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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)
225 Pictoria Drive, Suite 450 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, 2006
---------------------------------------------
Date of reporting period: March 31, 2006
---------------------------------------------
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 DAVENPORT EQUITY FUND
LETTER TO SHAREHOLDERS MAY 4, 2006
================================================================================
Dear Shareholders,
The following chart represents the Davenport Equity Fund's performance and the
performance of the S&P 500 Index, the Fund's primary benchmark, for the periods
ending March 31, 2006.
Since Inception **
Q1 2006 1 Year 3 Year** 5 Year** (1/15/98)
-----------------------------------------------------------
DAVPX 3.45% 9.48% 16.10% 5.02% 4.89%
S&P 500* 4.21% 11.73% 17.22% 3.97% 5.44%
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance data quoted. Performance
data, current to the most recent month end, may be obtained by calling
1-888-285-1863
* The S&P 500 Index is comprised of 500 U.S. stocks and is an indicator of
the performance of the overall U.S. stock market. An investor cannot invest
in an index and its returns are not indicative of the performance of any
specific investment.
** Annualized
MARKET COMMENTARY
Despite a stubborn Federal Reserve, rebounding energy prices and bankruptcy
being suggested as a possibility for one of the world's largest corporations
(General Motors), stocks had one of their best quarters in years. The Standard &
Poor's 500 gained 4.2% and the Dow Jones Industrial Average fared slightly
better returning 4.4%. As the old investor aphorism suggests, the market climbs
a wall of worry. Or perhaps more to the point, investors are choosing to ignore
news which typically can cause the market to trend lower by being far more
enamored with positive investment fundamentals.
Corporate balance sheets are the strongest they have been for some years showing
good liquidity and lower debt levels. Corporate profits jumped 14% with profit
margins a record 13.8% in the fourth quarter. The U.S. Commerce Secretary
recently reported healthy levels of job creation while unemployment has dropped
to 4.7%. Record levels of corporate stock buybacks occurred in 2005 while
mergers and acquisitions were up 38% during the year. Without question, these
positive developments have helped boost investor confidence and drive cash into
stocks. According to Barron's, equity mutual funds took in 80% more in net cash
in the first two months of this year than in the same period last year. If
Morgan Stanley is correct, S&P 500 companies are forecast to show a 10.2% rise
in first quarter net earnings which would make eleven consecutive quarters of
double-digit gains offering further incentive for investors.
What has been elusive over the past six years is competitive performance of
large-cap stocks versus their small and mid-cap counterparts. While we view this
as more of a cyclical event rather than any statement investors are making, it
is increasingly hard not to notice the very reasonable values in the large-cap
equity sector. At the end of March, the Russell Top 50 mega-cap stocks had an
average price earnings ratio of 16.4 versus the Russell 2000 small-cap index of
21.6. Combined with an average yield of 2.4% as compared to 1.0% for the
small-cap equities, an attractive total return picture unfolds. While reasonable
valuation does not guarantee out performance, we do believe as capital continues
to enter the stock market and the probability of a cyclical shift to large-caps
takes hold, a better showing from this group is likely.
1
FUND HIGHLIGHTS
In the Davenport Equity Fund during the past twelve months, we saw continued
strength in the energy sector, in spite of nearly three years ascendancy. Strong
demand for energy and renewed efforts to discover and extract new sources of
petroleum has kept this sector favorable in the eyes of many investors, and the
Fund's overweight position in this sector helped our relative performance.
The telecommunications and information technology sectors also contributed to
positive returns in the Fund, fueled by corporate spending and demand for the
latest technologically advanced hardware available, recently illustrated by
strength in sales of the latest generation of wireless phones. However, the
valuations of many companies in these industries gives us pause, and our
combined technology and telecommunications weighting is less than that of the
S&P 500, a factor that contributed to the Fund's performance slightly lagging
the index.
Financial stocks bucked a trend that suggested they would perform poorly during
periods of rising interest rates. Much of this performance can be attributed to
the insurance, investment banking, and real estate companies in the finance
sector, which are less susceptible to spread-based income. We have exposure to
these areas, but we remain underweighted versus the broader market. We are
generally cautious of the group overall based upon the assumption that interest
rates may move higher.
Positive contributions from the aforementioned areas were tempered by a poor
showing from the healthcare sector, but we believe that long term trends and
demographics show potential for growth. We are mindful that there is more to
investing than a review of a company's balance sheet. Factors not related to
financial performance weigh heavily on this industry, including litigation and
regulatory issues. Nevertheless, we believe that current valuations in the
health care sector are attractive, and that investors will eventually gravitate
to what has historically been a growth-oriented industry. The Fund currently
maintains a roughly equal weight in the health care sector to the S&P 500.
The majority of 2006 has yet to unfold and as is always the case, there are
plenty of issues to be navigated. The impact of high interest rates and energy
prices on the consumer, the Iraq war, Iran's nuclear intentions and a new Fed
chairman's philosophical impact on monetary policy, to name a few. One thing
seems sure: very few investors are complacent at this point. The Davenport
Equity Fund will continue to seek out investments which represent modest risk to
capital without sacrificing growth potential from strength in the global
economy.
In A CONNECTICUT YANKEE IN KING ARTHUR'S COURT, MARK TWAIN wrote, "it has never
been my way to bother much about things which you can't cure." True enough for
those who will listen. We, of course, will keep a sharp eye on the market ball.
As always, we would be happy to discuss your investments at any time. Thank you
for your trust.
Sincerely,
Joseph L. Antrim, III
President
Davenport Equity Fund
2
THE DAVENPORT EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
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]
STANDARD & POOR'S 500 INDEX THE DAVENPORT EQUITY FUND
---------------------------- -------------------------
DATE BALANCE DATE BALANCE
---- ------- -------- -------
01/15/98 $ 10,000 01/15/98 $ 10,000
03/31/98 11,625 03/31/98 11,140
06/30/98 12,009 06/30/98 11,295
09/30/98 10,814 09/30/98 9,950
12/31/98 13,118 12/31/98 11,519
03/31/99 13,771 03/31/99 12,090
06/30/99 14,742 06/30/99 12,709
09/30/99 13,821 09/30/99 11,920
12/31/99 15,878 12/31/99 13,321
03/31/00 16,242 03/31/00 13,894
06/30/00 15,810 06/30/00 13,456
09/30/00 15,657 09/30/00 13,330
12/31/00 14,432 12/31/00 13,226
03/31/01 12,721 03/31/01 11,580
06/30/01 13,466 06/30/01 11,966
09/30/01 11,489 09/30/01 10,738
12/31/01 12,717 12/31/01 11,706
03/31/02 12,752 03/31/02 11,915
06/30/02 11,043 06/30/02 10,913
09/30/02 9,136 09/30/02 9,288
12/31/02 9,906 12/31/02 9,801
03/31/03 9,594 03/31/03 9,453
06/30/03 11,071 06/30/03 10,784
09/30/03 11,364 09/30/03 11,204
12/31/03 12,748 12/31/03 12,272
03/31/04 12,964 03/31/04 12,640
06/30/04 13,187 06/30/04 12,677
09/30/04 12,941 09/30/04 12,479
12/31/04 14,135 12/31/04 13,674
03/31/05 13,832 03/31/05 13,514
06/03/05 14,021 06/03/05 13,535
09/30/05 14,526 09/30/05 14,003
12/31/05 14,829 12/31/05 14,302
03/31/06 15,453 03/31/06 14,795
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS SINCE INCEPTION*
The Davenport Equity Fund 9.48% 5.02% 4.89%
Standard & Poor's 500 Index 11.73% 3.97% 5.44%
- --------------------------------------------------------------------------------
* 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.
3
THE DAVENPORT EQUITY FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
SECTOR CONCENTRATION VS. THE STANDARD & POOR'S 500 INDEX (% of NET ASSETS)
[GRAPHIC OMITTED]
Davenport Equity Standard & Poor's
Fund 500 Index
-------------------------------------
Consumer Discretionary 12.5% 10.2%
Consumer Staples 10.5% 9.3%
Energy 12.8% 9.6%
Financials 17.7% 21.0%
Health Care 13.1% 12.9%
Industrials 8.2% 11.5%
Information Technology 10.1% 16.0%
Materials 8.4% 3.0%
Telecommunication Services 4.3% 3.3%
Utilities 1.4% 3.2%
Cash Equivalents 1.0% 0.0%
TOP TEN HOLDINGS
% OF
SECURITY DESCRIPTION NET ASSETS
- ------------------------------------------------- ----------
Microsoft Corporation 3.0%
Markel Corporation 2.7%
Harrah's Entertainment, Inc. 2.7%
Praxair, Inc. 2.6%
Johnson & Johnson 2.5%
Capital One Financial Corporation 2.5%
America Movil, S.A. de C.V. - Series L - ADR 2.4%
Amgen, Inc. 2.4%
Rio Tinto PLC - ADR 2.3%
Suncor Energy, Inc. 2.2%
4
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2006
================================================================================
ASSETS
Investments in securities:
At acquisition cost ....................................... $ 119,069,842
=============
At market value (Note 1) .................................. $ 149,082,294
Cash ........................................................ 3,408
Dividends receivable ........................................ 250,243
Receivable for capital shares sold .......................... 94,978
Other assets ................................................ 10,891
-------------
TOTAL ASSETS .............................................. 149,441,814
-------------
LIABILITIES
Dividends payable ........................................... 167,568
Payable for capital shares redeemed ......................... 228,917
Accrued investment advisory fees (Note 3) ................... 100,121
Accrued administration fees (Note 3) ........................ 17,600
Other accrued expenses and liabilities ...................... 4,969
-------------
TOTAL LIABILITIES ......................................... 519,175
-------------
NET ASSETS .................................................... $ 148,922,639
=============
Net assets consist of:
Paid-in capital ............................................... $ 119,198,703
Undistributed net investment income ........................... 15,277
Distributions in excess of net realized gains from
security transactions ....................................... (303,793)
Net unrealized appreciation on investments .................... 30,012,452
-------------
Net assets .................................................... $ 148,922,639
=============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) .................. 10,644,761
=============
Net asset value, offering price and redemption price
per share (Note 1) .......................................... $ 13.99
=============
See accompanying notes to financial statements.
5
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2006
================================================================================
INVESTMENT INCOME
Dividends ................................................... $ 2,128,510
-------------
EXPENSES
Investment advisory fees (Note 3) ........................... 1,074,250
Administration fees (Note 3) ................................ 203,323
Custodian fees .............................................. 18,886
Postage and supplies ........................................ 18,876
Compliance service fees (Note 3) ............................ 18,007
Professional fees ........................................... 17,768
Trustees' fees and expenses ................................. 13,591
Printing of shareholder reports ............................. 12,909
Registration fees ........................................... 12,462
Insurance expense ........................................... 8,310
Other expenses .............................................. 12,147
-------------
TOTAL EXPENSES ............................................ 1,410,529
-------------
NET INVESTMENT INCOME ......................................... 717,981
-------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions ............... 8,334,845
Net change in unrealized appreciation/depreciation
on investments ............................................ 4,083,467
-------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS .............. 12,418,312
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .................... $ 13,136,293
=============
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,
2006 2005
- --------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................ $ 717,981 $ 731,488
Net realized gains from security transactions .... 8,334,845 3,322,258
Net change in unrealized appreciation/depreciation
on investments ................................. 4,083,467 4,735,057
------------- -------------
Net increase in net assets from operations ......... 13,136,293 8,788,803
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ....................... (711,074) (728,398)
From net realized capital gains on security
transactions ................................... (2,709,239) --
------------- -------------
Net decrease in net assets from distributions to
shareholders ..................................... (3,420,313) (728,398)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................ 19,222,183 23,041,396
Net asset value of shares issued in
reinvestment of distributions to shareholders .. 3,209,394 677,059
Payments for shares redeemed ..................... (21,405,847) (15,366,719)
------------- -------------
Net increase in net assets from capital share
transactions ..................................... 1,025,730 8,351,736
------------- -------------
TOTAL INCREASE IN NET ASSETS ....................... 10,741,710 16,412,141
NET ASSETS
Beginning of year ................................ 138,180,929 121,768,788
------------- -------------
End of year ...................................... $ 148,922,639 $ 138,180,929
============= =============
UNDISTRIBUTED NET INVESTMENT INCOME ................ $ 15,277 $ 8,370
============= =============
CAPITAL SHARE ACTIVITY
Sold ............................................. 1,421,580 1,834,781
Reinvested ....................................... 230,611 52,020
Redeemed ......................................... (1,570,649) (1,224,506)
------------- -------------
Net increase in shares outstanding ............... 81,542 662,295
Shares outstanding at beginning of year .......... 10,563,219 9,900,924
------------- -------------
Shares outstanding at end of year ................ 10,644,761 10,563,219
============= =============
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
- ----------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
---------------------------------------------------------------------------
2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 13.08 $ 12.30 $ 9.23 $ 11.71 $ 11.42
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ............................ 0.07 0.07 0.04 0.06 0.04
Net realized and unrealized gains
(losses) on investments ........................ 1.17 0.78 3.07 (2.48) 0.29
----------- ----------- ----------- ----------- -----------
Total from investment operations ................... 1.24 0.85 3.11 (2.42) 0.33
----------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income ............. (0.07) (0.07) (0.04) (0.06) (0.04)
Distributions from net realized gains ............ (0.26) -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions ................................ (0.33) (0.07) (0.04) (0.06) (0.04)
----------- ----------- ----------- ----------- -----------
Net asset value at end of year ..................... $ 13.99 $ 13.08 $ 12.30 $ 9.23 $ 11.71
=========== =========== =========== =========== ===========
Total return(a) .................................... 9.48% 6.91% 33.72% (20.66%) 2.89%
=========== =========== =========== =========== ===========
Net assets at end of year (000's) .................. $ 148,923 $ 138,181 $ 121,769 $ 76,473 $ 82,515
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ........ 0.98% 0.98% 1.00% 1.04% 1.02%
Ratio of net investment income to average net assets 0.50% 0.57% 0.35% 0.62% 0.35%
Portfolio turnover rate ............................ 39% 28% 25% 18% 13%
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
See accompanying notes to financial statements.
8
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 99.0% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 12.5%
92,016 CarMax, Inc. (a) ................................ $ 3,007,083
62,706 E.W. Scripps Company - Class A (The) ............ 2,803,585
51,240 Harrah's Entertainment, Inc. .................... 3,994,670
83,550 Honda Motor Company Limited ..................... 2,586,708
31,500 International Speedway Corporation .............. 1,603,350
35,209 Lowe's Companies, Inc. .......................... 2,268,868
82,028 Walt Disney Company (The) ....................... 2,287,761
-------------
18,552,025
-------------
CONSUMER STAPLES -- 10.5%
44,834 Colgate-Palmolive Company ....................... 2,560,021
44,000 PepsiCo, Inc. ................................... 2,542,760
84,360 Sysco Corporation ............................... 2,703,738
66,021 Walgreen Company ................................ 2,847,486
57,080 Wal-Mart Stores, Inc. ........................... 2,696,459
36,419 Wm. Wrigley Jr. Company ......................... 2,330,816
-------------
15,681,280
-------------
ENERGY -- 12.8%
50,000 Chevron Corporation ............................. 2,898,500
45,500 ConocoPhillips .................................. 2,873,325
26,852 EOG Resources, Inc. ............................. 1,933,344
40,973 Exxon Mobil Corporation ......................... 2,493,617
40,875 GlobalSantaFe Corporation ....................... 2,483,156
24,309 Schlumberger Limited ............................ 3,076,790
42,948 Suncor Energy, Inc. ............................. 3,307,855
-------------
19,066,587
-------------
FINANCIALS -- 17.7%
49,908 American International Group, Inc. .............. 3,298,420
61,400 BB&T Corporation ................................ 2,406,880
840 Berkshire Hathaway, Inc. - Class B (a) .......... 2,530,080
52,322 Brookfield Asset Management, Inc. ............... 2,880,849
45,937 Capital One Financial Corporation ............... 3,698,847
49,350 Citigroup, Inc. ................................. 2,331,294
12,056 Markel Corporation (a) .......................... 4,071,070
27,450 T. Rowe Price Group, Inc. ....................... 2,146,865
54,460 Wachovia Corporation ............................ 3,052,483
-------------
26,416,788
-------------
HEALTHCARE -- 13.1%
48,741 Amgen, Inc. (a) ................................. 3,545,908
48,971 Eli Lilly & Company ............................. 2,708,096
62,886 Johnson & Johnson ............................... 3,724,109
33,464 Medtronic, Inc. ................................. 1,698,298
50,000 Teva Pharmaceutical Industries Limited - ADR .... 2,059,000
42,061 WellPoint, Inc. (a) ............................. 3,256,783
37,314 Zimmer Holdings, Inc. (a) ....................... 2,522,427
-------------
19,514,621
-------------
9
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.0% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 8.2%
49,150 Danaher Corporation ............................. $ 3,123,483
92,475 General Electric Company ........................ 3,216,280
34,421 United Parcel Service, Inc. - Class B ........... 2,732,339
53,925 United Technologies Corporation ................. 3,126,032
-------------
12,198,134
-------------
INFORMATION TECHNOLOGY -- 10.1%
96,738 Dell, Inc. (a) .................................. 2,878,923
5,265 Google, Inc. (a) ................................ 2,053,350
162,784 Microsoft Corporation ........................... 4,429,353
157,225 Nokia Oyj - ADR ................................. 3,257,702
76,300 Texas Instruments, Inc. ......................... 2,477,461
-------------
15,096,789
-------------
MATERIALS -- 8.4%
84,406 Cameco Corporation .............................. 3,038,616
55,979 Dow Chemical Company (The) ...................... 2,272,747
70,260 Praxair, Inc. ................................... 3,874,839
16,294 Rio Tinto PLC - ADR ............................. 3,372,858
-------------
12,559,060
-------------
TELECOMMUNICATIONS SERVICES -- 4.3%
105,882 America Movil S.A. de C.V. - Series L - ADR ..... 3,627,517
82,100 Verizon Communications, Inc. .................... 2,796,326
-------------
6,423,843
-------------
UTILITIES -- 1.4%
28,891 Dominion Resources, Inc. ........................ 1,994,346
-------------
TOTAL COMMON STOCKS (Cost $117,491,021) $ 147,503,473
-------------
================================================================================
SHARES MONEY MARKET FUNDS -- 1.1% VALUE
- --------------------------------------------------------------------------------
1,578,821 First American Treasury Obligation Fund - Class Y
(Cost $1,578,821).............................. $ 1,578,821
-------------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $119,069,842)............................ $ 149,082,294
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%).. (159,655)
-------------
NET ASSETS -- 100.0%............................. $ 148,922,639
=============
(a) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
10
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
================================================================================
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 traded on a national stock
exchange are valued based upon the closing price on the principal exchange where
the security is traded. Securities which are quoted by NASDAQ are valued at the
NASDAQ Official Closing Price. Securities which are traded over-the-counter are
valued at the last sales price, if available, otherwise, at the last quoted bid
price. 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. Short-term
instruments (those with remaining maturities of 60 days or less) are valued at
amortized cost, which approximates market value. Securities and other assets for
which no quotations are readily available will be valued in good faith at fair
value using methods determined by the Board of Trustees. Such methods of fair
valuation may include, but are not limited to: multiple of earnings, multiple of
book value, discount from market of a similar freely traded security, purchase
price of security, subsequent private transactions in the security or related
securities, or a combination of these and other factors.
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. Discounts and premiums on fixed-income
securities purchased are amortized using the interest method.
Security transactions -- Security transactions are accounted for on trade date.
Gains and losses on securities sold are determined on a specific identification
basis.
Common expenses -- Common expenses of the Trust are allocated among the funds
within the Trust based on relative net assets of each fund or the nature of the
services performed and the relative applicability to each fund.
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
11
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
generally accepted in the United States. The tax character of distributions paid
during the years ended March 31, 2006 and March 31, 2005 was as follows:
- --------------------------------------------------------------------------------
YEARS ENDED ORDINARY INCOME LONG-TERM CAPITAL GAINS TOTAL
- --------------------------------------------------------------------------------
March 31, 2006 $ 711,074 $2,709,239 $ 3,420,313
March 31, 2005 $ 728,398 $ -- $ 728,398
- --------------------------------------------------------------------------------
Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 Subchapter M 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.
The following information is computed on a tax basis for each item as of March
31, 2006:
- --------------------------------------------------------------------------------
Cost of portfolio investments ................................. $ 119,374,162
=============
Gross unrealized appreciation ................................. $ 32,151,536
Gross unrealized depreciation ................................. (2,443,404)
-------------
Net unrealized appreciation ................................... $ 29,708,132
Undistributed ordinary income ................................. 26,502
Undistributed long-term gains ................................. 156,869
Other temporary differences ................................... (167,567)
-------------
Accumulated earnings .......................................... $ 29,723,936
=============
- --------------------------------------------------------------------------------
During the year ended March 31, 2006, the Fund utilized capital loss
carryforwards of $5,929,399 to offset current year realized gains.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2006, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments and
U.S. government securities, amounted to $55,073,780 and $55,130,223,
respectively.
12
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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.
The Chief Compliance Officer of the Fund (the CCO) is an employee of the
Adviser. The Fund pays the Adviser $18,000 annually for providing CCO services.
In addition, the Fund reimburses the Adviser for out-of-pocket expenses related
to CCO services.
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 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 accounts. 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. The Distributor receives no compensation from the Fund for
acting as principal underwriter.
4. CONTINGENCIES AND COMMITMENTS
The Fund indemnifies the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Fund.
Additionally, in the normal course of business the Fund enters into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. The Fund's maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Fund that have not yet occurred. However, based on experience, the Fund expects
the risk of loss to be remote.
13
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees
of The Davenport Equity Fund of the Williamsburg Investment Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Davenport Equity Fund (the "Fund") (a
series of Williamsburg Investment Trust) as of March 31, 2006, and the related
statement 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 three 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 and financial highlights based on our audits. The financial
highlights presented for each of the two years in the period ended March 31,
2003 were audited by other auditors whose report dated April 25, 2003, expressed
an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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.
We were not engaged to perform an audit of the Fund's internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2006 by correspondence with the custodian.
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, 2006, 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 three years
in the period then ended in conformity with U.S. generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 12, 2006
14
THE DAVENPORT EQUITY FUND
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. 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/OFFICER ADDRESS AGE WITH THE TRUST TIME SERVED
- ----------------------------------------------------------------------------------------------------------------------------------
*Charles M. Caravati, Jr. 931 Broad Street Road, Manakin-Sabot, VA 69 Chairman and Trustee Since June 1991
*Austin Brockenbrough III 1802 Bayberry Court, Suite 400, Richmond, VA 69 Trustee Since September 1988
*John T. Bruce 800 Main Street, Lynchburg, VA 52 Trustee Since September 1988
J. Finley Lee 448 Pond Apple Drive North, Naples, FL 66 Trustee Since September 1988
Richard L. Morrill University of Richmond, Richmond, VA 66 Trustee Since March 1993
Harris V. Morrissette 100 Jacintoport Boulevard, Saraland, AL 46 Trustee Since March 1993
Erwin H. Will, Jr. 47 Willway Avenue, Richmond, VA 73 Trustee Since July 1997
Samuel B. Witt III 302 Clovelly Road, Richmond, VA 70 Trustee Since November 1988
Joseph L. Antrim III One James Center, 901 E. Cary Street, Richmond, VA 60 President Since November 1997
John P. Ackerly IV One James Center, 901 E. Cary Street, Richmond, VA 42 Vice President Since November 1997
J. Lee Keiger III One James Center, 901 E. Cary Street, Richmond, VA 51 Vice President Since November 1997
Laura E. Amory One James Center, 901 E. Cary Street, Richmond, VA 39 Chief Compliance Officer Since September 2004
Robert G. Dorsey 225 Pictoria Drive, Suite 450, Cincinnati, OH 49 Vice President Since November 2000
Mark J. Seger 225 Pictoria Drive, Suite 450, Cincinnati, OH 44 Treasurer Since November 2000
John F. Splain 225 Pictoria Drive, Suite 450, Cincinnati, OH 49 Secretary Since November 2000
*Messrs. Bruce, Brockenbrough and Caravati 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 eleven 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 Corporation (a plastics manufacturer) and
Wilkinson O'Grady & Co., Inc. (a global asset manager).
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.
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 (polymers and chemical manufacturer).
15
THE DAVENPORT EQUITY FUND
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED) (CONTINUED)
================================================================================
Harris V. Morrissette is Chief Executive Officer 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 the retired Chief Investment Officer of Equities of
Virginia Retirement System (VRS). Subsequent to his retirement, he temporarily
served as Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired 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 Senior Vice President and Portfolio Manager of the
Adviser.
J. Lee Keiger III is Senior Vice President and Chief Financial Officer of the
Adviser.
Laura E. Amory is Director of Compliance of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Additional information about members of the Board of Trustees 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.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
For the fiscal year ended March 31, 2006, certain dividends paid by the Fund may
be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth
Tax Relief Reconciliation Act of 2003. The Fund intends to designate up to a
maximum amount of $3,420,313 as taxed at a maximum rate of 15%. For the fiscal
year ended March 31, 2006, 100% of the dividends paid from ordinary income by
the Fund qualified for the dividends received deduction for corporations.
Complete information will be computed and reported in conjunction with your 2006
Form 1099-DIV.
16
THE DAVENPORT EQUITY FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Fund, you incur ongoing costs, including management fees and other Fund
expenses. Operating expenses, which are deducted from the Fund's gross income,
directly reduce the investment return of the Fund.
A fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The following examples are intended to
help you understand the ongoing costs (in dollars) of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds. The examples below are based on an investment of $1,000 made at the
beginning of the period shown and held for the entire period.
The table below illustrates the Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from the
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Fund. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Fund under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Fund's
costs with those of other mutual funds. It assumes that the Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the return used is not the Fund's actual
return, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess the
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Fund does not charge transaction fees, such as
purchase or redemption fees, nor does it carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
More information about the Fund's expenses, including annual expense ratios
since inception, can be found in this report. For additional information on
operating expenses and other shareholder costs, please refer to the Fund's
prospectus.
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2005 March 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,056.60 $5.08
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.00 $4.99
- --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 0.99% for the
period, multiplied by the average account value over the period, multiplied
by 182/365 (to reflect the one-half year period).
17
THE DAVENPORT EQUITY FUND
OTHER INFORMATION (UNAUDITED)
================================================================================
A description of the policies and procedures that the Fund uses to vote proxies
relating to portfolio securities is available without charge upon request by
calling toll-free 1-800-281-3217, or on the Securities and Exchange Commission's
(SEC) website at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is also available without charge upon request by calling toll-free
1-800-281-3217, or on the SEC's website at http://www.sec.gov.
The Trust files a complete listing of portfolio holdings for the Fund with the
SEC as of the first and third quarters of each fiscal year on Form N-Q. These
filings are available upon request by calling 1-800-281-3217. Furthermore, you
may obtain a copy of these filings on the SEC's website at http://www.sec.gov.
The Trust's Forms N-Q may also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC, and information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
18
THE DAVENPORT EQUITY FUND
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
================================================================================
At an in-person meeting held on February 13, 2006, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance of
the Fund's Investment Advisory Agreement with the Adviser for a one-year period.
Below is a discussion of the factors considered by the Board of Trustees along
with the conclusions with respect thereto that formed the basis for the Board's
approval.
In selecting the Adviser and approving the continuance of the Investment
Advisory Agreement, the Trustees considered all information they deemed
reasonably necessary to evaluate the terms of the Agreement. The principal areas
of review by the Trustees were the nature, extent and quality of the services
provided by the Adviser and the reasonableness of the fees charged for those
services. These matters were considered by the Independent Trustees consulting
with experienced counsel who is independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Fund was considered. The
Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives and to the Adviser's
comparably managed private accounts. The Trustees also considered the scope and
quality of the in-house capabilities of the Adviser and other resources
dedicated to performing services for the Fund. The quality of administrative and
other services, including the Adviser's role in coordinating the activities of
the Fund's other service providers, were considered in light of the Fund's
compliance with investment policies and applicable laws and regulations and of
related reports by management and the Fund's independent public accountants in
periodic meetings with the Trust's Audit Committee. The Trustees also considered
the business reputation of the Adviser, the qualifications of its key investment
and compliance personnel, and its financial resources.
In reviewing the fees payable under the Investment Advisory Agreement, the
Trustees compared the advisory fees and overall expense levels of the Fund with
those of competitive funds with similar investment objectives as well as the
private accounts managed by the Adviser. The Trustees considered information
provided by the Adviser concerning the Adviser's profitability with respect to
the Fund, including the assumptions and methodology used in preparing the
profitability information, in light of applicable case law relating to advisory
fees. For these purposes, the Trustees took into account not only the fees paid
by the Fund, but also so-called "fallout benefits" to the Adviser. The Trustees
also considered the fact that all of the Fund's portfolio trades were executed
by the Adviser at no cost to the Fund. In evaluating the Fund's advisory fees,
the Trustees took into account the complexity and quality of the investment
management of the Fund.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the long-term performance of the Fund (which exceeded both
its benchmark and the average of funds within its Morningstar category for the
most recent 5-year period) and other services provided under the Investment
Advisory Agreement, they believe that the Adviser has provided high-quality
services to the Fund; (ii) although the advisory fees payable to the Adviser are
in the higher range of fees for other comparably managed funds, they believe the
fees to be reasonable given the quality of services provided by the Adviser; and
(iii) the total operating expense ratio of the Fund is competitive with
comparably managed funds, according to statistics calculated and published by
Morningstar, Inc., and the Adviser has further benefited the shareholders by
executing portfolio transactions at no cost to the Fund. Given the size of the
Fund and its expected growth, the Independent Trustees did not believe that at
the present time it would be relevant to consider the extent to which economies
of scale would be realized as the Fund grows, and whether fee levels reflect
these economies of scale. The Independent Trustees also considered the "fallout
benefits" to, and the profitability of, the Adviser but given the amounts
involved viewed these as secondary factors in connection with the evaluation of
the reasonableness of the advisory fees paid by the Fund.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreement. Rather the Trustees concluded, in light of a weighing and balancing
of all factors considered, that it was in the best interests of the Fund and its
shareholders to continue the Investment Advisory Agreement without modification
to its terms, including the fees charged for services thereunder.
19
================================================================================
THE DAVENPORT EQUITY FUND
INVESTMENT ADVISER
Davenport & Company LLC
One James Center
901 East Cary Street
Richmond, Virginia 23219-4037 -----------------------------
D A V E N P O R T
ADMINISTRATOR
Ultimus Fund Solutions, LLC EQUITY FUND
P.O. Box 46707 -----------
Cincinnati, Ohio 45246-0707 -----------------------------
1-800-281-3217
CUSTODIAN
US Bank
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
1900 Scripps Center
312 Walnut Street
Cincinnati, Ohio 45202
LEGAL COUNSEL
Sullivan & Worcester LLP ANNUAL REPORT
One Post Office Square MARCH 31, 2006
Boston, Massachusetts 02109
BOARD OF TRUSTEES
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
OFFICERS
Joseph L. Antrim III, President
J. Lee Keiger III, Vice President
John P. Ackerly IV, Vice President
Laura E. Amory, Chief Compliance Officer
================================================================================
================================================================================
----------------------------------------------------------------------------
THE
[GRAPHIC OMITTED] FLIPPIN, BRUCE & PORTER
FUNDS
========================
FBP VALUE FUND
FBP BALANCED FUND
ANNUAL REPORT
MARCH 31, 2006
NO-LOAD FUNDS
----------------------------------------------------------------------------
================================================================================
LETTER TO SHAREHOLDERS MAY 18, 2006
================================================================================
We are pleased to report on the progress of your fund and its investments for
the fiscal year ending March 31, 2006. Illustrated below are the returns over
the past year and longer time periods.
% Average Annual Returns
Periods Ending March 31, 2006
-------------------------------------
One Three Five Ten
Year Year Year Year
- --------------------------------------------------------------------------------
FBP Value Fund 12.03 19.79 6.61 9.41
FBP Balanced Fund 8.81 14.36 6.20 8.59
S&P 500 Index 11.73 17.22 3.97 8.95
Lehman Intermediate Government/
Credit Bond Index 2.08 2.33 4.71 5.85
Markets often "climb a wall of worry" and this was the case over the past year.
Your Funds benefited from a strong stock market in spite of many concerns:
record oil prices, often troubling news concerning the war in Iraq, fears over
Iran, and rising interest rates to name a few. However, a strong economy and
solid profit increases provided the support for above average returns. The
Funds' investments in the Information Technology and Consumer Discretionary
sectors were particularly helpful. Agilent and Hewlett-Packard were very strong
performers along with Best Buy and Whirlpool. Although the Funds' energy
exposure was reduced through stock sales during the fiscal year, security
selection in the Energy sector was beneficial. Marathon Oil was one of the best
performers in the group. Health Care provided mixed returns with strong
performance from Cigna and Wellpoint offset by the other holdings in the sector.
Both Cendant and Tyco International in the Industrials Sector announced
corporate restructurings and also reduced earnings forecasts, which disappointed
investors. These corporate restructurings involve splitting the companies into
smaller, separate, public companies. We expect the market will ultimately award
higher valuation multiples to the resulting company shares, unlocking additional
shareholder value. The fixed income portion of the Balanced Fund performed well
and as we expected. The Fund's short maturity structure, averaging 2.1 years,
acted to dampen the negative effects of the rise in both shorter and longer term
interest rates over the past year.
The question facing investors is, how will the economy, energy prices, inflation
and the war play out for the remainder of the year? Current economic indicators
remain mixed. While consumer confidence has improved, buoyed by a good jobs
market, there are signs that consumer spending is slowing. Likely contributing
to this slowdown are moderating housing price gains and continued high gasoline
prices. Corporations seem to be cautious despite high levels of liquidity, but
merger and acquisition activity has increased, which suggests that valuations
are attractive. High levels of government spending have been stimulative to the
economy and should remain an economic positive in the near term. Inflation has
once again become a concern. The lagged effects of a strong economy, higher
commodity costs and a weaker dollar may ultimately be reflected in higher
consumer prices. We continue to believe, however, that a modest slowdown in
economic growth is likely in the second half of the year. This would allow the
Federal Reserve to stop raising short-term interest rates, reduce inflationary
pressures that are building, and help to remove demand pressures in the energy
and commodity markets.
1
Energy prices have remained elevated despite record levels of global production
and domestic inventories. Geopolitical concerns seem to be outweighing
supply/demand dynamics as unrest in Nigeria and Iran's nuclear ambitions combine
to push up prices. Additionally, delays in restoring refining capacity after
Katrina, uncertainty about this year's hurricane season and reformulation
requirements for gasoline contribute to keep prices higher than normal. Natural
gas prices, however, have already retreated from their recent peak, thanks in
part to a warmer-than-average winter. We expect that the slowdown in economic
growth will bring about a reduction in energy demand and contribute to falling
prices across a broad spectrum of commodities.
As we look forward and search to find attractive investment opportunities for
the Funds, we continue to be enthusiastic about the valuations and outlook for
large capitalization stocks. Large caps have generally performed poorly over the
last several years compared to small- and mid-sized companies. Valuations for
these stocks are at attractive levels not seen since the 1980s and it appears
that new money may be flowing back into these issues. We expect this rotation
will benefit the Funds, which currently have approximately 45% of their equity
assets invested in 15 of the 25 largest stocks in the S&P 500. Our sector
weights, which are derived from our bottom-up investment process, also add to
our optimism. If we are correct about a slowing economy later in 2006, our
larger weights in Health Care and Technology combined with our underweights in
Energy, Materials and Utilities should result in favorable relative performance.
With regard to the fixed income portion of the Balanced Fund, we have been
positioned defensively for some time, patiently waiting for the rise in interest
rates. This posture has benefited the Fund. With the latest increases in Fed
Funds rate by the Federal Reserve, we are seeing interest rates rise to levels
that are more attractive for investment. Therefore, as cash becomes available
from maturities and new investors, we are beginning to modestly lengthen the
Balanced Fund's maturities.
We want to close by thanking you for placing your confidence in FBP as your
investment manager. Over our firm's 21-year history, investment performance has
resulted from a strong adherence to our value investment approach. We invest
where our process identifies value. Currently, the Funds are invested somewhat
contrary to segments of the market that have driven performance over the past
several years, but we believe are positioned well to capitalize on opportunities
that lie ahead.
Please visit our website at www.fbpinc.com for information on our firm,
philosophy, investment process and 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
President - Portfolio Manager
2
THE FLIPPIN, BRUCE & PORTER FUNDS
COMPARATIVE PERFORMANCE CHARTS
(UNAUDITED)
================================================================================
Performance for each Fund is compared to the most appropriate broad-based index,
the S&P 500, an unmanaged index of 500 large common stocks. Over time, this
index has the potential to outpace the FBP Balanced Fund, which normally
maintains at least 25% in bonds. Balanced funds have the growth potential to
outpace inflation, but they will typically lag a 100% stock index over the long
term because of the bond portion of their portfolios. However, the advantage of
the 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.
FBP VALUE FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FBP VALUE
FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX FBP VALUE FUND
---------------------------- -------------------------
DATE BALANCE DATE BALANCE
---- ------- -------- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,449 06/30/96 10,454
09/30/96 10,772 09/30/96 10,706
12/31/96 11,670 12/31/96 11,613
03/31/97 11,983 03/31/97 11,765
06/30/97 14,075 06/30/97 13,403
09/30/97 15,129 09/30/97 14,673
12/31/97 15,563 12/31/97 14,566
03/31/98 17,734 03/31/98 16,341
06/30/98 18,320 06/30/98 16,284
09/30/98 16,497 09/30/98 13,783
12/31/98 20,011 12/31/98 17,175
03/31/99 21,008 03/31/99 17,606
06/30/99 22,489 06/30/99 19,978
09/30/99 21,084 09/30/99 17,348
12/31/99 24,222 12/31/99 17,815
03/31/00 24,777 03/31/00 16,655
06/30/00 24,119 06/30/00 16,056
09/30/00 23,885 09/30/00 16,699
12/31/00 22,016 12/31/00 17,473
03/31/01 19,406 03/31/01 17,850
06/30/01 20,542 06/30/01 19,173
09/30/01 17,527 09/30/01 16,849
12/31/01 19,399 12/31/01 19,462
03/31/02 19,453 03/31/02 19,489
06/30/02 16,847 06/30/02 17,006
09/30/02 13,936 09/30/02 14,142
12/31/02 15,112 12/31/02 15,238
03/31/03 14,636 03/31/03 14,303
06/30/03 16,889 06/30/03 17,133
09/30/03 17,336 09/30/03 17,916
12/31/03 19,447 12/31/03 20,102
03/31/04 19,776 03/31/04 20,968
06/30/04 20,117 06/30/04 21,215
09/30/04 19,741 09/30/04 20,446
12/31/04 21,563 12/31/04 22,275
03/31/05 21,100 03/31/05 21,943
06/30/05 21,389 06/30/05 22,453
09/30/05 22,160 09/30/05 22,829
12/31/05 22,622 12/31/05 23,578
03/31/06 23,574 03/31/06 24,583
CONSUMER PRICE INDEX:
---------------------
DATE BALANCE
---- -------
03/31/96 $ 10,000
06/30/96 10,110
09/30/96 10,155
12/31/96 10,238
03/31/97 10,310
06/30/97 10,329
09/30/97 10,375
12/31/97 10,439
03/31/98 10,452
06/30/98 10,510
09/30/98 10,554
12/31/98 10,599
03/31/99 10,625
06/30/99 10,721
09/30/99 10,779
12/31/99 10,863
03/31/00 10,966
06/30/00 11,076
09/30/00 11,160
12/31/00 11,244
03/31/01 11,354
06/30/01 11,477
09/30/01 11,464
12/31/01 11,457
03/31/02 11,484
06/30/02 11,612
09/30/02 11,670
12/31/02 11,709
03/31/03 11,825
06/30/03 11,851
09/30/03 11,922
12/31/03 11,916
03/31/04 12,026
06/30/04 12,213
09/30/04 12,239
12/31/04 12,335
03/31/05 12,485
06/30/05 12,655
09/30/05 12,785
12/31/05 12,863
03/31/06 12,935
Past performance is not predictive of future performance.
3
THE FLIPPIN, BRUCE & PORTER FUNDS
COMPARATIVE PERFORMANCE CHARTS
(CONTINUED) (UNAUDITED)
================================================================================
FBP BALANCED FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FBP BALANCED
FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX FBP BALANCED FUND
---------------------------- -------------------------
DATE BALANCE DATE BALANCE
---- ------- -------- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,449 06/30/96 10,340
09/30/96 10,772 09/30/96 10,516
12/31/96 11,670 12/31/96 11,212
03/31/97 11,983 03/31/97 11,315
06/30/97 14,075 06/30/97 12,605
09/30/97 15,129 09/30/97 13,566
12/31/97 15,563 12/31/97 13,525
03/31/98 17,734 03/31/98 14,734
06/30/98 18,320 06/30/98 14,867
09/30/98 16,497 09/30/98 13,375
12/31/98 20,011 12/31/98 15,573
03/31/99 21,008 03/31/99 16,021
06/30/99 22,489 06/30/99 17,428
09/30/99 21,084 09/30/99 15,836
12/31/99 24,222 12/31/99 16,400
03/31/00 24,777 03/31/00 15,721
06/30/00 24,119 06/30/00 15,238
09/30/00 23,885 09/30/00 15,853
12/31/00 22,016 12/31/00 16,572
03/31/01 19,406 03/31/01 16,874
06/30/01 20,542 06/30/01 17,725
09/30/01 17,527 09/30/01 16,501
12/31/01 19,399 12/31/01 18,217
03/31/02 19,453 03/31/02 18,178
06/30/02 16,847 06/30/02 16,595
09/30/02 13,936 09/30/02 14,806
12/31/02 15,112 12/31/02 15,717
03/31/03 14,636 03/31/03 15,240
06/30/03 16,889 06/30/03 17,432
09/30/03 17,336 09/30/03 18,015
12/31/03 19,447 12/31/03 19,633
03/31/04 19,776 03/31/04 20,298
06/30/04 20,117 06/30/04 20,423
09/30/04 19,741 09/30/04 19,908
12/31/04 21,563 12/31/04 21,211
03/31/05 21,100 03/31/05 20,948
06/30/05 21,389 06/30/05 21,304
09/30/05 22,160 09/30/05 21,555
12/31/05 22,622 12/31/05 22,093
03/31/06 23,574 03/31/06 22,793
CONSUMER PRICE INDEX:
---------------------
DATE BALANCE
---- -------
03/31/96 $ 10,000
06/30/96 10,110
09/30/96 10,155
12/31/96 10,238
03/31/97 10,310
06/30/97 10,329
09/30/97 10,375
12/31/97 10,439
03/31/98 10,452
06/30/98 10,510
09/30/98 10,554
12/31/98 10,599
03/31/99 10,625
06/30/99 10,721
09/30/99 10,779
12/31/99 10,863
03/31/00 10,966
06/30/00 11,076
09/30/00 11,160
12/31/00 11,244
03/31/01 11,354
06/30/01 11,477
09/30/01 11,464
12/31/01 11,457
03/31/02 11,484
06/30/02 11,612
09/30/02 11,670
12/31/02 11,709
03/31/03 11,825
06/30/03 11,851
09/30/03 11,922
12/31/03 11,916
03/31/04 12,026
06/30/04 12,213
09/30/04 12,239
12/31/04 12,335
03/31/05 12,485
06/30/05 12,655
09/30/05 12,785
12/31/05 12,863
03/31/06 12,935
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(FOR PERIODS ENDED MARCH 31, 2006)
1 YEAR 5 YEARS 10 YEARS
FBP Value Fund 12.03% 6.61% 9.41%
FBP Balanced Fund 8.81% 6.20% 8.59%
Standard & Poor's 500 Index 11.73% 3.97% 8.95%
Consumer Price Index 3.61% 2.64% 2.61%
- --------------------------------------------------------------------------------
(a) Total returns are a measure of the change in value of an investment in the
Funds over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Funds. Returns do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
4
FBP VALUE FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
GENERAL INFORMATION ASSET ALLOCATION
- -------------------------------------------- ---------------------------------
Net Asset Value Per share $ 26.60
Total Net assets (Millions) $ 59.60 Cash Equivalents - 0.2%
Current Expense Ratio 1.01% Stocks - 99.8%
Portfolio Turnover 15%
Fund Inception Date 7/30/93
FBP VALUE S&P 500
STOCK CHARACTERISTICS FUND INDEX
- --------------------------------------------
Number of Stocks 45 500
Weighted Avg Market
Capitalization (Billions) 106.3 90.5
Price-to-Earnings Ratio
(IBES 1Yr. Forecast EPS) 13.8 15.3
Price-to-Book Value 2.3 2.8
INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
FBP Value S&P 500
SECTOR DIVERSIFICATION Fund Index
- -------------------------------------------------------------------------------
Consumer Discretionary 8.5% 10.2%
Consumer Staples 7.4% 9.3%
Energy 1.9% 9.6%
Financials 32.0% 21.0%
Health Care 18.6% 12.9%
Industrials 11.5% 11.5%
Information Technology 17.4% 16.0%
Materials 0.0% 3.0%
Telecommunication Services 2.7% 3.3%
Utilities 0.0% 3.2%
TEN LARGEST HOLDINGS % OF NET ASSETS
-------------------- ---------------
Hewlett-Packard Company 4.6%
J.P. Morgan Chase & Company 4.4%
Bank of America Corporation 4.4%
Citigroup, Inc. 4.1%
Wachovia Corporation 4.0%
American International Group, Inc. 4.0%
International Business Machines Corporation 3.9%
St. Paul Travelers Companies, Inc. (The) 3.8%
Wal Mart Stores Inc. 3.6%
Pfizer Inc. 3.4%
5
FBP BALANCED FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
GENERAL INFORMATION ASSET ALLOCATION
- -------------------------------------------- ---------------------------------
Net Asset Value Per share $ 18.39
Total Net assets (Millions) $ 62.80 Cash Equivalents - 0.6%
Current Expense Ratio 0.99% Fixed Income - 29.2%
Portfolio Turnover 24% Stocks - 70.2%
Fund Inception Date 7/3/89
STOCK PORTFOLIO (70.2% OF FUND)
- ----------------------------------------------------------------------------------------------------------
Number of Stocks 45 TEN LARGEST HOLDINGS % OF NET ASSETS
Weighted Avg Market -------------------- ---------------
Capitalization (Billions) 106.3 J.P. Morgan Chase & Company 3.8%
Price-to-Earnings Ratio Hewlett-Packard Company 3.2%
(IBES 1Yr. Forecast EPS) 13.8 Bank of America Corporation 2.9%
Price-to-Book Value 2.3 Citigroup, Inc. 2.7%
Wachovia Corporation 2.7%
FIVE LARGEST SECTORS % OF NET ASSETS American International Group, Inc. 2.7%
- -------------------- --------------- International Business Machines Corporation 2.6%
Financials 22.4% Wal Mart Stores 2.5%
Health Care 12.7% St. Paul Travelers Companies, Inc. (The) 2.5%
Information Tech. 12.1% General Electric Co. 2.2%
Industrials 8.7%
Consumer Discretionary 5.7%
FIXED-INCOME PORTFOLIO (29.2% OF FUND)
- ----------------------------------------------------------------------------------------------------------
Number of Fixed-Income Securities 26 SECTOR BREAKDOWN % OF NET ASSETS
Average Quality AA ---------------- ---------------
Average Stated Maturity 2.1 U.S. Treasury 9.1%
Average Effective Duration 1.8 Government Agency 3.5%
Corporate 16.6%
6
FBP VALUE FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 99.8% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.5%
22,500 Best Buy Company, Inc. (b) ........................ $ 1,258,425
34,500 Dillard's, Inc. ................................... 898,380
7,787 Federated Department Stores, Inc. ................. 568,451
9,600 Gannett Company, Inc. ............................. 575,232
32,000 General Motors Corporation ........................ 680,640
13,000 Kohl's Corporation (a) ............................ 689,130
4,500 Whirlpool Corporation (b) ......................... 411,615
------------
5,081,873
------------
CONSUMER STAPLES -- 7.3%
19,000 Altria Group, Inc. ................................ 1,346,340
30,000 CVS Corporation ................................... 896,100
45,000 Wal-Mart Stores, Inc. ............................. 2,125,800
------------
4,368,240
------------
ENERGY -- 1.9%
6,000 Marathon Oil Corporation (b) ...................... 457,020
11,000 Royal Dutch Shell PLC - ADR ....................... 684,860
------------
1,141,880
------------
FINANCIALS -- 32.0%
20,000 American Express Company .......................... 1,051,000
36,000 American International Group, Inc. ................ 2,379,240
57,000 Bank of America Corporation ....................... 2,595,780
52,000 Citigroup, Inc. ................................... 2,456,480
23,000 Fannie Mae ........................................ 1,182,200
10,000 Freddie Mac ....................................... 610,000
19,000 Jefferson-Pilot Corporation (c) ................... 1,116,630
63,400 JPMorgan Chase & Company .......................... 2,639,976
54,000 St. Paul Travelers Companies, Inc. (The) .......... 2,256,660
17,500 UnumProvident Corporation ......................... 358,400
43,000 Wachovia Corporation .............................. 2,410,150
------------
19,056,516
------------
HEALTH CARE -- 18.6%
27,000 Bristol-Myers Squibb Company ...................... 664,470
4,000 CIGNA Corporation (b) ............................. 522,480
40,000 HCA, Inc. ......................................... 1,831,600
27,000 Johnson & Johnson ................................. 1,598,940
45,000 Merck & Company, Inc. ............................. 1,585,350
81,000 Pfizer, Inc. ...................................... 2,018,520
35,000 Watson Pharmaceuticals, Inc. (a) .................. 1,005,900
24,000 WellPoint, Inc. (a) ............................... 1,858,320
------------
11,085,580
------------
7
FBP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 11.4%
10,000 Avery Dennison Corporation ........................ $ 584,800
100,000 Cendant Corporation ............................... 1,735,000
10,300 FedEx Corporation ................................. 1,163,282
54,000 General Electric Company .......................... 1,878,120
40,000 Tyco International Limited ........................ 1,075,200
4,000 Union Pacific Corporation (b) ..................... 373,400
------------
6,809,802
------------
INFORMATION TECHNOLOGY -- 17.4%
28,000 Agilent Technologies, Inc. (a) .................... 1,051,400
34,000 Cisco Systems, Inc. (a) ........................... 736,780
28,000 Computer Sciences Corporation (a) ................. 1,555,400
83,000 Hewlett-Packard Company ........................... 2,730,700
28,000 International Business Machines Corporation ....... 2,309,160
50,000 Microsoft Corporation ............................. 1,360,500
156,000 Solectron Corporation (a) ......................... 624,000
------------
10,367,940
------------
TELECOMMUNICATIONS SERVICES -- 2.7%
47,000 Verizon Communications, Inc. ...................... 1,600,820
------------
TOTAL COMMON STOCKS (Cost $41,741,398)............. $ 59,512,651
------------
================================================================================
PAR VALUE SHORT-TERM CORPORATE NOTES -- 0.9% VALUE
- --------------------------------------------------------------------------------
$ 39,774 American Family Financial Services, Demand Note,
4.47%............................................ $ 39,774
97,332 U.S. Bank N.A., Demand Note, 4.57% 97,332
401,253 Wisconsin Corporate Central Credit Union, Demand
Note, 4.49% ..................................... 401,253
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $538,359)... $ 538,359
------------
TOTAL INVESTMENTS AT VALUE -- 100.7%
(Cost $42,279,757)............................... $ 60,051,010
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%).... (440,192)
------------
NET ASSETS --100.0%................................ $ 59,610,818
============
(a) Non-income producing security.
(b) Security covers a written call option.
(c) Fair value priced (Note 1). Fair valued securities totalled $1,116,630 at
March 31, 2006, representing 1.9% of net assets.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
8
FBP VALUE FUND
SCHEDULE OF OPEN OPTION CONTRACTS
MARCH 31, 2006
================================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- --------------------------------------------------------------------------------
Best Buy Company, Inc.,
120 09/16/2006 at $50........................ $ 68,400 $ 70,438
Cigna Corporation,
40 07/22/2006 at $130....................... 32,400 28,279
Marathon Oil Corporation,
60 07/22/2006 at $75........................ 35,400 41,219
Union Pacific Corporation,
40 08/19/2006 at $90........................ 30,800 25,924
Whirlpool Corporation,
45 06/17/2006 at $90........................ 26,100 26,121
-------- --------
$193,100 $191,981
======== ========
See accompanying notes to financial statements.
9
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 70.2% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 5.7%
15,000 Best Buy Company, Inc. (b) ........................ $ 838,950
24,500 Dillard's, Inc. ................................... 637,980
4,672 Federated Department Stores, Inc. ................. 341,056
7,000 Gannett Company, Inc. ............................. 419,440
22,000 General Motors Corporation ........................ 467,940
10,000 Kohl's Corporation (a) ............................ 530,100
4,000 Whirlpool Corporation (b) ......................... 365,880
------------
3,601,346
------------
CONSUMER STAPLES -- 5.4%
14,000 Altria Group, Inc. ................................ 992,040
27,000 CVS Corporation ................................... 806,490
33,000 Wal-Mart Stores, Inc. ............................. 1,558,920
------------
3,357,450
------------
ENERGY -- 1.3%
4,000 Marathon Oil Corporation (b) ...................... 304,680
8,000 Royal Dutch Shell PLC - ADR ....................... 498,080
------------
802,760
------------
FINANCIALS -- 22.4%
18,000 American Express Company .......................... 945,900
25,400 American International Group, Inc. ................ 1,678,686
40,000 Bank of America Corporation ....................... 1,821,600
36,000 Citigroup, Inc. ................................... 1,700,640
17,000 Fannie Mae ........................................ 873,800
7,000 Freddie Mac ....................................... 427,000
13,000 Jefferson-Pilot Corporation (c) ................... 764,010
57,760 JPMorgan Chase & Company .......................... 2,405,126
37,000 St. Paul Travelers Companies, Inc. (The) .......... 1,546,230
12,000 Unumprovident Corporation ......................... 245,760
30,000 Wachovia Corporation .............................. 1,681,500
------------
14,090,252
------------
HEALTH CARE -- 12.7%
22,000 Bristol-Myers Squibb Company ...................... 541,420
2,500 CIGNA Corporation (b) ............................. 326,550
27,500 HCA, Inc. ......................................... 1,259,225
23,000 Johnson & Johnson ................................. 1,362,060
37,000 Merck & Company, Inc. ............................. 1,303,510
48,000 Pfizer, Inc. ...................................... 1,196,160
25,000 Watson Pharmaceuticals, Inc. (a) .................. 718,500
16,400 WellPoint, Inc. (a) ............................... 1,269,852
------------
7,977,277
------------
10
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 70.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 8.7%
7,600 Avery Dennison Corporation ........................ $ 444,448
80,000 Cendant Corporation ............................... 1,388,000
7,400 FedEx Corporation ................................. 835,756
40,000 General Electric Company .......................... 1,391,200
39,000 Tyco International Limited ........................ 1,048,320
3,500 Union Pacific Corporation (b) ..................... 326,725
------------
5,434,449
------------
INFORMATION TECHNOLOGY -- 12.1%
21,000 Agilent Technologies, Inc. (a) .................... 788,550
23,000 Cisco Systems, Inc. (a) ........................... 498,410
20,000 Computer Sciences Corporation (a) ................. 1,111,000
60,500 Hewlett-Packard Company ........................... 1,990,450
20,000 International Business Machines Corporation ....... 1,649,400
40,800 Microsoft Corporation ............................. 1,110,168
115,000 Solectron Corporation (a) ......................... 460,000
------------
7,607,978
------------
TELECOMMUNICATIONS SERVICES -- 1.9%
35,000 Verizon Communications, Inc. ...................... 1,192,100
------------
TOTAL COMMON STOCKS (Cost $27,341,539)............. $ 44,063,612
------------
================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 12.6% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS -- 1.6%
$1,000,000 discount, due 08/17/2006 ........................ $ 982,857
------------
U.S. TREASURY NOTES -- 7.5%
1,000,000 2.25%, due 04/30/2006 ........................... 998,047
500,000 4.625%, due 05/15/2006 .......................... 499,922
500,000 2.50%, due 10/31/2006 ........................... 493,340
500,000 3.50%, due 11/15/2006 ........................... 495,781
750,000 4.375%, due 05/15/2007 .......................... 745,957
750,000 3.875%, due 07/31/2007 .......................... 740,479
750,000 4.50%, due 11/15/2010 ........................... 739,921
------------
4,713,447
------------
FEDERAL HOME LOAN BANK -- 2.7%
500,000 4.28%, due 07/14/2008 ........................... 491,653
500,000 4.035%, due 03/09/2009 .......................... 485,375
750,000 5.25%, due 03/17/2010 ........................... 746,344
------------
1,723,372
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.8%
500,000 2.50%, due 04/19/2007 ........................... 486,751
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $7,981,091)................................ $ 7,906,427
------------
11
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 16.6% VALUE
- --------------------------------------------------------------------------------
FINANCIALS -- 8.8%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/2008 .......................... $ 780,012
Caterpillar Financial Services Corporation,
750,000 2.59%, due 07/15/2006 ........................... 744,786
Credit Suisse First Boston USA, Inc.
750,000 4.70%, due 06/01/2009 ........................... 735,531
John Deere Capital Corporation,
500,000 3.375%, due 10/01/2007 .......................... 486,180
Merrill Lynch & Company, Inc.,
500,000 3.00%, due 04/30/2007 ........................... 487,511
Northern Trust Company,
1,000,000 7.10%, due 08/01/2009 ........................... 1,055,761
Student Loan Marketing Corporation,
750,000 3.625%, due 03/17/2008 .......................... 725,645
Textron Financial Corporation,
500,000 2.75%, due 06/01/2006 ........................... 498,279
------------
5,513,705
------------
HEALTH CARE -- 0.8%
UnitedHealth Group, Inc.,
500,000 3.30%, due 01/30/2008 ........................... 482,734
------------
INDUSTRIALS -- 3.5%
Donnelley (R.R.) & Sons Company,
750,000 3.75%, due 04/01/2009 ........................... 706,192
Raychem Corporation,
1,000,000 7.20%, due 10/15/2008 ........................... 1,032,218
Stanley Works (The),
500,000 3.50%, due 11/01/2007 ........................... 486,738
------------
2,225,148
------------
UTILITIES -- 3.5%
Dominion Resources, Inc.,
750,000 4.125%, due 02/15/2008 .......................... 731,356
Ohio Power Company,
750,000 5.30%, due 11/01/2010 ........................... 741,119
Public Service Electric & Gas Company,
750,000 4.00%, due 11/01/2008 ........................... 722,878
------------
2,195,353
------------
TOTAL CORPORATE BONDS (Cost $10,429,030)........... $ 10,416,940
------------
12
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE SHORT-TERM CORPORATE NOTES -- 2.2% VALUE
- --------------------------------------------------------------------------------
$ 27,467 American Family Financial Services, Demand Note,
4.47%............................................ $ 27,467
1,289,725 U.S. Bank N.A., Demand Note, 4.57% 1,289,725
79,310 Wisconsin Corporate Central Credit Union, Demand
Note, 4.49%...................................... 79,310
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $1,396,502). $ 1,396,502
------------
TOTAL INVESTMENTS AT VALUE -- 101.6%
(COST $47,148,162)............................... $ 63,783,481
OTHER ASSETS IN EXCESS OF LIABILITES -- (1.6%)..... (1,002,935)
------------
NET ASSETS -- 100.0%............................... $ 62,780,546
============
(a) Non-income producing security.
(b) Security covers a written call option.
(c) Fair value priced (Note 1). Fair valued securities totalled $764,010 at
March 31, 2006, representing 1.2% of net assets.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
FBP BALANCED FUND
SCHEDULE OF OPEN OPTION CONTRACTS
MARCH 31, 2006
================================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- --------------------------------------------------------------------------------
Best Buy Company, Inc.,
50 09/16/2006 at $55 $ 28,500 $ 29,349
Cigna Corporation,
25 07/22/2006 at $130 20,250 17,674
Marathon Oil Corporation,
40 07/22/2006 at $75 23,600 27,479
Union Pacific Corporation,
35 08/19/2006 at $90 26,950 22,684
Whirlpool Corporation,
40 06/17/2006 at $90 23,200 23,219
-------- --------
$122,500 $120,405
======== ========
See accompanying notes to financial statements.
13
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2006
==========================================================================================
FBP FBP
VALUE BALANCED
FUND FUND
- ------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost .................................. $42,279,757 $47,148,162
=========== ===========
At value (Note 1) .................................... $60,051,010 $63,783,481
Dividends and interest receivable ...................... 72,568 289,157
Receivable for capital shares sold ..................... 2,685 900
Other assets ........................................... 7,036 4,246
----------- -----------
TOTAL ASSETS ......................................... 60,133,299 64,077,784
----------- -----------
LIABILITIES
Distributions payable .................................. 70,340 152,753
Payable for investment securities purchased ............ 205,848 943,346
Payable for capital shares redeemed .................... -- 22,158
Accrued investment advisory fees (Note 3) .............. 35,762 37,422
Accrued administration fees (Note 3) ................... 6,700 6,900
Other accrued expenses and liabilities ................. 10,731 12,159
Covered call options, at value (Notes 1 and 4)
(premiums received $191,981 and $120,405,
respectively) ........................................ 193,100 122,500
----------- -----------
TOTAL LIABILITIES .................................... 522,481 1,297,238
----------- -----------
NET ASSETS ............................................... $59,610,818 $62,780,546
=========== ===========
Net assets consist of:
Paid-in capital ........................................ $41,831,914 $46,084,276
Undistributed net investment income .................... 8,436 62,655
Undistributed net realized gains from security
transactions ......................................... 334 391
Net unrealized appreciation on investments ............. 17,770,134 16,633,224
----------- -----------
Net assets ............................................... $59,610,818 $62,780,546
=========== ===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) .. 2,241,395 3,412,956
=========== ===========
Net asset value, offering price and redemption
price per share (Note 1) ............................... $ 26.60 $ 18.39
=========== ===========
See accompanying notes to financial statements.
14
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2006
==========================================================================================
FBP FBP
VALUE BALANCED
FUND FUND
- ------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ............................................... $ 57,321 $ 732,434
Dividends .............................................. 1,243,763 933,766
----------- -----------
TOTAL INVESTMENT INCOME .............................. 1,301,084 1,666,200
----------- -----------
EXPENSES
Investment advisory fees (Note 3) ...................... 417,347 426,202
Administration fees (Note 3) ........................... 80,355 79,549
Professional fees ...................................... 18,373 19,562
Postage and supplies ................................... 19,291 14,327
Trustees' fees and expenses ............................ 13,591 13,591
Registration fees ...................................... 15,059 9,444
Custodian fees ......................................... 11,517 8,785
Compliance service fees (Note 3) ....................... 8,962 9,052
Printing of shareholder reports ........................ 5,811 2,993
Insurance expense ...................................... 4,124 4,137
Pricing costs .......................................... 1,648 4,764
Other expenses ......................................... 8,461 8,758
----------- -----------
TOTAL EXPENSES ....................................... 604,539 601,164
----------- -----------
NET INVESTMENT INCOME .................................... 696,545 1,065,036
----------- -----------
REALIZED AND UNREALIZED GAINS
ON INVESTMENTS
Net realized gains on security transactions ............ 4,111,677 2,973,321
Net realized gains on option contracts written ......... 28,430 18,671
Net change in unrealized appreciation/
depreciation on investments .......................... 1,875,071 1,102,573
----------- -----------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS ......................................... 6,015,178 4,094,565
----------- -----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ........................................ $ 6,711,723 $ 5,159,601
=========== ===========
See accompanying notes to financial statements.
15
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================================================
FBP FBP
VALUE FUND BALANCED FUND
-------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ....................... $ 696,545 $ 673,346 $ 1,065,036 $ 962,877
Net realized gains on:
Security transactions ..................... 4,111,677 1,871,004 2,973,321 2,030,319
Option contracts written .................. 28,430 23,964 18,671 24,804
Net change in unrealized appreciation/
depreciation on investments ............... 1,875,071 273,731 1,102,573 (1,031,466)
------------ ------------ ------------ ------------
Net increase in net assets
from operations ............................. 6,711,723 2,842,045 5,159,601 1,986,534
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS
From net investment income .................. (699,731) (663,195) (1,054,135) (977,272)
From realized capital gains on
security transactions ..................... (3,930,094) -- (2,978,247) (2,024,416)
------------ ------------ ------------ ------------
Net decrease in net assets from
distributions to shareholders ............... (4,629,825) (663,195) (4,032,382) (3,001,688)
------------ ------------ ------------ ------------
FROM CAPITAL
SHARE TRANSACTIONS
Proceeds from shares sold ................... 5,846,188 13,801,391 3,742,137 4,666,235
Net asset value of shares issued in
reinvestment of distributions
to shareholders ........................... 4,481,385 622,343 3,703,976 2,749,642
Payments for shares redeemed ................ (14,011,089) (5,789,994) (7,259,209) (3,224,398)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from capital share transactions ............. (3,683,516) 8,633,740 186,904 4,191,479
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................... (1,601,618) 10,812,590 1,314,123 3,176,325
NET ASSETS
Beginning of year ........................... 61,212,436 50,399,846 61,466,423 58,290,098
------------ ------------ ------------ ------------
End of year ................................. $ 59,610,818 $ 61,212,436 $ 62,780,546 $ 61,466,423
============ ============ ============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME ........................... $ 8,436 $ 11,622 $ 62,655 $ 38,306
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ........................................ 220,216 557,688 202,061 257,220
Reinvested .................................. 170,458 24,448 202,709 153,088
Redeemed .................................... (528,043) (230,361) (395,037) (175,637)
------------ ------------ ------------ ------------
Net increase (decrease) in
shares outstanding ........................ (137,369) 351,775 9,733 234,671
Shares outstanding at beginning of year ..... 2,378,764 2,026,989 3,403,223 3,168,552
------------ ------------ ------------ ------------
Shares outstanding at end of year ........... 2,241,395 2,378,764 3,412,956 3,403,223
============ ============ ============ ============
See accompanying notes to financial statements
16
FBP VALUE FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
====================================================================================================================
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 25.73 $ 24.86 $ 17.12 $ 23.59 $ 21.78
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................. 0.32 0.29 0.22 0.20 0.18
Net realized and unrealized gains
(losses) on investments ............. 2.70 0.86 7.74 (6.47) 1.81
---------- ---------- ---------- ---------- ----------
Total from investment operations ........ 3.02 1.15 7.96 (6.27) 1.99
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income .. (0.32) (0.28) (0.22) (0.20) (0.18)
Distributions from net realized gains . (1.83) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ..................... (2.15) (0.28) (0.22) (0.20) (0.18)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .......... $ 26.60 $ 25.73 $ 24.86 $ 17.12 $ 23.59
========== ========== ========== ========== ==========
Total return (a) ........................ 12.03% 4.65% 46.60% (26.61%) 9.19%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ....... $ 59,611 $ 61,212 $ 50,400 $ 48,552 $ 62,657
========== ========== ========== ========== ==========
Ratio of expenses to average net assets . 1.01% 1.00% 1.02% 1.00% 0.97%
Ratio of net investment income to
average net assets .................... 1.17% 1.17% 0.94% 1.06% 0.80%
Portfolio turnover rate ................. 15% 15% 19% 12% 15%
(a) Total return is a measure of the change in value of an investment in the Fund over the periods covered, which
assumes any dividends or capital gains distributions are reinvested in shares of the Fund. Returns do not
reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares.
See accompanying notes to financial statements.
17
FBP BALANCED FUND
FINANCIAL HIGHLIGHTS
====================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
====================================================================================================================
YEARS ENDED MARCH 31,
--------------------------------------------------------------------------
2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 18.06 $ 18.40 $ 14.46 $ 17.68 $ 17.26
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................. 0.33 0.29 0.29 0.36 0.39
Net realized and unrealized gains
(losses) on investments .............. 1.22 0.28 4.49 (3.21) 0.92
---------- ---------- ---------- ---------- ----------
Total from investment operations ........ 1.55 0.57 4.78 (2.85) 1.31
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income .. (0.32) (0.30) (0.31) (0.37) (0.39)
Distributions from net realized gains . (0.90) (0.61) (0.53) -- (0.50)
---------- ---------- ---------- ---------- ----------
Total distributions ..................... (1.22) (0.91) (0.84) (0.37) (0.89)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year .......... $ 18.39 $ 18.06 $ 18.40 $ 14.46 $ 17.68
========== ========== ========== ========== ==========
Total return (a) ........................ 8.81% 3.20% 33.19% (16.16%) 7.73%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ....... $ 62,781 $ 61,466 $ 58,290 $ 44,333 $ 52,809
========== ========== ========== ========== ==========
Ratio of expenses to average net assets . 0.99% 0.96% 0.98% 1.00% 0.98%
Ratio of net investment income to
average net assets .................... 1.75% 1.62% 1.68% 2.31% 2.20%(b)
Portfolio turnover rate ................. 24% 17% 21% 21% 20%
(a) Total return is a measure of the change in value of an investment in the Fund over the periods covered, which
assumes any dividends or capital gains distributions are reinvested in shares of the Fund. Returns do not
reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares.
(b) 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 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.
See accompanying notes to financial statements.
18
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The FBP Value Fund and the FBP 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 Value 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 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 traded on a national stock
exchange are valued based upon the closing price on the principal exchange where
the security is traded. Securities which are quoted by NASDAQ are valued at the
NASDAQ Official Closing Price. Securities which are traded over-the-counter are
valued at the last sales price, if available, otherwise, at the last quoted bid
price. 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. Call options written by the Funds are valued at the then
current market quotation, using the ask price as of the close of each day on the
principal exchanges on which they are traded. Short-term instruments (those with
remaining maturities of 60 days or less) are valued at amortized cost, which
approximates market value. Securities and other assets for which no quotations
are readily available will be valued in good faith at fair value using methods
determined by the Board of Trustees. Such methods of fair valuation may include,
but are not limited to: multiple of earnings, multiple of book value, discount
from market of a similar freely traded security, purchase price of security,
subsequent private transactions in the security or related securities, or a
combination of these and other factors.
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. These
"book/tax" differences are either temporary or permanent in nature.
19
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================================================
The tax character of distributions paid during the years ended March 31, 2006 and 2005 are as follows:
- ---------------------------------------------------------------------------------------------------------------
Year Ordinary Long-Term Total
Ended Income Capital Gains Distributions
- ---------------------------------------------------------------------------------------------------------------
FBP Value Fund....................... 3/31/06 $ 840,818 $ 3,789,007 $ 4,629,825
3/31/05 $ 663,195 $ -- $ 663,195
- ---------------------------------------------------------------------------------------------------------------
FBP Balanced Fund.................... 3/31/06 $ 1,095,937 $ 2,936,445 $ 4,032,382
3/31/05 $ 989,268 $ 2,012,420 $ 3,001,688
- ---------------------------------------------------------------------------------------------------------------
Security transactions -- Security transactions are accounted for on trade date.
Gains and losses on securities sold are determined on a specific identification
basis.
Common expenses - Common expenses of the Trust are allocated among the funds of
the Trust which may be based on relative net assets of each fund or the nature
of the services performed and the relative applicability to each fund.
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 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 Subchapter M 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 following information is computed on a tax basis for each item as of March
31, 2006:
- --------------------------------------------------------------------------------
FBP FBP
VALUE FUND BALANCED FUND
- --------------------------------------------------------------------------------
Cost of portfolio investments and written
options ....................................... $ 42,087,776 $ 46,980,277
============ ============
Gross unrealized appreciation ................... $ 19,025,276 $ 17,478,903
Gross unrealized depreciation ................... (1,255,142) (798,199)
------------ ------------
Net unrealized appreciation ..................... 17,770,134 16,680,704
Undistributed ordinary income ................... 16,832 46,532
Undistributed long-term gains ................... 62,278 121,787
Other temporary differences ..................... (70,340) (152,753)
------------ ------------
Total distributable earnings .................... $ 17,778,904 $ 16,696,270
============ ============
- --------------------------------------------------------------------------------
20
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the FBP 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.
These "book/tax" differences are temporary in nature and are primarily due to
differing methods in the amortization of discounts and premiums on fixed income
securities.
During the year ended March 31, 2006, the FBP Value Fund utilized capital loss
carryforwards of $209,679 to offset current year realized gains.
For the year ended March 31, 2006, the FBP Balanced Fund reclassified $13,448 of
undistributed net investment income against accumulated net realized gains from
security transactions on the Statement of Assets and Liabilities due to
permanent differences in the recognition of capital gains and losses under
income tax regulations and accounting principles generally accepted in the
United States. These differences are primarily due to the tax treatment of
certain debt obligations. Such reclassification has no effect on the Fund's net
assets or net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2006, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments and
U.S. government securities, amounted to $8,876,337 and $12,964,497,
respectively, for the FBP Value Fund and $9,261,895 and $11,128,610
respectively, for the FBP Balanced Fund.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by Flippin, Bruce & Porter, Inc. (the
Adviser) under the terms of an Investment Advisory Agreement. Under the
Investment Advisory Agreement, each Fund pays the Adviser a fee, which is
computed and accrued daily and paid monthly, at an annual rate of .70% of its
average daily net assets up to $250 million; .65% of the next $250 million of
such net assets; and .50% of such net assets in excess of $500 million. Certain
Trustees and officers of the Trust are also officers of the Adviser.
The Chief Compliance Officer of the Funds (the CCO) is an employee of the
Adviser. The Funds pay the Adviser $18,000 annually for providing CCO services.
In addition, the Funds pay reasonable out-of-pocket expenses incurred by the
Adviser in connection with these services.
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
each Fund at an annual rate of .15% of its average daily net assets up to $25
million; .125% of the next $25 million of such net assets; and .10% of 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 accounts. 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 Distributor), the principal underwriter of each Fund's
shares. The Distributor receives no compensation from the Funds for acting as
principal underwriter.
21
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the year ended March 31, 2006 is as follows:
- ----------------------------------------------------------------------------------------------------------------
FBP FBP
VALUE FUND BALANCED FUND
---------------------------------------------------------------
OPTION OPTION OPTION OPTION
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ----------------------------------------------------------------------------------------------------------------
Options outstanding at beginning of year ...... 300 $ 110,908 162 $ 55,624
Options written ............................... 555 348,586 367 236,098
Options exercised ............................. (210) (142,894) (107) (83,887)
Options expired ............................... (180) (50,164) (120) (36,626)
Options cancelled in a closing
purchase transaction ................. (160) (74,455) (112) (50,804)
------------ ------------ ------------ ------------
Options outstanding at end of year ............ 305 $ 191,981 190 $ 120,405
============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------------------
5. CONTINGENCIES AND COMMITMENTS
The Funds indemnify the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, in the normal course of business the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. The Funds' maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
22
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
the FBP Value Fund and the FBP Balanced Fund
of the Williamsburg Investment Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the FBP Value Fund and the FBP Balanced Fund
(the "Funds") (each a series of the Williamsburg Investment Trust) as of March
31, 2006, 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 three 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. The financial highlights presented for each of the two years in the
period ended March 31, 2003 were audited by other auditors whose report dated
April 25, 2003, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2006 by correspondence with the custodian
and brokers. 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
FBP Value Fund and the FBP Balanced Fund as of March 31, 2006, 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 three years in the period then ended in conformity with U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
Cincinnati, Ohio
May 12, 2006
23
THE FLIPPIN, BRUCE & PORTER FUNDS
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. 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, 69 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- --------------------------------------------------------------------------------------------------------
*Austin Brockenbrough III 1802 Bayberry Court, Suite 400 69 Trustee Since
Richmond, VA September 1988
- --------------------------------------------------------------------------------------------------------
*John T. Bruce 800 Main Street 52 President and Since
Lynchburg, VA Trustee September 1988
- --------------------------------------------------------------------------------------------------------
J. Finley Lee, Jr. 4488 Pond Apple Drive North 66 Trustee Since
Naples, FL September 1988
- --------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 66 Trustee Since
Richmond, VA March 1993
- --------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintoport Boulevard 46 Trustee Since
Saraland, AL March 1993
- --------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 73 Trustee Since
Richmond, VA July 1997
- --------------------------------------------------------------------------------------------------------
Samuel B. Witt III 302 Clovelly Road 70 Trustee Since
Richmond, VA November 1988
- --------------------------------------------------------------------------------------------------------
John M. Flippin 800 Main Street 64 Vice President Since
Lynchburg, VA September 1988
- --------------------------------------------------------------------------------------------------------
R. Gregory Porter III 800 Main Street 64 Vice President Since
Lynchburg, VA September 1988
- --------------------------------------------------------------------------------------------------------
Teresa L. Sanderson 800 Main Street 43 Chief Compliance Since
Lynchburg, VA Officer September 2004
- --------------------------------------------------------------------------------------------------------
Robert G. Dorsey 225 Pictoria Drive, Suite 450 49 Vice President Since
Cincinnati, OH November 2000
- --------------------------------------------------------------------------------------------------------
Mark J. Seger 225 Pictoria Drive, Suite 450 44 Treasurer Since
Cincinnati, OH November 2000
- --------------------------------------------------------------------------------------------------------
John F. Splain 225 Pictoria Drive, Suite 450 49 Secretary Since
Cincinnati, OH November 2000
- --------------------------------------------------------------------------------------------------------
*Messrs. Bruce, Brockenbrough and Caravati 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 eleven 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.
24
THE FLIPPIN, BRUCE & PORTER FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED) (CONTINUED)
================================================================================
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 Corporation (a plastics manufacturer) and
Wilkinson O'Grady & Co., Inc. (a global asset manager).
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.
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 (polymers and chemical manufacturer).
Harris V. Morrissette is Chief Executive Officer 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 the retired Chief Investment Officer of Equities of
Virginia Retirement System (VRS). Subsequent to his retirement, he temporarily
served as Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired 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 Principal of the Adviser.
Teresa L. Sanderson is Chief Compliance Officer and a Principal of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Additional information about members of the Board of Trustees 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.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from ordinary income and net realized
gains made by the Funds during the year ended March 31, 2006. For the fiscal
year ended March 31, 2006, certain dividends paid by the Funds may be subject to
a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The FBP Value Fund and the FBP Balanced Fund intend
to designate up to a maximum amount of $4,629,825 and $4,032,382, respectively,
as taxed at a maximum rate of 15%. Additionally, for the fiscal year ended March
31, 2006, 100% and 86% of the dividends paid from ordinary income by the FBP
Value Fund and the FBP Balanced Fund, respectively, qualified for the dividends
received deduction for corporations. As required by federal regulations,
complete information will be computed and reported in conjunction with your 2006
Form 1099-DIV.
25
THE FLIPPIN BRUCE & PORTER FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Funds, you incur ongoing costs, including management fees and other fund
expenses. Operating expenses, which are deducted from each Fund's gross income,
directly reduce the investment return of the Funds.
A fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The following examples are intended to
help you understand the ongoing costs (in dollars) of investing in the Funds and
to compare these costs with the ongoing costs of investing in other mutual
funds. The examples below are based on an investment of $1,000 made at the
beginning of the period shown and held for the entire period.
The table below illustrates each Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Funds. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Funds under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the return used is not the Funds' actual
returns, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge transaction fees, such as
purchase or redemption fees, nor do they carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
More information about the Funds' expenses, including annual expense ratios for
the prior five fiscal years, can be found in this report. For additional
information on operating expenses and other shareholder costs, please refer to
the Funds' prospectus.
FBP VALUE FUND
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2005 March 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,076.80 $5.33
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.80 $5.19
- --------------------------------------------------------------------------------
* Expenses are equal to the FBP Value Fund's annualized expense ratio of
1.03% for the period, multiplied by the average account value over the
period, multiplied by 182/365 (to reflect the one-half year period).
FBP BALANCED FUND
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2005 March 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,057.50 $5.13
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.95 $5.04
- --------------------------------------------------------------------------------
* Expenses are equal to the FBP Balanced Fund's annualized expense ratio of
1.00% for the period, multiplied by the average account value over the
period, multiplied by 182/365 (to reflect the one-half year period).
26
THE FLIPPIN, BRUCE & PORTER FUNDS
OTHER INFORMATION (UNAUDITED)
================================================================================
The Trust files a complete listing of portfolio holdings for the Funds with the
Securities and Exchange Commission (the SEC) as of the first and third quarters
of each fiscal year on Form N-Q. The filings are available upon request, by
calling 1-800-327-9375. Furthermore, you may obtain a copy of these filings on
the SEC's website at http://www.sec.gov. The Trust's Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC, and
information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available without charge
upon request by calling toll-free 1-800-327-9375, or on the SEC's website at
http://www.sec.gov. Information regarding how the Funds voted proxies relating
to portfolio securities during the most recent 12-month period ended June 30 is
also available without charge upon request by calling toll-free 1-800-327-9375,
or on the SEC's website at http://www.sec.gov.
27
THE FLIPPIN BRUCE & PORTER FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
================================================================================
At an in-person meeting held on February 13, 2006, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance of
each Fund's Investment Advisory Agreement with the Adviser for a one-year
period. Below is a discussion of the factors considered by the Board of Trustees
along with their conclusions with respect thereto that formed the basis for the
Board's approvals.
In selecting the Adviser and approving the most recent annual continuance of the
Investment Advisory Agreements, the Trustees considered all information they
deemed reasonably necessary to evaluate the terms of the Agreements. The
principal areas of review by the Trustees were the nature, extent and quality of
the services provided by the Adviser and the reasonableness of the fees charged
for those services. These matters were considered by the Independent Trustees
consulting with experienced counsel who is independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Funds was considered.
Each Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives and to the Adviser's
comparably managed private accounts. The Trustees also considered the scope and
quality of the in-house capabilities of the Adviser and other resources
dedicated to performing services for the Funds. The quality of administrative
and other services, including the Adviser's role in coordinating the activities
of the Funds' other service providers, were considered in light of the Funds'
compliance with investment policies and applicable laws and regulations and of
related reports by management and the Funds' independent public accountants in
periodic meetings with the Trust's Audit Committee. The Trustees also considered
the business reputation of the Adviser, the qualifications of its key investment
and compliance personnel, and its financial resources.
In reviewing the fees payable under the Investment Advisory Agreements, the
Trustees compared the advisory fees and overall expense levels of each Fund with
those of competitive funds with similar investment objectives as well as the
private accounts managed by the Adviser. The Trustees considered information
provided by the Adviser concerning the Adviser's profitability with respect to
each Fund, including the assumptions and methodology used in preparing the
profitability information, in light of applicable case law relating to advisory
fees. For these purposes, the Trustees took into account not only the fees paid
by the Funds, but also so-called "fallout benefits" to the Adviser, such as the
benefits of research made available to the Adviser by reason of brokerage
commissions generated by the Funds' securities transactions. The Trustees also
reviewed the revenue sharing arrangements relating to the Funds, whereby fees
are paid by the Adviser to various intermediaries that direct assets to the
Funds. In evaluating the Funds' advisory fees, the Trustees took into account
the complexity and quality of the investment management of the Funds.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the performance of each Fund and the other services provided
under the Investment Advisory Agreements, they believe that the Adviser has
provided high quality services to the Funds as compared to similarly managed
funds and comparable private accounts managed by the Adviser; (ii) although the
advisory fees payable to the Adviser by each Fund are in the higher range of
fees for other comparably managed funds, they believe the fees to be reasonable
given the quality of services provided by the Adviser; and (iii) the total
operating expense ratio of each Fund is competitive and lower than the average
of comparably managed funds, as calculated and published by Morningstar, Inc.
Given the size of the Funds and their expected growth, the Independent Trustees
did not believe that at the present time it would be relevant to consider the
extent to which economies of scale would be realized as the Funds grow, and
whether fee levels reflect these economies of scale. The Independent Trustees
also considered the "fallout benefits" to, and the profitability of, the Adviser
but given the amounts involved viewed these as secondary factors in connection
with the evaluation of the reasonableness of the advisory fees paid by the
Funds.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreements. Rather the Trustees concluded, in light of a weighing and balancing
of all factors considered, that it was in the best interests of each Fund and
its shareholders to continue its Investment Advisory Agreement without
modification to its terms, including the fees charged for services thereunder.
28
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================================================================================
-----------------------------------------------------------------------------
THE
[GRAPHIC OMITTED] FLIPPIN, BRUCE & PORTER
FUNDS
==========================
INVESTMENT ADVISER LEGAL COUNSEL
Flippin, Bruce & Porter, Inc. Sullivan & Worcester LLP
800 Main Street, Second Floor One Post Office Square
P.O. Box 6138 Boston, Massachusetts 02109
Lynchburg, Virginia 24505
TOLL-FREE 1-800-327-9375 OFFICERS
WWW.FBPINC.COM John T. Bruce, President
and Portfolio Manager
ADMINISTRATOR John M. Flippin, Vice President
Ultimus Fund Solutions, LLC R. Gregory Porter, III,
P.O. Box 46707 Vice President
Cincinnati, Ohio 45246-0707 Teresa L. Sanderson, Chief
TOLL-FREE 1-866-738-1127 Compliance Officer
CUSTODIAN TRUSTEES
US Bank Austin Brockenbrough, III
425 Walnut Street John T. Bruce
Cincinnati, Ohio 45202 Charles M. Caravati, Jr.
J. Finley Lee, Jr.
INDEPENDENT REGISTERED Richard L. Morrill
PUBLIC ACCOUNTING FIRM Harris V. Morrissette
Ernst & Young LLP Erwin H. Will, Jr.
1900 Scripps Center Samuel B. Witt, III
312 Walnut Street
Cincinnati, Ohio 45202
----------------------------------------------------------------------------
================================================================================
=====================================================
THE
GOVERNMENT STREET
FUNDS
NO-LOAD MUTUAL FUNDS
ANNUAL REPORT
MARCH 31, 2006
=====================================================
T. LEAVELL & ASSOCIATES, INC.
-----------------------------------------
I N V E S T M E N T A D V I S E R
-----------------------------------------
Founded 1979
=====================================================
THE GOVERNMENT STREET EQUITY FUND
THE GOVERNMENT STREET MID-CAP FUND
THE GOVERNMENT STREET BOND FUND
THE ALABAMA TAX FREE BOND FUND
=====================================================
LETTER FROM THE PRESIDENT MAY 17, 2006
================================================================================
Dear Fellow Shareholders:
We are enclosing for your review the audited Annual Report of The Government
Street Funds for the year ended March 31, 2006.
THE GOVERNMENT STREET EQUITY FUND
- ---------------------------------
The Government Street Equity Fund had a very solid fiscal year. The return
of the Fund for the twelve month period ended March 31, 2006 was 12.39% compared
to a return of 11.73% for the S&P 500 Index. The Fund lost a little relative
performance in the final quarter, returning 3.85% compared to the S&P 500 return
of 4.21%, as major holdings in the Healthcare sector turned negative. The first
three quarters of the fiscal year had seen positive absolute and relative
returns.
The final quarter saw United Health Group and Wellpoint, each in the top 10
individual holdings of the Fund at 3.0% and 2.0%, respectively, fall -10.12% and
- -2.96%. Other large capitalization stocks continued to provide weak and negative
returns in a continuation of underperformance of that segment of the market
which has now existed almost continuously for the last 6 years. Examples for the
quarter were General Electric (-6.45%), Altria (-4.10%), Amgen (-7.75%), Intel
(-23.39%) and Medtronic (-11.70%)*.
On a positive note, Energy stocks with a slight portfolio overweighting at
the industry level, turned in solid results for the quarter. Examples are Exxon
(8.74%), BP PLC (8.26%), Conoco Phillips (9.19%) and Valero Energy (15.98%)*.
Other large positive moves were seen from Goldman Sachs (23.76%), Disney
(16.35%), Caterpillar (24.82%), Cisco (26.58%) and Corning (36.93%)*. The
resulting overall positive return of the Fund again demonstrated the value of
broad diversification among quality securities.
The positive absolute and relative returns of the Fund for the fiscal year
came, in general, from its value stocks and the mid to smaller capitalization
components. In general, these stocks fall below a price to book value of 3.5 and
a capitalization of $13 billion. In total they make up approximately 60% of the
portfolio.
In summary, fiscal year 2006 turned out to be generally good for equity
investments. Continued consumer spending on real estate and discretionary items
maintained a high level of demand for products. While the Federal Reserve
continued to raise interest rates as a deterrent to increased inflation, the
consumer and the investor seemed to shrug off all concerns of a slowdown with a
very positive bias.
The manager of your Fund believes the Federal Reserve rate increases,
higher energy prices and slowing consumer spending will create a more difficult
investment environment in fiscal 2007. While positive overall results are
anticipated, the confluence of negative mitigating factors should slow
investment progress.
1
As indicated by this Annual Report, the Fund has begun investing in
exchange traded funds. An exchange traded fund is a type of investment company
whose investment objective is to achieve the same return as a market index.
During the period of this Report, the Fund had invested in the Rydex Exhange
Traded Fund ("RSP") and the S&P Depository Receipts ("SPDRs"). Both the RSP and
SPDRs offer the Fund exposure to the S&P 500 Index but, at the same time, with
very different exposure characteristics. For example, RSP equally weights its
holdings in the securities of the S&P 500 Index while the SPDR weights its
holdings based on each of the underlying company's market capitalization. The
Adviser believes these and other exchange traded funds offer the Fund a unique
investment opportunity and may become common investments for the Fund.
As of March 31, 2006, the Fund's net assets were $107,242,848; net asset
value per share was $52.42; and the ratio of expenses to average net assets was
0.78%. Portfolio turnover rate was 17%. Dividends of $.50 per share were
distributed during the year.
THE GOVERNMENT STREET MID-CAP FUND
- ----------------------------------
The Government Street Mid-Cap Fund completed its second fiscal year on
March 31, 2006. It was a rewarding period for investors. The Fund produced a
21.51% total return for the 12-month period. At the same time, the Standard &
Poor's MidCap 400 Index returned 21.63%.
Your Fund participated fully in the continued excellent performance of
domestic mid-cap and small-cap investments when compared to their larger
capitalization counterparts. A proxy for larger capitalization investment is the
Standard & Poor's 500 Index, which rose 11.73% for the same 12-month period.
While an excellent return by the larger index, it was only slightly greater than
one-half that of the mid-cap benchmark.
Minimal industry overweightings within the Fund of Energy, Industrials and
Materials contributed highly positive results for the year. Within the Energy
sector, its growth component was up 33.58% while its value component climbed
34.85%. Growth and value components of Industrials were up 31.81% and 37.23%,
respectively, while Materials turned in 53.55% and 47.01%, respectively. The
Energy, Industrial and Materials sectors made up 11.7%, 12.9% and 6.4%,
respectively, of the Fund's total portfolio.
The laggard sectors were primarily Consumer Discretionary, Healthcare and
Staples. The growth and value components of those industries were 17.49% and
6.99%, 25.63% and 9.96%, and 12.47% and -6.95%, respectively. In total, these
three sectors made up 30.4% of the Fund's portfolio as of March 31, 2006.
Additionally, there were some truly outstanding returns among the Fund's
top ten holdings. The top five were Eagle Materials (161.6%), San Disk
Corporation (115.3%), Martin Marietta Materials (91.08%), Berkley (W.R.)
Corporation (78.43%) and Legg Mason (66.92%)*.
It is probably unrealistic to expect performance in fiscal 2007 to match or
exceed that of 2006. However, we do expect mid-cap securities to continue to
compete favorably on a relative basis with their larger and smaller domes-
2
tic counterparts. These types of companies seem to be in the "sweet spot" for
investment. They are not too large to be unmanageable and yet large enough to
have financial resources available from institutions and investors.
In all probability, the general economy is expected to slow in 2006. Rising
interest rates, increased energy prices, decreasing productivity, labor shortage
and political unrest will most likely undermine investor confidence. The mere
fact that we are currently in one of the longest economic expansions in history
argues for moderation in markets. History has shown that momentum can carry
markets beyond expectations, but this one seems to be leveling out.
Your Fund should do well in any upcoming market environment. It cannot be
expected to run counter to the general direction of the market - the broad
diversification with high quality stocks should yield good relative performance.
As of March 31, 2006 the net assets of the Fund were $37,618,750 and the
net asset value per share was $13.71. The turnover rate for 2006 was 28%. The
ratio of net expenses to average assets was 1.10%.
THE GOVERNMENT STREET BOND FUND
- -------------------------------
Fiscal 2006 was an interesting year for fixed income investors. The Federal
Reserve continued to raise the Federal Fund interest rates from 2.75% to 4.75%
in increments of a quarter point. Two historic bellwethers, General Motors and
Ford Motor Company, had their credit ratings downgraded from investment grade to
"junk." Yet, in spite of such negative influences, bond prices in the
intermediate-term maturity range stayed relatively stable to slightly down in
price.
This "conundrum" has been partially explained by increased demand for U.S.
Treasury Securities by foreign investors. They purchased, at an estimated total
of $311 billion, more corporate securities in the first 10 months of 2005 than
in all of 2004. It was estimated that foreigners have become the largest
aggregate buyer of U.S. Treasury Bonds. The United States continued its
excessive balance of trade deficit which flooded foreign interest with American
dollars.
Consequently, the intermediate range bonds stayed somewhat stable during
the period. Shorter term prices dropped marginally, reflecting the continuation
of Federal Fund increases. The result was a flat to inverted yield curve for all
bonds. Investors had to make investment decisions in a highly uncertain
environment.
Your Fund continued to opt for preservation of principal by utilizing
shorter term high quality investments. The average maturity of the Fund was 3.8
years with a duration of 3.2 years. This position is relatively short when
compared to one of its benchmarks, the Lehman Intermediate Government/Credit
Bond Index, which has an average maturity of 4.37 years. Your Fund is invested
heavily in high quality debt with more than 58% of the portfolio in U.S.
Government Securities. Additionally, the Fund carries a large percentage of its
investments in premium priced bonds which tend to be less volatile than
discounted or par issues.
3
The total return for The Government Street Bond Fund was 1.80% for the
fiscal year ended March 31, 2006. During the same period, the Lehman
Intermediate Government/Credit Bond Index was up 2.08%. The 90-Day Treasury Bill
Index was up 3.67%, dramatically demonstrating the result of the yield curve
inversion.
It is anticipated that the Federal Reserve will continue to raise interest
rates going forward. The current level of 4.75% is still below the average of
5.72% established over the past 51 years. The strategy for your Fund will
continue to remain defensive until the intermediate rates reflect more
accurately the higher rates believed appropriate for economic conditions. It is
expected that the yield curve will resume a more normal position in the coming
months, with intermediate and longer rates moving upward.
As of March 31, 2006, the net assets of the Fund were $36,234,682. Net
asset value per share was $19.67. Portfolio turnover rate was 32%, which is
relatively high by the Fund's historical standards, reflecting the shortening of
the maturity structure of the Fund.
THE ALABAMA TAX FREE BOND FUND
- ------------------------------
The Federal Reserve Board has remained vigilant in its efforts to control
the rate of inflation. Persistent one-quarter point hikes in the Fed Funds rate,
initiated in mid-2004, have brought the target rate to 4.75%. Further tightening
is expected. The impact of these actions on the bond market has been a
flattening of the yield curve whereby short-term rates have increased as
long-term rates have moved lower.
The adjustments taken in The Alabama Tax Free Bond Fund to shorten the
duration of the portfolio over the last two years have resulted in a generally
defensive posture designed to protect the portfolio from the adverse effects of
rising interest rates. While this stance has resulted in relative
underperformance when compared to intermediate-term indices, the portfolio is
well positioned to take advantage of increasing rates and a more normally sloped
yield curve.
For the twelve months ended March 31, 2006, the Fund had a return of 1.80%
compared to a return of 2.15% for the Lipper 5-year Municipal Bond Index and
2.87% for the Lipper Intermediate Municipal Fund Index. The funds which comprise
the Lipper Index are generally of longer average maturity and hold lower rated
securities than those of the Fund. As of March 31, 2006, the average maturity of
the Fund was 4.6 years - compared to 4.7 years a year ago. Approximately
two-thirds of the bonds in the portfolio are rated AAA and there are no
securities rated lower than A.
Investors should expect the Fund to continue to be positioned to achieve
its primary objectives of preserving principal value and generating income which
is exempt from both Federal and Alabama state taxes. Extending the average
maturity and the duration of the Fund will be initiated as rates move higher and
the yield curve takes on a more normal shape.
4
With commodity prices at record highs and the value of the dollar declining
against other major currencies, the Federal Reserve will continue its focus on
controlling the rate of inflation. New Federal Reserve Chairman Bernanke appears
to be on a path consistent with that of prior Chairman Greenspan, and as a
result, additional hikes in the Fed Funds rate are expected. The bond market
will, of course, continue to be influenced by their actions. Improvement in the
relative performance of the Fund should result from the defensive posture of the
portfolio in an environment of increasing interest rates.
The net assets of the Fund as of March 31, 2006 were $26,181,791 and the
net asset value per share was $10.40. The ratio of net investment income to
average net assets during the fiscal year was 3.25%.
Very truly yours,
/s/ Thomas W. Leavell
Thomas W. Leavell
President
T. Leavell & Associates, Inc.
The Government Street Funds
* The returns noted for individual stocks represent the internal rate of
return earned by the Fund on the holding using the discounted cash flow
method.
5
THE GOVERNMENT STREET EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE GOVERNMENT STREET EQUITY FUND
Comparison of the Change in Value of a $10,000 Investment in
The Government Street Equity Fund and the Standard & Poor's 500 Index
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX: THE GOVERNMENT STREET EQUITY FUND:
--------------------------- ---------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,449 06/30/96 10,287
09/30/96 10,772 09/30/96 10,820
12/31/96 11,670 12/31/96 11,512
03/31/97 11,983 03/31/97 11,694
06/30/97 14,075 06/30/97 13,634
09/30/97 15,129 09/30/97 14,472
12/31/97 15,563 12/31/97 14,717
03/31/98 17,734 03/31/98 16,291
06/30/98 18,320 06/30/98 16,557
09/30/98 16,497 09/30/98 15,059
12/31/98 20,011 12/31/98 18,209
03/31/99 21,008 03/31/99 18,704
06/30/99 22,489 06/30/99 20,143
09/30/99 21,084 09/30/99 18,821
12/31/99 24,222 12/31/99 21,434
03/31/00 24,777 03/31/00 22,432
06/30/00 24,119 06/30/00 21,997
09/30/00 23,885 09/30/00 21,914
12/31/00 22,016 12/31/00 20,612
03/31/01 19,406 03/31/01 17,809
06/30/01 20,542 06/30/01 18,553
09/30/01 17,527 09/30/01 16,122
12/31/01 19,399 12/31/01 17,930
03/31/02 19,453 03/31/02 18,055
06/30/02 16,847 06/30/02 15,677
09/30/02 13,936 09/30/02 13,184
12/31/02 15,112 12/31/02 14,111
03/31/03 14,636 03/31/03 13,637
06/30/03 16,889 06/30/03 15,671
09/30/03 17,336 09/30/03 16,154
12/31/03 19,447 12/31/03 18,077
03/31/04 19,776 03/31/04 18,559
06/30/04 20,117 06/30/04 18,710
09/30/04 19,741 09/30/04 18,059
12/31/04 21,563 12/31/04 19,755
03/31/05 21,100 03/31/05 19,166
06/30/05 21,389 06/30/05 19,429
09/30/05 22,160 09/30/05 20,304
12/31/05 22,622 12/31/05 20,743
03/31/06 23,574 03/31/06 21,541
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS 10 YEARS
The Government Street Equity Fund 12.39% 3.88% 7.98%
Standard & Poor's 500 Index 11.73% 3.97% 8.95%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
6
THE GOVERNMENT STREET MID-CAP FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE GOVERNMENT STREET MID-CAP FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Mid-Cap Fund and the Standard & Poor's MidCap 400 Index
[GRAPHIC OMITTED]
STANDARD & POOR'S MIDCAP 400 INDEX: THE GOVERNMENT STREET MID-CAP FUND:
---------------------------------- ----------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
11/17/03 $ 10,000 11/17/03 $ 10,000
12/31/03 10,435 12/31/03 10,218
03/31/04 10,963 03/31/04 10,683
06/30/04 11,069 06/30/04 10,808
09/30/04 10,837 09/30/04 10,652
12/31/04 12,155 12/31/04 11,602
03/31/05 12,106 03/31/05 11,696
06/30/05 12,623 06/30/05 12,223
09/30/05 13,239 09/30/05 12,855
12/31/05 13,682 12/31/05 13,226
03/31/06 14,725 03/31/06 14,211
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR SINCE INCEPTION*
The Government Street Mid-Cap Fund 21.51% 15.98%
Standard & Poor's MidCap 400 Index 21.63% 17.74%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. The return does not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
* Initial public offering of shares was November 17, 2003.
7
THE GOVERNMENT STREET BOND FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE GOVERNMENT STREET BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Bond Fund, the Lehman Intermediate Government/Credit Bond Index and the
90-Day Treasury Bill Index
[GRAPHIC OMITTED]
LEHMAN INTERMEDIATE GOVERNMENT
/CREDIT BOND INDEX: THE GOVERNMENT STREET BOND FUND:
----------------------- -------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,063 06/30/96 10,061
09/30/96 10,242 09/30/96 10,236
12/31/96 10,493 12/31/96 10,471
03/31/97 10,482 03/31/97 10,460
06/30/97 10,791 06/30/97 10,763
09/30/97 11,082 09/30/97 11,060
12/31/97 11,319 12/31/97 11,291
03/31/98 11,496 03/31/98 11,465
06/30/98 11,712 06/30/98 11,680
09/30/98 12,238 09/30/98 12,121
12/31/98 12,273 12/31/98 12,129
03/31/99 12,250 03/31/99 12,082
06/30/99 12,201 06/30/99 11,932
09/30/99 12,313 09/30/99 12,012
12/31/99 12,319 12/31/99 12,006
03/31/00 12,504 03/31/00 12,163
06/30/00 12,715 06/30/00 12,362
09/30/00 13,082 09/30/00 12,744
12/31/00 13,566 12/31/00 13,237
03/31/01 14,027 03/31/01 13,653
06/30/01 14,121 06/30/01 13,727
09/30/01 14,772 09/30/01 14,316
12/31/01 14,785 12/31/01 14,308
03/31/02 14,751 03/31/02 14,319
06/30/02 15,275 06/30/02 14,752
09/30/02 15,966 09/30/02 15,285
12/31/02 16,236 12/31/02 15,500
03/31/03 16,480 03/31/03 15,660
06/30/03 16,928 06/30/03 15,937
09/30/03 16,924 09/30/03 15,914
12/31/03 16,935 12/31/03 15,959
03/31/04 17,353 03/31/04 16,182
06/30/04 16,916 06/30/04 15,918
09/30/04 17,372 09/30/04 16,179
12/31/04 17,447 12/31/04 16,246
03/31/05 17,293 03/31/05 16,188
06/30/05 17,723 06/30/05 16,411
09/30/05 17,630 09/30/05 16,391
12/31/05 17,721 12/31/05 16,414
03/31/06 17,653 03/31/06 16,480
90-DAY TREASURY BILL INDEX:
--------------------------
DATE BALANCE
---- -------
03/31/96 $ 10,000
06/30/96 10,129
09/30/96 10,269
12/31/96 10,403
03/31/97 10,535
06/30/97 10,679
09/30/97 10,822
12/31/97 10,957
03/31/98 11,100
06/30/98 11,243
09/30/98 11,402
12/31/98 11,531
03/31/99 11,652
06/30/99 11,792
09/30/99 11,941
12/31/99 12,090
03/31/00 12,259
06/30/00 12,444
09/30/00 12,632
12/31/00 12,837
03/31/01 13,030
06/30/01 13,177
09/30/01 13,319
12/31/01 13,404
03/31/02 13,462
06/30/02 13,520
09/30/02 13,578
12/31/02 13,631
03/31/03 13,672
06/30/03 13,706
09/30/03 13,739
12/31/03 13,772
03/31/04 13,803
06/30/04 13,842
09/30/04 13,896
12/31/04 13,967
03/31/05 14,056
06/30/05 14,157
09/30/05 14,275
12/31/05 14,413
03/31/06 14,572
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS 10 YEARS
The Government Street Bond Fund 1.80% 3.84% 5.12%
Lehman Intermediate Government/
Credit Bond Index 2.08% 4.71% 5.85%
90-Day Treasury Bill Index 3.67% 2.26% 3.84%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
8
THE ALABAMA TAX FREE BOND FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
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 Municipal Bond Index, the Lehman 3-Year
Municipal Bond Index and the Lipper Intermidiate Municipal Fund Index
[GRAPHIC OMITTED]
LEHMAN 3-YEAR MUNICIPAL BOND INDEX: THE ALABAMA TAX FREE BOND FUND:
---------------------------------- ------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,081 06/30/96 10,026
09/30/96 10,214 09/30/96 10,195
12/31/96 10,386 12/31/96 10,415
03/31/97 10,428 03/31/97 10,382
06/30/97 10,621 06/30/97 10,636
09/30/97 10,803 09/30/97 10,853
12/31/97 10,956 12/31/97 11,072
03/31/98 11,069 03/31/98 11,155
06/30/98 11,194 06/30/98 11,283
09/30/98 11,416 09/30/98 11,575
12/31/98 11,526 12/31/98 11,641
03/31/99 11,654 03/31/99 11,683
06/30/99 11,603 06/30/99 11,491
09/30/99 11,719 09/30/99 11,526
12/31/99 11,753 12/31/99 11,526
03/31/00 11,872 03/31/00 11,723
06/30/00 12,037 06/30/00 11,864
09/30/00 12,231 09/30/00 12,089
12/31/00 12,486 12/31/00 12,470
03/31/01 12,813 03/31/01 12,744
06/30/01 12,969 06/30/01 12,803
09/30/01 13,276 09/30/01 13,095
12/31/01 13,308 12/31/01 13,014
03/31/02 13,376 03/31/02 13,076
06/30/02 13,768 06/30/02 13,519
09/30/02 14,075 09/30/02 14,044
12/31/02 14,203 12/31/02 14,110
03/31/03 14,323 03/31/03 14,209
06/30/03 14,449 06/30/03 14,486
09/30/03 14,608 09/30/03 14,514
12/31/03 14,583 12/31/03 14,566
03/31/04 14,718 03/31/04 14,692
06/30/04 14,579 06/30/04 14,431
09/30/04 14,856 09/30/04 14,752
12/31/04 14,884 12/31/04 14,803
03/31/05 14,772 03/31/05 14,683
06/30/05 14,950 06/30/05 14,898
09/30/05 14,971 09/30/05 14,889
12/31/05 15,013 12/31/05 14,941
03/31/06 15,031 03/31/06 14,947
LEHMAN 7-YEAR MUNICIPAL BOND INDEX: LIPPER INTERMEDIATE MUNICIPAL FUND INDEX:
- ---------------------------------- ----------------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,029 06/30/96 10,044
09/30/96 10,218 09/30/96 10,229
12/31/96 10,480 12/31/96 10,454
03/31/97 10,464 03/31/97 10,452
06/30/97 10,755 06/30/97 10,728
09/30/97 11,042 09/30/97 10,991
12/31/97 11,284 12/31/97 11,228
03/31/98 11,414 03/31/98 11,336
06/30/98 11,542 06/30/98 11,473
09/30/98 11,927 09/30/98 11,792
12/31/98 12,003 12/31/98 11,859
03/31/99 12,097 03/31/99 11,925
06/30/99 11,899 06/30/99 11,725
09/30/99 11,994 09/30/99 11,733
12/31/99 11,983 12/31/99 11,696
03/31/00 12,164 03/31/00 11,902
06/30/00 12,366 06/30/00 12,046
09/30/00 12,645 09/30/00 12,298
12/31/00 13,071 12/31/00 12,710
03/31/01 13,407 03/31/01 12,997
06/30/01 13,504 06/30/01 13,094
09/30/01 13,876 09/30/01 13,433
12/31/01 13,747 12/31/01 13,320
03/31/02 13,877 03/31/02 13,416
06/30/02 14,469 06/30/02 13,891
09/30/02 15,099 09/30/02 14,428
12/31/02 15,119 12/31/02 14,431
03/31/03 15,325 03/31/03 14,574
06/30/03 15,732 06/30/03 14,895
09/30/03 15,827 09/30/03 14,924
12/31/03 15,964 12/31/03 15,060
03/31/04 16,205 03/31/04 15,235
06/30/04 15,825 06/30/04 14,935
09/30/04 16,358 09/30/04 15,381
12/31/04 16,494 12/31/04 15,490
03/31/05 16,327 03/31/05 15,376
06/30/05 16,759 06/30/05 15,744
09/30/05 16,690 09/30/05 15,713
12/31/05 16,777 12/31/05 15,801
03/31/06 16,756 03/31/06 15,817
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS 10 YEARS
The Alabama Tax Free Bond Fund 1.80% 3.24% 4.10%
Lehman 7-Year Municipal Bond Index 2.63% 4.56% 5.30%
Lehman 3-Year Municipal Bond Index 1.76% 3.24% 4.16%
Lipper Intermediate Municipal Fund Index 2.87% 4.01% 4.69%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
9
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
INDUSTRY CONCENTRATION VS.THE S&P 500 INDEX (% OF NET ASSETS)
[GRAPHIC OMITTED]
The Government Street S&P 500
Equity Fund Index
-------------------------------------
Consumer Discretionary 10.4% 10.2%
Consumer Staples 7.3% 9.3%
Energy 12.3% 9.6%
Financials 14.9% 21.0%
Health Care 15.0% 12.9%
Industrials 10.4% 11.5%
Information Technology 14.3% 16.0%
Materials 5.3% 3.0%
Real Estate 3.3% 0.0%
Telecommunication Services 0.7% 3.3%
Utilities 3.7% 3.2%
Exchange-Traded Funds 2.0% 0.0%
Cash Equivalents 0.4% 0.0%
TOP TEN HOLDINGS
SECURITY DESCRIPTION % OF NET ASSETS
-----------------------------------------------------------
UnitedHealth Group, Inc. 3.0%
Bank of America Corporation 2.7%
ConocoPhillips 2.6%
Home Depot, Inc. 2.5%
Procter & Gamble Company (The) 2.3%
Altria Group, Inc. 2.2%
Duke Energy Corp. 2.1%
Wellpoint, Inc. 2.0%
U.S. Bancorp 2.0%
Rydex S&P Equal Weight ETF 2.0%
10
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
INDUSTRY CONCENTRATION VS.THE S&P MIDCAP 400 INDEX (% OF NET ASSETS)
[GRAPHIC OMITTED]
The Government Street S&P MidCap
Mid-Cap Fund 400 Index
------------------------------------------
Consumer Discretionary 12.8% 15.5%
Consumer Staples 4.3% 1.8%
Energy 11.7% 9.5%
Financials 13.8% 19.3%
Health Care 13.3% 10.2%
Industrials 12.9% 15.1%
Information Technology 14.7% 16.6%
Materials 6.4% 4.4%
Real Estate 2.0% 0.0%
Telecommunication Services 0.7% 0.4%
Utilities 6.3% 7.2%
Cash Equivalents 1.1% 0.0%
TOP TEN HOLDINGS
SECURITY DESCRIPTION % OF NET ASSETS
-----------------------------------------------------------
Valero Energy Corporation 2.3%
Covance, Inc. 1.4%
Gilead Sciences, Inc. 1.3%
SanDisk Corporation 1.2%
Coventry Health Care, Inc. 1.2%
Martin Marietta Materials, Inc. 1.1%
XTO Energy, Inc. 1.1%
Berkley (W.R.) Corporation 1.0%
Eagle Materials, Inc. 1.0%
Legg Mason, Inc. 1.0%
11
THE GOVERNMENT STREET BOND FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION VS. THE LEHMAN INTERNEDIATE
GOVERNMENT/CREDIT BOND INDEX (% OF PORTFOLIO)
[GRAPHIC OMITTED]
Lehman Intermediate
The Government Street Government/Credit
Bond Fund Bond Index
-------------------------------------------
U.S. Treasury Obligations 2.4% 40.5%
U.S. Agency Obligations 23.4% 21.7%
Coporate Bonds 45.8% 37.8%
Mortgage-Backed Securities 23.6% 0.0%
Cash Equivalents 4.8% 0.0%
DISTRIBUTION BY MATURITY
-----------------------------------------------
Maturity % Holdings
-------- ----------
Under 1 year 17.1%
1-3 Years 14.6%
3-5 Years 16.3%
5-7 Years 24.5%
7-10 Years 27.5%
DISTRIBUTION BY RATING
-----------------------------------------------
Rating % Holdings
------ ----------
AAA 58.9%
AA 8.4%
A 30.0%
BBB 2.7%
12
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF HOLDINGS)
[GRAPHIC OMITTED]
Revenue Bonds - 29.2%
Pre-Refunded & Escrowed Bonds - 14.1%
General Obligation Bonds - 47.5%
Cash Equivalents - 9.2%
DISTRIBUTION BY RATING
-------------------------------------------------
Rating % Holdings
------ ----------
Aaa 65.9%
AA 33.2%
A 0.9%
13
THE GOVERNMENT STREET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2006
==========================================================================================================
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------
ASSET
Investments in securities
At acquisition cost ..................... $ 60,131,506 $ 28,349,802 $ 36,859,450 $ 25,542,753
============ ============ ============ ============
At value (Note 1) ....................... $106,901,641 $ 37,623,224 $ 35,872,554 $ 25,922,185
Dividends and interest receivable ......... 103,173 22,332 435,310 306,916
Receivable for investment securities sold . 3,341,718 -- -- --
Receivable for capital shares sold ........ 1,500 17,675 -- 100
Other assets .............................. 6,604 5,366 5,660 4,295
------------ ------------ ------------ ------------
TOTAL ASSETS ............................ 110,354,636 37,668,597 36,313,524 26,233,496
------------ ------------ ------------ ------------
LIABILITIES
Bank overdraft ............................ -- -- -- 803
Distributions payable ..................... 8,536 -- 11,000 25,970
Payable for investment securities purchased 2,125,143 -- -- --
Payable for capital shares redeemed ....... 901,936 11,002 55,727 7,316
Accrued investment advisory fees (Note 3) . 57,666 26,395 1,540 6,176
Accrued administration fees (Note 3) ...... 11,400 4,800 2,500 3,300
Other accrued expenses .................... 7,107 7,650 8,075 8,140
------------ ------------ ------------ ------------
TOTAL LIABILITIES ....................... 3,111,788 49,847 78,842 51,705
------------ ------------ ------------ ------------
NET ASSETS ................................ $107,242,848 $ 37,618,750 $ 36,234,682 $ 26,181,791
============ ============ ============ ============
Net assets consist of:
Paid-in capital ........................... $ 55,055,489 $ 27,350,533 $ 39,831,997 $ 25,882,226
Undistributed (in excess of) net
investment income ....................... 3,568 92,025 (703,627) 10,659
Accumulated net realized gains (losses)
from security transactions .............. 5,413,656 902,770 (1,906,792) (90,526)
Net unrealized appreciation (depreciation)
on investments .......................... 46,770,135 9,273,422 (986,896) 379,432
------------ ------------ ------------ ------------
Net assets ................................ $107,242,848 $ 37,618,750 $ 36,234,682 $ 26,181,791
============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ........................... 2,045,885 2,744,459 1,842,539 2,518,648
============ ============ ============ ============
Net asset value, offering price and
redemption price per share (Note 1) ..... $ 52.42 $ 13.71 $ 19.67 $ 10.40
============ ============ ============ ============
See accompanying notes to financial statements.
14
THE GOVERNMENT STREET FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2006
==========================================================================================================
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ................................ $ 36,772 $ 96,431 $ 2,603,838 $ 1,231,617
Dividends ............................... 2,288,338 477,552 129 18,496
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ............... 2,325,110 573,983 2,603,967 1,250,113
------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) ....... 773,382 291,836 292,196 112,344
Administration fees (Note 3) ............ 153,400 54,494 43,843 46,318
Professional fees ....................... 18,868 16,668 17,768 15,668
Trustees' fees and expenses ............. 13,591 13,591 13,591 13,591
Custodian fees .......................... 17,144 16,942 14,899 5,298
Pricing costs ........................... 4,645 6,249 10,987 15,110
Postage and supplies .................... 12,813 6,952 8,474 7,598
Account maintenance fees ................ 10,095 8,885 5,100 2,160
Registration fees ....................... 6,594 5,980 4,591 3,209
Compliance fees (Note 3) ............... 9,262 2,347 4,102 2,317
Insurance expense ....................... 8,031 2,402 4,060 2,526
Printing of shareholder reports ......... 5,583 2,219 2,567 2,082
Other expenses .......................... 11,273 5,148 7,710 5,378
------------ ------------ ------------ ------------
TOTAL EXPENSES ........................ 1,044,681 433,713 429,888 233,599
Fees waived by the Adviser (Note 3) ..... -- (5,688) (14,970) (24,959)
------------ ------------ ------------ ------------
NET EXPENSES .......................... 1,044,681 428,025 414,918 208,640
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ..................... 1,280,429 145,958 2,189,049 1,041,473
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses) from
security transactions ................. 7,070,087 1,116,759 88,201 (1,406)
Net change in unrealized appreciation/
depreciation on investments ........... 7,628,352 6,448,351 (1,219,754) (443,003)
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS ........... 14,698,439 7,565,110 (1,131,553) (444,409)
------------ ------------ ------------ ------------
NET INCREASE IN
NET ASSETS FROM OPERATIONS .............. $ 15,978,868 $ 7,711,068 $ 1,057,496 $ 597,064
============ ============ ============ ============
See accompanying notes to financial statements.
15
THE GOVERNMENT STREET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
==========================================================================================================
GOVERNMENT STREET GOVERNMENT STREET
EQUITY FUND MID-CAP FUND
-------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2006 2005 2006 2005
- ----------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 1,280,429 $ 1,404,316 $ 145,958 $ 32,776
Net realized gains (losses) from
security transactions ................. 7,070,087 1,889,478 1,116,759 (17,302)
Net change in unrealized appreciation/
depreciation on investments ........... 7,628,352 819,447 6,448,351 2,415,666
------------ ------------ ------------ ------------
Net increase in net assets
from operations ......................... 15,978,868 4,113,241 7,711,068 2,431,140
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .............. (1,289,147) (1,392,242) (64,987) (21,722)
From realized capital gains
on security transactions .............. -- -- -- (72)
------------ ------------ ------------ ------------
Net decrease in net assets from
distributions to shareholders ........... (1,289,147) (1,392,242) (64,987) (21,794)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 7,008,051 9,712,122 10,696,669 11,727,145
Net asset value of shares issued in
reinvestment of distributions
to shareholders ....................... 1,259,283 1,361,236 62,706 21,474
Payments for shares redeemed ............ (48,635,746) (10,591,440) (12,812,121) (1,359,538)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
capital share transactions .............. (40,368,412) 481,918 (2,052,746) 10,389,081
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ........................... (25,678,691) 3,202,917 5,593,335 12,798,427
NET ASSETS
Beginning of year ....................... 132,921,539 129,718,622 32,025,415 19,226,988
------------ ------------ ------------ ------------
End of year ............................. $107,242,848 $132,921,539 $ 37,618,750 $ 32,025,415
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME .................................. $ 3,568 $ 12,286 $ 92,025 $ 11,054
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................... 142,558 207,826 869,617 1,101,273
Reinvested .............................. 25,262 28,955 4,914 1,915
Redeemed ................................ (943,681) (228,716) (963,680) (130,709)
------------ ------------ ------------ ------------
Net increase (decrease) in
shares outstanding .................... (775,861) 8,065 (89,149) 972,479
Shares outstanding, beginning of year ... 2,821,746 2,813,681 2,833,608 1,861,129
------------ ------------ ------------ ------------
Shares outstanding, end of year ......... 2,045,885 2,821,746 2,744,459 2,833,608
============ ============ ============ ============
See accompanying notes to financial statements.
16
THE GOVERNMENT STREET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
==========================================================================================================
GOVERNMENT STREET ALABAMA TAX FREE
BOND FUND BOND FUND
-------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2006 2005 2006 2005
- ----------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 2,189,049 $ 2,116,554 $ 1,041,473 $ 1,143,433
Net realized gains (losses) from
security transactions ................. 88,201 146,098 (1,406) 22,933
Net change in unrealized appreciation/
depreciation on investments ........... (1,219,754) (2,269,571) (443,003) (1,181,568)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from operations ......................... 1,057,496 (6,919) 597,064 (15,202)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From and/or in excess of net
investment income ..................... (2,795,083) (2,826,223) (1,031,750) (1,140,113)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 6,594,193 6,392,132 2,730,197 2,124,741
Net asset value of shares issued in
reinvestment of distributions
to shareholders ....................... 2,668,658 2,700,878 748,246 845,985
Payments for shares redeemed ............ (31,209,270) (10,346,120) (11,386,673) (5,992,957)
------------ ------------ ------------ ------------
Net decrease in net assets from
capital share transactions .............. (21,946,419) (1,253,110) (7,908,230) (3,022,231)
------------ ------------ ------------ ------------
TOTAL DECREASE IN NET ASSETS .............. (23,684,006) (4,086,252) (8,342,916) (4,177,546)
NET ASSETS
Beginning of year ....................... 59,918,688 64,004,940 34,524,707 38,702,253
------------ ------------ ------------ ------------
End of year ............................. $ 36,234,682 $ 59,918,688 $ 26,181,791 $ 34,524,707
============ ============ ============ ============
UNDISTRIBUTED (IN EXCESS OF)
NET INVESTMENT INCOME ................... $ (703,627) $ (760,726) $ 10,659 $ 8,652
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................... 326,991 309,184 259,561 198,966
Reinvested .............................. 133,172 130,907 71,117 79,164
Redeemed ................................ (1,570,726) (500,688) (1,085,020) (556,252)
------------ ------------ ------------ ------------
Net decrease in shares outstanding ..... (1,110,563) (60,597) (754,342) (278,122)
Shares outstanding, beginning of year ... 2,953,102 3,013,699 3,272,990 3,551,112
------------ ------------ ------------ ------------
Shares outstanding, end of year ......... 1,842,539 2,953,102 2,518,648 3,272,990
============ ============ ============ ============
See accompanying notes to financial statements.
17
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
========================================================================================================================
YEARS ENDED MARCH 31,
------------------------------------------------------------------------------
2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 47.11 $ 46.10 $ 34.13 $ 45.55 $ 45.14
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.50 0.50 0.32 0.28 0.21
Net realized and unrealized
gains (losses) on investments ....... 5.31 1.01 11.97 (11.42) 0.41
----------- ----------- ----------- ----------- -----------
Total from investment operations ........ 5.81 1.51 12.29 (11.14) 0.62
----------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income .. (0.50) (0.50) (0.32) (0.28) (0.21)
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......... $ 52.42 $ 47.11 $ 46.10 $ 34.13 $ 45.55
=========== =========== =========== =========== ===========
Total return (a) ........................ 12.39% 3.27% 36.09% (24.47%) 1.38%
=========== =========== =========== =========== ===========
Net assets at end of year (000's) ....... $ 107,243 $ 132,922 $ 129,719 $ 87,837 $ 105,701
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets . 0.78% 0.76% 0.79% 0.81% 0.80%
Ratio of net investment income
to average net assets ................. 0.95% 1.08% 0.77% 0.76% 0.47%
Portfolio turnover rate ................. 17% 13% 15% 12% 17%
(a) Total return is a measure of the change in value of an investment in the Fund over the period covered, which
assumes any dividends or capital gains distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares.
See accompanying notes to financial statements.
18
THE GOVERNMENT STREET MID-CAP FUND
FINANCIAL HIGHLIGHTS
=================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
=================================================================================================
YEAR YEAR PERIOD
ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31,
2006 2005 2004 (a)
- -------------------------------------------------------------------------------------------------
Net asset value at beginning of period ........ $ 11.30 $ 10.33 $ 10.00
---------- ---------- ----------
Income from investment operations:
Net investment income ....................... 0.05 0.01 0.01
Net realized and unrealized
gains on investments ...................... 2.38 0.97 0.68
---------- ---------- ----------
Total from investment operations .............. 2.43 0.98 0.69
---------- ---------- ----------
Less distributions:
Dividends from net investment income ........ (0.02) (0.01) (0.01)
Distributions from net realized gains ....... -- (0.00)(b) (0.35)
---------- ---------- ----------
Total distributions ........................... (0.02) (0.01) (0.36)
---------- ---------- ----------
Net asset value at end of period .............. $ 13.71 $ 11.30 $ 10.33
========== ========== ==========
Total return (c) .............................. 21.51% 9.47% 6.83%(d)
========== ========== ==========
Net assets at end of period (000's) ........... $ 37,619 $ 32,025 $ 19,227
========== ========== ==========
Ratio of net expenses to average net assets (e) 1.10% 1.10% 1.09%(f)
Ratio of net investment income
to average net assets ....................... 0.37% 0.14% 0.11%(f)
Portfolio turnover rate ....................... 28% 6% 177%(f)
(a) Represents the period from the commencement of operations (November 17, 2003) through March
31, 2004.
(b) Amount rounds to less than $0.01 per share.
(c) Total return is a measure of the change in value of an investment in the Fund over the
period covered, which assumes any dividends or capital gains distributions are reinvested in
shares of the Fund. Returns do not reflect the deduction of taxes a shareholder would pay on
Fund distributions or the redemption of Fund shares.
(d) Not annualized.
(e) Absent investment advisory fees voluntarily waived by the Adviser, the ratio of expenses
to average net assets would have been 1.11%, 1.23% and 1.71%(f) for the periods ended
March 31, 2006, 2005 and 2004, respectively (Note 3).
(f) Annualized.
See accompanying notes to financial statements.
19
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
========================================================================================================================
YEARS ENDED MARCH 31,
------------------------------------------------------------------------------
2006 2005 2004 2003 2002(a)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 20.29 $ 21.24 $ 21.55 $ 20.75 $ 20.90
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.77(b) 0.71 0.81 0.99 1.07
Net realized and unrealized
gains (losses) on investments ....... (0.41) (0.71) (0.11) 0.92 (0.06)
----------- ----------- ----------- ----------- -----------
Total from investment operations ........ 0.36 0.00 0.70 1.91 1.01
----------- ----------- ----------- ----------- -----------
Dividends from and/or in excess of
net investment income ................. (0.98) (0.95) (1.01) (1.11) (1.16)
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......... $ 19.67 $ 20.29 $ 21.24 $ 21.55 $ 20.75
=========== =========== =========== =========== ===========
Total return (c) ........................ 1.80% 0.04% 3.34% 9.36% 4.88%
=========== =========== =========== =========== ===========
Net assets at end of year (000's) ....... $ 36,235 $ 59,919 $ 64,005 $ 58,665 $ 53,688
=========== =========== =========== =========== ===========
Ratio of net expenses
to average net assets (d) ............. 0.71% 0.71% 0.70% 0.71% 0.70%
Ratio of net investment income
to average net assets ................. 3.75% 3.44% 3.65% 4.62% 5.06%
Portfolio turnover rate ................. 32% 28% 33% 39% 18%
(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%.
(b) Calculated using weighted average shares outstanding during the year.
(c) Total return is a measure of the change in value of an investment in the Fund over the period covered, which
assumes any dividends or capital gains distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d) Absent investment advisory fees voluntarily waived by the Adviser, the ratio of expenses to average net assets
would have been 0.74% for the year ended March 31, 2006 (Note 3).
See accompanying notes to financial statements.
20
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,
------------------------------------------------------------------------------
2006 2005 2004 2003 2002(a)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 10.55 $ 10.90 $ 10.89 $ 10.40 $ 10.55
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.34 0.35 0.35 0.40 0.42
Net realized and unrealized
gains (losses) on investments ....... (0.15) (0.36) 0.01 0.49 (0.15)
----------- ----------- ----------- ----------- -----------
Total from investment operations ........ 0.19 (0.01) 0.36 0.89 0.27
----------- ----------- ----------- ----------- -----------
Dividends from net investment income .... (0.34) (0.34) (0.35) (0.40) (0.42)
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......... $ 10.40 $ 10.55 $ 10.90 $ 10.89 $ 10.40
=========== =========== =========== =========== ===========
Total return (b) ........................ 1.80% (0.06%) 3.40% 8.67% 2.61%
=========== =========== =========== =========== ===========
Net assets at end of year (000's) ....... $ 26,182 $ 34,525 $ 38,702 $ 34,729 $ 31,603
=========== =========== =========== =========== ===========
Ratio of net expenses to
average net assets (c) ................ 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of net investment income
to average net assets ................. 3.25% 3.21% 3.26% 3.74% 4.02%
Portfolio turnover rate ................. 5% 4% 10% 9% 10%
(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%.
(b) Total return is a measure of the change in value of an investment in the Fund over the period covered, which
assumes any dividends or capital gains distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares.
(c) Absent investment advisory fees voluntarily waived by the Adviser, the ratios of expenses to average net assets
would have been 0.73%, 0.69%, 0.68%, 0.69%, and 0.71% for the years ended March 31, 2006, 2005, 2004, 2003, and
2002, respectively (Note 3).
See accompanying notes to financial statements.
21
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 97.6% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 10.4%
15,000 Best Buy Company, Inc. ........................... $ 838,950
3,000 Black & Decker Corporation (The) ................. 260,670
10,000 Harrah's Entertainment, Inc. ..................... 779,600
62,500 Home Depot, Inc. ................................. 2,643,750
4,000 J.C. Penney Company, Inc. ........................ 241,640
17,000 Johnson Controls, Inc. ........................... 1,290,810
5,500 NIKE, Inc. - Class B ............................. 468,050
500 Omnicom Group, Inc. .............................. 41,625
26,000 Starbucks Corporation (a) ........................ 978,640
20,000 Target Corporation ............................... 1,040,200
5,000 Timberland Company (The) (a) ..................... 171,150
50,000 Walt Disney Company (The) ........................ 1,394,500
20,000 Yum! Brands, Inc. ................................ 977,200
------------
11,126,785
------------
CONSUMER STAPLES -- 7.3%
33,000 Altria Group, Inc. ............................... 2,338,380
14,000 Clorox Company (The) ............................. 837,900
20,000 PepsiCo, Inc. .................................... 1,155,800
42,000 Procter & Gamble Company (The) ................... 2,420,040
25,000 Walgreen Company ................................. 1,078,250
------------
7,830,370
------------
ENERGY -- 12.3%
23,314 Apache Corporation ............................... 1,527,300
25,000 Baker Hughes, Inc. ............................... 1,710,000
20,000 BP plc - ADR ..................................... 1,378,800
26,000 Chevron Corporation .............................. 1,507,220
44,000 ConocoPhillips ................................... 2,778,600
31,300 Exxon Mobil Corporation .......................... 1,904,918
10,000 Transocean, Inc. (a) ............................. 803,000
20,000 Valero Energy Corporation ........................ 1,195,600
8,000 XTO Energy, Inc. ................................. 348,560
------------
13,153,998
------------
FINANCIALS -- 14.9%
45,080 Aegon N.V. - ARS ................................. 830,824
30,000 AFLAC, Inc. ...................................... 1,353,900
37,000 American Express Company ......................... 1,944,350
62,870 Bank of America Corporation ...................... 2,863,100
10,000 Charles Schwab Corporation ....................... 172,100
20,000 CIT Group, Inc. .................................. 1,070,400
25,000 Citigroup, Inc. .................................. 1,181,000
7,000 Goldman Sachs Group, Inc. (The) .................. 1,098,720
7,000 Hartford Financial Services Group, Inc. (The) .... 563,850
2,000 Legg Mason, Inc. ................................. 250,660
14,000 Progressive Corporation .......................... 1,459,640
20,000 SLM Corporation .................................. 1,038,800
70,000 U.S. Bancorp ..................................... 2,135,000
------------
15,962,344
------------
22
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTHCARE -- 15.0%
16,000 Amgen, Inc. (a) .................................. $ 1,164,000
17,000 Becton, Dickinson & Company ...................... 1,046,860
15,000 Biomet, Inc. ..................................... 532,800
27,000 Cardinal Health, Inc. ............................ 2,012,040
10,000 Caremark Rx, Inc. (a) ............................ 491,800
4,000 Cerner Corporation (a) ........................... 189,800
28,000 Elan Corporation (a) ............................. 404,320
17,000 Eli Lilly & Company .............................. 940,100
5,000 Fresenius Medical Care AG & Company - ADR ........ 199,250
20,000 Johnson & Johnson ................................ 1,184,400
21,000 Medtronic, Inc. .................................. 1,065,750
10,000 Techne Corporation (a) ........................... 601,400
57,000 UnitedHealth Group, Inc. ......................... 3,184,020
21,000 Waters Corporation (a) ........................... 906,150
28,000 WellPoint, Inc. (a) .............................. 2,168,040
------------
16,090,730
------------
INDUSTRIALS -- 10.4%
26,000 Caterpillar, Inc. ................................ 1,867,060
2,500 ChoicePoint, Inc. (a) ............................ 111,875
2,500 C.H. Robinson Worldwide, Inc. .................... 122,725
15,000 Emerson Electric Company ......................... 1,254,450
2,000 Fastenal Company ................................. 94,680
15,000 Fedex Corporation ................................ 1,694,100
26,000 General Dynamics Corporation ..................... 1,663,480
25,000 General Electric Company ......................... 869,500
6,500 Illinois Tool Works, Inc. ........................ 626,015
16,000 Ingersoll-Rand Company Ltd. - Class A ............ 668,640
10,000 Norfolk Southern Corporation ..................... 540,700
32,000 Quanta Services, Inc. (a) ........................ 512,640
2,500 Stericycle, Inc. (a) ............................. 169,050
16,000 United Technologies Corporation .................. 927,520
------------
11,122,435
------------
INFORMATION TECHNOLOGY -- 14.3%
54,000 Adobe Systems, Inc. .............................. 1,885,680
18,979 Agilent Technologies, Inc. (a) ................... 712,661
24,200 Automatic Data Processing, Inc. .................. 1,105,456
33,000 Broadcom Corporation - Class A (a) ............... 1,424,280
67,000 Cisco Systems, Inc. (a) .......................... 1,451,890
132 Computer Associates International, Inc. .......... 3,592
23,000 Computer Sciences Corporation (a) ................ 1,277,650
30,000 Corning, Inc. (a) ................................ 807,300
5,000 Electronic Arts, Inc. (a) ........................ 273,600
13,000 EMC Corporation (a) .............................. 177,190
14,000 First Data Corporation ........................... 655,480
15,000 Harmonic, Inc. (a) ............................... 95,550
32,000 Hewlett-Packard Company .......................... 1,052,800
45,100 Intel Corporation ................................ 872,685
13,500 International Business Machines Corporation ...... 1,113,345
23
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 14.3% (CONTINUED)
20,000 Kemet Corporation (a) ............................ $ 189,400
25,000 Motorola, Inc. ................................... 572,750
18,000 Network Appliance, Inc. (a) ...................... 648,540
33,000 Texas Instruments, Inc. .......................... 1,071,510
------------
15,391,359
------------
MATERIALS -- 5.3%
24,000 Alcoa, Inc. ...................................... 733,440
30,000 Florida Rock Industries, Inc. .................... 1,686,600
10,000 Inco Ltd. ........................................ 498,900
2,500 Joy Global, Inc. ................................. 149,425
10,000 Newmont Mining Corporation ....................... 518,900
5,000 Nucor Corporation ................................ 523,950
7,000 POSCO - ADR ...................................... 446,600
40,000 Valspar Corporation .............................. 1,114,800
------------
5,672,615
------------
REAL ESTATE -- 3.3%
27,200 Colonial Properties Trust ........................ 1,363,536
40,000 Plum Creek Timber Company, Inc. .................. 1,477,200
15,000 Rayonier, Inc. ................................... 683,850
------------
3,524,586
------------
TELECOMMUNICATIONS SERVICES -- 0.7%
30,000 AT&T, Inc. ....................................... 811,200
------------
UTILITIES -- 3.7%
75,980 Duke Energy Corporation .......................... 2,214,817
54,000 Southern Company (The) ........................... 1,769,580
------------
3,984,397
------------
TOTAL COMMON STOCKS (Cost $57,892,342)............ $104,670,819
------------
================================================================================
SHARES EXCHANGE-TRADED FUNDS -- 2.0% VALUE
- --------------------------------------------------------------------------------
12,000 Rydex S&P Equal Weight ETF (Cost $2,125,142)...... $ 2,116,800
------------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 0.1% VALUE
- --------------------------------------------------------------------------------
$ 114,000 U.S. Bancorp N.A., discount, due 04/03/2006
(Cost $113,971)................................. $ 113,971
------------
24
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
51 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $51)................................ $ 51
------------
TOTAL INVESTMENTS AT VALUE -- 99.7%
(Cost $60,131,506).............................. $106,901,641
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3% 341,207
------------
NET ASSETS -- 100.0%.............................. $107,242,848
============
(a) Non-income producing security.
ADR - American Depositary Receipt
ARS - American Registered Shares
See accompanying notes to financial statements.
25
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 98.9% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 12.8%
2,500 Abercrombie & Fitch Company - Class A ............ $ 145,750
6,500 Barnes & Noble, Inc. ............................. 300,625
1,000 Bed Bath & Beyond, Inc. (a) ...................... 38,400
5,700 BJ's Wholesale Club, Inc. (a) .................... 179,607
1,600 Black & Decker Corporation (The) ................. 139,024
3,200 CBRL Group, Inc. ................................. 140,512
5,000 Chicos FAS, Inc. (a) ............................. 203,200
5,000 Claire's Stores, Inc. ............................ 181,550
7,000 Coach, Inc. (a) .................................. 242,060
5,000 Darden Restaurants, Inc. ......................... 205,150
400 GameStop Corporation - Class A (a) ............... 18,856
3,100 GameStop Corporation - Class B (a) ............... 134,292
1,400 Harman International Industries, Inc. ............ 155,582
4,000 Harrah's Entertainment, Inc. ..................... 311,840
4,000 Harte-Hanks, Inc. ................................ 109,400
6,000 Herman Miller, Inc. .............................. 194,460
1,000 Hilton Hotels Corporation ........................ 25,460
1,900 International Speedway Corporation - Class A ..... 96,710
1,500 ITT Educational Services, Inc. (a) ............... 96,075
3,600 Lennar Corporation ............................... 217,368
2,000 Limited Brands, Inc. ............................. 48,920
1,000 Michaels Stores, Inc. ............................ 37,580
3,400 Mohawk Industries, Inc. (a) ...................... 274,448
5,000 MSC Industrial Direct Company, Inc. .............. 270,100
5,000 O'Reilly Automotive, Inc. (a) .................... 182,800
5,500 Pacific Sunwear of California, Inc. (a) .......... 121,880
3,000 Thor Industries, Inc. ............................ 160,080
5,000 Timberland Company (The) (a) ..................... 171,150
9,000 Urban Outfitters, Inc. (a) ....................... 220,860
4,500 Williams-Sonoma, Inc. (a) ........................ 190,800
------------
4,814,539
------------
CONSUMER STAPLES -- 4.3%
7,000 Church & Dwight Company, Inc. .................... 258,440
8,600 Constellation Brands, Inc. (a) ................... 215,430
6,000 Dean Foods Company (a) ........................... 232,980
7,500 Hormel Foods Corporation ......................... 253,500
4,700 J.M. Smucker Company ............................. 186,590
11,000 PepsiAmericas, Inc. .............................. 268,950
1,200 TreeHouse Foods, Inc. (a) ........................ 31,860
2,900 Whole Foods Market, Inc. ......................... 192,676
------------
1,640,426
------------
ENERGY -- 11.7%
4,500 Arch Coal, Inc. .................................. 341,730
4,760 Cooper Cameron Corporation (a) ................... 209,821
6,000 FMC Technologies, Inc. (a) ....................... 307,320
4,200 Forest Oil Corporation (a) ....................... 156,156
4,300 Lone Star Technologies, Inc. (a) ................. 238,263
3,399 Mariner Energy, Inc. (a) ......................... 69,713
7,250 Murphy Oil Corporation ........................... 361,195
26
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
ENERGY -- 11.7% (CONTINUED)
2,800 Newfield Exploration Company (a) ................. $ 117,320
2,680 Noble Corporation ................................ 217,348
4,900 Patterson-UTI Energy, Inc. ....................... 156,604
7,100 Peabody Energy Corporation ....................... 357,911
3,800 Pogo Producing Company ........................... 190,950
5,000 Pride International, Inc. (a) .................... 155,900
6,500 Smith International, Inc. ........................ 253,240
14,400 Valero Energy Corporation ........................ 860,832
9,700 XTO Energy, Inc. ................................. 422,629
------------
4,416,932
------------
FINANCIALS -- 13.8%
5,600 American Financial Group, Inc. ................... 233,016
5,950 AmerUs Group Company ............................. 358,428
7,300 Associated Banc-Corp ............................. 248,054
6,000 Bank of Hawaii Corporation ....................... 319,860
6,700 Berkley (W.R.) Corporation ....................... 389,002
9,000 Brown & Brown, Inc. .............................. 298,800
5,500 Compass Bancshares, Inc. ......................... 278,355
5,600 Cullen/Frost Bankers, Inc. ....................... 301,000
10,250 Eaton Vance Corporation .......................... 280,645
2,600 Everest Re Group Ltd. ............................ 242,762
9,300 HCC Insurance Holdings, Inc. ..................... 323,640
6,200 Investors Financial Services Corporation ......... 290,594
6,000 Jefferies Group, Inc. ............................ 351,000
2,900 Legg Mason, Inc. ................................. 363,457
2,700 Mercantile Bankshares Corporation ................ 103,815
10,100 New York Community Bancorp, Inc. ................. 176,952
7,777 Washington Federal, Inc. ......................... 188,203
4,500 Westamerica Bancorporation ....................... 233,640
5,200 Wilmington Trust Corporation ..................... 225,420
------------
5,206,643
------------
HEALTHCARE -- 13.3%
1,400 Alcon, Inc. ...................................... 145,964
4,450 Barr Pharmaceuticals, Inc. (a) ................... 280,261
6,000 Cerner Corporation (a) ........................... 284,700
8,000 Community Health Systems, Inc. (a) ............... 289,200
8,700 Covance, Inc. (a) ................................ 511,125
8,250 Coventry Health Care, Inc. (a) ................... 445,335
2,800 DENTSPLY International, Inc. ..................... 162,820
1,000 Elan Corporation plc - ADR (a) ................... 14,440
3,500 Fresenius Medical Care AG & Company - ADR ........ 139,475
7,800 Gilead Sciences, Inc. (a) ........................ 485,316
2,800 Henry Schein, Inc. (a) ........................... 134,008
4,000 Invitrogen Corporation (a) ....................... 280,520
3,000 LCA-Vision, Inc. ................................. 150,330
500 Millipore Corporation (a) ........................ 36,530
8,700 Mylan Laboratories, Inc. ......................... 203,580
5,100 Omnicare, Inc. ................................... 280,449
5,400 PDL BioPharma, Inc. (a) .......................... 177,120
27
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTHCARE -- 13.3% (CONTINUED)
2,000 ResMed, Inc. (a) ................................. $ 87,960
4,500 Techne Corporation (a) ........................... 270,630
3,500 Triad Hospitals, Inc. (a) ........................ 146,650
4,186 UnitedHealth Group, Inc. ......................... 233,830
4,600 Varian Medical Systems, Inc. (a) ................. 258,336
------------
5,018,579
------------
INDUSTRIALS -- 12.9%
3,600 Alexander & Baldwin, Inc. ........................ 171,648
5,800 AMETEK, Inc. ..................................... 260,768
5,000 ChoicePoint, Inc. (a) ............................ 223,750
6,000 C.H. Robinson Worldwide, Inc. .................... 294,540
3,000 Corporate Executive Board Company ................ 302,700
6,000 Donaldson Company, Inc. .......................... 202,740
5,000 Energizer Holdings, Inc. (a) ..................... 265,000
3,000 Expeditors International of Washington, Inc. ..... 259,170
7,000 Fastenal Company ................................. 331,380
6,000 Graco, Inc. ...................................... 272,580
3,000 Jacobs Engineering Group, Inc. (a) ............... 260,220
3,500 L-3 Communications Holdings, Inc. ................ 300,265
4,000 Manpower, Inc. ................................... 228,720
4,500 Overseas Shipbuilding Group, Inc. ................ 215,685
5,000 SPX Corporation .................................. 267,100
4,500 Stericycle, Inc. (a) ............................. 304,290
8,000 Swift Transportation Company, Inc. (a) ........... 173,840
2,500 Teleflex, Inc. ................................... 179,075
6,000 Trinity Industries, Inc. ......................... 326,340
------------
4,839,811
------------
INFORMATION TECHNOLOGY -- 14.7%
9,000 Activision, Inc. (a) ............................. 124,110
8,500 Acxiom Corporation ............................... 219,640
8,500 ADC Telecommunications, Inc. (a) ................. 217,515
6,000 ADTRAN, Inc. ..................................... 157,080
4,000 Advent Software, Inc. (a) ........................ 113,680
5,000 Alliance Data Systems Corporation (a) ............ 233,850
7,000 Arrow Electronics, Inc. (a) ...................... 225,890
4,000 CDW Corporation .................................. 235,400
4,500 CheckFree Corporation (a) ........................ 227,250
6,500 Cree, Inc. (a) ................................... 213,265
4,000 Cognizant Technology Solutions Corporation (a) ... 237,960
4,000 DST Systems, Inc. (a) ............................ 231,760
7,000 GTECH Holdings Corporation ....................... 238,350
5,500 Harris Corporation ............................... 260,095
9,000 Integrated Device Technology, Inc. (a) ........... 133,740
8,200 Jack Henry & Associates, Inc. .................... 187,534
7,000 Lam Research Corporation (a) ..................... 301,000
7,000 Macrovision Corporation (a) ...................... 155,050
5,000 Microchip Technology, Inc. ....................... 181,500
7,000 National Instruments Corporation ................. 228,340
6,000 Plantronics, Inc. ................................ 212,580
28
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 14.7% (CONTINUED)
10,000 RSA Security, Inc. (a) ........................... $ 179,400
8,000 SanDisk Corporation (a) .......................... 460,160
10,000 Semtech Corporation (a) .......................... 178,900
4,500 Silicon Laboratories, Inc. (a) ................... 247,275
2,500 Zebra Technologies Corporation (a) ............... 111,800
------------
5,513,124
------------
MATERIALS -- 6.4%
5,000 Airgas, Inc. ..................................... 195,450
5,700 Albemarle Corporation ............................ 258,495
5,000 Cabot Corporation ................................ 169,950
6,000 Eagle Materials, Inc. ............................ 382,560
4,000 Martin Marietta Materials, Inc. .................. 428,120
5,000 Scotts Miracle-Gro Company (The) - Class A ....... 228,800
6,000 Sonoco Products Company .......................... 203,220
5,000 Steel Dynamics, Inc. ............................. 283,650
9,000 Valspar Corporation (The) ........................ 250,830
------------
2,401,075
------------
REAL ESTATE -- 2.0%
4,600 Liberty Property Trust ........................... 216,936
5,000 Potlatch Corporation ............................. 214,200
7,000 Rayonier, Inc. ................................... 319,130
------------
750,266
------------
TELECOMMUNICATIONS SERVICES -- 0.7%
3,300 Telephone and Data Systems, Inc. ................. 130,152
3,300 Telephone and Data Systems, Inc. - Special Shares 124,575
------------
254,727
------------
UTILITIES -- 6.3%
5,400 AGL Resources, Inc. .............................. 194,670
8,300 Alliant Energy Corporation ....................... 261,201
4,400 Aqua America, Inc. ............................... 122,408
9,700 Equitable Resources, Inc. ........................ 354,147
6,000 Hawaiian Electric Industries, Inc. ............... 162,780
5,900 MDU Resources Group, Inc. ........................ 197,355
5,750 ONEOK, Inc. ...................................... 185,438
7,900 Pepco Holdings, Inc. ............................. 180,041
6,300 SCANA Corporation ................................ 247,212
5,000 Wisconsin Energy Corporation ..................... 199,950
5,000 WPS Resources Corporation ........................ 246,100
------------
2,351,302
------------
TOTAL COMMON STOCKS (Cost $27,934,002)............ $ 37,207,424
------------
29
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE COMMERCIAL PAPER -- 1.1% VALUE
- --------------------------------------------------------------------------------
$ 415,000 U.S. Bancorp N.A., discount, due 04/03/2006
(Cost $414,894)................................. $ 414,894
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
906 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $906)............................... $ 906
------------
TOTAL INVESTMENTS AT VALUE -- 100.0%
(Cost $28,349,802).............................. $ 37,623,224
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.0%)... (4,474)
------------
NET ASSETS -- 100.0%.............................. $ 37,618,750
============
(a) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
30
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
PAR VALUE U.S. TREASURY AND AGENCY OBLIGATIONS -- 25.8% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 2.4%
$ 750,000 5.50%, due 02/15/2008 ............................ $ 759,053
100,000 5.625%, due 05/15/2008 ........................... 101,566
------------
860,619
------------
FEDERAL FARM CREDIT BANK -- 0.9%
300,000 6.28%, due 11/26/2012 ............................ 319,311
------------
FEDERAL HOME LOAN BANK -- 19.7%
1,000,000 5.375%, due 04/07/2010 ........................... 1,000,020
1,000,000 5.75%, due 04/20/2010 ............................ 1,001,554
2,000,000 5.00%, due 08/16/2011 ............................ 1,956,128
200,000 5.625%, due 11/15/2011 ........................... 204,216
2,000,000 6.00%, due 12/28/2011 ............................ 2,008,666
1,000,000 5.00%, due 06/13/2012 ............................ 973,816
------------
7,144,400
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 2.8%
1,000,000 7.40%, due 10/30/2014 ............................ 1,012,343
------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(Cost $9,492,266)............................... $ 9,336,673
------------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 23.6% VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.2%
$ 273 Pool #15032, 7.50%, due 02/15/2007 ............... $ 287
65,100 Pool #438434, 6.50%, due 01/15/2013 .............. 66,778
18,700 Pool #470177, 7.00%, due 03/15/2014 .............. 19,331
32,129 Pool #518403, 7.00%, due 09/15/2014 .............. 33,213
1,077 Pool #181540, 8.00%, due 02/15/2017 .............. 1,150
432,019 Pool #581879, 6.50%, due 03/15/2017 .............. 443,151
40,773 Pool #493659, 6.50%, due 12/15/2018 .............. 42,266
92,499 Pool #476695, 6.50%, due 10/15/2023 .............. 95,887
40,649 Pool #366710, 6.50%, due 02/15/2024 .............. 42,138
29,352 Pool #453826, 7.25%, due 09/15/2027 .............. 30,576
57,823 Pool #412360, 7.00%, due 11/15/2027 .............. 60,284
227,004 Pool #447408, 7.00%, due 01/15/2028 .............. 236,665
16,086 Pool #454162, 7.00%, due 05/15/2028 .............. 16,770
134,611 Pool #780825, 6.50%, due 07/15/2028 .............. 139,541
30,473 Pool #2617, 7.50%, due 07/20/2028 ................ 31,711
28,637 Pool #158794, 7.00%, due 09/15/2028 .............. 29,856
25,731 Pool #486760, 6.50%, due 12/15/2028 .............. 26,674
90,121 Pool #781096, 6.50%, due 12/15/2028 .............. 93,422
89,890 Pool #781136, 7.00%, due 12/15/2028 .............. 93,716
65,152 Pool #506618, 7.00%, due 03/15/2029 .............. 67,925
12,719 Pool #511562, 7.50%, due 07/15/2030 .............. 13,340
107,383 Pool #448316, 6.50% due 04/15/2031 ............... 111,315
56,037 Pool #530606, 6.50% due 04/15/2031 ............... 58,090
45,320 Pool #545820, 7.00% due 06/15/2031 ............... 47,249
234,446 Pool #781330, 6.00%, due 09/15/2031 .............. 237,215
31
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 23.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.2% (CONTINUED)
$ 93,105 Pool #3228, 6.50%, due 04/20/2032 ................ $ 95,527
129,646 Pool #569903, 6.50%, due 06/15/2032 .............. 134,394
560,676 Pool #595934, 6.00%, due 09/15/2032 .............. 567,298
137,750 Pool #3927, 6.00%, due 11/20/2032 ................ 139,377
------------
2,975,146
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 8.0%
1,135,842 Pool #01173, 5.50%, due 06/01/2017 ............... 1,128,377
1,816,747 Pool #G18056, 5.00%, due 06/01/2020 .............. 1,771,125
------------
2,899,502
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 7.4%
862,243 Pool #635149, 5.50%, due 07/01/2017 .............. 857,246
1,881,862 Pool #255808, 5.00%, due 07/01/2025 .............. 1,808,021
------------
2,665,267
------------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $8,753,657) $ 8,539,915
------------
================================================================================
PAR VALUE CORPORATE BONDS -- 45.8% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 25.8%
Banc One Corporation,
$1,000,000 6.875%, due 08/01/2006 ......................... $ 1,005,553
------------
CIT Group, Inc.,
2,000,000 4.75%, due 12/15/2010 .......................... 1,936,042
------------
General Electric Capital Corporation,
2,500,000 5.00%, due 02/15/2007 .......................... 2,496,495
------------
H.J. Heinz Finance Company,
1,000,000 6.00%, due 03/15/2012 .......................... 997,511
------------
Household Finance Company,
1,000,000 7.25%, due 05/15/2006 .......................... 1,002,344
------------
JPMorgan Chase & Company,
1,000,000 4.50%, due 01/15/2012 .......................... 946,356
------------
Student Loan Marketing Association,
1,000,000 5.125%, due 08/27/2012 ......................... 972,277
------------
TOTAL FINANCE CORPORATE BONDS..................... 9,356,578
------------
32
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 45.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIAL -- 20.0%
Abbott Laboratories,
$1,370,000 6.40%, due 12/01/2006 .......................... $ 1,379,717
------------
Anheuser-Busch Companies, Inc.,
1,800,000 5.125%, due 10/01/2008 ......................... 1,796,873
------------
Ford Motor Company,
1,000,000 7.25%, due 10/01/2008 .......................... 907,500
------------
General Dynamics Corporation,
1,750,000 4.50%, due 08/15/2010 .......................... 1,693,374
------------
Wal-Mart Stores, Inc.,
1,500,000 4.375%, due 07/12/2007 ......................... 1,485,414
------------
TOTAL INDUSTRIAL CORPORATE BONDS.................. 7,262,878
------------
TOTAL CORPORATE BONDS (Cost $17,237,017).......... $ 16,619,456
------------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 3.8% VALUE
- --------------------------------------------------------------------------------
$1,376,000 U.S. Bancorp N.A., discount, due 04/04/2006
(Cost $1,375,647)............................... $ 1,375,647
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
863 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $863)............................... $ 863
------------
TOTAL INVESTMENTS AT VALUE -- 99.0%
(Cost $36,859,450).............................. $ 35,872,554
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0%..... 362,128
------------
NET ASSETS -- 100.0%.............................. $ 36,234,682
============
See accompanying notes to financial statements.
33
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.8% VALUE
- --------------------------------------------------------------------------------
Alabama Special Care Facilities Financing Auth.,
Birmingham, Rev.,
$ 500,000 4.50%, due 11/01/2009, ETM ..................... $ 511,105
400,000 5.375%, due 11/01/2012, ETM .................... 404,552
------------
915,657
------------
Alabama Special Care Facilities Financing Auth.,
Mobile Hospital, Rev.,
250,000 4.50%, due 11/01/2010, ETM ..................... 256,745
------------
Alabama State, GO,
500,000 3.00%, due 09/01/2007 .......................... 495,835
------------
Alabama State Public School & College Auth., Capital
Improvements, Rev.,
300,000 5.00%, due 02/01/2010 .......................... 313,347
475,000 5.00%, due 11/01/2012 .......................... 495,586
600,000 5.125%, due 11/01/2013 ......................... 628,032
525,000 5.125%, due 11/01/2015 ......................... 549,528
------------
1,986,493
------------
Alabama State Public School & College Auth., Rev.,
325,000 5.00%, due 05/01/2010 .......................... 340,528
------------
Alabama Water Pollution Control Auth., Rev.,
500,000 5.00%, due 08/15/2010 .......................... 525,335
------------
Athens, AL, Electric Revenue Warrants,
500,000 3.00%, due 06/01/2011 .......................... 472,930
------------
Athens, AL, School Warrants,
335,000 5.05%, due 08/01/2015 .......................... 347,499
------------
Auburn, AL, Capital Improvements, GO, School Warrants,
300,000 4.00%, due 08/01/2007 .......................... 301,563
285,000 4.25%, due 08/01/2009 .......................... 289,654
225,000 5.00%, due 08/01/2012 .......................... 238,565
------------
829,782
------------
Auburn, AL, Water Works Board, Rev.,
335,000 5.00%, due 07/01/2015 .......................... 353,060
------------
Auburn University, AL, General Fee Rev.,
400,000 4.45%, due 06/01/2011 .......................... 407,612
------------
Baldwin Co., AL, Board of Education, Revenue Warrants,
200,000 5.20%, due 06/01/2009 .......................... 204,424
300,000 5.00%, due 06/01/2010 .......................... 313,407
------------
517,831
------------
34
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Baldwin Co., AL, GO,
$ 500,000 4.50%, due 11/01/2008 .......................... $ 509,225
------------
Birmingham, AL, Industrial Water Board, Rev.,
100,000 6.00%, due 07/01/2007 .......................... 102,489
------------
Birmingham, AL, Series B, GO,
300,000 3.00%, due 07/01/2006 .......................... 299,640
------------
Birmingham, AL, Special Care Facilities Financing
Authority, Rev.,
200,000 5.00%, due 06/01/2006 .......................... 200,454
300,000 3.70%, due 06/01/2009 .......................... 299,040
------------
499,494
------------
Decatur, AL, GO, Warrants,
300,000 5.00%, due 06/01/2009 .......................... 306,606
------------
Decatur, AL, Water Rev.,
100,000 5.00%, due 05/01/2014 .......................... 104,348
------------
Dothan, AL, GO,
500,000 5.50%, due 09/01/2014 .......................... 533,365
------------
Fairhope, AL, Utilities Rev.,
225,000 2.50%, due 12/01/2006 .......................... 222,887
------------
Fairhope, AL, Warrants,
295,000 5.10%, due 06/01/2014 .......................... 310,517
------------
Florence, AL, School Warrants,
200,000 4.65%, due 12/01/2012 .......................... 206,376
------------
Foley, AL, Utilities Board, Rev.,
500,000 4.00%, due 11/01/2007 .......................... 503,190
------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009 .......................... 309,018
------------
Homewood, AL, Board of Education, Capital Outlay
Warrants,
300,000 4.00%, due 02/01/2007 .......................... 301,119
------------
Homewood, AL, GO,
500,000 5.00%, due 09/01/2014 .......................... 527,455
------------
Houston Co., AL, GO,
300,000 5.60%, due 10/15/2014 .......................... 324,219
------------
Huntsville, AL, Capital Improvements, GO,
100,000 3.25%, due 11/01/2010 .......................... 97,552
------------
35
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Huntsville, AL, Electric Systems, Rev.,
$ 250,000 4.80%, due 12/01/2012 .......................... $ 257,063
------------
Huntsville, AL, GO,
200,000 4.50%, due 08/01/2007 .......................... 202,358
400,000 5.50%, due 08/01/2009 .......................... 422,580
500,000 5.00%, due 08/01/2011 .......................... 527,880
250,000 5.25%, due 11/01/2012 .......................... 261,288
------------
1,414,106
------------
Huntsville, AL, Water Systems, Rev.,
200,000 4.70%, due 11/01/2013 .......................... 204,990
------------
Madison, AL, Warrants,
200,000 4.40%, due 02/01/2011 .......................... 204,198
400,000 4.85%, due 02/01/2013 .......................... 412,912
------------
617,110
------------
Madison Co., AL, Board of Education, Capital Outlay
Tax Antic. Warrants,
400,000 5.20%, due 03/01/2011 .......................... 423,192
------------
Mobile, AL, GO,
275,000 6.20%, due 02/15/2007, ETM ..................... 281,028
------------
Montgomery, AL, GO,
500,000 5.10%, due 10/01/2008 .......................... 517,255
300,000 5.00%, due 11/01/2015 .......................... 314,991
------------
832,246
------------
Montgomery, AL, Waterworks & Sanitation, Rev.,
500,000 5.00%, due 09/01/2008 .......................... 515,615
400,000 5.60%, due 09/01/2009 .......................... 407,420
------------
923,035
------------
Montgomery Co., AL, GO,
300,000 3.00%, due 11/01/2006 .......................... 299,145
------------
Mountain Brook, AL, City Board of Education, Capital
Outlay Warrants,
405,000 4.80%, due 02/15/2011 .......................... 408,236
------------
Opelika, AL, GO,
500,000 5.00%, due 04/01/2006 .......................... 500,000
210,000 4.00%, due 03/01/2010 .......................... 212,174
------------
712,174
------------
Scottsboro, AL, Waterworks Sewer & Gas Board, Rev.,
200,000 4.35%, due 08/01/2011 .......................... 203,198
------------
Shelby Co., AL, Board of Education, Rev. Warrants,
500,000 4.80%, due 02/01/2011 .......................... 516,905
------------
Trussville, AL, Warrants,
400,000 4.30%, due 10/01/2010 .......................... 408,948
------------
36
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Tuscaloosa, AL, Board of Education, GO,
$ 300,000 4.625%, due 08/01/2008 ......................... $ 303,216
------------
Tuscaloosa, AL, Board of Education, Special Tax Warrants,
300,000 4.85%, due 02/15/2013 .......................... 302,730
------------
Tuscaloosa, AL, GO Warrants,
300,000 5.00%, due 02/15/2007 .......................... 303,690
145,000 4.25%, due 02/15/2011 .......................... 147,762
500,000 5.45%, due 01/01/2014 .......................... 532,170
------------
983,622
------------
Tuscaloosa Co., AL, GO Warrants,
425,000 4.30%, due 10/01/2009 .......................... 433,861
------------
University of Alabama, AL, General Fee Rev.,
240,000 4.10%, due 12/01/2013 .......................... 241,450
------------
University of Alabama, AL, Auxiliary - Series A, Rev.,
400,000 5.25%, due 06/01/2010 .......................... 409,108
100,000 5.375%, due 06/01/2013 ......................... 102,297
------------
511,405
------------
University of Alabama, AL, Series A, Rev.,
300,000 4.00%, due 10/01/2010 .......................... 303,513
------------
Vestavia Hills, AL, Warrants,
565,000 5.00%, due 02/01/2012 .......................... 596,363
------------
TOTAL ALABAMA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (Cost $23,404,911)........ $ 23,784,343
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 8.2% VALUE
- --------------------------------------------------------------------------------
2,137,842 Alpine Muncipal Money Market Fund - Class I
($2,137,842).................................... $ 2,137,842
------------
TOTAL INVESTMENTS AT VALUE -- 99.0%
(Cost $25,542,753).............................. $ 25,922,185
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0%..... 259,606
------------
NET ASSETS -- 100.0%.............................. $ 26,181,791
============
See accompanying notes to financial statements.
37
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Government Street Equity Fund, The Government Street Mid-Cap 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 Mid-Cap Fund's investment objective is to seek capital
appreciation by investing in common stocks of mid-cap companies.
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 traded on a national stock
exchange are valued based upon the closing price on the principal exchange where
the security is traded. Securities which are quoted by NASDAQ are valued at the
NASDAQ Official Closing Price. Securities which are traded over-the-counter are
valued at the last sales price, if available, otherwise, at the last quoted bid
price. 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. Short-term instruments (those with remaining maturities of 60
days or less) are valued at amortized cost, which approximates market value.
Securities and other assets for which no quotations are readily available will
be valued in good faith at fair value using methods determined by the Board of
Trustees. Such methods of fair valuation may include, but are not limited to:
multiple of earnings, multiple of book value, discount from market of a similar
freely traded security, purchase price of security, subsequent private
transactions in the security or related securities, or a combination of these
and other factors.
38
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 The Government Street Equity
Fund; declared and paid annually to shareholders of The Government Street
Mid-Cap 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. These "book/tax" differences are either
temporary or permanent in nature. Certain Funds may utilize earnings and profits
distributed to shareholders on redemptions of shares as part of the dividends
paid deduction for income tax purposes. The tax character of distributions paid
during the years ended March 31, 2006 and 2005 are as follows:
- -----------------------------------------------------------------------------------------------------
YEARS ORDINARY EXEMPT-INTEREST TOTAL
ENDED INCOME DIVIDENDS DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------
Government Street Equity Fund.......... 3/31/06 $ 1,289,147 $ -- $ 1,289,147
3/31/05 $ 1,392,242 $ -- $ 1,392,242
- -----------------------------------------------------------------------------------------------------
Government Street Mid-Cap Fund......... 3/31/06 $ 64,987 $ -- $ 64,987
3/31/05 $ 21,794 $ -- $ 21,794
- -----------------------------------------------------------------------------------------------------
Government Street Bond Fund............ 3/31/06 $ 2,795,083 $ -- $ 2,795,083
3/31/05 $ 2,826,223 $ -- $ 2,826,223
- -----------------------------------------------------------------------------------------------------
Alabama Tax Free Bond Fund............. 3/31/06 $ -- $ 1,031,750 $ 1,031,750
3/31/05 $ -- $ 1,140,113 $ 1,140,113
- -----------------------------------------------------------------------------------------------------
39
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Security transactions -- Security transactions are accounted for on trade date.
Gains and losses on securities sold are determined on a specific identification
basis.
Common expenses -- Common expenses of the Trust are allocated among the funds of
the Trust based on relative net assets of each fund or the nature of the
services performed and the relative applicability to each fund.
Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 Subchapter M 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 following information is computed on a tax basis for each item as of March
31, 2006:
- -----------------------------------------------------------------------------------------------------------
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------
Cost of portfolio investments ............. $ 60,131,506 $ 28,354,263 $ 37,564,655 $ 25,601,646
============ ============ ============ ============
Gross unrealized appreciation ............. $ 48,368,883 $ 9,720,856 $ 32,330 $ 446,100
Gross unrealized depreciation ............. (1,598,748) (451,895) (1,724,431) (125,561)
------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) .......................... 46,770,135 9,268,961 (1,692,101) 320,539
Undistributed ordinary income ............. 12,104 104,604 12,578 25,970
Capital loss carryforwards ................ -- -- (1,687,170) (20,713)
Post-October losses ....................... -- -- (219,622) (261)
Undistributed long-term gains ............. 5,413,656 894,652 -- --
Other temporary differences ............... (8,536) -- (11,000) (25,970)
------------ ------------ ------------ ------------
Total distributable earnings
(accumulated deficit) ................... $ 52,187,359 $ 10,268,217 $ (3,597,315) $ 299,565
============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------
40
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for The Government Street Mid-Cap Fund, 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. These "book/tax" differences are temporary in nature and are primarily
due to the tax deferral of losses on wash sales and/or differing methods in the
amortization of discounts and premiums on fixed income securities.
As of March 31, 2006, The Government Street Bond Fund and The Alabama Tax Free
Bond Fund had the following capital loss carryforwards for federal income tax
purposes:
- --------------------------------------------------------------------------------
EXPIRES
AMOUNT MARCH 31,
- --------------------------------------------------------------------------------
Government Street Bond Fund $ 106,011 2007
220,187 2008
195,097 2009
86,819 2010
70,419 2011
218,396 2012
261,545 2013
528,696 2014
------------
$ 1,687,170
============
- --------------------------------------------------------------------------------
Alabama Tax Free Bond Fund $ 20,713 2009
- --------------------------------------------------------------------------------
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains, if any, prior to distribution to shareholders.
In addition, The Government Street Bond Fund and The Alabama Tax Free Bond Fund
had net realized capital losses of $219,622 and $261, respectively, during the
period November 1, 2005 through March 31, 2006, which are treated for federal
income tax purposes as arising during the Fund's tax year ending March 31, 2007.
These "post-October" losses may be utilized in future years to offset net
realized capital gains prior to distributing such gains to shareholders.
During the year ended March 31, 2006, The Government Street Equity Fund, The
Government Street Mid-Cap Fund and The Alabama Tax Free Bond Fund utilized
capital loss carryforwards of $877,582, $15,179 and $6,571, respectively, to
offset current year realized gains.
For the year ended March 31, 2006, The Government Street Equity Fund and The
Government Street Mid-Cap Fund reclassified $718,832 and $196,687 of accumulated
net realized gains from security transaction, respectively, against paid-in
capital on the Statement of Assets and Liabilities due to permanent differences
in the recognition of capital gains and losses under
41
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
income tax regulations and accounting principles generally accepted in the
United States. These differences are primarily due to the utilization of
earnings and profits distributed to shareholders or redemptions of shares as
part of the dividends paid deduction for income tax purposes. Such
reclassifications had no effect on the Funds' net assets or net asset value per
share.
For the year ended March 31, 2006, The
Government Street Bond Fund reclassified $663,133 of overdistributed net
investment income against accumulated net realized gains and The Alabama Tax
Free Bond Fund reclassified $7,716 of undistributed net investment income
against accumulated net realized losses on the Statements of Assets and
Liabilities due to permanent differences in the recognition of capital gains or
losses under income tax regulations and accounting principles generally accepted
in the United States. These differences are primarily due to the tax treatment
of certain debt obligations and paydown adjustments. Such reclassifications had
no effect on the Funds' net assets or net asset value per share.
For the year ended March 31, 2006, The Government Street Bond Fund reclassified
accumulated net realized losses of $126,569 against paid-in capital on the
Statement of Assets and Liabilities due to the expiration of capital loss
carryforwards. Such reclassification had no effect on the Fund's net assets or
net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2006, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments and
U.S. government securities, amounted to $22,419,745 and $62,154,879,
respectively, for The Government Street Equity Fund; $10,950,179 and $9,995,227,
respectively, for The Government Street Mid-Cap Fund; $8,097,494 and
$16,410,081, respectively, for The Government Street Bond Fund; and $1,432,501
and $10,119,256, 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 Mid-Cap Fund
pays the Adviser a fee at an annual rate of .75% of its average daily net
assets. 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
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 assets in excess of $100 million.
42
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the year ended March 31, 2006, the Adviser voluntarily undertook to limit
the total operating expenses of The Government Street Mid-Cap Fund, The
Government Street Bond Fund and The Alabama Tax Free Bond Fund to 1.10%, .71%
and .65%, respectively, of each Fund's average daily net assets. Accordingly,
the Adviser voluntarily waived $5,688, $14,970 and $24,959, respectively, of its
investment advisory fees from The Government Street Mid-Cap Fund, The Government
Street Bond Fund and The Alabama Tax Free Bond Fund during the year ended March
31, 2006.
The Chief Compliance Officer of the Funds (the CCO) is an employee of the
Adviser. The Funds pay the Adviser $18,000 annually for providing CCO services.
In addition, the Funds pay reasonable out-of-pocket expenses incurred by the
Adviser in connection with these services.
Certain Trustees and officers of the Trust are also officers of the Adviser.
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, The Government Street Mid-Cap 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. Additionally, The
Government Street Mid-Cap Fund is subject to a minimum monthly fee of $4,000.
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 Distributor), the principal underwriter of each Fund's
shares and an affiliate of Ultimus. The Distributor receives no compensation
from the Funds for acting as principal underwriter.
4. CONTINGENCIES AND COMMITMENTS
The Funds indemnify the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, in the normal course of business the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. The Funds' maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
43
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
The Government Street Equity Fund, The Government Street Mid-Cap Fund, The
Government Street Bond Fund, and The Alabama Tax-Free Bond Fund
of the Williamsburg Investment Trust
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of The Government Street Equity Fund,
The Government Street Mid-Cap Fund, The Government Street Bond Fund, and The
Alabama Tax-Free Bond Fund (the "Funds") (each a series of Williamsburg
Investment Trust) as of March 31, 2006, 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
three 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. The financial highlights presented for each of the two
years in the period ended March 31, 2003 were audited by other auditors whose
report dated April 25, 2003, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). 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.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2006 by correspondence with the custodian
and brokers. 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 Government Street Equity Fund, The Government Street Mid-Cap Fund, The
Government Street Bond Fund, and The Alabama Tax-Free Bond Fund as of March 31,
2006, 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 three years in the period then ended in
conformity with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 12, 2006
44
THE GOVERNMENT STREET FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Funds, you incur ongoing costs, including management fees and other fund
expenses. Operating expenses, which are deducted from each Fund's gross income,
directly reduce the investment returns of the Funds.
A fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The following examples are intended to
help you understand the ongoing costs (in dollars) of investing in the Funds and
to compare these costs with the ongoing costs of investing in other mutual
funds. The examples below are based on an investment of $1,000 made at the
beginning of the period shown and held for the entire period.
The table below illustrates each Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Funds. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Funds under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the returns used are not the Funds' actual
returns, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge transaction fees, such as
purchase or redemption fees, nor do they carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
45
THE GOVERNMENT STREET FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
(CONTINUED)
================================================================================
More information about the Funds' expenses, including annual expense ratios for
the prior five fiscal years, can be found in this report. For additional
information on operating expenses and other shareholder costs, please refer to
the Funds' prospectus.
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
Oct. 1, 2005 March 31, 2006 During Period*
- --------------------------------------------------------------------------------
GOVERNMENT STREET EQUITY FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,060.90 $ 3.96
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.09 $ 3.88
- --------------------------------------------------------------------------------
GOVERNMENT STREET MID-CAP FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,105.50 $ 5.77
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.45 $ 5.54
- --------------------------------------------------------------------------------
GOVERNMENT STREET BOND FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,005.50 $ 3.55
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.39 $ 3.58
- --------------------------------------------------------------------------------
ALABAMA TAX FREE BOND FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,003.90 $ 3.25
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.69 $ 3.28
- --------------------------------------------------------------------------------
* Expenses are equal to the Funds' annualized expense ratios for the period
as stated below, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
Government Street Equity Fund 0.77%
Government Street Mid-Cap Fund 1.10%
Government Street Bond Fund 0.71%
Alabama Tax Free Bond Fund 0.65%
46
THE GOVERNMENT STREET FUNDS
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. 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, 69 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- --------------------------------------------------------------------------------------------------------------
*Austin Brockenbrough III 1802 Bayberry Court, 69 Trustee Since
Suite 400 September 1988
Richmond, VA
- --------------------------------------------------------------------------------------------------------------
*John T. Bruce 800 Main Street 52 Trustee Since
Lynchburg, VA September 1988
- --------------------------------------------------------------------------------------------------------------
J. Finley Lee, Jr. 4488 Pond Apple 66 Trustee Since
Drive North September 1988
Naples, FL
- --------------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 66 Trustee Since
Richmond, VA March 1993
- --------------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintoport Boulevard 46 Trustee Since
Saraland, AL March 1993
- --------------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 73 Trustee Since
Richmond, VA July 1997
- --------------------------------------------------------------------------------------------------------------
Samuel B. Witt III 302 Clovelly Road 70 Trustee Since
Richmond, VA November 1988
- --------------------------------------------------------------------------------------------------------------
Thomas W. Leavell 150 Government Street 62 President Since
Mobile, AL February 2004
- --------------------------------------------------------------------------------------------------------------
Mary Shannon Hope 150 Government Street 42 Vice President of The Since
Mobile, AL Government Street February 2004
Bond Fund
- --------------------------------------------------------------------------------------------------------------
Timothy S. Healey 600 Luckie Drive 53 Vice President of The Since
Suite 305 Alabama Tax Free Bond January 1995
Birmingham, AL Fund and The Government
Street Mid-Cap Fund
- --------------------------------------------------------------------------------------------------------------
Margaret H. Alves 150 Government Street 34 Chief Compliance Officer Since
Mobile, AL February 2006
- --------------------------------------------------------------------------------------------------------------
Robert G. Dorsey 225 Pictoria Drive 49 Vice President Since
Suite 450 November 2000
Cincinnati, OH
- --------------------------------------------------------------------------------------------------------------
Mark J. Seger 225 Pictoria Drive 44 Treasurer Since
Suite 450 November 2000
Cincinnati, OH
- --------------------------------------------------------------------------------------------------------------
John F. Splain 225 Pictoria Drive 49 Secretary Since
Suite 450 November 2000
Cincinnati, OH
- --------------------------------------------------------------------------------------------------------------
47
THE GOVERNMENT STREET FUNDS
BOARD OF TRUSTEES AND EXECUTIVE
OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
*Messrs. Bruce, Brockenbrough and Caravati 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 eleven 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 Corporation (a plastics manufacturer) and
Wilkinson O'Grady & Co., Inc. (a global asset manager).
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
J. Finley Lee, Jr. is a financial consultant and the Julian Price Professor
Emeritus at the University of North Carolina.
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 (polymers and chemical manufacturer).
Harris V. Morrissette is Chief Executive Officer 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 the retired Chief Investment Officer of Virginia
Retirement System (VRS). Subsequent to his retirement, he temporarily served as
Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired 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).
Thomas W. Leavell is a Principal of the Adviser.
Mary Shannon Hope is a Principal of the Adviser.
Timothy S. Healey is a Principal of the Adviser.
Margaret H. Alves is Chief Compliance Officer of the Adviser. She is also an
attorney with Alford, Clausen & McDonald, LLP.
48
THE GOVERNMENT STREET FUNDS
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.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Additional information about members of the Board of Trustees 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.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
For the fiscal year ended March 31, 2006 certain dividends paid by The
Government Street Equity Fund and The Government Street Mid-Cap Fund may be
subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax
Relief Reconciliation Act of 2003. The Funds intend to designate up to a maximum
amount of $1,289,147 and $64,987, respectively, as taxed at a maximum rate of
15%, as well as $718,832 and $196,687, respectively, as long-term gain
distributions. Additionally, for the fiscal year ended March 31, 2006, 100% of
the dividends paid from ordinary income by The Governent Street Equity Fund and
The Government Street Mid-Cap Fund qualified for the dividends received
deduction for corporations. Complete information will be computed and reported
in conjunction with your 2006 Form 1099-DIV.
49
THE GOVERNMENT STREET FUNDS
OTHER INFORMATION (UNAUDITED)
================================================================================
A description of the policies and procedures that the Funds use to vote proxies
relating to portfolio securities is available without charge upon request by
calling toll-free 1-866-738-1125, or on the Securities and Exchange Commission's
(SEC) website at http://www.sec.gov. Information regarding how the Funds voted
proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is available without charge upon request by calling toll-free
1-866-738-1125 or on the SEC's website at http://www.sec.gov.
The Trust files a complete listing of portfolio holdings for the Funds with the
SEC as of the first and third quarters of each fiscal year on Form N-Q. The
filings are available upon request, by calling 1-866-738-1125. Furthermore, you
may obtain a copy of these filings on the SEC's website at http://www.sec.gov.
The Trust's Forms N-Q may also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC, and information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
50
THE GOVERNMENT STREET FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED)
================================================================================
At an in-person meeting held on February 13, 2006, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance of
each Fund's Investment Advisory Agreement for a one-year period. Below is a
discussion of the factors considered by the Board of Trustees along with the
conclusions with respect thereto that formed the basis for the Board's
approvals.
In selecting the Adviser and approving the most recent annual continuance of the
Investment Advisory Agreements, the Trustees considered all information they
deemed reasonably necessary to evaluate the terms of the Agreements, including
the departure of certain professional personnel from the Adviser in January 2006
and their replacements, substantial net redemptions in each of the Funds, and
the response by and impact on the Adviser with respect to these recent
developments. The principal areas of review by the Trustees were the nature,
extent and quality of the services provided by the Adviser and the
reasonableness of the fees charged for those services. These matters were
considered by the Independent Trustees consulting with experienced counsel who
is independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Funds was considered.
Each Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives. The Trustees also
considered the scope and quality of the in-house capabilities of the Adviser and
other resources dedicated to performing services for the Funds. The quality of
administrative and other services, including the Adviser's role in coordinating
the activities of the Funds' other service providers, were considered in light
of the Funds' compliance with investment policies and applicable laws and
regulations and of related reports by management and the Funds' independent
public accountants in periodic meetings with the Trust's Audit Committee. The
Trustees also considered the business reputation of the Adviser, the
qualifications of its key investment and compliance personnel, and its financial
resources.
In reviewing the fees payable under the Investment Advisory Agreements, the
Trustees compared the advisory fees and overall expense levels of each Fund with
those of competitive funds with similar investment objectives. The Trustees
considered information provided by the Adviser concerning the Adviser's
profitability with respect to each Fund, including the assumptions and
methodology used in preparing the profitability information, in light of
applicable case law relating to advisory fees. For these purposes, the Trustees
took into account not only the fees paid by the Funds, but also so-called
"fallout benefits" to the Adviser. The Trustees
51
THE GOVERNMENT STREET FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
================================================================================
also considered the Adviser's representations that all of the Funds' portfolio
trades were executed based on the best price and execution available, and that
the Adviser does not participate in any soft dollar or directed brokerage
arrangements. The Trustees further considered that neither the Funds nor the
Adviser participate in any revenue sharing arrangements on behalf of the Funds.
In evaluating the Funds' advisory fees, the Trustees took into account the
complexity and quality of the investment management of the Funds.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the performance of each Fund as compared to similarly managed
funds and the other services provided under the Investment Advisory Agreements,
they believe that the Adviser has provided high quality services to the Fund;
(ii) the investment advisory fees payable to the Adviser by each Fund are
competitive with similarly managed funds, and they believe the fees to be
reasonable given the quality of services provided by the Adviser; (iii) the
total operating expense ratio of each Fund is in line with the average of
comparably managed funds, as calculated and published by Morningstar, Inc.; and
(iv) the Adviser's voluntary commitment to cap overall operating expenses of The
Government Street Mid-Cap Fund and The Alabama Tax Free Bond Fund through
advisory fee waivers has enabled those Funds to increase returns for
shareholders and maintain an overall expense ratio lower than the average for
similarly managed funds, as calculated and published by Morningstar, Inc. Given
the current size of the Funds and their expected growth, the Independent
Trustees did not believe that at the present time it would be relevant to
consider the extent to which economies of scale would be realized as the Funds
grow, and whether fee levels reflect these economies of scale. The Independent
Trustees also considered the "fallout benefits" to, and the profitability of,
the Adviser with respect to the Funds, but given the amounts involved viewed
these as secondary factors in connection with the evaluation of the
reasonableness of the advisory fees paid by the Funds.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreements, including recent developments concerning the Adviser. Rather the
Trustees concluded, in light of a weighing and balancing of all factors
considered, that it was in the best interests of each Fund and its shareholders
to continue its Investment Advisory Agreement without modification to its terms,
including the fees charged for services thereunder.
52
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================================================================================
----------------------------------------------------------------------------
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
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
1900 Scripps Center
312 Walnut Street
Cincinnati, OH 45202
BOARD OF TRUSTEES
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
The Government Street Mid-Cap Fund
Timothy S. Healey,
The Government Street Mid-Cap Fund
The Alabama Tax Free Bond Fund
Richard E. Anthony, Jr.,
The Government Street Mid-Cap Fund
Mary Shannon Hope,
The Government Street Bond Fund
----------------------------------------------------------------------------
================================================================================
================================================================================
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, 2006
Investment Advisor
LOWE, BROCKENBROUGH & COMPANY, INC.
RICHMOND, VIRGINIA
================================================================================
LETTER TO SHAREHOLDERS MAY 12, 2006
================================================================================
Dear Fellow Shareholders:
THE JAMESTOWN BALANCED FUND
For the fiscal year ending March 31, 2006, The Jamestown Balanced Fund returned
9.1% versus a return of 10.0% for the Lipper Balanced Fund Index and a return of
7.8% for a blend of 60% S&P 500 and 40% Lehman Intermediate Government/Credit
Index. The Lehman Intermediate Government/Credit Index rose 2.1% during the
twelve month period, while the S&P 500 rose 11.7%. Continuing the trend seen for
the last several years, value stocks (led by Energy, Financials, and Telecom
Services) outperformed growth stocks as the Citigroup Large Capitalization Value
Index increased 14.9% compared to an 8.5% return for the Citigroup Large Growth
Index.
The outperformance of the equity portion of the Fund was driven by strong stock
selection in the Healthcare and Industrial sectors. The Fund also benefited from
being overweight Industrial and Energy stocks, while the underweight in
Financials and Telecom Services hurt performance for the year. The fixed income
portion of the Fund outperformed the Lehman Index due to our defensive maturity
positioning as rates rose during the period. Shorter overall maturity than the
Index helped as did our underweight in the 2-5 year maturity range that was hurt
the worst by the persistent increase in the Federal Funds rate. Our overweight
in spread-oriented products also helped as spreads relative to Treasury
securities remained very tight.
The economy has continued to defy skeptics and has remained very strong in the
face of higher energy prices and the Federal Reserve's campaign to raise
interest rates. We do expect economic growth to begin moderating throughout the
year as higher rates and higher energy prices slow down consumer spending.
Although it has not happened yet, earnings growth should also begin to moderate
from the higher than expected levels experienced over the last several years.
The valuation on the S&P 500 still looks reasonable at less than 16X forecasted
earnings.
The equity portion of the portfolio continues to be well diversified with a bias
toward companies that can benefit from stronger corporate spending and stronger
international economic growth. The portfolio is overweight the Industrial,
Healthcare, and Technology sectors. We have recently reduced our Energy holdings
to a weight in line with the S&P 500 and currently favor companies in the
service sector over the producers. The fixed income portion of the Fund is still
defensively positioned in its maturity structure relative to the Lehman Index,
but we are looking for opportunities to lengthen maturities as the Federal
Reserve nears the end of their rate hike campaign.
As of March 31, 2006, The Jamestown Balanced Fund had 1.0% in cash, 29.7% in
fixed income, and 69.3% in equities.
THE JAMESTOWN EQUITY FUND
For the fiscal year ending March 31, 2006, The Jamestown Equity Fund returned
12.7% versus a return of 11.7% for the S&P 500. Continuing the trend seen for
the last several years, value stocks (led by Energy, Financials, and Telecom
Services) outperformed growth stocks as the Citigroup Large Capitalization Value
Index increased 14.9% compared to an 8.5% return for the Citigroup Large Growth
Index.
The good relative performance of the Fund was driven by strong stock selection
in the Healthcare and Industrial sectors. The Fund also benefited from being
overweight Industrial and Energy stocks, while the underweight in Financial and
Telecom Services hurt performance for the year.
The economy has continued to defy skeptics and has remained very strong in the
face of higher energy prices and the Federal Reserve's campaign to raise
interest rates. We do expect economic growth to begin moderating throughout the
year as higher rates and higher energy prices slow down consumer spending.
Although it has not happened yet, earnings growth should also begin to moderate
from the higher than expected levels experienced over the last several years.
The valuation on the S&P 500 still looks reasonable at less than 16X forecasted
earnings.
1
The portfolio continues to be well diversified with a bias toward companies that
can benefit from stronger corporate spending and stronger international economic
growth. The portfolio is overweight the Industrial, Healthcare, and Technology
sectors. We have recently reduced our Energy holdings to a weight in line with
the S&P 500 and favor companies in the service sector over the producers.
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ending March 31, 2006, The Jamestown Tax Exempt Virginia
Fund produced a total return of 1.8% compared to 2.9% for the Lipper
Intermediate Municipal Fund Index. The broader Lehman Municipal Bond Index rose
3.8% during the same twelve-month period. During most of the fiscal year, the
Fund faced the headwinds of a rising interest rate environment, which dampened
returns for most fixed income investors.
Over the last two years the Federal Reserve has steadily increased short-term
interest rates in response to robust economic growth and rising inflation risks.
Monetary policy has shifted from overly accommodative in 2002-2004 to close to
neutral by the first quarter of 2006. In March the Federal Reserve signaled that
at least one more rate hike would likely be needed even though the tightening
cycle is nearing its endpoint. During the year ending March 31, 2006, Treasury
bond yields climbed sharply higher on shorter maturities while yields on longer
maturities moved modestly higher, resulting in a flat yield curve by the end of
the period. Municipal bond yields also moved sharply higher in short maturities.
However, municipal bonds with maturities longer than 15 years saw yields decline
slightly from the levels at the beginning of the fiscal year. For example, the
yield on a 2-year AAA-rated municipal bond rose 79 basis points while the
10-year yield increased just 15 basis points. The yield spread between 2-year
and 10-year AAA-rated municipal bonds narrowed to 45 basis points, while there
was almost no yield spread between 2 and 10-year Treasuries at the end of the
period.
Following a record year of issuances in 2005, the municipal bond market
experienced a sharp decline in issuances during the first quarter of 2006, with
new-issue volume nationally down 29% from a year ago. In Virginia, the supply
crunch was even starker with new-issue volume down 57% from last year. Due to a
steep drop in refunding issues, new issue volume is now expected to run well
below the levels of the past two years. Meanwhile demand for tax-exempt paper
continues to be healthy, causing municipal bonds to be well bid. With supply
down and demand firm, municipal bonds became relatively more expensive and
yields rose less than those of other bond sectors. The ratio of municipal bond
yields to Treasury yields declined, with 5-year and 10-year ratios of 75% and
83%, respectively, as of March 31, 2006.
The Fund was positioned during the fiscal year in anticipation of higher
interest rates, with a shorter average maturity and duration than that of its
benchmarks. Rising bond yields negatively affected the Fund's performance by
causing bond prices to fall. The Fund remains conservatively postured with its
emphasis on high quality, intermediate maturities, which normally display lower
price sensitivity due to changes in market yields than bonds with the longest
maturities. In the past fiscal year, the twisting of the municipal yield curve
and the narrowing of municipal yield ratios in the longest maturities rewarded
strategies with greater exposure to long maturities.
Virginia bond issuers typically find strong demand for tax-exempt bonds due to
the state's solid credit quality and the relatively high state income tax rate.
Virginia bonds therefore command a premium price and lower yield than bonds
issued by other states with lesser credit quality and/or state income tax rates.
The Fund's single-state concentration in Virginia also caused the Fund's
performance to lag behind that of funds with greater exposure to higher-yielding
general market bonds. Nevertheless, Fund shareholders who are Virginia residents
benefit from double tax-free treatment on the Fund's income dividends.
As of March 31, 2006, The Fund had an average effective maturity of 4.7 years,
an effective duration of 4.0 years, and a current yield of 3.43%, which produced
a tax equivalent yield of 5.28% (assuming a maximum 35.0% federal tax rate).
The Jamestown Tax Exempt Virginia Fund returned 3.4% on an annualized basis for
the five years ended March 31, 2006, versus 4.0% for the Lipper Intermediate
Municipal Fund Index. For the ten-year period, the Fund generated an annualized
return of 4.3%, as compared to the 4.7% annualized return for the Lipper
Intermediate Municipal Fund Index.
2
THE JAMESTOWN INTERNATIONAL EQUITY FUND
For the year ending March 31, 2006, The Jamestown International Equity Fund
returned 24.5% and the Morgan Stanley EAFE Index rose 24.4%. International
equity markets continued to outperform their domestic counterparts as they have
since the recovery that began in global equity markets in early 2003. Similar to
the trends seen in domestic equities, value securities have continued to
outperform growth oriented equities. As economic growth begins to moderate,
Oechsle International Advisors believes that the markets will return to
companies that can continue to show earnings growth in a slower growth
environment.
A string of positive surprises among leading economic indicators pointed to
accelerating growth across Europe and Japan. Materials, Financials, and
Industrial stocks continued to outperform. The Fund benefited over the past
twelve months by overweighting the Finance sector with a particular emphasis on
Japanese Financial stocks. The Fund has been underweight Materials and
Industrials, which detracted from performance over the period.
While Oechsle believes that the U.S. economy will likely slow behind weaker
consumer spending, economic activity in the rest of the world is broadly
improving. Both European and Japanese consumers appear poised to pick up any
demand slack from the U.S. consumer. Business around the world appears healthy
as trends in globalization, privatization, and corporate restructuring are
boosting global economic activity.
As the U.S. Federal Reserve and the European Central Bank both raised their key
short term interest rates during the most recent quarter, liquidity will
continue to tighten in the key global economies. However, given their low bases,
liquidity conditions should remain supportive for equities in general and higher
quality companies should benefit. Market volatility should pick up as investors
differentiate between slow and fast growing companies.
Sustained moderate inflation remains a key component of Oechsle's favorable
economic and investment perspective. While their outlook is broadly positive
from both an economic and investment perspective, Oechsle acknowledges that
there are several risks that include a sharper than expected slowdown in the
U.S. consumer, a continued sharp rise in oil and other commodities, and a surge
in terrorists activities or global health risks.
As of March 31, 2006, The Fund had 44.6% invested in Continental Europe, 17.8%
in the United Kingdom, 30.9% in Japan, 3.2% in the Pacific Basin outside of
Japan, and 0.4% in Emerging Markets.
Sincerely,
/s/ Charles M. Caravati, III, CFA
Charles M. Caravati, III, CFA
President
Jamestown Balanced Fund
Jamestown Equity Fund
Jamestown International Equity Fund
/s/ Joseph A. Jennings, III
Joseph A. Jennings, III
President
Jamestown Tax Exempt Virginia Fund
3
THE JAMESTOWN BALANCED FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
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
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN BALANCED FUND:
---------------------------- ----------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,449 06/30/96 10,305
09/30/96 10,772 09/30/96 10,553
12/31/96 11,670 12/31/96 11,209
03/31/97 11,983 03/31/97 11,229
06/30/97 14,075 06/30/97 12,499
09/30/97 15,129 09/30/97 13,120
12/31/97 15,563 12/31/97 13,438
03/31/98 17,734 03/31/98 14,869
06/30/98 18,320 06/30/98 14,949
09/30/98 16,497 09/30/98 13,633
12/31/98 20,011 12/31/98 15,893
03/31/99 21,008 03/31/99 15,993
06/30/99 22,489 06/30/99 16,487
09/30/99 21,084 09/30/99 16,020
12/31/99 24,222 12/31/99 17,716
03/31/00 24,777 03/31/00 18,536
06/30/00 24,118 06/30/00 18,791
09/30/00 23,884 09/30/00 18,243
12/31/01 22,019 12/31/00 17,867
03/31/01 19,408 03/31/01 16,191
06/30/01 20,543 06/30/01 16,353
09/30/01 17,528 09/30/01 14,801
12/31/01 19,400 12/31/01 15,852
03/31/02 19,454 03/31/02 15,670
06/30/02 16,847 06/30/02 14,974
09/30/02 13,936 09/30/02 13,868
12/31/02 15,112 12/31/02 14,202
03/31/03 14,636 03/31/03 14,094
06/30/03 16,889 06/30/03 15,395
09/30/03 17,336 09/30/03 15,488
12/31/03 19,447 12/31/03 16,534
03/31/04 19,776 03/31/04 16,954
06/30/04 20,117 06/30/04 17,097
09/30/04 19,741 09/30/04 16,959
12/31/04 21,563 12/31/04 17,674
03/31/05 21,100 03/31/05 17,433
06/30/05 21,389 06/30/05 17,649
09/30/05 22,160 09/30/05 18,230
12/31/05 22,622 12/31/05 18,558
03/31/06 23,574 03/31/06 19,026
CONSUMER PRICE INDEX
--------------------
DATE BALANCE
---- -------
03/31/96 $ 10,000
06/30/96 10,110
09/30/96 10,155
12/31/96 10,238
03/31/97 10,310
06/30/97 10,329
09/30/97 10,375
12/31/97 10,439
03/31/98 10,452
06/30/98 10,510
09/30/98 10,554
12/31/98 10,599
03/31/99 10,625
06/30/99 10,721
09/30/99 10,779
12/31/99 10,863
03/31/00 10,966
06/30/00 11,076
09/30/00 11,160
12/31/00 11,244
03/31/01 11,354
06/30/01 11,477
09/30/01 11,464
12/31/01 11,457
03/31/02 11,484
06/30/02 11,612
09/30/02 11,670
12/31/02 11,709
03/31/03 11,825
06/30/03 11,851
09/30/03 11,922
12/31/03 11,916
03/31/04 12,026
06/30/04 12,213
09/30/04 12,239
12/31/04 12,335
03/31/05 12,485
06/30/05 12,655
09/30/05 12,785
12/31/05 12,863
03/31/06 12,935
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS 10 YEARS
The Jamestown Balanced Fund 9.14% 3.28% 6.64%
Standard & Poor's 500 Index 11.73% 3.97% 8.95%
Consumer Price Index 3.61% 2.64% 2.61%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
4
THE JAMESTOWN EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
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
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX: THE JAMESTOWN EQUITY FUND:
---------------------------- --------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,449 06/30/96 10,405
09/30/96 10,772 09/30/96 10,690
12/31/96 11,670 12/31/96 11,527
03/31/97 11,983 03/31/97 11,527
06/30/97 14,075 06/30/97 13,293
09/30/97 15,129 09/30/97 14,090
12/31/97 15,563 12/31/97 14,469
03/31/98 17,734 03/31/98 16,569
06/30/98 18,320 06/30/98 16,544
09/30/98 16,497 09/30/98 14,136
12/31/98 20,011 12/31/98 17,938
03/31/99 21,008 03/31/99 17,949
06/30/99 22,489 06/30/99 18,926
09/30/99 21,084 09/30/99 18,052
12/31/99 24,222 12/31/99 20,925
03/31/00 24,777 03/31/00 22,263
06/30/00 24,118 06/30/00 22,631
09/30/00 23,884 09/30/00 21,373
12/31/00 22,019 12/31/00 20,566
03/31/01 19,408 03/31/01 17,478
06/30/01 20,543 06/30/01 17,715
09/30/01 17,528 09/30/01 14,822
12/31/01 19,400 12/31/01 16,499
03/31/02 19,454 03/31/02 16,182
06/30/02 16,847 06/30/02 14,810
09/30/02 13,936 09/30/02 12,640
12/31/02 15,112 12/31/02 13,051
03/31/03 14,636 03/31/03 12,760
06/30/03 16,889 06/30/03 14,497
09/30/03 17,336 09/30/03 14,612
12/31/03 19,447 12/31/03 16,139
03/31/04 19,776 03/31/04 16,601
06/30/04 20,117 06/30/04 16,973
09/30/04 19,741 09/30/04 16,614
12/31/04 21,563 12/31/04 17,609
03/31/05 21,100 03/31/05 17,321
06/30/05 21,389 06/30/05 17,458
09/30/05 22,160 09/30/05 18,355
12/31/05 22,622 12/31/05 18,791
03/31/06 23,574 03/31/06 19,518
CONSUMER PRICE INDEX
--------------------
DATE BALANCE
---- -------
03/31/96 $ 10,000
06/30/96 10,110
09/30/96 10,155
12/31/96 10,238
03/31/97 10,310
06/30/97 10,329
09/30/97 10,375
12/31/97 10,439
03/31/98 10,452
06/30/98 10,510
09/30/98 10,554
12/31/98 10,599
03/31/99 10,625
06/30/99 10,721
09/30/99 10,779
12/31/99 10,863
03/31/00 10,966
06/30/00 11,076
09/30/00 11,160
12/31/00 11,244
03/31/01 11,354
06/30/01 11,477
09/30/01 11,464
12/31/01 11,457
03/31/02 11,484
06/30/02 11,612
09/30/02 11,670
12/31/02 11,709
03/31/03 11,825
06/30/03 11,851
09/30/03 11,922
12/31/04 11,916
03/31/04 12,026
06/30/04 12,213
09/30/04 12,239
12/31/04 12,335
03/31/05 12,485
06/30/05 12,655
09/30/05 12,785
12/31/05 12,863
03/31/06 12,935
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS 10 YEARS
The Jamestown Equity Fund 12.69% 2.23% 6.92%
Standard & Poor's 500 Index 11.73% 3.97% 8.95%
Consumer Price Index 3.61% 2.64% 2.61%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
5
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
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
[GRAPHIC OMITTED]
LEHMAN MUNICIPAL BOND INDEX: THE JAMESTOWN TAX EXEMPT VIRGINIA FUND:
---------------------------- --------------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
03/31/96 $ 10,000 03/31/96 $ 10,000
06/30/96 10,077 06/30/96 10,063
09/30/96 10,307 09/30/96 10,229
12/31/96 10,570 12/31/96 10,449
03/31/97 10,545 03/31/97 10,439
06/30/97 10,908 06/30/97 10,720
09/30/97 11,237 09/30/97 10,947
12/31/97 11,542 12/31/97 11,188
03/31/98 11,675 03/31/98 11,275
06/30/98 11,853 06/30/98 11,407
09/30/98 12,216 09/30/98 11,744
12/31/98 12,290 12/31/98 11,792
03/31/99 12,399 03/31/99 11,830
06/30/99 12,180 06/30/99 11,648
09/30/99 12,131 09/30/99 11,641
12/31/99 12,037 12/31/99 11,587
03/31/00 12,389 03/31/00 11,835
06/30/00 12,576 06/30/00 11,966
09/30/00 12,880 09/30/00 12,208
12/31/00 13,444 12/31/00 12,628
03/31/01 13,742 03/31/01 12,896
06/30/01 13,831 06/30/01 12,957
09/30/01 14,220 09/30/01 13,254
12/31/01 14,133 12/31/01 13,190
03/31/02 14,266 03/31/02 13,291
06/30/02 14,788 06/30/02 13,708
09/30/02 15,490 09/30/02 14,276
12/31/02 15,490 12/31/02 14,289
03/31/03 15,676 03/31/03 14,386
06/30/03 16,081 06/30/03 14,678
09/30/03 16,093 09/30/03 14,665
12/31/03 16,313 12/31/03 14,762
03/31/04 16,596 03/31/04 14,905
06/30/04 16,202 06/30/04 14,613
09/30/04 16,831 09/30/04 15,004
12/31/04 17,041 12/31/04 15,078
03/31/05 17,035 03/31/05 14,933
06/30/05 17,534 06/30/05 15,241
09/30/05 17,513 09/30/05 15,178
12/31/05 17,640 12/31/05 15,238
03/31/06 17,684 03/31/06 15,208
LIPPER INTERMEDIATE MUNICIPAL FUND INDEX:
----------------------------------------
DATE BALANCE
---- -------
03/31/96 $ 10,000
06/30/96 10,044
09/30/96 10,229
12/31/96 10,454
03/31/97 10,452
06/30/97 10,728
09/30/97 10,991
12/31/97 11,228
03/31/98 11,336
06/30/98 11,473
09/30/98 11,792
12/31/98 11,859
03/31/99 11,925
06/30/99 11,725
09/30/99 11,733
12/31/99 11,696
03/31/00 11,902
06/30/02 12,046
09/30/00 12,298
12/31/00 12,710
03/31/01 12,997
06/30/01 13,094
09/30/01 13,433
12/31/01 13,320
03/31/02 13,416
06/30/02 13,891
09/30/02 14,428
12/31/02 14,431
03/31/03 14,574
06/30/03 14,895
09/30/03 14,924
12/31/03 15,060
03/31/04 15,235
06/30/04 14,935
09/30/04 15,381
12/31/04 15,490
03/31/05 15,376
06/30/05 15,744
09/30/05 15,713
12/31/05 15,801
03/31/06 15,817
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS 10 YEARS
The Jamestown Tax Exempt Virginia Fund 1.83% 3.35% 4.28%
Lipper Intermediate Municipal Fund Index 2.87% 4.01% 4.69%
Lehman Municipal Bond Index 3.81% 5.18% 5.87%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
6
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE JAMESTOWN
INTERNATIONAL EQUITY FUND AND THE MORGAN STANLEY EUROPE, AUSTRALIA AND FAR EAST
INDEX (EAFE INDEX)
MORGAN STANLEY EUROPE, AUSTRALIA
AND FAR EAST INDEX (EAFE INDEX) THE JAMESTOWN INTERNATIONAL EQUITY FUND
-------------------------------- ---------------------------------------
DATE BALANCE DATE BALANCE
---- ------- ---- -------
04/30/96 $ 10,000 04/16/96 $ 10,000
06/30/96 9,871 06/30/96 9,820
09/30/96 9,859 09/30/96 9,539
12/31/96 10,016 12/31/96 9,770
03/31/97 9,860 03/31/97 9,850
06/30/97 11,138 06/30/97 11,407
09/30/97 11,059 09/30/97 11,899
12/31/97 10,193 12/31/97 10,984
03/31/98 11,693 03/31/98 12,773
06/30/98 11,817 06/30/98 13,370
09/30/98 10,138 09/30/98 11,527
12/31/98 12,232 12/31/98 13,615
03/31/99 12,402 03/31/99 13,879
06/30/99 12,717 06/30/99 14,490
09/30/99 13,277 09/30/99 15,366
12/31/99 15,532 12/31/99 19,008
03/31/00 15,517 03/31/00 19,341
06/30/00 14,902 06/30/00 17,682
09/30/00 13,701 09/30/00 16,245
12/31/00 13,333 12/31/00 15,128
03/31/01 11,501 03/31/01 12,902
06/30/01 11,380 06/30/01 12,486
09/30/01 9,787 09/30/01 10,231
12/31/01 10,469 12/31/01 11,003
03/31/02 10,522 03/31/02 11,139
06/30/02 10,299 06/30/02 10,643
09/30/02 8,267 09/30/02 8,361
12/31/02 8,800 12/31/02 8,782
03/31/03 8,078 03/31/03 7,889
06/30/03 9,634 06/30/03 9,377
09/30/03 10,417 09/30/03 9,965
12/31/03 12,195 12/31/03 11,398
03/31/04 12,723 03/31/04 11,851
06/30/04 12,751 06/30/04 11,801
09/30/04 12,715 09/30/04 11,486
12/31/04 14,663 12/31/04 13,289
03/31/05 14,640 03/31/05 13,096
06/30/05 14,493 06/30/05 12,691
09/30/05 15,998 09/30/05 14,112
12/31/05 16,650 12/31/05 14,994
03/31/06 18,216 03/31/06 16,311
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2006)
1 YEAR 5 YEARS SINCE INCEPTION*
The Jamestown International Equity Fund 24.54% 4.80% 5.04%
Morgan Stanley Europe, Australia and
Far East Index (EAFE Index) 24.43% 9.63% 6.23%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
* Initial public offering of shares was April 16, 1996.
7
THE JAMESTOWN BALANCED FUND
PERFORMANCE INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- --------------------------------- TEN LARGEST EQUITY HOLDINGS NET ASSETS
----------------------------------------
[GRAPHIC OMITTED] General Electric Company 2.0%
Noble Corporation 2.0%
Common Stocks 69.3% WellPoint, Inc. 1.9%
Fixed Income 29.7% Cisco Systems, Inc. 1.7%
Cash Equivalents 1.0% Dover Corporation 1.7%
Home Depot, Inc. 1.6%
PepsiCo, Inc. 1.6%
Bank of America Corporation 1.6%
Amgen, Inc. 1.5%
American International Group 1.4%
EQUITY INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX (69.3% OF NET ASSETS)
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED] THE
JAMESTOWN
BALANCED S&P 500
FUND INDEX
- --------------------------------------------------------------
Consumer Discretionary 10.4% 10.2%
Consumer Staples 6.8% 9.3%
Energy 10.1% 9.6%
Financials 17.3% 21.0%
Health Care 16.9% 12.9%
Industrials 15.1% 11.5%
Information Technology 18.8% 16.0%
Materials 2.3% 3.0%
Telecommunication Services 1.2% 3.3%
Utilities 1.1% 3.2%
FIXED-INCOME PORTFOLIO (29.7% OF NET ASSETS) SECTOR BREAKDOWN
- -------------------------------------------- ----------------------------------
Average Stated Maturity (Years) 4.3 U.S. Treasury 17.5%
Average Duration (Years) 3.3 U.S. Government Agency 20.9%
Average Coupon 5.53% Mortgage-Backed 14.8%
Average Yield to Maturity 5.31% Corporate 44.1%
Municipal 1.4%
Canadian Regional Authority 1.3%
CREDIT QUALITY % OF FIXED INCOME PORTFOLIO
--------------------------------------------------
AAA 2.8%
AA 5.6%
A 30.9%
BAA 7.5%
U.S. Treasury 17.4%
U.S. Government Agency 35.8%
8
THE JAMESTOWN EQUITY FUND
PERFORMANCE INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- --------------------------------- TEN LARGEST EQUITY HOLDINGS NET ASSETS
----------------------------------------
[GRAPHIC OMITTED] General Electric Company 2.9%
Noble Corporation 2.7%
Stocks 99.8% WellPoint, Inc. 2.5%
Cash Equivalents 0.2% Dover Corporation 2.5%
Cisco Systems, Inc. 2.5%
Home Depot, Inc. 2.4%
PepsiCo, Inc. 2.3%
Amgen, Inc. 2.0%
Prudential Financial, Inc. 2.0%
Ingersoll Rand Company - Class A 2.0%
INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
THE
JAMESTOWN
EQUITY S&P 500
FUND INDEX
- --------------------------------------------------------------
Consumer Discretionary 10.8% 10.2%
Consumer Staples 6.2% 9.3%
Energy 10.0% 9.6%
Financials 16.5% 21.0%
Health Care 16.4% 12.9%
Industrials 15.3% 11.5%
Information Technology 19.7% 16.0%
Materials 2.3% 3.0%
Telecommunication Services 1.4% 3.3%
Utilities 1.2% 3.2%
Cash Equivalents 0.2% 0.0%
9
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PERFORMANCE INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
CHARACTERISTICS MATURITY BREAKDOWN (% OF PORTFOLIO)
(WEIGHTED AVERAGE) ----------------------------------------
- -------------------------------------
Current Yield 3.43% [GRAPHIC OMITTED]
Tax-Equivalent Yield 5.28%*
Average Maturity (Years) 4.7 0-2 Years 24%
Average Duration (Years) 4.0 2-5 Years 36%
Average Quality AA+ 5-10 Years 40%
Number of Issues 36
* Assumes a maximum 35.0% federal tax rate.
CREDIT QUALITY (% OF PORTFOLIO) SECTOR DIVERSIFICIATION (% OF PORTFOLIO)
- ------------------------------------- ----------------------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
AAA 60.3% Revenues 52.3%
AA 39.7% Government Guaranteed 32.2%
Floating Rate Notes 13.8%
General Obligations 1.7%
10
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PERFORMANCE INFORMATION
MARCH 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- ----------------------------- TEN LARGEST HOLDINGS COUNTRY NET ASSETS
------------------------------------------------
[GRAPHIC OMITTED] Mitsubishi UFJ
Financial Group, Inc. Japan 2.9%
Stocks 96.9% GlaxoSmithKline PLC United Kingdom 2.4%
Cash Equivalents 3.1% Repsol YPF SA Spain 2.3%
Sumitomo Mitsui
Financial Group, Inc. Japan 2.2%
Mitsubishi Estate
Company Ltd. Japan 2.2%
Nomura Holdings, Inc. Japan 2.0%
Koninkijke (Royal)
KPN NV Netherlands 2.0%
ENI SpA Italy 1.9%
Royal Dutch Shell
PLC - Class A United Kingdom 1.9%
Schering AG Germany 1.8%
GEOGRAPHIC DIVERSIFICATION VS. THE MORGAN STANLEY EAFE INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
THE
JAMESTOWN MORGAN
INTERNATIONAL STANLEY
EQUITY EAFE
FUND INDEX
----------------------
Australia 1.9% 5.1%
France 8.5% 9.8%
Germany 11.6% 7.1%
Greece 1.0% 0.7%
Italy 4.3% 3.8%
Japan 30.9% 25.4%
Netherlands 7.3% 3.5%
Singapore 1.2% 0.8%
Spain 3.1% 3.8%
Sweden 2.4% 2.4%
Switzerland 5.5% 6.7%
United Kingdom 17.8% 23.4%
Other 1.4% 7.5%
Cash Equivalents 3.1% 0.0%
11
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2006
==================================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost .......................... $ 47,311,393 $ 33,549,590 $ 29,799,635 $ 15,141,857
============ ============ ============ ============
At value (Note 1) ............................ $ 56,975,180 $ 42,935,309 $ 30,229,349 $ 20,931,243
Cash ........................................... -- -- -- 525,820
Cash denominated in
foreign currency(a) (Note 5) ................. -- -- -- 50,848
Dividends and interest receivable .............. 237,422 29,289 388,495 62,550
Receivable for capital shares sold ............. 13,141 11,589 -- 175,000
Net unrealized appreciation on forward
foreign currency exchange contracts (Note 6) . -- -- -- 202
Other assets ................................... 1,624 5,765 5,513 1,267
------------ ------------ ------------ ------------
TOTAL ASSETS ................................. 57,227,367 42,981,952 30,623,357 21,746,930
------------ ------------ ------------ ------------
LIABILITIES
Distributions payable .......................... 122,835 116,806 18,485 --
Payable for capital shares redeemed ............ 177,633 66,713 170,743 --
Payable for securities purchased ............... -- -- -- 101,358
Accrued investment advisory fees (Note 3) ...... 31,641 23,641 8,838 13,700
Accrued administration fees (Note 3) ........... 6,500 5,100 3,800 3,600
Other accrued expenses ......................... 9,729 -- -- 28,350
------------ ------------ ------------ ------------
TOTAL LIABILITIES ............................ 348,338 212,260 201,866 147,008
------------ ------------ ------------ ------------
NET ASSETS ...................................... $ 56,879,029 $ 42,769,692 $ 30,421,491 $ 21,599,922
============ ============ ============ ============
Net assets consist of:
Paid-in capital ................................ $ 47,361,367 $ 33,450,575 $ 29,986,904 $ 32,170,642
Undistributed (overdistributed) net
investment income ............................ (37,454) 1,445 10,932 15,336
Accumulated net realized losses
from security transactions ................... (108,671) (68,047) (6,059) (16,375,489)
Net unrealized appreciation on investments ..... 9,663,787 9,385,719 429,714 5,789,386
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies . -- -- -- 47
------------ ------------ ------------ ------------
Net assets ...................................... $ 56,879,029 $ 42,769,692 $ 30,421,491 $ 21,599,922
============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) .................................. 3,798,437 2,317,558 3,026,281 1,693,086
============ ============ ============ ============
Net asset value, offering price and redemption
price per share(b) ............................. $ 14.97 $ 18.45 $ 10.05 $ 12.76
============ ============ ============ ============
(a) For Jamestown International Equity Fund, the cost of cash denominated in
foreign currency is $50,846.
(b) For Jamestown International Equity Fund, redemption price varies based on
length of time held (Note 1).
See accompanying notes to financial statements.
12
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2006
==================================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ...................................... $ 537,883 $ 507,706 $ 9,982 $ 520,517
Foreign withholding taxes on dividends ......... -- -- -- (68,070)
Interest ....................................... 1,091,431 31,028 1,296,719 6,984
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ...................... 1,629,314 538,734 1,306,701 459,431
------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) .............. 406,154 274,436 124,772 197,293
Administration fees (Note 3) ................... 81,294 59,054 45,304 39,513
Professional fees .............................. 20,60 17,768 15,862 19,552
Custodian fees ................................. 10,891 9,189 5,057 43,287
Trustees' fees and expenses .................... 13,591 13,591 13,591 13,591
Pricing costs .................................. 9,487 1,776 5,604 31,980
Postage and supplies ........................... 8,744 9,506 6,087 6,852
Registration fees .............................. 5,980 6,230 1,436 5,412
Compliance consulting fees (Note 3) ............ 7,192 4,972 3,547 2,317
Printing of shareholder reports ................ 2,874 4,097 1,665 2,055
Insurance expense .............................. 4,175 3,046 2,379 1,682
Other expenses ................................. 8,168 6,977 2,710 4,862
------------ ------------ ------------ ------------
TOTAL EXPENSES ............................... 579,158 410,642 228,014 368,396
Fees waived by the Adviser (Note 3) ............ -- -- (12,782) (84,295)
Expenses reimbursed through a directed
brokerage arrangement (Note 4) ............... (24,000) (24,000) -- --
------------ ------------ ------------ ------------
NET EXPENSES ................................. 555,158 386,642 215,232 284,101
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ........................... 1,074,156 152,092 1,091,469 175,330
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (Note 5)
Net realized gains (losses) from:
Security transactions ........................ 3,960,067 3,030,933 26,160 939,193
Foreign currency transactions ................ -- -- -- (2,031)
Net change in unrealized appreciation/
depreciation on:
Investments .................................. 475,466 1,861,077 (554,553) 3,281,131
Foreign currency translation ................. -- -- -- 62
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES ......................... 4,435,533 4,892,010 (528,393) 4,218,355
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ................................ $ 5,509,689 $ 5,044,102 $ 563,076 $ 4,393,685
============ ============ ============ ============
See accompanying notes to financial statements.
13
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,
2006 2005 2006 2005
- ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .......................... $ 1,074,156 $ 1,171,563 $ 152,092 $ 291,596
Net realized gains on
security transactions ........................ 3,960,067 2,503,054 3,030,933 2,936,243
Net change in unrealized appreciation/
depreciation on investments .................. 475,466 (1,945,221) 1,861,077 (1,239,526)
------------ ------------ ------------ ------------
Net increase in net assets
from operations ................................ 5,509,689 1,729,396 5,044,102 1,988,313
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ..................... (1,102,478) (1,211,016) (151,097) (291,146)
From net realized gains from
security transactions ........................ (3,872,793) (2,479,946) (3,031,520) (2,982,053)
------------ ------------ ------------ ------------
Net decrease in net assets from
distributions to shareholders .................. (4,975,271) (3,690,962) (3,182,617) (3,273,199)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 2,477,785 2,063,209 1,520,283 2,989,063
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. 4,684,832 3,472,724 2,887,949 3,081,869
Payments for shares redeemed ................... (13,052,698) (5,177,280) (5,752,829) (12,719,998)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
capital share transactions ..................... (5,890,081) 358,653 (1,344,597) (6,649,066)
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS .................................. (5,355,663) (1,602,913) 516,888 (7,933,952)
NET ASSETS
Beginning of year .............................. 62,234,692 63,837,605 42,252,804 50,186,756
------------ ------------ ------------ ------------
End of year .................................... $ 56,879,029 $ 62,234,692 $ 42,769,692 $ 42,252,804
============ ============ ============ ============
UNDISTRIBUTED (OVERDISTRIBUTED)
NET INVESTMENT INCOME .......................... $ (37,454) $ (73,816) $ 1,445 $ 450
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ........................................... 165,132 134,979 82,920 162,067
Reinvested ..................................... 313,505 230,750 160,456 173,805
Redeemed ....................................... (850,187) (340,541) (314,377) (692,771)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding .. (371,550) 25,188 (71,001) (356,899)
Shares outstanding, beginning of year .......... 4,169,987 4,144,799 2,388,559 2,745,458
------------ ------------ ------------ ------------
Shares outstanding, end of year ................ 3,798,437 4,169,987 2,317,558 2,388,559
============ ============ ============ ============
See accompanying notes to financial statements.
14
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,
2006 2005 2006 2005
- ------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .......................... $ 1,091,469 $ 1,154,607 $ 175,330 $ 155,094
Net realized gains (losses) from:
Security transactions ........................ 26,160 31,027 939,193 2,520,865
Foreign currency transactions ................ -- -- (2,031) (9,732)
Net change in unrealized appreciation/
depreciation on:
Investments .................................. (554,553) (1,106,925) 3,281,131 (782,364)
Foreign currency translation ................. -- -- 62 (1,411)
------------ ------------ ------------ ------------
Net increase in net assets from operations ...... 563,076 78,709 4,393,685 1,882,452
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ..................... (1,089,001) (1,141,162) (164,170) (157,727)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 1,971,725 3,119,028 764,281 1,122,011
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. 867,903 866,777 161,289 152,797
Proceeds from redemption fees collected ........ -- -- 5 --
Payments for shares redeemed ................... (3,451,665) (4,966,001) (3,820,953) (3,892,103)
------------ ------------ ------------ ------------
Net decrease in net assets from
capital share transactions ..................... (612,037) (980,196) (2,895,378) (2,617,295)
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ..................................... (1,137,962) (2,042,649) 1,334,137 (892,570)
NET ASSETS
Beginning of year .............................. 31,559,453 33,602,102 20,265,785 21,158,355
------------ ------------ ------------ ------------
End of year .................................... $ 30,421,491 $ 31,559,453 $ 21,599,922 $ 20,265,785
============ ============ ============ ============
UNDISTRIBUTED NET
INVESTMENT INCOME .............................. $ 10,932 $ 8,888 $ 15,336 $ 6,207
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ........................................... 193,535 301,917 64,093 111,780
Reinvested ..................................... 85,055 83,713 14,029 14,839
Redeemed ....................................... (338,953) (479,453) (347,821) (410,618)
------------ ------------ ------------ ------------
Net decrease in shares outstanding ............. (60,363) (93,823) (269,699) (283,999)
Shares outstanding, beginning of year .......... 3,086,644 3,180,467 1,962,785 2,246,784
------------ ------------ ------------ ------------
Shares outstanding, end of year ................ 3,026,281 3,086,644 1,693,086 1,962,785
============ ============ ============ ============
See accompanying notes to financial statements.
15
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
=========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
------------------------------------------------------------------------
2006 2005 2004 2003 2002(a)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 14.92 $ 15.40 $ 13.76 $ 15.66 $ 16.78
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ....................... 0.26 0.29 0.27 0.31 0.32
Net realized and unrealized gains
(losses) on investments ................... 1.06 0.14 2.48 (1.88) (0.86)
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. 1.32 0.43 2.75 (1.57) (0.54)
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ........ (0.27) (0.30) (0.29) (0.33) (0.35)
Distributions from net realized gains ....... (1.00) (0.61) (0.82) -- (0.23)
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (1.27) (0.91) (1.11) (0.33) (0.58)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 14.97 $ 14.92 $ 15.40 $ 13.76 $ 15.66
========== ========== ========== ========== ==========
Total return(b) .............................. 9.14% 2.83% 20.29% (10.06%) (3.22%)
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 56,879 $ 62,235 $ 63,838 $ 65,339 $ 96,824
========== ========== ========== ========== ==========
Ratio of gross expenses to average net assets 0.93% 0.92% 0.91% 0.90% 0.86%
Ratio of net expenses to average net assets(c) 0.89% 0.88% 0.88% 0.87% 0.83%
Ratio of net investment income to
average net assets .......................... 1.72% 1.87% 1.77% 2.12% 1.97%
Portfolio turnover rate ...................... 49% 29% 36% 38% 62%
(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%.
(b) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
(c) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
16
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
=========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
------------------------------------------------------------------------
2006 2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 17.69 $ 18.28 $ 14.47 $ 18.40 $ 19.94
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ....................... 0.07 0.12 0.05 0.04 0.06
Net realized and unrealized gains
(losses) on investments ................... 2.11 0.65 4.30 (3.93) (1.54)
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. 2.18 0.77 4.35 (3.89) (1.48)
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ........ (0.07) (0.12) (0.05) (0.04) (0.06)
Distributions from net realized gains ....... (1.35) (1.24) (0.49) -- --
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (1.42) (1.36) (0.54) (0.04) (0.06)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 18.45 $ 17.69 $ 18.28 $ 14.47 $ 18.40
========== ========== ========== ========== ==========
Total return(a) .............................. 12.69% 4.34% 30.10% (21.15%) (7.42%)
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 42,770 $ 42,253 $ 50,187 $ 38,619 $ 54,807
========== ========== ========== ========== ==========
Ratio of gross expenses to average net assets 0.97% 0.95% 0.94% 0.96% 0.90%
Ratio of net expenses to average net assets(b) 0.92% 0.90% 0.88% 0.89% 0.86%
Ratio of net investment income
to average net assets ....................... 0.36% 0.63% 0.27% 0.25% 0.31%
Portfolio turnover rate ...................... 60% 34% 52% 60% 89%
(a) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
17
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,
------------------------------------------------------------------------
2006 2005 2004 2003 2002(a)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 10.22 $ 10.57 $ 10.56 $ 10.12 $ 10.22
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ....................... 0.36 0.37 0.37 0.38 0.41
Net realized and unrealized gains
(losses) on investments ................... (0.17) (0.35) 0.00(b) 0.44 (0.10)
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. 0.19 0.02 0.37 0.82 0.31
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ........ (0.36) (0.37) (0.36) (0.38) (0.41)
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 10.05 $ 10.22 $ 10.57 $ 10.56 $ 10.12
========== ========== ========== ========== ==========
Total return(c) .............................. 1.83% 0.19% 3.61% 8.24% 3.04%
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 30,421 $ 31,559 $ 33,602 $ 36,424 $ 33,896
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets(d) 0.69% 0.69% 0.69% 0.69% 0.68%
Ratio of net investment income to
average net assets .......................... 3.50% 3.60% 3.46% 3.68% 4.02%
Portfolio turnover rate ...................... 22% 15% 43% 28% 27%
(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%.
(b) Represents less than a penny per share.
(c) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
(d) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 0.73%, 0.72%, 0.74%
and 0.70% for the years ended March 31, 2006, 2005, 2004 and 2003,
respectively.
See accompanying notes to financial statements.
18
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
=========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
------------------------------------------------------------------------
2006 2005 2004 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ......... $ 10.33 $ 9.42 $ 6.31 $ 8.98 $ 10.56
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ....................... 0.10 0.08 0.05 0.06 0.01
Net realized and unrealized gains (losses)
on investments and foreign currencies ..... 2.43 0.91 3.12 (2.69) (1.47)
---------- ---------- ---------- ---------- ----------
Total from investment operations ............. 2.53 0.99 3.17 (2.63) (1.46)
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ........ (0.10) (0.08) (0.05) (0.05) (0.05)
Return of capital ........................... -- -- -- -- (0.08)
Distributions from net realized gains ....... -- -- (0.01) -- --
---------- ---------- ---------- ---------- ----------
Total distributions .......................... (0.10) (0.08) (0.06) (0.05) (0.13)
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ...... 0.00(a) -- 0.00(a) 0.01 0.01
---------- ---------- ---------- ---------- ----------
Net asset value at end of year ............... $ 12.76 $ 10.33 $ 9.42 $ 6.31 $ 8.98
========== ========== ========== ========== ==========
Total return(b) .............................. 24.54% 10.51% 50.22% (29.18%) (13.66%)
========== ========== ========== ========== ==========
Net assets at end of year (000's) ............ $ 21,600 $ 20,266 $ 21,158 $ 21,308 $ 44,022
========== ========== ========== ========== ==========
Ratio of net expenses to average net assets(c) 1.44% 1.43% 1.38% 1.38% 1.38%
Ratio of net investment income
to average net assets ....................... 0.89% 0.78% 0.57% 0.60% 0.12%
Portfolio turnover rate ...................... 13% 111% 78% 56% 80%
(a) Represents less than a penny per share.
(b) Total return is a measure of the change in value of an investment in the
Fund over the period covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
(c) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 1.87%, 1.92%,
1.77%, 1.70% and 1.51% for the years ended March 31, 2006, 2005, 2004, 2003
and 2002, respectively.
See accompanying notes to financial statements.
19
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 69.3% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 7.2%
5,000 Black & Decker Corporation (The) ................. $ 434,450
14,500 eBay, Inc. (a) ................................... 566,370
22,000 Home Depot, Inc. ................................. 930,600
7,500 J.C. Penney Company, Inc. ........................ 453,075
8,500 Lennar Corporation ............................... 513,230
17,500 Staples, Inc. .................................... 446,600
11,000 Target Corporation ............................... 572,110
4,500 Viacom, Inc. - Class B (a) ....................... 174,600
-----------
4,091,035
-----------
CONSUMER STAPLES -- 4.7%
15,200 Constellation Brands, Inc. (a) ................... 380,760
20,000 CVS Corporation .................................. 597,400
16,000 PepsiCo, Inc. .................................... 924,640
9,500 Procter & Gamble Company (The) ................... 547,390
6,000 Sysco Corporation ................................ 192,300
-----------
2,642,490
-----------
ENERGY -- 7.0%
7,000 Anadarko Petroleum Corporation ................... 707,070
13,000 Chevron Corporation .............................. 753,610
4,000 ConocoPhillips ................................... 252,600
9,500 Nabors Industries Ltd. (a) ....................... 680,010
14,000 Noble Corporation ................................ 1,135,400
10,000 Noble Energy, Inc. ............................... 439,200
-----------
3,967,890
-----------
FINANCIALS -- 12.0%
12,000 American International Group, Inc. ............... 793,080
20,000 Bank of America Corporation ...................... 910,800
5,700 Chubb Corporation (The) .......................... 544,008
10,850 CIT Group, Inc. .................................. 580,692
12,000 E*TRADE Financial Corporation (a) ................ 323,760
3,000 Franklin Resources, Inc. ......................... 282,720
5,000 Lehman Brothers Holdings, Inc. ................... 722,650
7,000 Merrill Lynch & Company, Inc. .................... 551,320
11,000 MetLife, Inc. .................................... 532,070
9,800 Morgan Stanley ................................... 615,636
3,300 PNC Financial Services Group, Inc. ............... 222,123
10,000 Prudential Financial, Inc. ....................... 758,100
-----------
6,836,959
-----------
HEALTHCARE -- 11.7%
12,000 Aetna, Inc. ...................................... 589,680
12,000 Amgen, Inc. (a) .................................. 873,000
8,700 Fisher Scientific International, Inc. (a) ........ 592,035
7,000 Gilead Sciences, Inc. (a) ........................ 435,540
10,000 Johnson & Johnson ................................ 592,200
12,000 Medtronic, Inc. .................................. 609,000
21,000 Pfizer, Inc. ..................................... 523,320
16,000 Teva Pharmaceutical Industries Ltd. .............. 658,880
14,000 WellPoint, Inc. (a) .............................. 1,084,020
10,000 Zimmer Holdings, Inc. (a) ........................ 676,000
-----------
6,633,675
-----------
20
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 69.3% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 10.5%
7,800 3M Company ....................................... $ 590,382
8,200 Caterpillar, Inc. ................................ 588,842
19,500 Dover Corporation ................................ 946,920
10,000 General Dynamics Corporation ..................... 639,800
33,000 General Electric Company ......................... 1,147,740
18,500 Ingersoll-Rand Company Ltd. - Class A ............ 773,115
10,600 ITT Industries, Inc. ............................. 595,932
13,000 Norfolk Southern Corporation ..................... 702,910
-----------
5,985,641
-----------
INFORMATION TECHNOLOGY -- 13.0%
12,900 Accenture Ltd. - Class A ......................... 387,903
9,000 Affiliated Computer Services, Inc. (a) ........... 536,940
22,000 Applied Materials, Inc. .......................... 385,220
44,000 Cisco Systems, Inc. (a) .......................... 953,480
20,000 Dell Computer Corporation (a) .................... 595,200
44,000 EMC Corporation (a) .............................. 599,720
800 Google, Inc. (a) ................................. 312,000
6,500 International Business Machines Corporation ...... 36,055
12,000 Jabil Circuit, Inc. (a) .......................... 514,320
29,000 Microsoft Corporation ............................ 789,090
28,000 Motorola, Inc. ................................... 641,480
45,000 Oracle Corporation (a) ........................... 616,050
10,500 Qualcomm, Inc. ................................... 531,405
-----------
7,398,863
-----------
MATERIALS -- 1.6%
12,000 Dow Chemical Company (The) ....................... 487,200
8,000 Praxair, Inc. .................................... 441,200
-----------
928,400
-----------
TELECOMMUNICATIONS SERVICES -- 0.8%
18,000 Sprint Nextel Corporation ........................ 465,120
-----------
UTILITIES -- 0.8%
10,000 TXU Corporation .................................. 447,600
-----------
TOTAL COMMON STOCKS (Cost $29,731,540) ........... $39,397,673
-----------
================================================================================
PAR VALUE U.S. TREASURY OBLIGATIONS -- 5.2% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 4.7%
$ 1,000,000 7.00%, due 07/15/2006 ............................ $ 1,006,055
500,000 4.00%, due 02/15/2014 ............................ 471,446
1,250,000 4.25%, due 11/15/2014 ............................ 1,194,726
-----------
2,672,227
-----------
U.S. TREASURY INFLATION-PROTECTION NOTES -- 0.5%
256,519 3.375%, due 01/15/2007 ........................... 259,264
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $3,011,948). $ 2,931,491
-----------
21
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.2% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK -- 1.7%
$ 1,000,000 4.125%, due 11/15/2006 ........................... $ 993,869
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 3.6%
500,000 3.625%, due 09/15/2006 ........................... 496,806
1,000,000 6.625%, due 09/15/2009 ........................... 1,046,442
200,000 4.75%, due 12/08/2010 ............................ 196,421
300,000 5.125%, due 07/15/2012 ........................... 299,054
-----------
2,038,723
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.9%
250,000 4.00%, due 12/14/2007 ............................ 245,309
250,000 7.25%, due 01/15/2010 ............................ 267,864
-----------
513,173
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $3,495,760) .............................. $ 3,545,765
-----------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 4.4% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 0.4%
$ 44,898 Pool #1471, 7.00%, due 03/01/2008 ................ $ 44,972
119,552 Pool #E00616, 6.00%, due 01/01/2014 .............. 120,971
39,447 Pool #E90624, 6.00%, due 08/01/2017 .............. 39,915
-----------
205,858
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 3.5%
294,816 Pool #618465, 5.00%, due 12/01/2016 .............. 287,443
385,314 Pool #684231, 5.00%, due 01/01/2018 .............. 375,678
342,494 Pool #255455, 5.00%, due 10/01/2024 .............. 329,358
552,650 Pool #255702, 5.00%, due 05/01/2025 .............. 530,965
76,883 Pool #489757, 6.00%, due 04/01/2029 .............. 76,883
390,807 Pool #808413, 5.50%, due 01/01/2035 .............. 381,526
-----------
1,981,853
-----------
GOVERNMENT NATIONAL MORTAGE ASSOCIATION -- 0.5%
55,707 Pool #781344, 6.50%, due 10/01/2031 .............. 57,747
263,038 Series #2003-102-PD, 4.25%, due 05/01/2033 ....... 251,057
-----------
308,804
-----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $2,566,002) $ 2,496,515
-----------
22
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 13.1% VALUE
- --------------------------------------------------------------------------------
Abbott Laboratories,
$ 220,000 5.625%, due 07/01/2006 ........................... $ 220,312
Alcoa, Inc.,
250,000 6.50%, due 06/01/2011 ............................ 260,821
American Express Company,
150,000 4.875%, due 07/15/2013 ........................... 143,912
Anheuser-Busch Companies, Inc.,
249,000 5.375%, due 09/15/2008 ........................... 249,940
BB&T Corporation,
325,000 6.50% , due 08/01/2011 ........................... 340,899
Burlington Resources, Inc.,
350,000 6.68%, due 02/15/2011 ............................ 367,985
Citigroup, Inc.,
200,000 5.00%, due 03/06/2007 ............................ 199,471
ConocoPhillips,
200,000 4.75%, due 10/15/2012 ............................ 192,866
Deutsche Telekom AG,
300,000 8.50%, due 06/15/2010 ............................ 326,711
Dover Corporation,
345,000 6.50%, due 02/15/2011 ............................ 360,109
Duke Realty L.P., Medium Term Notes,
390,000 6.75%, due 05/30/2008 ............................ 398,886
FPL Group Capital, Inc.,
300,000 7.375%, due 06/01/2009 ........................... 316,905
General Dynamics Corporation,
125,000 4.25%, due 05/15/2013 ............................ 116,397
Goldman Sachs Group, Inc.,
350,000 6.65%, due 05/15/2009 ............................ 362,632
GTE Northwest, Inc.,
300,000 6.30%, due 06/01/2010 ............................ 302,843
HSBC Finance Corporation,
300,000 6.40%, due 06/17/2008 ............................ 306,569
Illinois Tool Works, Inc.,
216,000 5.75%, due 03/01/2009 ............................ 219,270
International Business Machines Corporation,
175,000 4.375%, due 06/01/2009 ........................... 170,719
Jefferson-Pilot Corporation,
100,000 4.75%, due 01/30/2014 ............................ 94,922
JPMorgan Chase & Company,
300,000 6.75%, due 02/01/2011 ............................ 315,365
May Department Stores Company,
260,000 5.95%, due 11/01/2008 ............................ 263,130
Morgan Stanley,
250,000 5.30%, due 03/01/2013 ............................ 244,498
SBC Communciations, Inc., Medium Term Notes,
400,000 6.875%, due 08/15/2006 ........................... 402,094
SunTrust Banks, Inc.,
300,000 6.00%, due 01/15/2028 ............................ 304,283
Union Camp Corporation,
300,000 6.50%, due 11/15/2007 ............................ 304,324
23
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 13.1% VALUE
- --------------------------------------------------------------------------------
United Technologies Corporation,
$ 250,000 6.10%, due 05/15/2012 ............................ $ 258,595
U.S. Bank, N.A.,
200,000 4.80%, due 04/15/2015 ............................ 189,017
Wachovia Corporation,
250,000 5.25%, due 08/01/2014 ............................ 242,606
-----------
TOTAL CORPORATE BONDS (Cost $7,383,287) ............ $ 7,476,081
-----------
================================================================================
PAR VALUE MUNICIPAL DEBT SECURITIES -- 0.4% VALUE
- --------------------------------------------------------------------------------
$ 230,000 Virginia State Resources Authority, Infrastructure,
Revenue, 5.90%, due 05/01/2011 (Cost $233,619).... $ 235,626
-----------
================================================================================
PAR VALUE REGIONAL AUTHORITY BONDS -- 0.4% VALUE
- --------------------------------------------------------------------------------
$ 205,000 Manitoba (Province of), Medium Term Notes,
5.50%, due 10/01/2008 (Cost $203,692)............. $ 206,484
-----------
================================================================================
SHARES MONEY MARKET FUNDS --1.2% VALUE
- --------------------------------------------------------------------------------
685,545 Fidelity Institutional Money Market Portfolio
(Cost $685,545)................................... $ 685,545
-----------
TOTAL INVESTMENTS AT VALUE -- 100.2%
(Cost $47,311,393)................................ $56,975,180
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%) (96,151)
-----------
NET ASSETS -- 100.0% $56,879,029
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
24
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 100.2% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 10.8%
5,350 Black & Decker Corporation (The) ................. $ 464,861
15,500 eBay, Inc. (a) ................................... 605,430
24,500 Home Depot, Inc. ................................. 1,036,350
8,000 J.C. Penney Company, Inc. ........................ 483,280
9,000 Lennar Corporation ............................... 543,420
17,500 Staples, Inc. .................................... 446,600
12,000 Target Corporation ............................... 624,120
10,500 Viacom, Inc. - Class B(a) ........................ 407,400
-----------
4,611,461
-----------
CONSUMER STAPLES -- 6.2%
15,800 Constellation Brands, Inc.(a) .................... 395,790
22,200 CVS Corporation .................................. 663,114
17,000 PepsiCo, Inc. .................................... 982,430
10,700 Procter & Gamble Company (The) ................... 616,534
-----------
2,657,868
-----------
ENERGY -- 10.0%
7,000 Anadarko Petroleum Corporation ................... 707,070
14,000 Chevron Corporation .............................. 811,580
7,500 ConocoPhillips ................................... 473,625
9,000 Nabors Industries Ltd.(a) ........................ 644,220
14,500 Noble Corporation ................................ 1,175,950
10,500 Noble Energy, Inc. ............................... 461,160
-----------
4,273,605
-----------
FINANCIAL -- 16.6%
12,650 American International Group, Inc. ............... 836,039
9,000 Bank of America Corporation ...................... 409,860
6,000 Chubb Corporation (The) .......................... 572,640
11,700 CIT Group, Inc. .................................. 626,184
13,000 E*TRADE Financial Corporation(a) ................. 350,740
3,200 Franklin Resources, Inc. ......................... 301,568
5,100 Lehman Brothers Holdings, Inc. ................... 737,103
7,000 Merrill Lynch & Company, Inc. .................... 551,320
11,000 MetLife, Inc. .................................... 532,070
10,600 Morgan Stanley ................................... 665,892
4,900 PNC Financial Services Group, Inc. ............... 329,819
11,500 Prudential Financial, Inc. ....................... 871,815
5,800 Wachovia Corporation ............................. 325,090
-----------
7,110,140
-----------
HEALTHCARE -- 16.5%
13,200 Aetna, Inc. ...................................... 648,648
12,000 Amgen, Inc.(a) ................................... 873,000
9,400 Fisher Scientific International, Inc.(a) ......... 639,670
7,500 Gilead Sciences, Inc.(a) ......................... 466,650
11,000 Johnson & Johnson ................................ 651,420
12,900 Medtronic, Inc. .................................. 654,675
24,000 Pfizer, Inc. ..................................... 598,080
17,000 Teva Pharmaceutical Industries Ltd. .............. 700,060
13,900 WellPoint, Inc.(a) ............................... 1,076,277
11,000 Zimmer Holdings, Inc.(a) ......................... 743,600
-----------
7,052,080
-----------
25
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 100.2% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 15.4%
8,500 3M Company ....................................... $ 643,365
9,000 Caterpillar, Inc. ................................ 646,290
22,000 Dover Corporation ................................ 1,068,320
11,000 General Dynamics Corporation ..................... 703,780
36,000 General Electric Company ......................... 1,252,080
20,500 Ingersoll-Rand Company Ltd. - Class A ............ 856,695
11,500 ITT Industries, Inc. ............................. 646,530
14,000 Norfolk Southern Corporation ..................... 756,980
-----------
6,574,040
-----------
INFORMATION TECHNOLOGY -- 19.8%
13,000 Accenture Ltd. - Class A ......................... 390,910
10,300 Affiliated Computer Services, Inc.(a) ............ 614,498
24,000 Applied Materials, Inc. .......................... 420,240
49,000 Cisco Systems, Inc.(a) ........................... 1,061,830
21,000 Dell Computer Corporation(a) ..................... 624,960
47,100 EMC Corporation(a) ............................... 641,973
750 Google, Inc.(a) .................................. 292,500
7,200 International Business Machines Corporation ...... 593,784
10,000 Intuit, Inc.(a) .................................. 531,900
12,300 Jabil Circuit, Inc.(a) ........................... 527,178
31,400 Microsoft Corporation ............................ 854,394
29,200 Motorola, Inc. ................................... 668,972
50,000 Oracle Corporation(a) ............................ 684,500
11,500 Qualcomm, Inc. ................................... 582,015
-----------
8,489,654
-----------
MATERIALS -- 2.3%
12,800 Dow Chemical Company (The) ....................... 519,680
8,100 Praxair, Inc. .................................... 446,715
-----------
966,395
-----------
TELECOMMUNICATIONS SERVICES -- 1.4%
24,000 Sprint Nextel Corporation ........................ 620,160
-----------
UTILITIES -- 1.2%
1,000 TXU Corporation .................................. 492,360
-----------
TOTAL COMMON STOCKS (Cost $33,462,044) ........... $42,847,763
-----------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.2% VALUE
- --------------------------------------------------------------------------------
87,546 Fidelity Institutional Money Market Portfolio
(Cost $87,546).................................. $ 87,546
-----------
TOTAL INVESTMENTS AT VALUE -- 100.4%
(Cost $33,549,590).............................. $42,935,309
LIABILITIES IN EXCESS OF OTHER ASSETS -- ( 0.4%) (165,617)
-----------
NET ASSETS -- 100.0% $42,769,692
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
26
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
============================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 97.0% VALUE
- --------------------------------------------------------------------------------------------
Alexandria, Virginia, GO,
$ 1,000,000 5.00%, due 06/15/2011, prerefunded 06/15/2010 @ 101 ......... $ 1,060,650
Arlington Co., Virginia, GO,
500,000 4.10%, due 11/01/2018 ....................................... 496,780
Chesterfield Co., Virginia, GO,
1,000,000 4.75%, due 01/01/2013, prerefunded 01/01/2008 @100 .......... 1,019,620
Fairfax Co., Virginia, Economic Dev. Authority, Revenue,
1,000,000 5.00%, due 06/01/2018 ....................................... 1,058,350
Fairfax Co., Virginia, GO,
700,000 5.00%, due 10/01/2011 ....................................... 744,555
Hampton, Virginia, GO,
1,000,000 5.50%, due 02/01/2012, prerefunded 02/01/2010 @ 102 ......... 1,081,850
Hanover Co., Virginia, GO,
1,000,000 5.125%, due 07/15/2013 ...................................... 1,052,170
Hanover Co., Virginia, Industrial Dev. Authority, Revenue,
1,000,000 6.50%, due 08/15/2009 ....................................... 1,084,150
Henrico Co., Virginia, Economic Dev. Authority, Revenue,
1,000,000 5.50%, due 11/01/2008 ....................................... 1,045,360
James City, Virginia, School District, GO,
500,000 5.00%, due 12/15/2018 ....................................... 532,405
James City, Virginia, Service Authority, Water and Sewer,
1,000,000 Revenue, 5.125%, due 01/15/2017 ............................. 1,064,950
Loudoun Co., Virginia, GO,
500,000 5.00%, due 07/01/2012 ....................................... 533,645
Loudoun Co., Virginia, Industrial Dev. Authority, Public
1,000,000 Facility Lease, Revenue, 5.00%, due 03/01/2019 .............. 1,050,540
Loudoun Co., Virginia, Industrial Dev. Authority, Revenue,
500,000 3.17%, floating rate, due 02/15/2038 ........................ 500,000
Lynchburg, Virginia, GO,
500,000 5.00%, due 06/01/2015 ....................................... 536,165
Medical College of Virginia, Hospital Authority, Revenue,
700,000 5.00%, due 07/01/2013 ....................................... 728,175
Norfolk, Virginia, Water, Revenue,
1,000,000 5.00%, due 11/01/2016 ....................................... 1,050,480
Portsmouth, Virginia, GO,
800,000 5.00%, due 08/01/2017 ....................................... 819,936
Richmond, Virginia, GO,
1,000,000 5.45%, due 01/15/2008 ....................................... 1,031,540
Richmond, Virginia, Industrial Dev. Authority, Government
1,010,000 Facilities, Revenue, 4.75%, due 07/15/2010 .................. 1,050,390
Richmond, Virginia, Metropolitan Authority, Revenue,
1,000,000 5.25%, due 07/15/2014 ....................................... 1,087,240
Roanoke, Virginia, GO,
185,000 5.00%, due 08/01/2009, prerefunded 08/01/2006 @ 102 ......... 189,577
815,000 5.00%, due 08/01/2009 ....................................... 834,625
Southeastern Public Service Authority, Virginia, Revenue,
1,000,000 5.00%, due 07/01/2015 ....................................... 1,064,880
Spotsylvania Co., Virginia, GO,
500,000 5.00%, due 01/15/2016 ....................................... 530,710
27
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
============================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 97.0% (Continued) VALUE
- --------------------------------------------------------------------------------------------
Suffolk, Virginia, GO,
$ 1,000,000 5.00%, due 12/01/2015 ....................................... $ 1,038,760
University of Virginia, Revenue,
1,000,000 5.25%, due 06/01/2012 ....................................... 1,054,460
Upper Occoquan, Virginia, Sewer Authority, Revenue,
700,000 5.00%, due 07/01/2015, prerefunded 07/01/2006 @ 102 ......... 716,478
Virginia Beach, Virginia, GO,
800,000 5.25%, due 08/01/2010 ....................................... 835,456
Virginia College Building Authority, Educational Facilities,
500,000 Revenue, 5.00%, due 04/01/2017 .............................. 531,960
Virginia Commonwealth Transportation Board, Federal Highway
Reimbursement Anticipation Note, Revenue,
500,000 5.00%, due 09/28/2015 ....................................... 536,715
Virginia Commonwealth Transportation Board, Transportation
850,000 Revenue, 7.25%, due 05/15/2020 .............................. 891,752
Virginia Polytechnic Institute & State University, Revenue,
500,000 5.00%, due 06/01/2016 ....................................... 534,935
Virginia State, GO,
500,000 5.00%, due 06/01/2012 ....................................... 533,390
Virginia State Public School Authority, Revenue,
995,000 5.25%, due 08/01/2009 ....................................... 1,043,437
Virginia State Resource Authority, Revenue,
500,000 5.50%, due 05/01/2017 ....................................... 535,025
-----------
TOTAL VIRGINIA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (Cost $29,071,397)..................... $29,501,111
-----------
============================================================================================
SHARES MONEY MARKET FUNDS -- 2.4% VALUE
- --------------------------------------------------------------------------------------------
728,238 Fidelity Institutional Tax-Exempt Portfolio (Cost $728,238).... $ 728,238
-----------
TOTAL INVESTMENTS AT VALUE -- 99.4% (Cost $29,799,635).......... $30,229,349
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.6%................... 192,142
-----------
NET ASSETS -- 100.0%............................................ $30,421,491
===========
See accompanying notes to financial statements.
28
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2006
================================================================================
SHARES COMMON STOCKS -- 96.9% VALUE
- --------------------------------------------------------------------------------
AUSTRALIA -- 1.9%
49,300 Alumina Ltd.(b) .................................. $ 259,473
7,407 BHP Billiton Ltd.(b) ............................. 146,808
-----------
406,281
-----------
CHINA -- 0.2%
108,538 Air China Ltd. - Class H(a)(b) .................. 41,858
-----------
FINLAND -- 0.4%
4,003 Nokia Oyj - ADR .................................. 82,942
-----------
FRANCE -- 8.5%
15,643 Alcatel SA(b) .................................... 240,169
4,316 Carrefour SA ..................................... 229,291
1,442 Casino Guichard-Perrachon SA(b) .................. 100,458
2,935 Compagnie de Saint-Gobain(b) ..................... 204,238
4,351 France Telecom SA(b) ............................. 97,545
1,646 PPR SA(b) ........................................ 198,197
2,191 Sanofi-Aventis(b) ................................ 207,478
9,420 Suez SA(b) ....................................... 369,688
5,421 Vivendi Universal SA(b) .......................... 185,028
-----------
1,832,092
-----------
GERMANY -- 11.6%
1,804 Allianz AG(b) .................................... 300,469
1,437 Altana AG(b) ..................................... 88,936
4,235 Bayer AG(b) ...................................... 169,473
3,334 DaimlerChrysler AG(b) ............................ 191,057
2,851 Deustche Bank AG(b) .............................. 324,600
5,402 Infineon Technologies AG(a)(b).. ................. 55,413
2,779 KarstadtQuelle AG(b) ............................. 64,539
2,673 Metro AG(b) ...................................... 137,095
1,432 Muencher Rueckversicherungs-Gesellschaft AG(b) ... 202,423
1,096 SAP AG(b) ........................................ 237,672
3,848 Schering AG(b) ................................... 399,316
3,583 Siemens AG(b) .................................... 333,205
-----------
2,504,198
-----------
GREECE -- 1.0%
9,682 Hellenic Telecommunications Organization SA(b) ... 215,165
-----------
ITALY -- 4.3%
6,237 Assicurazioni Generali SpA(b) .................... 233,990
10,890 Enel SpA(b) ...................................... 91,914
14,565 ENI SpA(b) ....................................... 414,159
37,652 Pirelli & Company SpA(b) ......................... 35,775
22,267 UniCredito Italiano SpA(b) ....................... 160,370
-----------
936,208
-----------
29
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 96.9% (Continued) VALUE
- --------------------------------------------------------------------------------
JAPAN -- 30.9%
9,000 Bridgestone Corporation(b) ....................... $ 187,134
2,400 Canon, Inc.(b) ................................... 157,998
14,000 Daiwa Securities Group, Inc.(b) .................. 187,400
38 East Japan Railway Company(b) .................... 280,756
600 Electric Power Development Company Ltd.(b) ....... 18,945
2,700 FAST RETAILING COMPANY Ltd.(b) ................... 263,574
8,100 JSR Corporation(b) ............................... 240,177
550 KEYENCE CORPORATION(b) ........................... 142,442
8,900 MARUI COMPANY LTD.(b) ............................ 175,608
12,000 Matsushita Electric Industrial Company Ltd.(b) ... 264,491
17 Millea Holdings, Inc.(b) ......................... 334,575
20,000 Mitsubishi Estate Company Ltd.(b) ................ 473,217
41 Mitsubishi UFJ Financial Group, Inc.(b) .......... 621,982
10,000 Nikko Cordial Corporation(b) ..................... 165,199
20,000 Nissan Motor Company Ltd.(b) ..................... 236,978
19,800 Nomura Holdings, Inc.(b) ......................... 437,550
76 NTT Data Corporation(b) .......................... 364,971
109 NTT DoCoMo, Inc.(b) .............................. 160,224
7,600 PIONEER Corporation(b) ........................... 122,261
4,000 SECOM Company Ltd.(b) ............................ 203,532
8,300 Seven & I Holdings Company Ltd. (a) (b) .......... 328,005
13,000 Sharp Corporation(b) ............................. 229,502
500 SUMCO CORPORATION ................................ 26,782
43 Sumitomo Mitsui Financial Group, Inc.(b) ......... 473,479
3,450 T&D Holdings, Inc.(b) ............................ 268,445
1,700 TDK CORPORATION(b) ............................... 127,296
2,600 Tokyo Electron Ltd.(b) ........................... 178,337
-----------
6,670,860
-----------
NETHERLANDS -- 7.3%
3,995 ABN AMRO Holdings NV(b) .......................... 119,209
7,331 Aegon NV(b) ...................................... 135,044
3,363 Akzo Nobel NV(b) ................................. 177,855
6,574 Fortis(b) ........................................ 233,651
6,683 ING Groep NV(b) .................................. 262,831
37,822 Koninklijke (Royal) KPN NV(b) .................... 424,659
5,093 Koninklijke (Royal) Philips Electronics NV(b) .... 171,190
1,666 VNU NV(b) ........................................ 53,917
-----------
1,578,356
-----------
POLAND -- 0.2%
4,686 Powszechna Kasa Oszczednosci Bank Polski SA(b) ... 49,856
-----------
PORTUGAL -- 0.5%
26,999 EDP - Energias de Portugal SA(b) ................. 105,837
-----------
SINGAPORE -- 1.2%
25,000 DBS Group Holdings Ltd.(b) ....................... 251,635
-----------
SOUTH KOREA -- 0.1%
1,531 Lotte Shopping Company Ltd.(a) ................... 31,356
-----------
30
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 96.9% (Continued) VALUE
- --------------------------------------------------------------------------------
SPAIN -- 3.1%
17,291 Repsol YPF SA(b) ................................. $ 490,383
10,933 Telefonica SA(b) ................................. 170,980
-----------
661,363
-----------
SWEDEN -- 2.4%
23,723 Nordea Bank AB(b) ................................ 292,605
59,692 Telefonaktiebolaget LM Ericsson(b) ............... 225,346
-----------
517,951
-----------
SWITZERLAND -- 5.5%
4,463 Credit Suisse Group(b) ........................... 249,066
564 Nestle SA(b) ..................................... 166,597
6,605 Novartis AG(b) ................................... 365,588
1,610 Roche Holdings AG(b) ............................. 238,682
1,033 Swiss Re(b) ...................................... 71,813
455 Zurich Financial Services AG(b) .................. 106,257
-----------
1,198,003
-----------
UNITED KINGDOM -- 17.8%
25,298 BAE Systems PLC(b) ............................... 184,349
5,143 Berkeley Group (The) PLC(a)(b) ................... 105,499
2,202 Carnival PLC(b) .................................. 107,991
20,184 GlaxoSmithKline PLC(b) ........................... 527,154
28,009 Imperial Chemical Industries PLC(b) .............. 167,774
35,041 J Sainsbury PLC(b) ............................... 201,564
9,128 Kesa Electricals PLC(b) .......................... 49,342
39,934 Kingfisher PLC(b) ................................ 165,598
11,644 Land Securities Group PLC(b) ..................... 389,159
23,581 Lloyds TSB Group PLC(b) .......................... 225,103
21,473 Prudential PLC(b) ................................ 247,951
5,840 Rio Tinto PLC(b) ................................. 299,246
23,388 Rolls-Royce Group PLC(b) ......................... 185,580
1,258,274 Rolls-Royce Group PLC - B Shares ................. 2,226
12,786 Royal Dutch Shell PLC - Class A(b) ............... 399,743
6,897 Royal Dutch Shell PLC - Class B(b) ............... 224,260
9,366 Whitbread PLC(b) ................................. 192,277
34,354 William Morrison Supermarkets PLC(b) ............. 113,015
98,159 Woolworths Group PLC(b) .......................... 59,451
-----------
3,847,282
-----------
TOTAL COMMON STOCKS -- 96.9% (Cost $15,141,857).... $20,931,243
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.1%...... 668,679
-----------
NET ASSETS -- 100.0%............................... $21,599,922
===========
(a) Non-income producing security.
(b) Fair value priced (Note 1). Fair valued securities totalled $20,558,646 at
March 31, 2006, reprsenting 95.2% of net assets.
ADR - American Depositary Receipt.
See accompanying notes to portfolio of investments.
31
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
================================================================================
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 a shareholder's
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 traded on a national or foreign
stock exchange are generally valued based upon the closing price on the
principal exchange where the security is traded. Securities which are quoted by
NASDAQ are valued at the NASDAQ Official Closing Price. Securities which are
traded over-the-counter are valued at the last sales price, if available,
otherwise, at the last quoted bid price. 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. Because the value of foreign
securities may be materially affected by events occurring before the Fund's
pricing time but after the close of the primary markets or exchanges on which
such securities are traded, portfolio securities of The Jamestown International
Equity Fund may be priced at their fair value as determined by an independent
pricing service approved by the Board of Trustees. As a result, the prices of
securities used to calculate The Jamestown International Equity Fund's NAV may
differ from quoted or published prices for the same securities. Foreign
securities are translated from the local currency into U.S. dollars using
currency exchange rates supplied by a quotation service. Short-term instruments
(those with remaining maturities of 60 days or less) are valued at amortized
cost, which approximates market value.
32
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
When market quotations are not readily available, securities may be valued on
the basis of prices provided by an independent pricing service. The prices
provided by the pricing service are determined with consideration given to
institutional bid and last sale prices and take into account securities prices,
yields, maturities, call features, ratings, institutional trading in similar
groups of securities and developments related to specific securities. 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. Such methods of fair valuation may include, but are not limited to:
multiple of earnings, multiple of book value, discount from market of a similar
freely traded security, purchase price of security, subsequent private
transactions in the security or related securities, or a combination of these
and other factors.
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, 2006 and March 31, 2005, proceeds from redemption fees totaled $5 and $0,
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. 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.
33
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributions paid during the years ended March 31, 2006
and March 31, 2005 was as follows:
EXEMPT-
YEARS ORDINARY LONG-TERM INTEREST TOTAL
ENDED INCOME CAPITAL GAINS DIVIDENDS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------
Jamestown Balanced Fund 3/31/06 $ 1,775,891 $ 3,199,380 $ -- $ 4,975,271
3/31/05 $ 1,272,922 $ 2,418,040 $ -- $ 3,690,962
- --------------------------------------------------------------------------------------------------------------------
Jamestown Equity Fund 3/31/06 $ 632,226 $ 2,550,391 $ -- $ 3,182,617
3/31/05 $ 387,209 $ 2,885,990 $ -- $ 3,273,199
- --------------------------------------------------------------------------------------------------------------------
Jamestown Tax Exempt Virginia Fund 3/31/06 $ -- $ -- $ 1,089,001 $ 1,089,001
3/31/05 $ 12,358 $ -- $ 1,128,804 $ 1,141,162
- --------------------------------------------------------------------------------------------------------------------
Jamestown International Equity Fund 3/31/06 $ 164,170 $ -- $ -- $ 164,170
3/31/05 $ 157,727 $ -- $ -- $ 157,727
- --------------------------------------------------------------------------------------------------------------------
Security transactions -- Security transactions are accounted for on trade date.
Gains and losses on securities sold are 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.
Common expenses -- Common expenses of the Trust are allocated among the funds of
the Trust based on relative net assets of each fund or the nature of the
services performed and the relative applicability to each fund.
Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 Subchapter M 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.
34
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributable earnings at March 31, 2006 was as follows:
- -----------------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN JAMESTOWN JAMESTOWN
BALANCED EQUITY TAX EXEMPT INTERNATIONAL
FUND FUND VIRGINIA FUND EQUITY FUND
- -----------------------------------------------------------------------------------------------------------------
Cost of portfolio investments ................ $ 47,468,267 $ 33,617,759 $ 29,788,703 $ 15,163,761
============ ============ ============ ============
Gross unrealized appreciation ................ $ 10,184,332 $ 9,756,470 $ 621,498 $ 5,936,803
Gross unrealized depreciation ................ (677,419) (438,920) (180,852) (169,321)
------------ ------------ ------------ ------------
Net unrealized appreciation on investments ... $ 9,506,913 $ 9,317,550 $ 440,646 $ 5,767,482
------------ ------------ ------------ ------------
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies -- -- -- 47
Undistributed ordinary income ................ 62,559 43,741 18,485 15,336
Undistributed long-term gains ................ 71,025 74,632 -- --
Capital loss carryforwards ................... -- -- (6,059) (16,353,585)
Other temporary differences .................. (122,835) (116,806) (18,485) --
------------ ------------ ------------ ------------
Total distributable earnings
(accumulated deficit) ...................... $ 9,517,662 $ 9,319,117 $ 434,587 $(10,570,720)
============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------------
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. These "book/tax"
differences are temporary in nature and are primarily due to the tax deferral of
losses on wash sales and/or differing methods in the amortization of discounts
and premiums on fixed income securities.
During the year ended March 31, 2006, The Jamestown Tax Exempt Virginia Fund and
The Jamestown International Equity Fund utilized capital loss carryforwards of
$26,584 and $918,783, respectively, to offset current year realized gains.
As of March 31, 2006, the Funds had the following capital loss carryforwards for
federal income tax purposes:
- --------------------------------------------------------------------------------
EXPIRES
AMOUNT MARCH 31,
- --------------------------------------------------------------------------------
Jamestown Tax Exempt Virginia Fund $ 6,059 2009
- --------------------------------------------------------------------------------
Jamestown International Equity Fund $ 1,854,313 2010
13,878,931 2011
620,341 2012
-----------
$16,353,585
===========
- --------------------------------------------------------------------------------
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains, if any, prior to distribution to shareholders.
35
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the year ended March 31, 2006, The Jamestown Balanced Fund reclassified
$64,684 of overdistributed net investment income against accumulated net
realized loss and The Jamestown Tax Exempt Virginia Fund reclassified $424 of
undistributed net investment income against accumulated net realized losses on
the Statement of Assets and Liabilities due to permanent differences in the
recognition of capital gains or losses under income tax regulations and
accounting principles generally accepted in the United States. These differences
are primarily due to the tax treatment of certain debt obligations and paydown
adjustments. Such reclassifications had no effect on the Funds' net assets or
net assets value per share.
Additionally, for the year ended March 31, 2006, The Jamestown International
Equity Fund reclassified $2,031 of net realized losses from security
transactions against undistributed net investment income on the Statement of
Assets and Liabilities due to permanent differences in the recognition of
capital gains and losses under income tax regulations and accounting principles
generally accepted in the United States. These differences are primarily due to
the tax treatment of forward foreign currency exchange contracts. Such
reclassification had no effect on the Fund's net assets or net asset value per
share.
2. INVESTMENT TRANSACTIONS
Investment transactions, other than short-term investments and U.S. government
securities, were as follows for the year ended March 31, 2006:
- -------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN JAMESTOWN JAMESTOWN
BALANCED EQUITY TAX EXEMPT INTERNATIONAL
FUND FUND VIRGINIA FUND EQUITY FUND
- -------------------------------------------------------------------------------------------------------
C>
Purchases of investment securities... $25,484,466 $24,905,194 $ 6,842,395 $ 2,505,945
=========== =========== =========== ===========
Proceeds from sales and maturities
of investment securities.......... $34,165,481 $29,126,364 $ 7,657,887 $ 5,494,639
=========== =========== =========== ===========
- -------------------------------------------------------------------------------------------------------
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% of its average daily net assets up to $250 million, .60% of the next $250
million of such net assets and .55% of such net assets in excess of $500
million. The Jamestown Equity Fund pays the Adviser a fee at an annual rate of
..65% of its average daily net assets up to $500 million and .55% of 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% of its average daily net assets up
to $250 million, .35% of the next $250 million of such net assets and .30% of
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% of its average daily net
assets. Certain Trustees and officers of the Trust are also officers of the
Adviser.
36
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the year ended March 31, 2006, the Adviser voluntarily undertook to limit
the total operating expenses of The Jamestown Tax Exempt Virginia Fund to 0.69%
of its average daily net assets. Additionally, the Adviser voluntarily undertook
to limit the total operating expenses of The Jamestown International Equity Fund
to 1.44% of average daily net assets. Accordingly, the Adviser voluntarily
waived $12,782 and $84,295, respectively, of such Funds' investment advisory
fees during the year ended March 31, 2006.
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.
The Chief Compliance Officer of the Funds (the CCO) is an employee of the
Adviser. The Funds pay the Adviser $18,000 annually for providing CCO services.
In addition, the Funds pay reasonable out-of-pocket expenses incurrred by the
Adviser in connection with these services.
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
each of The Jamestown Balanced Fund, The Jamestown Equity Fund and The Jamestown
Tax Exempt Virginia Fund at an annual rate of .15% of its respective average
daily net assets up to $25 million; .125% of the next $25 million of such net
assets; and .10% of 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% of its average daily net assets up to $25 million; .175% of the next $25
million of such net assets; and .15% of 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 Distributor), the principal underwriter of
each Fund's shares and an affiliate of Ultimus. The Distributor receives no
compensation from the Funds for acting as principal underwriter.
4. 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.
37
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Expenses reimbursed through the brokerage arrangement totaled $24,000 for each
of The Jamestown Balanced and The Jamestown Equity Funds for the year ended
March 31, 2006.
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.
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.
38
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
As of March 31, 2006, The Jamestown International Equity Fund had forward
foreign currency exchange contracts outstanding as follows:
- --------------------------------------------------------------------------------
INITIAL MARKET NET UNREALIZED
SETTLEMENT DATE TO DELIVER VALUE VALUE APPRECIATION
- --------------------------------------------------------------------------------
CONTRACTS TO SELL
04/05/2006 46,108 EUR $ 55,925 $ 55,814 $ 111
04/05/2006 37,648 EUR 45,663 45,572 91
----------- ----------- -----------
Total sell contracts $ 101,588 $ 101,386 $ 202
=========== =========== ===========
- --------------------------------------------------------------------------------
EUR-Euro
7. CONTINGENCIES AND COMMITMENTS
The Funds indemnify the Trust's officers and trustees for certain liabilities
that might arise from their performance of their duties to the Funds.
Additionally, in the normal course of business the Funds enter into contracts
that contain a variety of representations and warranties and which provide
general indemnifications. The Funds' maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the
Funds that have not yet occurred. However, based on experience, the Funds expect
the risk of loss to be remote.
39
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
The Jamestown Balanced Fund, The Jamestown Equity Fund,
The Jamestown Tax Exempt Virginia Fund, and The Jamestown International Fund
of the Williamsburg Investment Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of The Jamestown Balanced Fund, The Jamestown
Equity Fund, The Jamestown Tax Exempt Virginia Fund, and The Jamestown
International Fund (the "Funds") (each a series of Williamsburg Investment
Trust) as of March 31, 2006, 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
three 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. The financial highlights presented for each of the two
years in the period ended March 31, 2003 were audited by other auditors whose
report dated April 25, 2003, expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2006 by correspondence with the custodians
and brokers. 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 Fund as of March 31, 2006, 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 ended, and the financial
highlights for each of the three years in the period then ended in conformity
with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 12, 2006
40
THE JAMESTOWN FUNDS
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. 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 69 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- -----------------------------------------------------------------------------------------------------------------
* Austin Brockenbrough III 1802 Bayberry Court, Suite 400 69 Trustee and Since
Richmond, VA Vice President September 1988
- -----------------------------------------------------------------------------------------------------------------
* John T. Bruce 800 Main Street 52 Trustee Since
Lynchburg, VA September 1988
- -----------------------------------------------------------------------------------------------------------------
J. Finley Lee, Jr. 4488 Pond Apple Drive North 66 Trustee Since
Naples, FL September 1988
- -----------------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 66 Trustee Since
Richmond, VA March 1993
- -----------------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintopport Boulevard 46 Trustee Since
Saraland, AL March 1993
- -----------------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 73 Trustee Since
Richmond, VA July 1997
- -----------------------------------------------------------------------------------------------------------------
Samuel B. Witt III 302 Clovelly Road 70 Trustee Since
Richmond, VA November 1988
- -----------------------------------------------------------------------------------------------------------------
Charles M. Caravati III 1802 Bayberry Court, Suite 400 41 President, Jamestown Since
Richmond, VA Balanced Fund, January 1996
Equity Fund and
International Equity Fund
- -----------------------------------------------------------------------------------------------------------------
Joseph A. Jennings, III 1802 Bayberry Court, Suite 400 43 President, Jamestown Since
Richmond, VA Tax Exempt Virginia Fund July 2005
- -----------------------------------------------------------------------------------------------------------------
Lawrence B. Whitlock, Jr. 1802 Bayberry Court, Suite 400 58 Vice President, Jamestown Since
Richmond, VA Balanced Fund and February 2002
Equity Fund
- -----------------------------------------------------------------------------------------------------------------
Connie R. Taylor 1802 Bayberry Court, Suite 400 56 Vice President, Jamestown Since
Richmond, VA Balanced Fund and March 1993
Equity Fund
- -----------------------------------------------------------------------------------------------------------------
Pamela C. Simms 1802 Bayberry Court, Suite 400 44 Vice President, Jamestown Since
Richmond, VA Tax Exempt Virginia Fund February 2003
- -----------------------------------------------------------------------------------------------------------------
Page T. Reece 1802 Bayberry Court, Suite 400 49 Chief Compliance Officer Since
Richmond, VA September 2004
- -----------------------------------------------------------------------------------------------------------------
Robert G. Dorsey 225 Pictoria Drive, Suite 450 49 Vice President Since
Cincinnati, OH November 2000
- -----------------------------------------------------------------------------------------------------------------
Mark J. Seger 225 Pictoria Drive, Suite 450 44 Treasurer Since
Cincinnati, OH November 2000
- -----------------------------------------------------------------------------------------------------------------
John F. Splain 225 Pictoria Drive, Suite 450 49 Secretary Since
Cincinnati, OH November 2000
- -----------------------------------------------------------------------------------------------------------------
* Messrs. Bruce, Brockenbrough are Caravati 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.
41
THE JAMESTOWN FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED)
================================================================================
Each Trustee oversees eleven 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 the Adviser. He
is a member of the Board of Directors of Tredegar Corporation (a plastics
manufacturer) and Wilkinson O'Grady & Co., Inc. (a global asset manager).
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
J. Finley Lee, Jr. is a financial consultant and the Julian Price Professor
Emeritus at the University of North Carolina.
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 (polymers and chemicals manufacturer).
Harris V. Morrissette is Chief Executive Officer 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 the retired Chief Investment Officer of Equities of
Virginia Retirment System (VRS). Subsequent to his retirement, he temporarily
served as Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired 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.
Joseph A. Jennings, III 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.
Page T. Reece is Chief Compliance Officer and Director of Operations of the
Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Additional information about member of the Board of Trustees 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.
42
THE JAMESTOWN FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. As a shareholder of the Funds, you may incur two types of costs: (1)
transaction costs, including redemption fees; and (2) ongoing costs, including
management fees and other Fund expenses. The following examples are intended to
help you understand your ongoing costs (in dollars) of investing in the Funds
and to compare these costs with the ongoing costs of investing in other mutual
funds.
A Fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The expenses in the table below are based
on an investment of $1,000 made at the beginning of the period shown and held
for the entire period.
The table below illustrates each Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Funds. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Funds under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the returns used are not the Funds' actual
returns, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge sales loads. However, a
redemption fee of 2% is applied on the sale of shares of The Jamestown
International Equity Fund held for less than 90 days.
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
More information about the Funds' expenses, including annual expense ratios for
the prior five fiscal years, can be found in this report. For additional
information on operating expenses and other shareholder costs, please refer to
the Funds' prospectus.
43
THE JAMESTOWN FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
- -----------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2005 March 31, 2006 During Period*
- -----------------------------------------------------------------------------------
THE JAMESTOWN BALANCED FUND
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,043.60 $4.53
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.49 $4.48
- -----------------------------------------------------------------------------------
THE JAMESTOWN EQUITY FUND
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,063.40 $4.73
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.34 $4.63
- -----------------------------------------------------------------------------------
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 1001.90 $3.44
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.49 $3.48
- -----------------------------------------------------------------------------------
THE JAMESTOWN INTERNATIONAL EQUITY FUND
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,155.80 $7.74
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,017.75 $7.24
- -----------------------------------------------------------------------------------
* Expenses are equal to the Funds' annualized expense ratios for the period
as stated below, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
The Jamestown Balanced Fund 0.89%
The Jamestown Equity Fund 0.92%
The Jamestown Tax Exempt Virginia Fund 0.69%
The Jamestown International Equity Fund 1.44%
44
THE JAMESTOWN FUNDS
OTHER INFORMATION (UNAUDITED)
================================================================================
A description of the policies and procedures that the Fund uses to vote proxies
relating to portfolio securities is available without charge upon request by
calling toll-free 1-866-738-1126, or on the Securities and Exchange Commission's
(SEC) website at http://www.sec.gov. Information regarding how the Funds voted
proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is available without charge upon request by calling toll-free
1-866-738-1126, or on the SEC's website at http://www.sec.gov.
The Company files a complete listing of portfolio holdings for the Fund with the
SEC as of the first and third quarters of each fiscal year on Form N-Q. The
filings are available upon request, by calling 1-866-738-1126. Furthermore, you
may obtain a copy of these filings on the SEC's website at http://www.sec.gov.
The Company's Forms N-Q may also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC, and information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from ordinary income and net realized
gains made by the Funds during the fiscal year ended March 31, 2006. Certain
dividends paid by the Funds may be subject to a maximum tax rate of 15%, as
provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The
Jamestown Balanced Fund, The Jamestown Equity Fund and The Jamestown
International Equity Fund intend to designate up to a maximum amount of
$1,775,891, $632,226 and $164,170, respectively, as taxed at a maximum rate of
15%. For the fiscal year ended March 31, 2006, 47% and 100% of the dividends
paid from ordinary income by The Jamestown Balanced Fund and The Jamestown
Equity Fund, respectively, qualified for the dividends received deduction for
corporations.
As required by federal regulations, complete information will be computed and
reported in conjunction with your 2006 Form 1099-DIV.
45
THE JAMESTOWN FUNDS
DISCLOSURE REGARDING APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED)
================================================================================
At an in-person meeting held on February 13, 2006, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance for a
one-year period of each Fund's Investment Advisory Agreement with the Adviser,
as well as the Sub-Advisory Agreement with Oechsle on behalf of The Jamestown
International Equity Fund. Below is a discussion of the factors considered by
the Board of Trustees along with their conclusions with respect thereto that
formed the basis for the Board's approvals.
In selecting the Adviser and approving the most recent annual continuance of the
Investment Advisory Agreements and the Sub-Advisory Agreement, the Trustees
considered all information they deemed reasonably necessary to evaluate the
terms of the Agreements. The principal areas of review by the Trustees were the
nature, extent and quality of the services provided by the Adviser and Oechsle
and the reasonableness of the fees charged for those services. These matters
were considered by the Independent Trustees consulting with experienced counsel
who is independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Funds was considered.
Each Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives and to the Adviser's
comparably managed private accounts. The Trustees also considered the scope and
quality of the in-house capabilities of the Adviser and other resources
dedicated to performing services for the Funds. The quality of administrative
and other services, including the Adviser's role in coordinating the activities
of the Funds' other service providers, were considered in light of the Funds'
compliance with investment policies and applicable laws and regulations and of
related reports by management and the Funds' independent public accountants in
periodic meetings with the Trust's Audit Committee. The Trustees also considered
the business reputation of the Adviser and Oechsle, the qualifications of their
key investment and compliance personnel, and the Adviser's financial resources.
In reviewing the fees payable under the Investment Advisory Agreements, the
Trustees compared the advisory fees and overall expense levels of each Fund with
those of competitive funds with similar investment objectives as well as the
private accounts managed by the Adviser. The Trustees considered information
provided by the Adviser concerning the Adviser's profitability with respect to
each Fund, including the assumptions and methodology used in preparing the
profitability information, in light of applicable case law relating to advisory
fees. For these purposes, the Trustees took into account not only the fees paid
by the Funds, but also so-called "fallout" benefits to the Adviser and Oechsle,
such as the benefits of research made available to the Adviser and Oechsle by
reason of brokerage commissions generated by the Funds' securities transactions.
The Trustees also reviewed the revenue sharing arrangements relating to the
Funds, whereby fees are paid by the Adviser to various intermediaries that
direct assets to the Fund. In
46
THE JAMESTOWN FUNDS
DISCLOSURE REGARDING APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
================================================================================
evaluating the Funds' advisory fees, the Trustees took into account the
complexity and quality of the investment management of the Funds.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the competitive long-term returns of The Jamestown Balanced
Fund, The Jamestown Equity Fund and The Jamestown Tax-Exempt Virginia Fund as
compared to similarly managed funds and comparable private accounts managed by
the Adviser, and the other services provided under the Investment Advisory
Agreements, they believe that the Adviser has provided high-quality services to
such Funds; (ii) although The Jamestown International Equity Fund has
underperformed its benchmark and most of its peer group over its operating
history, they believe that the Fund's competitive short-term performance
indicates that the Adviser and Oechsle have made appropriate changes to the
Fund's investment strategies and management, particularly in naming a new
portfolio manager; (iii) the investment advisory fees of The Jamestown Balanced
Fund, The Jamestown Equity Fund and The Jamestown Tax-Exempt Virginia Fund are
competitive and their total expense ratios are lower than the average of
comparably managed funds, as calculated and published by Morningstar, Inc.; and
(iv) the Adviser's voluntary commitment to cap overall operating expenses by
waiving a significant portion of its advisory fees has enabled The Jamestown
International Equity Fund to increase returns for shareholders of the Fund and
maintain an overall expense ratio that is competitive with the average of
similarly managed funds, despite the small size of the Fund. Given the current
size of the Funds and their expected growth, the Independent Trustees did not
believe that at the present time it would be relevant to consider the extent to
which economies of scale would be realized as the Funds grow, and whether fee
levels reflect these economies of scale. The Independent Trustees also
considered the "fallout benefits" to, and the profitability of, the Adviser with
respect to the Funds, but given the amounts involved viewed these as secondary
factors in connection with the evaluation of the reasonableness of the advisory
fees paid by the Funds.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreements and the Sub-Advisory Agreement. Rather the Trustees concluded, in
light of a weighing and balancing of all factors considered, that it was in the
best interests of each Fund and its shareholders to continue its Investment
Advisory Agreement (and, with respect to the The Jamestown International Equity
Fund, the Sub-Advisory Agreement) without modification to its terms, including
the fees charged for services thereunder.
47
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THIS PAGE INTENTIONALLY LEFT BLANK.
================================================================================
THE JAMESTOWN FUNDS
INVESTMENT ADVISER
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 REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
1900 Scripps Center
312 Walnut Street
Cincinnati, Ohio 45202
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 L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
================================================================================
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the registrant or a third party. Pursuant to Item 12(a)(1), a
copy of registrant's code of ethics is filed as an exhibit to this Form N-CSR.
During the period covered by this report, the code of ethics has not been
amended, and the registrant has not granted any waivers, including implicit
waivers, from the provisions of the code of ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. The
name of the audit committee financial expert is Erwin H. Will, Jr. Mr. Will is
"independent" for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the registrant's
annual financial statements or for services that are normally provided
by the accountant in connection with statutory and regulatory filings
or engagements were $125,001 and $118,823 with respect to the
registrant's fiscal years ended March 31, 2006 and 2005, respectively.
(b) AUDIT-RELATED FEES. The aggregate fees billed for services by the
principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item were $3,000 with respect to
the registrant's fiscal year ended March 31, 2005. The services
comprising these fees related to the review of a post-effective
amendment to the registrant's registration statement and issuance of
the public accountant's consent to the inclusion in such registration
statement of its report relating to the registrant's audited financial
statements. No fees were billed with respect to the registrant's
fiscal year ended March 31, 2006 for assurance and related services by
the principal accountant that are reasonably related to the
performance of the audit of the registrant's financial statements and
are not reported under paragraph (a) of this Item.
(c) TAX FEES. No fees were billed in either of the last two fiscal years
for professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning.
(d) ALL OTHER FEES. No fees were billed in either of the last two fiscal
years for products and services provided by the principal accountant,
other than the services reported in paragraphs (a) through (c) of this
Item.
(e)(1)The audit committee has adopted pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. Pursuant
to the pre-approval policies and procedures, the audit committee has
pre-approved certain audit, audit-related and tax services and has
established, with respect to each fiscal year of the registrant, the
following maximum fee levels for services covered under the
pre-approval policies and procedures:
o Services, relating to a new series or class of a series,
associated with SEC registration statements, periodic
reports and other documents filed by the registrant with the
SEC or other documents issued by the registrant in
connection with securities offerings and assistance in
responding to SEC comment letters--$5,000
o Consultations with management of the registrant, not in
connection with an audit, as to the accounting or disclosure
treatment of transactions or events and/or the actual or
potential impact of final or proposed rules, standards or
interpretations by the SEC, FASB or other regulatory or
standard setting bodies--$5,000
o All tax services provided to the registrant in the
aggregate--$5,000
(e)(2)None of the services described in paragraph (b) through (d) of this
Item were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50% of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year were attributed to work performed by persons other
than the principal accountant's full-time, permanent employees.
(g) No non-audit fees were billed in either of the last two fiscal years
by the registrant's accountant for services rendered to the
registrant, and rendered to the registrant's investment adviser (not
including any sub-adviser whose role is primarily portfolio management
and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant.
(h) The principal accountant has not provided any non-audit services to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with
or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable [schedule filed with Item 1]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant's Nominating Committee shall review shareholder recommendations
to fill vacancies on the registrant's board of trustees if such recommendations
are submitted in writing, addressed to the Committee at the registrant's offices
and meet any minimum qualifications adopted by the Committee. The Committee may
adopt, by resolution, a policy regarding its procedures for considering
candidates for the board of trustees, including any recommended by shareholders.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) as of a date within 90 days of the filing date of this report, the
registrant's principal executive officers and principal financial officer have
concluded that such disclosure controls and procedures are reasonably designed
and are operating effectively to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to them
by others within those entities, particularly during the period in which this
report is being prepared, and that the information required in filings on Form
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) 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: Attached hereto
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)): Attached hereto
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act (17 CFR 270.23c-1) sent or given during the period covered by the report
by or on behalf of the registrant to 10 or more persons: Not applicable
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)): Attached hereto
Exhibit 99.CODE ETH Code of Ethics
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
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 31, 2006
-----------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ John T. Bruce
-------------------------------------------
John T. Bruce, President (FBP Value Fund and
FBP Balanced Fund)
Date May 31, 2006
-----------------------------
By (Signature and Title)* /s/ Thomas W. Leavell
------------------------------------------
Thomas W. Leavell, President (The Government
Street Equity Fund, The Government Street Bond
Fund and The Alabama Tax Free Bond Fund)
Date May 31, 2006
-----------------------------
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 31, 2006
-----------------------------
By (Signature and Title)* /s/ Joseph A. Jennings III
-------------------------------------------
Joseph A. Jennings III, President (The Jamestown
Tax Exempt Virginia Fund)
Date May 31, 2006
-----------------------------
By (Signature and Title)* /s/ Joseph L. Antrim III
-------------------------------------------
Joseph L. Antrim III, President (The Davenport
Equity Fund)
Date May 31, 2006
-----------------------------
By (Signature and Title)* /s/ Mark J. Seger
-------------------------------------------
Mark J. Seger, Treasurer
Date May 31, 2006
-----------------------------
* Print the name and title of each signing officer under his or her signature.