39% 18% 9% 20% 17%
(a) As required, effective April 1, 2001, the Fund adopted new provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premiums on debt securities and recording paydown gains and
losses as adjustments to interest income. Had the Fund not adopted these
new provisions, the net investment income per share would have been $1.16
and the ratio of net investment income to average net assets would have
been 5.50%. Per share data and ratios for periods prior to April 1, 2001
have not been restated to reflect this change in presentation.
See accompanying notes to financial statements.
11
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -----------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2003 2002(a) 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 10.40 $ 10.55 $ 10.13 $ 10.54 $ 10.49
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................ 0.40 0.42 0.44 0.44 0.44
Net realized and unrealized
gains (losses) on investments ..... 0.49 (0.15) 0.42 (0.41) 0.05
---------- ---------- ---------- ---------- ----------
Total from investment operations ........ 0.89 0.27 0.86 0.03 0.49
---------- ---------- ---------- ---------- ----------
Dividends from net investment income .... (0.40) (0.42) (0.44) (0.44) (0.44)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .......... $ 10.89 $ 10.40 $ 10.55 $ 10.13 $ 10.54
========== ========== ========== ========== ==========
Total return ............................ 8.67% 2.61% 8.71% 0.34% 4.73%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ....... $ 34,729 $ 31,603 $ 28,091 $ 23,048 $ 21,560
========== ========== ========== ========== ==========
Ratio of net expenses to
average net assets(b) ................ 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of net investment income
to average net assets ................ 3.74% 4.02% 4.29% 4.32% 4.16%
Portfolio turnover rate ................. 9% 10% 6% 19% 7%
(a) As required, effective April 1, 2001, the Fund adopted new provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began
accreting market discount on debt securities. Had the Fund not adopted this
new provision, the ratio of net investment income to average net assets
would have been 4.00%. Per share data and ratios prior to April 1, 2001
have not been restated to reflect this change in presentation.
(b) Absent investment advisory fees waived by the Adviser, the ratios of
expenses to average net assets would have been 0.69%, 0.71%, 0.71%, 0.72%,
and 0.76% for the years ended March 31, 2003, 2002, 2001, 2000 and 1999,
respectively (Note 3).
See accompanying notes to financial statements.
12
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
SHARES COMMON STOCKS -- 97.2% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 13.8%
7,000 Abercrombie & Fitch Company - Class A (a) ....... $ 210,210
22,000 Applebee's International, Inc. .................. 616,880
21,000 Circuit City Stores - Circuit City Group ........ 109,200
12,000 Comcast Corporation - Class A (a) ............... 343,080
10,000 Cooper Tire & Rubber Company .................... 122,000
15,000 Harrah's Entertainment, Inc. (a) ................ 535,500
30,000 Hasbro, Inc. .................................... 416,700
49,500 Home Depot, Inc. ................................ 1,205,820
16,000 Johnson Controls, Inc. .......................... 1,159,040
12,000 Legget & Platt, Inc. ............................ 219,360
6,500 Loew's Corporation .............................. 258,960
3,500 Maytag Corporation .............................. 66,605
5,500 NIKE, Inc. - Class B ............................ 282,810
5,500 Omnicom Group, Inc. ............................. 297,935
4,000 Pulte Corporation ............................... 200,600
20,000 Radioshack Corporation .......................... 445,800
8,000 Russell Corporation ............................. 140,000
30,000 Sears, Roebuck & Company ........................ 724,500
22,000 Target Corporation .............................. 643,720
12,000 Tribune Company ................................. 540,120
27,000 Viacom, Inc. - Class A (a) ...................... 985,500
34,000 Wal-Mart Stores, Inc. ........................... 1,769,020
35,000 Walt Disney Company (The) ....................... 595,700
10,000 Williams-Sonoma, Inc. (a) ....................... 218,000
------------
12,107,060
------------
CONSUMER STAPLES -- 10.6%
33,000 Altria Group, Inc. .............................. 988,680
20,000 Anheuser-Busch Companies, Inc. .................. 932,200
20,000 Avon Products, Inc. ............................. 1,141,000
12,000 Clorox Company (The) ............................ 554,040
40,000 Coca-Cola Enterprises, Inc. ..................... 747,600
25,000 Conagra Foods, Inc. ............................. 502,000
1,260 J.M. Smucker Company (The) ...................... 44,062
10,000 Kimberly Clark Corporation ...................... 454,600
15,000 PepsiCo, Inc. ................................... 600,000
13,000 Procter & Gamble Company ........................ 1,157,650
24,500 SYSCO Corporation ............................... 623,280
14,000 Unilever N.V. - ADR ............................. 832,160
25,000 Walgreen Company ................................ 737,000
------------
9,314,272
------------
ENERGY -- 5.9%
10,657 Apache Corporation .............................. 657,994
33,082 BP PLC - ADR .................................... 1,276,634
13,000 ChevronTexaco Corporation ....................... 840,450
7,000 ConocoPhillips .................................. 375,200
31,300 Exxon Mobil Corporation ......................... 1,093,935
24,000 Nabors Industries, Inc. (a) ..................... 956,880
------------
5,201,093
------------
13
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.2% (Continued) VALUE
- --------------------------------------------------------------------------------
FINANCIALS -- 16.9%
25,000 Aegon N.V. - ADR ................................ $ 188,750
45,000 AFLAC, Inc. ..................................... 1,442,250
30,000 American Express Company ........................ 996,900
22,500 American International Group, Inc. .............. 1,112,625
30,000 BB&T Corporation ................................ 942,900
32,000 Charles Schwab Corporation ...................... 231,040
11,000 Cincinnati Financial Corporation ................ 385,770
40,833 Citigroup, Inc. ................................. 1,406,697
20,000 Fifth Third Bancorp ............................. 1,002,800
35,000 FleetBoston Financial Corporation ............... 835,800
10,000 Freddie Mac ..................................... 531,000
24,000 Marsh & McLennan Companies, Inc. ................ 1,023,120
38,000 MBNA Corporation ................................ 571,900
9,000 Progressive Corporation ......................... 533,790
7,000 SLM Corporation ................................. 776,440
20,000 SouthTrust Corporation .......................... 510,600
50,000 Synovus Financial Corporation ................... 894,500
75,000 U.S. Bancorp .................................... 1,423,500
------------
14,810,382
------------
HEALTHCARE -- 16.4%
8,000 Amgen, Inc. (a) ................................. 460,400
34,000 Becton, Dickinson & Company ..................... 1,170,960
31,750 Biomet, Inc. .................................... 973,138
41,000 Cardinal Health, Inc. ........................... 2,335,770
44,000 Elan Corporation (a) ............................ 122,760
17,000 Eli Lilly & Company ............................. 971,550
18,500 Forest Lab, Inc. (a) ............................ 998,445
11,000 Henry Schein, Inc. (a) .......................... 496,100
25,000 Johnson & Johnson ............................... 1,446,750
13,000 Medtronic, Inc. ................................. 586,560
24,900 Merck & Company ................................. 1,364,022
41,500 Pfizer, Inc. .................................... 1,293,140
27,000 Tenet Healthcare Corporation (a) ................ 450,900
18,500 UnitedHealth Group, Inc. ........................ 1,695,895
------------
14,366,390
------------
INDUSTRIALS -- 8.3%
22,200 Automatic Data Processing, Inc. ................. 683,538
13,000 Caterpillar, Inc. ............................... 639,600
10,500 Emerson Electric Company ........................ 476,175
13,000 General Dynamics Corporation .................... 715,910
70,000 General Electric Company ........................ 1,785,000
8,000 Ingersoll-Rand Company - Class A ................ 308,720
5,000 Jacobs Engineering Group, Inc. (a) .............. 210,050
8,000 Mueller Industries, Inc. (a) .................... 199,760
18,000 Pall Corporation ................................ 360,000
25,000 Quanta Services, Inc. (a) ....................... 80,000
9,000 Ryder System, Inc. .............................. 184,590
10,236 SPX Corporation (a) ............................. 349,662
53,786 Tyco International, Ltd. ........................ 691,688
14
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.2% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 8.3% (Continued)
5,000 Union Pacific Corporation ....................... $ 275,000
15,000 Waste Management, Inc. .......................... 317,700
------------
7,277,393
------------
INFORMATION TECHNOLOGY-- 14.0%
26,000 Adaptec, Inc. (a) ............................... 156,780
40,000 ADC Telecommunications, Inc. (a) ................ 82,400
30,000 Adobe Systems, Inc. ............................. 924,900
2,479 Agilent Technologies, Inc. (a) .................. 32,599
32,000 Applied Materials, Inc. (a) ..................... 402,560
13,500 Broadcom Corporation - Class A (a) .............. 166,725
11,000 Celestica, Inc. (a) ............................. 125,730
60,000 Cisco Systems, Inc. (a) ......................... 774,000
27,500 Computer Sciences Corporation (a) ............... 895,125
15,000 Dell Computer Corporation (a) ................... 409,650
31,000 Electronic Data Systems Corporation ............. 545,600
13,000 Harmonic, Inc. (a) .............................. 43,290
22,000 Hewlett-Packard Company ......................... 342,100
60,100 Intel Corporation ............................... 978,428
9,500 International Business Machines Corporation ..... 745,085
6,000 ITT Educational Services, Inc. (a) .............. 168,000
20,000 Kemet Corporation (a) ........................... 156,000
8,000 Kla-Tencor Corporation (a) ...................... 287,536
11,500 Lexmark International Group, Inc. (a) ........... 769,925
29,000 Macromedia, Inc. (a) ............................ 350,320
66,000 Microsoft Corporation ........................... 1,597,860
19,000 Network Appliance, Inc. (a) ..................... 212,610
36,000 Scientific-Atlanta, Inc. ........................ 494,640
11,500 Teradyne, Inc. (a) .............................. 133,860
28,000 Texas Instruments, Inc. ......................... 458,360
26,000 Titan Corporation (a) ........................... 193,700
20,000 Waters Corporation (a) .......................... 423,200
19,000 Xilinx, Inc. (a) ................................ 444,790
------------
12,315,773
------------
MATERIALS -- 4.3%
24,000 Alcoa, Inc. ..................................... 465,120
15,000 du Pont (E.I.) de Nemours & Company ............. 582,900
10,000 Florida Rock Industries, Inc. ................... 338,500
20,000 General Cable Corporation ....................... 74,000
16,955 International Paper Company ..................... 573,079
10,000 Newmont Mining Corporation ...................... 261,500
5,000 Pactiv Corporation (a) .......................... 101,500
13,000 Sealed Air Corporation (a) ...................... 521,690
20,000 Valspar Corporation ............................. 818,600
7,000 Worthington Industries, Inc. .................... 83,510
------------
3,820,399
------------
REAL ESTATE INVESTMENT TRUSTS-- 1.5%
22,200 Colonial Properties Trust ....................... 734,376
29,000 Plum Creek Timber Company, Inc. ................. 626,110
------------
1,360,486
------------
15
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES-- 2.9%
35,000 Bellsouth Corporation ........................... $ 758,450
32,000 Nokia Corporation - ADR ......................... 448,320
59,900 SBC Communications, Inc. ........................ 1,201,594
30,000 Sprint Corporation (PCS Group) (a) .............. 130,800
------------
2,539,164
------------
UTILITIES -- 2.6%
60,980 Duke Energy Corporation ......................... 886,649
30,373 Mirant Corporation (a) .......................... 48,597
47,000 Southern Company (The) .......................... 1,336,680
------------
2,271,926
------------
TOTAL COMMON STOCKS (Cost $79,128,881) .......... $ 85,384,338
------------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 2.7% VALUE
- --------------------------------------------------------------------------------
$2,382,000 Galaxy Funding Corporation, 1.23%, due 04/01/2003
(Cost $2,382,000) ............................... $ 2,382,000
------------
================================================================================
SHARES MONEY MARKETS -- 0.0% VALUE
- --------------------------------------------------------------------------------
275 First American Treasury Obligation Fund -
Class S (Cost $275) ............................. $ 275
------------
TOTAL INVESTMENTS AT VALUE-- 99.9%
(Cost $81,511,156) .............................. $ 87,766,613
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.1% .... 70,566
------------
NET ASSETS-- 100.0% ............................. $ 87,837,179
============
(a) Non-income producing security.
See accompanying notes to financial statements.
16
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
PAR VALUE U.S. TREASURY AND AGENCY OBLIGATIONS-- 23.6% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 8.4%
$ 850,000 5.75%, due 04/30/2003 ......................... $ 853,088
100,000 5.875%, due 02/15/2004 ........................ 104,094
500,000 5.75%, due 11/15/2005 ......................... 550,488
925,000 5.875%, due 11/15/2005 ........................ 1,021,149
725,000 5.625%, due 02/15/2006 ........................ 800,219
100,000 6.625%, due 05/15/2007 ........................ 116,172
750,000 5.50%, due 02/15/2008 ......................... 843,838
100,000 5.625%, due 05/15/2008 ........................ 113,176
500,000 5.00%, due 02/15/2011 ......................... 549,414
------------
4,951,638
------------
FEDERAL FARM CREDIT BANK BONDS -- 1.6%
500,000 6.00%, due 01/07/2008 ......................... 564,902
300,000 6.28%, due 11/26/2012 ......................... 346,538
------------
911,440
------------
FEDERAL HOME LOAN BANK BONDS -- 4.7%
500,000 7.57%, due 08/19/2004 ......................... 541,630
500,000 6.045%, due 12/10/2004 ........................ 536,733
500,000 6.345%, due 11/01/2005 ........................ 554,441
200,000 5.625%, due 11/15/2011 ........................ 220,786
870,000 6.55%, due 07/02/2014 ......................... 880,623
------------
2,734,213
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-- 2.6%
1,000,000 5.125%, due 08/20/2012 ........................ 1,022,544
500,000 5.125%, due 02/20/2013 ........................ 509,307
------------
1,531,851
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS-- 6.3%
500,000 6.63%, due 06/20/2005 ......................... 553,161
1,000,000 7.125%, due 03/15/2007 ........................ 1,168,255
750,000 6.62%, due 06/25/2007 ......................... 862,895
400,000 6.80%, due 08/27/2012 ......................... 450,711
600,000 6.875%, due 09/24/2012 ........................ 679,234
------------
3,714,256
------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(Cost $12,924,081) .............................. $ 13,843,398
------------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 30.6% VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-- 30.6%
$ 4,551 Pool #15032, 7.50%, due 02/15/2007 ............ $ 4,869
103,964 Pool #438434, 6.50%, due 01/15/2013 ........... 110,905
216,099 Pool #470177, 7.00%, due 03/15/2014 ........... 232,074
203,977 Pool #518403, 7.00%, due 09/15/2014 ........... 219,057
2,767 Pool #170784, 8.00%, due 12/15/2016 ........... 2,997
5,473 Pool #181540, 8.00%, due 02/15/2017 ........... 5,928
1,625,652 Pool #581879, 6.50%, due 03/15/2017 ........... 1,734,175
1,494,123 Pool #553051, 5.50%, due 02/15/2018 ........... 1,566,467
17
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES-- 30.6% (Continued) VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-- 30.6% (Continued)
$ 188,565 Pool #493659, 6.50%, due 12/15/2018 ........... $ 198,254
196,721 Pool #476695, 6.50%, due 10/15/2023 ........... 206,829
185,234 Pool #366710, 6.50%, due 02/15/2024 ........... 194,752
99,734 Pool #453826, 7.25%, due 09/15/2027 ........... 106,333
320,789 Pool #412360, 7.00%, due 11/15/2027 ........... 340,444
1,155,087 Pool #447408, 7.00%, due 01/15/2028 ........... 1,225,857
149,722 Pool #454162, 7.00%, due 05/15/2028 ........... 158,895
676,329 Pool #780825, 6.50%, due 07/15/2028 ........... 711,079
231,141 Pool #2617, 7.50%, due 07/20/2028 ............. 245,520
170,109 Pool #158794, 7.00%, due 09/15/2028 ........... 180,532
180,251 Pool #486760, 6.50%, due 12/15/2028 ........... 189,512
491,802 Pool #781096, 6.50%, due 12/15/2028 ........... 517,070
483,330 Pool #781136, 7.00%, due 12/15/2028 ........... 512,943
294,364 Pool #506618, 7.00%, due 03/15/2029 ........... 312,399
1,257,820 Pool #536619, 6.50%, due 09/15/2029 ........... 1,322,446
179,658 Pool #511562, 7.50%, due 07/15/2030 ........... 192,182
632,945 Pool #448316, 6.50% due 04/15/2031 ............ 665,466
517,468 Pool #530606, 6.50% due 04/15/2031 ............ 544,055
412,165 Pool #545820, 7.00% due 06/15/2031 ............ 437,418
836,065 Pool #781330, 6.00%, due 09/15/2031 ........... 873,804
711,263 Pool #3228, 6.50%, due 04/20/2032 ............. 744,252
852,214 Pool #569903, 6.50%, due 06/15/2032 ........... 896,000
1,162,951 Pool #595934, 6.00%, due 09/15/2032 ........... 1,215,445
1,994,351 Pool #3927, 6.00%, due 11/20/2032 ............. 2,084,372
------------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $17,516,262) $ 17,952,331
------------
================================================================================
PAR VALUE CORPORATE BONDS -- 38.7% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 21.1%
AmSouth Bancorp,
$ 550,000 7.75%, due 05/15/2004 ......................... $ 587,878
------------
Banc One Corporation,
665,000 7.00%, due 07/15/2005 ......................... 733,988
1,000,000 6.875%, due 08/01/2006 ........................ 1,130,834
------------
1,864,822
------------
Bank of America Corporation,
550,000 7.625%, due 04/15/2005 ........................ 610,930
750,000 7.125%, due 03/01/2009 ........................ 879,111
------------
1,490,041
------------
Chase Manhattan Corporation,
1,500,000 6.50%, due 01/15/2009 ......................... 1,670,340
------------
General Electric Capital Corporation,
500,000 5.00%, due 02/15/2007 ......................... 535,315
------------
18
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 38.7% (Continued) VALUE
- --------------------------------------------------------------------------------
FINANCE -- 21.1% (Continued)
International Lease Finance Corporation,
$1,000,000 5.625%, due 06/01/2007 ........................ $ 1,048,896
------------
Marsh & McLennan Companies, Inc.,
720,000 6.625%, due 06/15/2004 ........................ 762,923
------------
Merrill Lynch & Company, Inc.,
1,000,000 7.00%, due 04/27/2008 ......................... 1,150,445
------------
Regions Financial Corporation,
1,000,000 6.375%, due 05/15/2012 ........................ 1,125,744
------------
SouthTrust Bank of Alabama, N.A.,
665,000 7.00%, due 11/15/2008 ......................... 775,730
------------
Transamerica Financial Corporation,
1,276,000 7.50%, due 03/15/2004 ......................... 1,342,317
------------
TOTAL FINANCE CORPORATE BONDS ................... 12,354,451
------------
INDUSTRIAL -- 14.3%
Alcoa, Inc.,
1,000,000 7.25%, due 08/01/2005 ......................... 1,112,044
------------
Altria Group, Inc.,
700,000 7.125%, due 10/01/2004 ........................ 722,772
------------
Anheuser-Busch Companies, Inc.,
1,000,000 5.125%, due 10/01/2008 ........................ 1,082,064
------------
Coca-Cola Enterprises, Inc.,
600,000 6.625%, due 08/01/2004 ........................ 639,261
------------
Conoco, Inc.,
1,490,000 6.35%, due 04/15/2009 ......................... 1,700,528
------------
Ford Motor Company,
1,000,000 7.25%, due 10/01/2008 ......................... 958,148
------------
General Motors Corporation,
565,000 7.10%, due 03/15/2006 ......................... 598,202
------------
Wal-Mart Stores, Inc.,
1,000,000 7.50%, due 05/15/2004 ......................... 1,066,691
500,000 4.375%, due 07/12/2007 ........................ 528,475
------------
1,595,166
------------
TOTAL INDUSTRIAL CORPORATE BONDS ................ 8,408,185
------------
19
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 38.7% (Continued) VALUE
- --------------------------------------------------------------------------------
UTILITY -- 3.3%
AT&T Corporation,
$1,000,000 6.00%, due 03/15/2009 ......................... $ 1,004,421
------------
BellSouth Capital Funding,
750,000 7.75%, due 02/15/2010 ......................... 902,233
------------
TOTAL UTILITY CORPORATE BONDS ................... 1,906,654
------------
TOTAL CORPORATE BONDS (Cost $21,229,870) ........ $ 22,669,290
------------
================================================================================
PAR VALUE MUNICIPAL OBLIGATIONS-- 2.1% VALUE
- --------------------------------------------------------------------------------
Alabama State Public School & College Authority,
$1,050,000 7.15%, due 09/01/2009 (Cost $1,028,241) ....... $ 1,240,565
------------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 5.9% VALUE
- --------------------------------------------------------------------------------
$2,600,000 Galaxy Funding Corporation, 1.23%, due 04/01/2003 $ 2,600,000
883,000 U.S. Bancorp, 1.20%, due 04/01/2003 ............. 883,000
------------
TOTAL COMMERCIAL PAPER (Cost $3,483,000) ........ $ 3,483,000
------------
================================================================================
SHARES MONEY MARKETS -- 0.0% VALUE
- --------------------------------------------------------------------------------
68 First American Treasury Obligation Fund -
Class S (Cost $68) .............................. $ 68
------------
TOTAL INVESTMENTS AT VALUE-- 100.9%
(Cost $56,181,522) .............................. $ 59,188,652
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.9)% .. (524,079)
------------
NET ASSETS-- 100.0% ............................. $ 58,664,573
============
See accompanying notes to financial statements.
20
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2003
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.1% VALUE
- --------------------------------------------------------------------------------
Alabama Mental Health Finance Auth., Special Tax,
$ 515,000 5.00%, due 05/01/2006 ......................... $ 553,141
------------
Alabama Special Care Facilities Financing
Auth. Birmingham, Rev.,
500,000 4.50%, due 11/01/2009, ETM .................... 543,620
400,000 5.375%, due 11/01/2012, ETM ................... 437,616
------------
981,236
------------
Alabama Special Care Facilities Financing Auth.
Mobile Hospital, Rev.,
250,000 4.50%, due 11/01/2010, ETM .................... 269,143
------------
Alabama State, GO,
500,000 3.00%, due 09/01/2007 ......................... 513,975
------------
Alabama State Industrial Access Road & Bridge Corp., GO,
100,000 5.25%, due 06/01/2003 ......................... 100,652
------------
Alabama State Municipal Electric Authority
Power-Supply, Rev.,
100,000 5.00%, due 09/01/2004 ......................... 105,230
------------
Alabama State Public School & College Auth.,
Capital Improvements, Rev.,
275,000 5.25%, due 11/01/2005 ......................... 300,635
305,000 5.00%, due 12/01/2005 ......................... 316,056
300,000 5.00%, due 02/01/2010 ......................... 331,695
255,000 5.125%, due 11/01/2010 ........................ 283,280
350,000 5.00%, due 11/01/2012 ......................... 379,946
250,000 5.625%, due 07/01/2013 ........................ 283,645
600,000 5.125%, due 11/01/2013 ........................ 656,676
500,000 5.125%, due 11/01/2015 ........................ 541,775
------------
3,093,708
------------
Alabama State Public School & College Auth., Rev.,
300,000 5.00%, due 05/01/2010 ......................... 332,631
------------
Alabama Water Pollution Control Auth., Rev.,
190,000 6.25%, due 08/15/2004 ......................... 202,800
200,000 4.65%, due 08/15/2008 ......................... 220,112
500,000 5.00%, due 08/15/2010 ......................... 556,170
180,000 5.00%, due 08/15/2015 ......................... 187,519
------------
1,166,601
------------
Anniston, AL, GO
250,000 5.50%, due 01/01/2004 ......................... 257,672
------------
Anniston, AL, Regional Medical Center Hospital
Board, Rev.,
5,000 7.375%, due 07/01/2006, ETM ................... 5,460
------------
Athens, AL, School Warrants,
335,000 5.05%, due 08/01/2015 ......................... 360,165
------------
21
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.1% (Continued) VALUE
- --------------------------------------------------------------------------------
Auburn, AL, GO,
$ 300,000 4.00%, due 08/01/2007 ......................... $ 320,694
285,000 4.25%, due 08/01/2009 ......................... 305,366
------------
626,060
------------
Auburn, AL, Water Works Board, Water Rev.,
335,000 5.00%, due 07/01/2015 ......................... 362,952
------------
Auburn University, AL, General Fee Rev.,
300,000 4.00%, due 06/01/2008 ......................... 319,920
400,000 4.45%, due 06/01/2011 ......................... 421,168
------------
741,088
------------
Auburn University, AL, Rev.,
175,000 5.20%, due 06/01/2004, prerefunded
06/01/2003 @ 102 .............................. 179,694
325,000 5.25%, due 04/01/2005, prerefunded
04/01/2003 @ 102 .............................. 331,500
------------
511,194
------------
Baldwin Co., AL, Board of Education, Rev.,
200,000 5.20%, due 06/01/2009 ......................... 223,046
------------
Baldwin Co., AL, GO,
200,000 5.85%, due 08/01/2003 ......................... 203,148
400,000 5.00%, due 02/01/2007 ......................... 437,796
500,000 4.50%, due 11/01/2008 ......................... 547,705
200,000 4.55%, due 02/01/2009 ......................... 212,334
------------
1,400,983
------------
Birmingham, AL, Industrial Water Board, Rev.,
100,000 6.00%, due 07/01/2007 ......................... 115,598
------------
Birmingham, AL, Medical Clinic Board, Rev.,
30,000 7.30%, due 07/01/2005, ETM .................... 32,185
------------
Birmingham, AL, Series B, GO,
200,000 5.90%, due 04/01/2003 ......................... 200,000
------------
Birmingham, AL, Southern College, Private
Education Bldg. Auth., Rev.,
500,000 5.10%, due 12/01/2012 ......................... 514,350
------------
Birmingham, AL, Special Care Facilities
Financing Authority, Rev.,
200,000 5.00%, due 06/01/2006 ......................... 218,594
------------
Decatur, AL, GO,
300,000 5.00%, due 06/01/2009 ......................... 331,227
------------
Decatur, AL, Water Rev.,
100,000 5.00%, due 05/01/2014 ......................... 107,579
------------
Dothan, AL, GO,
500,000 5.50%, due 09/01/2014 ......................... 561,350
------------
22
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.1% (Continued) VALUE
- --------------------------------------------------------------------------------
Fairhope, AL, Utilities Rev.,
$ 200,000 5.10%, due 12/01/2008 ......................... $ 204,616
------------
Fairhope, AL, Warrants,
200,000 4.00%, due 06/01/2009 ......................... 211,976
295,000 5.10%, due 06/01/2014 ......................... 319,379
------------
531,355
------------
Florence, AL, School Warrants,
200,000 5.00%, due 09/01/2008 ......................... 207,066
200,000 4.65%, due 12/01/2012 ......................... 213,702
400,000 5.75%, due 09/01/2015 ......................... 441,024
------------
861,792
------------
Foley, AL, Utilities Board, Rev.,
500,000 4.00%, due 11/01/2007 ......................... 536,315
------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009 ......................... 335,301
------------
Homewood, AL, Board of Education, Capital
Outlay Warrants,
300,000 4.00%, due 02/01/2007 ......................... 319,434
------------
Homewood, AL, GO,
500,000 5.00%,due 09/01/2014 (a) ...................... 543,000
------------
Hoover, AL, Board of Education, Special Tax,
300,000 3.00%, due 02/15/2006 ......................... 310,071
400,000 6.00%, due 02/15/2006, prerefunded
02/15/2004 @ 102 .............................. 425,012
------------
735,083
------------
Houston Co., AL, GO,
300,000 5.60%, due 10/15/2014 ......................... 339,855
------------
Huntsville, AL, Electric Systems, Rev.,
250,000 4.80%, due 12/01/2012 ......................... 267,548
------------
Huntsville, AL, GO,
200,000 4.50%, due 08/01/2007 ......................... 217,896
300,000 5.40%, due 02/01/2010 ......................... 323,382
500,000 5.00%, due 08/01/2011 ......................... 552,945
250,000 5.25%, due 11/01/2011 ......................... 277,490
------------
1,371,713
------------
Huntsville, AL, Water Systems, Rev.,
150,000 5.15%, due 05/01/2004 ......................... 153,489
300,000 4.00%, due 05/01/2005 (a) ..................... 315,450
150,000 5.25%, due 05/01/2005 ......................... 153,504
200,000 4.70%, due 11/01/2013 ......................... 210,646
------------
833,089
------------
23
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.1% (Continued) VALUE
- --------------------------------------------------------------------------------
Jefferson Co., AL, Board of Education,
Capital Outlay Warrants,
$ 300,000 5.70%, due 02/15/2011, prerefunded
02/15/2005 @ 102 .............................. $ 330,009
------------
Jefferson Co., AL, GO Unlimited Warrants,
100,000 5.00%, due 04/01/2004 ......................... 102,065
------------
Jefferson Co., AL, Sewer Rev.,
50,000 5.50%, due 09/01/2003, ETM .................... 50,915
300,000 5.75%, due 09/01/2005, prerefunded
09/01/2003 @ 101 .............................. 308,790
------------
359,705
------------
Lee Co., AL, GO,
300,000 5.50%, due 02/01/2007 ......................... 327,123
------------
Madison, AL, Warrants,
325,000 5.55%, due 04/01/2007 ......................... 356,671
200,000 4.40%, due 02/01/2011 ......................... 211,072
400,000 4.85%, due 02/01/2013 ......................... 426,264
------------
994,007
------------
Madison Co., AL, Board of Education, Capital
Outlay Tax Antic. Warrants,
175,000 5.20%, due 09/01/2004, ETM .................... 185,012
400,000 5.20%, due 03/01/2011 ......................... 444,248
250,000 5.10%, due 09/01/2011 ......................... 273,583
------------
902,843
------------
Mobile, AL, GO,
180,000 5.75%, due 02/15/2016, prerefunded
02/15/2006 @ 102 .............................. 203,940
275,000 6.20%, due 02/15/2007, ETM .................... 315,829
------------
519,769
------------
Mobile, AL, Water & Sewer Commissioners, Rev.,
200,000 5.00%, due 01/01/2013 ......................... 208,534
------------
Mobile Co., AL, Board of School Commissioners
Capital Outlay Warrants,
400,000 5.00%, due 03/01/2008 ......................... 421,104
------------
Mobile Co., AL, Gas Tax Antic. Warrants,
250,000 3.55%, due 02/01/2009 ......................... 255,230
------------
Mobile Co., AL, Warrants,
300,000 5.00%, due 02/01/2006 ......................... 326,481
200,000 5.40%, due 08/01/2013 ......................... 222,816
------------
549,297
------------
Montgomery, AL, GO,
500,000 5.10%, due 10/01/2008 ......................... 555,205
300,000 5.00%, due 11/01/2015 ......................... 323,304
------------
878,509
------------
24
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.1% (Continued) VALUE
- --------------------------------------------------------------------------------
Montgomery, AL, Waterworks & Sanitation, Rev.,
$ 500,000 5.00%, due 09/01/2008 ......................... $ 559,370
400,000 5.60%, due 09/01/2009 ......................... 451,668
------------
1,011,038
------------
Montgomery Co., AL, GO,
300,000 3.00%, due 11/01/2006 ......................... 311,514
------------
Mountain Brook, AL, City Board of Education,
Capital Outlay Warrants,
405,000 4.80%, due 02/15/2011 ......................... 432,317
------------
Muscle Shoals, AL, GO,
400,000 5.60%, due 08/01/2010 ......................... 447,888
------------
Opelika, AL, GO,
100,000 5.30%, due 07/01/2003 ......................... 101,046
------------
Scottsboro, AL, Waterworks Sewer & Gas Board, Rev.,
200,000 4.35%, due 08/01/2011 ......................... 209,320
------------
Shelby Co., AL, Board of Education, GO Warrants,
315,000 4.75%, due 02/01/2009 ......................... 345,382
------------
500,000 Shelby Co., AL, Board of Education, Rev. Warrants,
4.80%, due 02/01/2011 ......................... 538,585
------------
Trussville, AL, Warrants,
400,000 4.30%, due 10/01/2010 ......................... 427,068
------------
Tuscaloosa, AL, Board of Education, GO,
100,000 5.10%, due 02/01/2004 ......................... 103,299
300,000 4.625%, due 08/01/2008 ........................ 321,528
------------
424,827
------------
Tuscaloosa, AL, Board of Education,
Special Tax Warrants,
300,000 4.85%, due 02/15/2013 ......................... 320,112
------------
Tuscaloosa, AL, GO Warrants,
500,000 5.45%, due 01/01/2014 ......................... 555,415
------------
Tuscaloosa Co., AL, GO Warrants,
425,000 4.30%, due 10/01/2009 ......................... 458,269
------------
University of Alabama, AL, Hospital Board, Rev.,
400,000 5.00%, due 10/01/2014 ......................... 407,996
------------
University of Alabama, AL, Series A, Rev.,
400,000 5.25%, due 06/01/2010 ......................... 445,352
100,000 5.375%, due 06/01/2013 ........................ 110,871
------------
556,223
------------
25
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.1% (Continued) VALUE
- --------------------------------------------------------------------------------
Vestavia Hills, AL, Warrants,
$ 125,000 4.90%, due 04/01/2005 ......................... $ 131,691
565,000 5.00%, due 02/01/2012 ......................... 621,585
------------
753,276
------------
TOTAL ALABAMA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (Cost $31,660,264) ........ $ 33,713,392
------------
================================================================================
SHARES MONEY MARKETS -- 3.7% VALUE
================================================================================
1,307,689 First American Tax-Free Obligation Fund -
Class S (Cost $1,307,689) ....................... $ 1,307,689
------------
TOTAL INVESTMENTS AT VALUE-- 100.8%
(Cost $32,967,953) .............................. $ 35,021,081
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.8%) .. (292,529)
------------
NET ASSETS-- 100.0% ............................. $ 34,728,552
============
(a) When-issued security.
ETM - Escrowed to maturity.
See accompanying notes to financial statements.
26
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Government Street Equity Fund, The Government Street Bond Fund, and The
Alabama Tax Free Bond Fund (the Funds) are each a no-load series of the
Williamsburg Investment Trust (the Trust). The Trust, an open-end management
investment company registered under the Investment Company Act of 1940, was
organized as a Massachusetts business trust on July 18, 1988.
The Government Street Equity Fund's investment objective is to seek capital
appreciation through the compounding of dividends and capital gains, both
realized and unrealized, by investing in common stocks.
The Government Street Bond Fund's investment objectives are to preserve capital,
to provide current income and to protect the value of the portfolio against the
effects of inflation.
The Alabama Tax Free Bond Fund's investment objectives are to provide current
income exempt from federal income taxes and from the personal income taxes of
Alabama and to preserve capital.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities which are traded over-the-counter
are valued at the last sales price, if available, otherwise, at the last quoted
bid price.
Securities traded on a national stock exchange are valued based upon the closing
price on the principal exchange where the security is traded. It is expected
that fixed income securities will ordinarily be traded in the over-the-counter
market, and common stocks will ordinarily be traded on a national securities
exchange, but may also be traded in the over-the-counter market. When market
quotations are not readily available, fixed income securities may be valued on
the basis of prices provided by an independent pricing service.
Repurchase agreements -- The Funds may enter into joint repurchase agreements
with other funds within the Trust. The joint repurchase agreement, which is
collateralized by U.S. Government obligations, is valued at cost which, together
with accrued interest, approximates market value. At the time the Funds enter
into the joint repurchase agreement, the Funds take possession of the underlying
securities and the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the face
amount of the repurchase agreement. In addition, each Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
27
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 (CONTINUED)
================================================================================
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on fixed-income
securities purchased are amortized using the interest method.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of The Government Street Equity
Fund; declared and paid monthly to shareholders of The Government Street Bond
Fund; and declared daily and paid monthly to shareholders of The Alabama Tax
Free Bond Fund. 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. The amount of distributions from
net investment income and net realized gains are determined in accordance with
federal income tax regulations which may differ from accounting principles
generally accepted in the United States of America. There were no differences
between the book and tax basis of distributions for the years ended March 31,
2003 and 2002.
Security transactions -- Security transactions are accounted for on trade date.
Cost of securities sold is determined on a specific identification basis.
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 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 each 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 a 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 each 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.
28
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 (CONTINUED)
================================================================================
The tax character of distributable earnings at March 31, 2003 was as follows:
- --------------------------------------------------------------------------------
Government Government Alabama Tax
Street Equity Street Bond Free Bond
Fund Fund Fund
- --------------------------------------------------------------------------------
Undistributed Ordinary Income .. $ 3,698 $ 5,692 $ --
Capital Loss Carryforwards ..... (2,862,276) (1,041,038) (167,203)
Other Losses ................... (102,746) (186,769) --
Unrealized Appreciation ........ 6,255,457 2,756,220 2,008,169
----------- ----------- -----------
Total Distributable Earnings ... $ 3,294,133 $ 1,534,105 $ 1,840,966
=========== =========== ===========
- --------------------------------------------------------------------------------
As of March 31, 2003, the Funds had the following capital loss carryforwards for
federal income tax purposes. These capital loss carryforwards may be utilized in
the future years to offset net realized capital gains, if any, prior to
distribution to shareholders.
- --------------------------------------------------------------------------------
EXPIRES
AMOUNT MARCH 31,
- --------------------------------------------------------------------------------
Government Street Equity Fund $ 277,085 2009
2,585,191 2011
-----------
$ 2,862,276
===========
- --------------------------------------------------------------------------------
Government Street Bond Fund $ 106,397 2004
129,539 2005
126,569 2006
106,011 2007
220,187 2008
195,097 2009
87,182 2010
70,056 2011
-----------
$ 1,041,038
===========
- --------------------------------------------------------------------------------
Alabama Tax Free Bond Fund $ 108,458 2004
347 2007
58,398 2009
-----------
$ 167,203
===========
- --------------------------------------------------------------------------------
In addition, The Government Street Equity Fund and The Government Street Bond
had net realized capital losses of $102,746 and $186,769, respectively, during
the period November 1, 2002 through March 31, 2003, which are treated for
federal income tax purposes as arising during the Funds' tax year ending March
31, 2004. These "post-October" losses may be utilized in future years to offset
net realized capital gains prior to distributing such gains to shareholders.
For the year ended March 31, 2003, The Government Street Bond Fund reclassified
accumulated net realized losses of $64,123 against paid-in capital on the
Statement of Assets and Liabilities due to the expiration of
29
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 (CONTINUED)
================================================================================
capital loss carryforwards. Such reclassification has no effect on the Fund's
net assets or net asset value per share.
The following information is based upon the federal income tax cost of portfolio
investments of each Fund as of March 31, 2003:
- --------------------------------------------------------------------------------
GOVERNMENT GOVERNMENT ALABAMA
STREET STREET TAX FREE
EQUITY FUND BOND FUND BOND FUND
- --------------------------------------------------------------------------------
Gross unrealized appreciation $ 21,837,663 $ 2,916,973 $ 2,010,880
Gross unrealized depreciation (15,582,206) (160,753) (2,711)
------------ ------------ ------------
Net unrealized appreciation . $ 6,255,457 $ 2,756,220 $ 2,008,169
============ ============ ============
Federal income tax cost ..... $ 81,511,156 $ 56,432,432 $ 33,012,912
============ ============ ============
- --------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for The Government Street Bond Fund and The Alabama
Tax Free Bond Fund is due to certain timing differences in the recognition of
capital gains or losses under income tax regulations and accounting principles
generally accepted in the United States of America.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2003, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $21,994,156 and $10,971,672, respectively, for The Government Street
Equity Fund, $24,253,707 and $20,614,494, respectively, for The Government
Street Bond Fund, and $5,641,128 and $2,956,100, respectively, for The Alabama
Tax Free Bond Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by T. Leavell & Associates, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, The Government Street Equity Fund pays the
Adviser a fee, which is computed and accrued daily and paid monthly, at an
annual rate of .60% of its average daily net assets up to $100 million and .50%
of such assets in excess of $100 million. The Government Street Bond Fund pays
the Adviser a fee at an annual rate of .50% of its average daily net assets up
to $100 million and .40% of such net assets in excess of $100 million. The
Alabama Tax Free Bond Fund pays the Adviser a fee at an annual rate of .35% of
its average daily net assets up to $100 million and .25% of such net assets in
excess of $100 million.
The Adviser currently intends to limit the total operating expenses of The
Alabama Tax Free Bond Fund to .65% of its average daily net assets. Accordingly,
the Adviser voluntarily waived $13,765 of its investment advisory fees from The
Alabama Tax Free Bond Fund during the year ended March 31, 2003.
Certain Trustees and officers of the Trust are also officers of the Adviser.
30
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 (CONTINUED)
================================================================================
MUTUAL FUND SERVICES AGREEMENT
Under the terms of a Mutual Fund Services Agreement between the Trust and
Ultimus Fund Solutions, LLC (Ultimus), Ultimus provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, Ultimus receives a monthly fee from
The Government Street Equity Fund and The Alabama Tax Free Bond Fund at an
annual rate of .15% of each Fund's average daily net assets up to $25 million;
..125% of the next $25 million of such assets; and .10% of such net assets in
excess of $50 million. From The Government Street Bond Fund, Ultimus receives a
monthly fee at an annual rate of .075% of the Fund's average daily net assets up
to $200 million and .05% of such assets in excess of $200 million. In addition,
each Fund pays out-of-pocket expenses including, but not limited to, postage,
supplies and costs of pricing the Funds' portfolio securities.
Certain officers of the Trust are also officers of Ultimus, or of Ultimus Fund
Distributors, LLC, the principal underwriter of each Fund's shares and an
affiliate of Ultimus.
31
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Board of Trustees
The Williamsburg Investment Trust
Cincinnati, Ohio
We have audited the accompanying statements of assets and liabilities of
The Government Street Equity Fund, The Government Street Bond Fund and The
Alabama Tax Free Bond Fund, (each a series of The Williamsburg Investment
Trust), including the portfolios of investments, as of March 31, 2003, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 2003 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of The
Government Street Equity Fund, The Government Street Bond Fund and The Alabama
Tax Free Bond Fund, as of March 31, 2003, the results of their operations for
the year then ended, the changes in their net assets for each of the two years
in the period then ended and their financial highlights for each of the five
years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 25, 2003
32
BOARD OF TRUSTEES AND EXECUTIVE
OFFICERS (UNAUDITED)
================================================================================
Overall responsibility for management of the Fund rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Fund to actively supervise its day-to-day
operations. The officers have been elected for an annual term. The following are
the Trustees and executive officers of the Fund:
POSITION HELD LENGTH OF
TRUSTEE ADDRESS AGE WITH THE TRUST TIME SERVED
- ---------------------------------------------------------------------------------------------------
*Charles M. Caravati, Jr. 931 Broad Street Road 66 Chairman Since
Manakin-Sabot, VA and Trustee June 1991
*Austin Brockenbrough III 1802 Bayberry Court 66 Trustee Since
Suite 400 September 1988
Richmond, VA
*John T. Bruce 800 Main Street 49 Trustee Since
Lynchburg, VA September 1988
*Richard Mitchell 150 Government Street 53 Trustee Since
Mobile, AL and President June 1991
J. Finley Lee 200 Westminster Drive 63 Trustee Since
Chapel Hill, NC September 1988
Richard L. Morrill University of Richmond 63 Trustee Since
Richmond, VA March 1993
Harris V. Morrissette 100 Jacintoport Blvd 43 Trustee Since
Saraland, AL March 1993
Erwin H. Will, Jr. 47 Willway Avenue 70 Trustee Since
Richmond, VA July 1997
Samuel B. Witt III 2300 Clarendon Blvd 67 Trustee Since
Suite 407 November 1988
Arlington, VA
Timothy S. Healey 600 Luckie Drive 50 Vice President Since
Suite 305 of The Alabama January 1995
Birmingham, AL Tax Free
Bond Fund
Robert G. Dorsey 135 Merchant Street 46 Vice President Since
Suite 230 November 2000
Cincinnati, OH
Mark J. Seger 135 Merchant Street 41 Treasurer Since
Suite 230 November 2000
Cincinnati, OH
John F. Splain 135 Merchant Street 46 Secretary Since
Suite 230 November 2000
Cincinnati, OH
33
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
*Messrs. Bruce, Brockenbrough, Caravati and Mitchell are "interested persons" of
the Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati III, an
officer of The Jamestown Funds, which are other portfolios of the Trust.
Each Trustee oversees ten portfolios of the Trust, including the Funds. The
principal occupations of the Trustees and executive officers of the Funds during
the past five years and public directorships held by the Trustees are set forth
below:
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of Lowe,
Brockenbrough & Company, Inc. (an investment advisory firm). He is a member of
the Board of Directors of Tredegar Industries, Inc. (a plastics manufacturer)
and Wilkinson O'Grady & Co., Inc. (a global asset manager). In addition, he is a
member of the Board of Trustees for the University of Richmond.
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
Richard Mitchell is a Principal of the Adviser.
J. Finley Lee is a financial consultant and the Julian Price Professor Emeritus
at the University of North Carolina. In addition, he is a member of the Board of
Trustees of the Albemarle Investment Trust (a registered investment company).
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (a manufacturer of polymers and chemicals).
Harris V. Morrissette is President of Marshall Biscuit Co., Inc. He is a member
of the Board of Directors of BancTrust Financial Group, Inc. (a bank holding
company) and EnergySouth, Inc. In addition, he is Chairman of Azalea Aviation,
Inc. (an airplane fueling company).
Erwin H. Will, Jr. is retired. Until December 31, 2001, he was the Managing
Director of Equities of Virginia Retirement System.
Samuel B. Witt III is Senior Vice President and General Counsel of Stateside
Associates, Inc. He is also a member of the Board of Directors of The Swiss
Helvetia Fund, Inc. (a closed-end investment company).
Timothy S. Healey is a Principal of the Adviser.
34
BOARD OF TRUSTEES AND EXECUTIVE
OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC. Prior to March 1999, he was President of
Countrywide Fund Services, Inc. (a mutual fund services company).
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President of
Countrywide Fund Services, Inc.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC. Prior to March 1999, he was First Vice President and
Secretary of Countrywide Fund Services, Inc. and affiliated companies.
Additional information about members of the Board of Directors and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-866-738-1125.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, The Alabama Tax-Free Bond Fund
designates its respective dividends paid from net investment income during the
year ended March 31, 2003 as "exempt-interest dividends."
35
================================================================================
THE GOVERNMENT STREET FUNDS
---------------------------
No Load Mutual Funds
INVESTMENT ADVISER
T. Leavell & Associates, Inc.
150 Government Street
Post Office Box 1307
Mobile, AL 36633
ADMINISTRATOR
Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, OH 45246-0707
1-866-738-1125
LEGAL COUNSEL
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
BOARD OF TRUSTEES
Richard Mitchell, President
Austin Brockenbrough, III
John T. Bruce
Charles M. Caravati, Jr.
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
PORTFOLIO MANAGERS
Thomas W. Leavell,
The Government Street Equity Fund
Mary Shannon Hope,
The Government Street Bond Fund
Timothy S. Healey,
The Alabama Tax Free Bond Fund
================================================================================
ITEM 2. CODE OF ETHICS.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not required
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Not required
(b) Not required
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(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: Not applicable
(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): Attached hereto
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) Williamsburg Investment Trust
------------------------------------------------
By (Signature and Title)* /s/ John F. Splain
------------------------------------
John F. Splain, Secretary
Date May 26, 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 M. Flippin
------------------------------------
John M. Flippin, President (FBP Contrarian Equity
Fund and FBP Contrarian Balanced Fund)
Date May 26, 2003
-----------------------
By (Signature and Title)* /s/ Richard Mitchell
------------------------------------
Richard Mitchell, President (The Government Street
Equity Fund, The Government Street Bond Fund and
The Alabama Tax Free Bond Fund)
Date May 26, 2003
-----------------------
By (Signature and Title)* /s/ Charles M. Caravati III
------------------------------------
Charles M. Caravati III, President (The Jamestown
Balanced Fund, The Jamestown Equity Fund and The
Jamestown International Equity Fund)
Date May 26, 2003
-----------------------
By (Signature and Title)* /s/ Beth Ann Gustafson
------------------------------------
Beth Ann Gustafson, President (The Jamestown Tax
Exempt Virginia Fund)
Date May 28, 2003
-----------------------
By (Signature and Title)* /s/ Joseph L. Antrim III
------------------------------------
Joseph L. Antrim III, President (The Davenport
Equity Fund)
Date May 28, 2003
-----------------------
By (Signature and Title)* /s/ Mark J. Seger
------------------------------------
Mark J. Seger, Treasurer
Date May 28, 2003
-----------------------
* Print the name and title of each signing officer under his or her signature.