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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, 2007
---------------------------
Date of reporting period: September 30, 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 OCTOBER 25, 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
ended September 30, 2006.
Since Inception **
Q3 2006 YTD 1 Year 3 Years** 5 Years** (1/15/98)
------------------------------------------------------------------------
DAVPX 4.04% 6.30% 8.57% 10.71% 7.20% 4.93%
S&P 500 Index* 5.67% 8.53% 10.79% 12.30% 6.97% 5.62%
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
directly in an index and its returns are not indicative of the performance
of any specific investment.
** Annualized.
MARKET COMMENTARY
The third quarter was a good one for the overall equity market, with the S&P 500
up 5.7% for the quarter, the Russell Mid Cap up 2.1% and the Lipper Equity
Income up 5.4%. The Dow Jones Industrials made several attempts at a new all
time high, last hit more than six years ago. A series of concerns in the second
quarter interrupted a steady advance through the first four months of the year;
however the third quarter's performance suggests that some of those concerns
have abated.
What sparked the market's retreat in the second quarter were comments from the
Fed and economic data that suggested that the FOMC had more tightening to do
than previously expected. Combined with oil prices that were then heading to
eighty dollars a barrel and a softening housing market, many prognosticators
believed that this would be more than the consumer could bear.
Oil futures now trade at about sixty dollars a barrel, having flirted with the
lows of the year in the final week of the quarter. The Fed funds rate futures
are discounting a slight possibility that the Fed could begin to cut rates in
October. The housing market remains a question mark, but for now many of the
stocks directly exposed to the housing industry appear to have stabilized.
Also during the course of the past quarter, we somehow extinguished what many
thought could be the catalyst for World War III. Compared to the assassination
of the Archduke of Austria in 1914 as a precursor to World War I, the capture
and killing of several Israeli soldiers by Hezbollah sparked a conflict that
many feared would draw several countries into the conflict. These incidents and
shifts are often reported by the media as weighty events that will reshape the
financial markets for some time. We would do well to be reminded that the media
has a financial incentive to hype everyday events.
1
The noise created by these market influences provides the volatility that is
necessary for hedge funds to have the short term successes that they crave. With
the growth in the number of hedge funds estimated to have reached more than
7000, rivaling the number of mutual funds, it is no wonder so many interesting
investment ideas have been driven to valuations that become hard to justify.
Many of these fund managers believe the opportunity for distinguishing returns
lies in the small "undiscovered" companies that have done so well in the past
several years. With the Russell 2000 Index, which represents the smallest market
capitalization companies of the Russell 3000, trading at 150% of its historical
P/E ratio while the largest of the Russell 3000 trades at nearly a 15% discount,
it does not take "smart money" to recognize the opportunity.
We do not want to suggest that owning small capitalization stocks should be
avoided simply because they are small capitalization stocks. Rather we have
always believed that one should invest in stocks based on sound fundamentals,
regardless of the size of the company. Valuations in that market segment are
making them tough to find. It reminds us of the late 90's when investors coveted
their "New Economy" stocks despite the increasingly lofty valuations, while many
fundamentally sound companies were ignored. Where is that intuitive child from
Hans Christian Andersen's THE EMPEROR'S NEW CLOTHES?
Many "Old Economy" stocks have seen their time in the sun as the developing
world consumes the basic building blocks of developed society. We believe there
will be an opportunity for companies which offer products that enhance the
quality of life in developing countries. Several providers of goods and services
in America should have eager markets overseas, and yet these mature companies'
stock prices remain at low valuations. It is difficult for us to ignore the
strong fundamentals of some of the best companies in the world trading at
valuations not seen in a decade or so, but we won't tell you they have not tried
our patience.
We hope you have a great fall, and look forward to reporting to you in the New
Year. Thank you for your trust and confidence.
THE FUND
During the third quarter, the Telecommunications sector continued to outpace the
broader market, and Health Care rebounded after a prolonged bout of
underperformance. We have been taking profits from the Energy sector lately and
while we remain bullish on the long term demand for petroleum, the sector
weakened on news of inventory growth, a mild hurricane season, and the discovery
of significant reserves deep under the Gulf of Mexico. Materials, a sector which
has contributed positively to the Davenport Equity Fund in the recent past and
one in which we are overweighted relative to the broader market, weakened during
the third quarter and hindered our overall performance in an otherwise positive
quarter.
We have mentioned that large-cap core and growth stocks have been neglected by
investors. Recent trends suggest market sentiment has begun to turn to stable,
established companies with anticipated earnings growth, trading at reasonable
valuations with lower risk than the broader market. These factors have always
attracted our attention and we are encouraged to see that our patience has begun
to pay off. We are pleased with the progress the Davenport Equity Fund has made
and we believe that even as the market flirts with new highs, there is a great
deal of unrecognized potential in the companies whose stocks we own.
RECENT PURCHASES
APPLE COMPUTER INC. (AAPL) produces and licenses hardware and software under the
Apple and Macintosh names, including the popular iPod portable music system.
With a keen eye on market trends and a loyal customer base, this company has
demonstrated an innovative product pipeline which should generate impressive
earnings potential in a resurgent technology sector.
2
We increased our position in CAPITAL ONE FINANCIAL CORP. (COF) after the stock
fell due to reports of credit quality issues among its peers. Capital One has an
excellent history of managing credit risk, and we believe that the weakness in
these shares represented an ideal opportunity to bolster our existing holdings.
Capital One operates a variety of consumer lending products and credit card
services.
CITIGROUP INC. (C), a global diversified financial services company, offers many
of the same characteristics which prompted our original purchase of the stock in
early 2005. Citigroup does substantial business overseas, where there are
attractive opportunities in developing markets such as Brazil and India where
Citigroup has already established its presence. The stock boasts an attractive
dividend yield, a reasonable valuation and potential for solid long term growth.
We added to our existing position in DOMINION RESOURCES INC. (D), based on a
sum-of-the-parts valuation which looked increasingly attractive in light of
recent industry consolidation. Dominion pays an above market dividend which will
likely grow with its earnings. Dominion's major business segments include
electricity generation and delivery, natural gas reserves, storage and
pipelines, and distribution franchises.
GENERAL ELECTRIC CO. (GE) is one of the world's largest and most-recognized
corporations, operating an industrial manufacturing and financing conglomerate.
With projected double digit earnings growth in five of their six business
segments (the sixth, NBC Universal, struggles with advertising revenue but
appears to be slowly improving), we took this opportunity to augment our
existing position.
HARTFORD FINANCIAL SERVICES GROUP INC. (HIG) is one of the leading providers of
property/casualty insurance, also offering life insurance, asset management
services, annuities and employee benefit products. We believe that the company's
earnings growth is solid and that its diversified business model insulates it
from pricing pressures inherent to its industry.
L3 COMMUNICATIONS HOLDINGS INC. (LLL) is a technology product and service
provider concentrating on the defense and homeland security markets. Their
primary focus is on the ISR market (Intelligence, Surveillance and
Reconnaissance), a large part of the current U.S. defense budget. This stock has
been under pressure recently since the death of its founder and CEO and a
subsequent investigation of the company's stock option practices. However,
operationally there has been no interruption and we believe that spending on
defense and homeland security will remain steady going forward.
PROCTER & Gamble Co. (PG) is a global supplier of a wide variety of products
including detergents, soaps, food and paper products, and toiletries. The
company's fundamentals look strong following a merger with Gillette, and we
believe that a recent pullback in share price is unwarranted. We have confidence
that the company's global presence will continue to expand, making it a
reasonably valued stock with solid earnings growth potential.
We added to our position in TEXAS INSTRUMENTS INC. (TXI), based upon positive
trends in the technology sector. TXI is the third-largest semiconductor company
in the world and the largest provider of semiconductor solutions to the wireless
handset market, an area with strong growth potential. Texas Instruments
maintains a sound balance sheet, strong free cash flow, and trades at a
reasonable valuation.
Sincerely,
Joseph L. Antrim, III
President
Davenport Equity Fund
3
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
06/30/06 15,231 06/30/06 14,612
09/30/06 16,094 09/30/06 15,203
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
----------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended September 30, 2006)
1 YEAR 5 YEARS SINCE INCEPTION*
The Davenport Equity Fund 8.57% 7.20% 4.93%
Standard & Poor's 500 Index 10.79% 6.97% 5.61%
----------------------------------------------------------------------
* Initial public offering of shares was January 15, 1998.
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
4
THE DAVENPORT EQUITY FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SECTOR CONCENTRATION VS. THE STANDARD & POOR'S 500 INDEX
[GRAPHIC OMITTED]
(% of NET ASSETS)
DAVENPORT EQUITY STANDARD & POOR'S
FUND 500 INDEX
-------------------------------------
Consumer Discretionary 10.0% 10.1%
Consumer Staples 11.5% 9.6%
Energy 10.5% 9.4%
Financials 20.9% 22.2%
Health Care 10.5% 12.7%
Industrials 11.8% 10.9%
Information Technology 10.3% 15.3%
Materials 6.9% 2.9%
Telecommunication Services 4.1% 3.5%
Utilities 2.0% 3.4%
Cash Equivalents 1.5% 0.0%
TOP TEN HOLDINGS
% OF
SECURITY DESCRIPTION NET ASSETS
------------------------------------ ----------
Markel Corporation 3.4%
Microsoft Corporation 3.0%
General Electric Company 2.8%
Johnson & Johnson 2.8%
Capital One Financial Corporation 2.7%
CarMax, Inc. 2.6%
Eli Lilly & Company 2.6%
Texas Instruments, Inc. 2.4%
Amgen, Inc.. 2.4%
Sysco Corporation 2.3%
5
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ASSETS
Investments in securities:
At acquisition cost ...................................... $ 118,591,069
==============
At market value (Note 1) ................................. $ 147,360,704
Dividends receivable ....................................... 121,992
Receivable for investment securities sold .................. 1,301,689
Receivable for capital shares sold ......................... 17,694
Other assets ............................................... 16,829
--------------
TOTAL ASSETS ............................................. 148,818,908
--------------
LIABILITIES
Dividends payable .......................................... 20,272
Payable for investment securities purchased ................ 886,228
Payable for capital shares redeemed ........................ 334,430
Accrued investment advisory fees (Note 3) .................. 95,636
Accrued administration fees (Note 3) ....................... 16,800
Accrued compliance fees (Note 3) ........................... 1,600
Other accrued expenses and liabilities ..................... 7,681
--------------
TOTAL LIABILITIES ........................................ 1,362,647
--------------
NET ASSETS ................................................... $ 147,456,261
==============
Net assets consist of:
Paid-in capital .............................................. $ 114,295,450
Accumulated undistributed net investment income .............. 15,046
Accumulated net realized gains from security transactions .... 4,376,130
Net unrealized appreciation on investments ................... 28,769,635
--------------
Net assets ................................................... $ 147,456,261
==============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) ................. 10,292,145
==============
Net asset value, offering price and redemption
price per share (Note 1) ................................... $ 14.33
==============
See accompanying notes to financial statements.
6
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
INVESTMENT INCOME
Dividends .................................................. $ 1,160,017
Interest ................................................... 21,799
--------------
TOTAL INVESTMENT INCOME .................................. 1,181,816
--------------
EXPENSES
Investment advisory fees (Note 3) .......................... 548,307
Administration fees (Note 3) ............................... 102,397
Compliance service fees (Note 3) ........................... 9,225
Custodian fees ............................................. 9,114
Printing of shareholder reports ............................ 8,958
Professional fees .......................................... 7,430
Postage and supplies ....................................... 7,189
Registration fees .......................................... 6,487
Trustees' fees and expenses ................................ 5,413
Insurance expense .......................................... 4,688
Other expenses ............................................. 7,247
--------------
TOTAL EXPENSES ........................................... 716,455
--------------
NET INVESTMENT INCOME ........................................ 465,361
--------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions .............. 4,679,923
Net change in unrealized appreciation/depreciation
on investments ........................................... (1,242,817)
--------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ............. 3,437,106
--------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................... $ 3,902,467
==============
See accompanying notes to financial statements.
7
THE DAVENPORT EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
=========================================================================================
SIX MONTHS
ENDED YEAR
SEPTEMBER 30, ENDED
2006 MARCH 31,
(UNAUDITED) 2006
- -----------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................ $ 465,361 $ 717,981
Net realized gains from security transactions .... 4,679,923 8,334,845
Net change in unrealized appreciation/depreciation
on investments ................................. (1,242,817) 4,083,467
-------------- --------------
Net increase in net assets from operations ......... 3,902,467 13,136,293
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ....................... (465,592) (711,074)
From net realized capital gains on security
transactions ................................... -- (2,709,239)
-------------- --------------
Net decrease in net assets from distributions
to shareholders .................................. (465,592) (3,420,313)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................ 5,210,457 19,222,183
Net asset value of shares issued in
reinvestment of distributions to shareholders .. 432,339 3,209,394
Payments for shares redeemed ..................... (10,546,049) (21,405,847)
-------------- --------------
Net increase (decrease) in net assets from capital
share transactions ............................... (4,903,253) 1,025,730
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ (1,466,378) 10,741,710
NET ASSETS
Beginning of period .............................. 148,922,639 138,180,929
-------------- --------------
End of period .................................... $ 147,456,261 $ 148,922,639
============== ==============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME .... $ 15,046 $ 15,277
============== ==============
CAPITAL SHARE ACTIVITY
Sold ............................................. 372,952 1,421,580
Reinvested ....................................... 30,625 230,611
Redeemed ......................................... (756,193) (1,570,649)
-------------- --------------
Net increase (decrease) in shares outstanding .... (352,616) 81,542
Shares outstanding at beginning of period ........ 10,644,761 10,563,219
-------------- --------------
Shares outstanding at end of period .............. 10,292,145 10,644,761
============== ==============
See accompanying notes to financial statements.
8
THE DAVENPORT EQUITY FUND
FINANCIAL HIGHLIGHTS
==============================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2006 ------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 13.99 $ 13.08 $ 12.30 $ 9.23 $ 11.71 $ 11.42
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ................... 0.05 0.07 0.07 0.04 0.06 0.04
Net realized and unrealized gains
(losses) on investments ............... 0.34 1.17 0.78 3.07 (2.48) 0.29
-------- -------- -------- -------- -------- --------
Total from investment operations .......... 0.39 1.24 0.85 3.11 (2.42) 0.33
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .... (0.05) (0.07) (0.07) (0.04) (0.06) (0.04)
Distributions from net realized gains ... -- (0.26) -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions ....................... (0.05) (0.33) (0.07) (0.04) (0.06) (0.04)
-------- -------- -------- -------- -------- --------
Net asset value at end of period .......... $ 14.33 $ 13.99 $ 13.08 $ 12.30 $ 9.23 $ 11.71
======== ======== ======== ======== ======== ========
Total return(a) ........................... 2.76%(b) 9.48% 6.91% 33.72% (20.66%) 2.89%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ....... $147,456 $148,923 $138,181 $121,769 $ 76,473 $ 82,515
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets 0.98%(c) 0.98% 0.98% 1.00% 1.04% 1.02%
Ratio of net investment income to
average net assets ...................... 0.64%(c) 0.50% 0.57% 0.35% 0.62% 0.35%
Portfolio turnover rate ................... 24%(c) 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.
(b) Not annualized.
(c) Annualized.
See accompanying notes to financial statements.
9
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 98.5% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 10.0%
92,016 CarMax, Inc.(a) ............................... $ 3,837,987
31,090 Harrah's Entertainment, Inc. .................. 2,065,309
83,550 Honda Motor Company Limited ................... 2,809,787
31,500 International Speedway Corporation ............ 1,569,960
70,418 Lowe's Companies, Inc. ........................ 1,975,929
82,028 Walt Disney Company (The) ..................... 2,535,485
-------------
14,794,457
-------------
CONSUMER STAPLES -- 11.5%
44,834 Colgate-Palmolive Company ..................... 2,784,191
44,000 PepsiCo, Inc. ................................. 2,871,440
35,125 Proctor & Gamble Company (The) ................ 2,177,048
102,360 Sysco Corporation ............................. 3,423,942
66,021 Walgreen Company .............................. 2,930,672
57,080 Wal-Mart Stores, Inc. ......................... 2,815,186
-------------
17,002,479
-------------
ENERGY -- 10.5%
50,000 Chevron Corporation ........................... 3,243,000
45,500 ConocoPhillips ................................ 2,708,615
26,852 EOG Resources, Inc. ........................... 1,746,723
40,973 Exxon Mobil Corporation ....................... 2,749,288
40,875 GlobalSantaFe Corporation ..................... 2,043,341
48,618 Schlumberger Limited .......................... 3,015,775
-------------
15,506,742
-------------
FINANCIALS -- 20.9%
49,908 American International Group, Inc. ............ 3,306,904
61,400 BB&T Corporation .............................. 2,688,092
840 Berkshire Hathaway, Inc. - Class B(a) ......... 2,666,160
48,908 Brookfield Asset Management, Inc. ............. 2,168,581
50,737 Capital One Financial Corporation ............. 3,990,972
58,650 Citigroup, Inc. ............................... 2,913,146
28,650 Hartford Financial Services Group, Inc. (The) . 2,485,387
12,056 Markel Corporation(a) ......................... 4,950,917
54,460 Wachovia Corporation .......................... 3,038,868
54,900 T. Rowe Price Group, Inc. ..................... 2,626,965
-------------
30,835,992
-------------
HEALTH CARE -- 10.5%
48,741 Amgen, Inc.(a) ................................ 3,486,444
67,271 Eli Lilly & Company ........................... 3,834,447
62,886 Johnson & Johnson ............................. 4,083,817
33,464 Medtronic, Inc. ............................... 1,554,068
37,314 Zimmer Holdings, Inc.(a) ...................... 2,518,695
-------------
15,477,471
-------------
10
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 11.8%
49,150 Danaher Corporation ........................... $ 3,375,130
50,000 Empresa Brasileira de Aeronautica S.A. - ADR .. 1,963,500
117,475 General Electric Company ...................... 4,146,867
26,000 L-3 Communications Holdings, Inc. ............. 2,036,580
34,421 United Parcel Service, Inc. - Class B ......... 2,476,247
53,925 United Technologies Corporation ............... 3,416,149
-------------
17,414,473
-------------
INFORMATION TECHNOLOGY -- 10.3%
27,000 Apple Computer, Inc.(a) ....................... 2,079,810
5,265 Google, Inc.(a) ............................... 2,116,003
162,784 Microsoft Corporation ......................... 4,448,887
157,225 Nokia Oyj - ADR ............................... 3,095,760
105,075 Texas Instruments, Inc. ....................... 3,493,744
-------------
15,234,204
-------------
MATERIALS -- 6.9%
63,681 Cameco Corporation ............................ 2,328,814
55,979 Dow Chemical Company (The) .................... 2,182,061
42,635 Praxair, Inc. ................................. 2,522,287
16,294 Rio Tinto PLC - ADR ........................... 3,089,831
-------------
10,122,993
-------------
TELECOMMUNICATION SERVICES -- 4.1%
75,882 America Movil S.A. de C.V. - Series L - ADR ... 2,987,474
82,100 Verizon Communications, Inc. .................. 3,048,373
-------------
6,035,847
-------------
UTILITIES -- 2.0%
37,991 Dominion Resources, Inc. ...................... 2,905,932
-------------
TOTAL COMMON STOCKS (Cost $116,560,956) ....... $ 145,330,590
-------------
================================================================================
SHARES MONEY MARKET FUNDS -- 1.4% VALUE
- --------------------------------------------------------------------------------
2,030,113 First American Treasury Obligation Fund
- Class Y (Cost $2,030,113) ................. $ 2,030,113
-------------
TOTAL INVESTMENTS AT VALUE -- 99.9%
(Cost $118,591,069) ......................... $ 147,360,703
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% . 95,558
-------------
NET ASSETS -- 100.0% .......................... $ 147,456,261
=============
(a) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to portfolio of investments.
11
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
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.
12
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of the Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. The amount of distributions from net investment income and net realized
gains are determined in accordance with federal income tax regulations which may
differ from accounting principles generally accepted in the United States. The
tax character of distributions paid during the periods ended September 30, 2006
and March 31, 2006 was as follows:
--------------------------------------------------------------------------
PERIOD ENDED ORDINARY INCOME LONG-TERM CAPITAL GAINS TOTAL
--------------------------------------------------------------------------
Sept. 30, 2006 $ 465,592 $ -- $ 465,592
March 31, 2006 $ 711,074 $ 2,709,239 $ 3,420,313
--------------------------------------------------------------------------
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
September 30, 2006:
- --------------------------------------------------------------------------------
Cost of portfolio investments ................................ $ 118,895,388
==============
Gross unrealized appreciation ................................ $ 30,094,776
Gross unrealized depreciation ................................ (1,629,460)
--------------
Net unrealized appreciation .................................. $ 28,465,316
Undistributed ordinary income ................................ 35,318
Undistributed long-term gains ................................ 4,680,449
Other temporary differences .................................. (20,272)
--------------
Accumulated earnings ......................................... $ 33,160,811
==============
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 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 $17,538,859 and
$23,136,925, respectively.
13
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.
Until August 2006, the Advisor was reimbursed for the estimated costs of
providing a Chief Compliance Officer (CCO) for the Fund. The Adviser received
fees of $6,000 for providing CCO services during the period ended September 30,
2006.
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.
COMPLIANCE CONSULTING AGREEMENT
Effective August 7, 2006, under the terms of a Compliance Consulting Agreement
between the Trust and Ultimus, Ultimus provides an individual to serve as the
Trust's Chief Compliance Officer and to administer the Trust's compliance
policies and procedures. For these services, the Fund pays Ultimus an annual
base fee of $15,000 plus an asset-based fee equal to 0.01% per annum on net
assets in excess of $100 million. During the period ended September 30, 2006,
the Fund paid fees of $3,225 to Ultimus for compliance consulting services.
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.
5. ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 (FIN 48) "Accounting for Uncertainty in Income Taxes". FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken in the course of preparing the fund's tax
returns to determine whether the tax positions are "more-likely-than-not" of
being sustained by the applicable tax authority. Tax benefits of positions not
deemed to meet the more-likely-than-not threshold would be booked as a tax
expense in the current year and recognized as: a liability for unrecognized tax
benefits; a reduction of an income tax refund receivable; a reduction of
deferred tax asset; an increase in deferred tax liability; or a combination
thereof. Adoption of FIN 48 is required for fiscal years beginning after
December 15, 2006. At this time, management is evaluating the implications of
FIN 48 and its impact on the financial statements has not yet been determined.
14
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
April 1, 2006 Sept. 30, 2006 During Period*
- -------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,027.60 $4.98
- -------------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.16 $4.96
- -------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 0.98% for the
period, multiplied by the average account value over the period, multiplied
by 183/365 (to reflect the one-half year period).
15
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.
A complete listing of portfolio holdings for the Fund is updated daily and can
be reviewed at the Fund's website at http://www.investdavenport.com.
16
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================================================================================
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 EQUITY FUND
Ultimus Fund Solutions, LLC ------------------
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 SEMI-ANNUAL REPORT
One Post Office Square SEPTEMBER 30, 2006
Boston, Massachusetts 02109 (UNAUDITED)
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
------------------
------------------
================================================================================
- --------------------------------------------------------------------------------
THE
FLIPPIN, BRUCE & PORTER
FUNDS
-----------------------
FBP VALUE FUND
FBP BALANCED FUND
SEMI-ANNUAL REPORT
SEPTEMBER 30, 2006
(UNAUDITED)
NO-LOAD FUNDS
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS NOVEMBER 20, 2006
================================================================================
We are pleased to report on the progress of the FBP Value Fund and FBP Balanced
Fund and their investments for the semi-annual period ended September 30, 2006.
The FBP Value Fund and FBP Balanced Fund returned 6.28% and 5.18%, respectively,
for the six-month period ended September 30, 2006. Illustrated below are the
returns over the past year and longer time periods.
% Average Annual Returns
Periods Ended September 30, 2006
-------------------------------------
One Three Five Ten
Year Year Year Year
- --------------------------------------------------------------------------------
FBP Value Fund 14.45 13.40 9.17 9.33
FBP Balanced Fund 11.22 9.99 7.76 8.59
S&P 500 Index 10.79 12.30 6.97 8.59
Lehman Intermediate Government/
Credit Bond Index 3.73 2.52 4.33 5.98
In our letter to you this past May, we commented on our expectation that a
slowing economy in the second half of 2006 would allow the Federal Reserve to
stop raising short-term interest rates, reduce inflationary pressures, and help
to remove demand pressures in the energy and commodity markets. These events
have unfolded and in particular have led to a decline in longer-term interest
rates, sparking a mid June stock market rally that continues today. Stocks have
also overcome the uncertainty of the November elections as control of both the
US House of Representatives and US Senate has moved to the Democrats.
Looking forward, the pace of economic activity should continue its recent trend
of moderation. Consumers, while feeling better about the cost of gasoline, will
continue to face challenges such as higher credit card minimum payments, tougher
lending standards and perhaps more importantly, stagnant housing values. Slower
economic growth will likely translate into lower corporate earnings gains next
year of around 7%, in line with the long-term growth of profits.
Performance in both Funds over this semi-annual period has been favorable.
Consumer Discretionary has been the strongest sector, led by General Motors,
Dillard's Inc. and Federated Department Stores. Each Fund's Health Care
positions continued to provide good returns, especially as large pharmaceuticals
Merck and Pfizer performed well. Financials also aided results, responding to
the previously mentioned drop in interest rates. The Industrial sector lagged
this period as Cendant dropped in advance of its splitting into three separate
companies. We have also seen a rotation into larger capitalization stocks, which
we have been anticipating for some time, thus benefiting both Funds.
Recent activity in the Funds includes the purchase of KIMBERLY CLARK (KMB). The
company manufactures a variety of consumer products using pulp as its primary
raw material. Company brands include Kleenex, Scott, Cottonelle, Viva, Huggies,
Pull-Ups, Kotex and Depend. The stock was trading at attractive valuation levels
that were approaching ten-year low levels for price/cash flow, price/earnings
and price/sales and offered a dividend yield above 3%. Rising input costs,
specifically for pulp and energy to run its manufacturing facilities, have
hampered earnings growth. We expect these cost pressures will abate, allowing
KMB to generate good earnings growth in the coming quarters. LINCOLN NATIONAL
(LNC) was acquired after the company completed
1
its purchase of JEFFERSON-PILOT (JP) in early April. The Funds owned
Jefferson-Pilot for a number of years and elected to receive Lincoln shares in
the merger. SABRE HOLDINGS (TSG), an operator of travel reservations systems
including internet site Travelocity, was added. The company recently announced
the successful renegotiation of its reservation system agreements with major
airlines, removing an overhang from the stock. We expect Travelocity will
continue to grow and benefit from cost savings following recent acquisitions. At
9 times free cash flow, TSG appeared to be attractively priced. FAMILY DOLLAR
STORES (FDO) was also just added to the Funds. FDO operates a chain of mid-sized
discount stores and should benefit from different consumer purchasing patterns
as consumer discretionary spending slows. Although FDO has a presence in 44
states, most of its stores are located in smaller markets in the southern and
eastern portions of the U.S. We expect sales to get a lift from continued store
expansion, with an emphasis on penetrating markets in larger urban areas, and
from its traffic boosting initiative to add coolers to its stores. SPRINT NEXTEL
(S) is the Funds' most recent addition. Investors became disappointed with
Sprint because customer service deteriorated, phone offerings were weak and
customer churn increased since the merger with Nextel. With the spin-off this
year of its traditional local wireline business, Sprint has now transformed
itself into a near pure play in the wireless communications market but is
trading in line with other slower growing telecommunication stocks. As the
company improves execution in its core business, increased valuation along with
earnings growth provides the upside investment opportunity. UNION PACIFIC,
CIGNA, UNUMPROVIDENT and MARATHON OIL were eliminated during this period, each
having reached their full value targets and producing nice gains for the Funds.
We believe there is good appreciation potential for both the market and the
Funds as the current mid-cycle economic slowdown evolves and the shift toward
large-cap stocks continues. Robust cash generation by corporations should
continue to fuel dividend increases, share repurchases and along with private
equity drive increased merger activity. The drop in long-term interest rates
should also provide support to the equity market as bond yields are less
attractive. We expect some volatility in the coming months given the stock
market's recent strength, yet we remain optimistic about the opportunities in
the Funds, with their equity holdings as of September 30th trading at 13.8 times
forward earnings versus 14.9 times for the S&P 500.
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 VAULE 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 CONSUMER PRICE INDEX
--------------------- ---------------------- ----------------------
DATE BALANCE DATE BALANCE DATE BALANCE
---- ------- ---- ------- ---- -------
09/30/96 $ 10,000 09/30/96 $ 10,000 09/30/96 $ 10,000
12/31/96 10,834 12/31/96 10,847 12/31/96 10,082
03/31/97 11,124 03/31/97 10,988 03/31/97 10,153
06/30/97 13,066 06/30/97 12,519 06/30/97 10,172
09/30/97 14,045 09/30/97 13,705 09/30/97 10,216
12/31/97 14,448 12/31/97 13,605 12/31/97 10,280
03/31/98 16,463 03/31/98 15,263 03/31/98 10,292
06/30/98 17,007 06/30/98 15,209 06/30/98 10,350
09/30/98 15,315 09/30/98 12,873 09/30/98 10,393
12/31/98 18,577 12/31/98 16,042 12/31/98 10,437
03/31/99 19,503 03/31/99 16,444 03/31/99 10,462
06/30/99 20,877 06/30/99 18,659 06/30/99 10,558
09/30/99 19,574 09/30/99 16,203 09/30/99 10,615
12/31/99 22,486 12/31/99 16,640 12/31/99 10,698
03/31/00 23,002 03/31/00 15,556 03/31/00 10,799
06/30/00 22,391 06/30/00 14,997 06/30/00 10,907
09/30/00 22,174 09/30/00 15,597 09/30/00 10,990
12/31/00 20,439 12/31/00 16,321 12/31/00 11,072
03/31/01 18,016 03/31/01 16,672 03/31/01 11,181
06/30/01 19,070 06/30/01 17,908 06/30/01 11,302
09/30/01 16,271 09/30/01 15,738 09/30/01 11,289
12/31/01 18,009 12/31/01 18,178 12/31/01 11,282
03/31/02 18,059 03/31/02 18,203 03/31/02 11,308
06/30/02 15,640 06/30/02 15,884 06/30/02 11,435
09/30/02 12,937 09/30/02 13,209 09/30/02 11,492
12/31/02 14,029 12/31/02 14,232 12/31/02 11,530
03/31/03 13,587 03/31/03 13,359 03/31/03 11,644
06/30/03 15,679 06/30/03 16,002 06/30/03 11,670
09/30/03 16,094 09/30/03 16,733 09/30/03 11,740
12/31/03 18,054 12/31/03 18,775 12/31/03 11,734
03/31/04 18,359 03/31/04 19,585 03/31/04 11,842
06/30/04 18,675 06/30/04 19,815 06/30/04 12,027
09/30/04 18,326 09/30/04 19,097 09/30/04 12,052
12/31/04 20,018 12/31/04 20,805 12/31/04 12,147
03/31/05 19,588 03/31/05 20,495 03/31/05 12,294
06/30/05 19,856 06/30/05 20,972 06/30/05 12,461
09/30/05 20,572 09/30/05 21,323 09/30/05 12,590
12/31/05 21,001 12/31/05 22,023 12/31/05 12,667
03/31/06 21,885 03/31/06 22,961 03/31/06 12,738
06/30/06 21,570 06/30/06 22,685 06/30/06 12,981
09/30/06 22,792 09/30/06 24,404 09/30/06 13,070
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 VAULE 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 CONSUMER PRICE INDEX
------------------- ---------------------- ----------------------
DATE BALANCE DATE BALANCE DATE BALANCE
---- ------- ---- ------- ---- -------
09/30/96 $ 10,000 09/30/96 $ 10,000 09/30/96 $ 10,000
12/31/96 10,834 12/31/96 10,662 12/31/96 10,082
03/31/97 11,124 03/31/97 10,759 03/31/97 10,153
06/30/97 13,066 06/30/97 11,987 06/30/97 10,172
09/30/97 14,045 09/30/97 12,900 09/30/97 10,216
12/31/97 14,448 12/31/97 12,862 12/31/97 10,280
03/31/98 16,463 03/31/98 14,011 03/31/98 10,292
06/30/98 17,007 06/30/98 14,138 06/30/98 10,350
09/30/98 15,315 09/30/98 12,718 09/30/98 10,393
12/31/98 18,577 12/31/98 14,809 12/31/98 10,437
03/31/99 19,503 03/31/99 15,235 03/31/99 10,462
06/30/99 20,877 06/30/99 16,573 06/30/99 10,558
09/30/99 19,574 09/30/99 15,059 09/30/99 10,615
12/31/99 22,486 12/31/99 15,595 12/31/99 10,698
03/31/00 23,002 03/31/00 14,949 03/31/00 10,799
06/30/00 22,391 06/30/00 14,491 06/30/00 10,907
09/30/00 22,174 09/30/00 15,075 09/30/00 10,990
12/31/00 20,439 12/31/00 15,759 12/31/00 11,072
03/31/01 18,016 03/31/01 16,046 03/31/01 11,181
06/30/01 19,070 06/30/01 16,855 06/30/01 11,302
09/30/01 16,271 09/30/01 15,691 09/30/01 11,289
12/31/01 18,009 12/31/01 17,323 12/31/01 11,282
03/31/02 18,059 03/31/02 17,286 03/31/02 11,308
06/30/02 15,640 06/30/02 15,780 06/30/02 11,435
09/30/02 12,937 09/30/02 14,079 09/30/02 11,492
12/31/02 14,029 12/31/02 14,946 12/31/02 11,530
03/31/03 13,587 03/31/03 14,492 03/31/03 11,644
06/30/03 15,679 06/30/03 16,577 06/30/03 11,670
09/30/03 16,094 09/30/03 17,131 09/30/03 11,740
12/31/03 18,054 12/31/03 18,669 12/31/03 11,734
03/31/04 18,359 03/31/04 19,302 03/31/04 11,842
06/30/04 18,675 06/30/04 19,420 06/30/04 12,027
09/30/04 18,326 09/30/04 18,931 09/30/04 12,052
12/31/04 20,018 12/31/04 20,170 12/31/04 12,147
03/31/05 19,588 03/31/05 19,920 03/31/05 12,294
06/30/05 19,856 06/30/05 20,259 06/30/05 12,461
09/30/05 20,572 09/30/05 20,497 09/30/05 12,590
12/31/05 21,001 12/31/05 21,009 12/31/05 12,667
03/31/06 21,885 03/31/06 21,675 03/31/06 12,738
06/30/06 21,570 06/30/06 21,558 06/30/06 12,981
09/30/06 22,792 09/30/06 22,798 09/30/06 13,070
Past performance is not predictive of future performance.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS(a)
(FOR PERIODS ENDED SEPTEMBER 30, 2006)
1 YEAR 5 YEARS 10 YEARS
FBP Value Fund 14.45% 9.17% 9.33%
FBP Balanced Fund 11.22% 7.76% 8.59%
Standard & Poor's 500 Index 10.79% 6.97% 8.59%
Consumer Price Index 3.82% 2.97% 2.71%
================================================================================
(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
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
GENERAL INFORMATION ASSET ALLOCATION
============================================== ================================
Net Asset Value Per share $ 28.10 Cash Equivalents 0.6%
Total Net Assets ( Millions) $ 57.3 Stocks 99.4%
Current Expense Ratio 1.01%
Portfolio Turnover (annualized) 15% [GRAPHIC OMITTED]
Fund Inception Date 7/30/93
FBP VALUE S&P 500
STOCK CHARACTERISTICS FUND INDEX
=================================================
Number of Stocks 47 500
Weighted Avg Market
Capitalization ( Billions) 111.6 95.5
Price-to-Earnings Ratio
(IBES 1 Yr. Forecast EPS) 13.8 14.9
Price-to-Book Value 2.3 2.8
INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX
================================================================================
[GRAPHIC OMITTED]
(% OF PORTFOLIO)
FBP Value Fund S&P 500 Index
------------------ ---------------
Consumer Discretionary 11.1% 10.1%
Consumer Staples 7.7% 9.6%
Energy 1.3% 9.4%
Financials 32.7% 22.2%
Health Care 17.2% 12.7%
Industrials 9.4% 10.9%
Information Technology 16.0% 15.3%
Materials 0.0% 2.9%
Telecommunication Services 4.0% 3.5%
Utilities 0.0% 3.4%
Cash Equivalents 0.6% 0.0%
TEN LARGEST HOLDINGS % OF NET ASSETS
==================== ===============
Bank of America Corporation 4.4%
Wachovia Corporation 4.2%
J.P. Morgan Chase & Company 4.1%
American International Group, Inc. 4.1%
Citigroup, Inc. 4.1%
St. Paul Travelers Companies, Inc. (The) 3.8%
International Business Machines Corporation 3.5%
Wal-Mart Stores Inc. 3.5%
Johnson & Johnson 3.3%
Hewlett-Packard Company 3.2%
5
FBP BALANCED FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
GENERAL INFORMATION ASSET ALLOCATION
========================================== ===================================
Net Asset Value Per share $ 19.15 Cash Equivalents 4.7%
Total Net Assets ( Millions ) $ 65.0 Fixed Income 23.7%
Current Expense Ratio 0.98% Stocks 71.6%
Portfolio Turnover (annualized) 12%
Fund Inception Date 7/3/89
[GRAPHIC OMITTED]
STOCK PORTFOLIO (71.6% OF FUND)
====================================================================================================
Number of Stocks 47 TEN LARGEST HOLDINGS % OF NET ASSETS
Weighted Avg Market ==================== ===============
Capitalization (Billions) 111.3 Bank of America Corporation 3.3%
Price-to-Earnings Ratio J.P. Morgan Chase & Company 3.2%
(IBES 1 Yr. Forecast EPS) 13.9 Wachovia Corporation 2.8%
Price-to-Book Value 2.3 Citigroup, Inc. 2.7%
St. Paul Travelers Companies, Inc. (The) 2.7%
FIVE LARGEST SECTORS % OF NET ASSETS American International Group, Inc. 2.6%
==================== =============== Hewlett-Packard Company 2.5%
Financials 23.0% International Business Machines Corporation 2.5%
Health Care 13.1% Wal-Mart Stores 2.5%
Information Tech. 11.9% Merck & Company, Inc. 2.4%
Consumer Discretionary 7.5%
Industrials 6.3%
FIXED-INCOME PORTFOLIO ( 23.7% OF FUND)
================================================================================
Number of Fixed-Income Securities 23 SECTOR BREAKDOWN % OF NET ASSETS
Average Quality AA ================== ===============
Average Stated Maturity 2.0 U.S. Treasury 5.0%
Average Effective Duration 1.9 Government Agency 3.4%
Corporate 15.3%
6
FBP VALUE FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 99.4% VALUE
================================================================================
CONSUMER DISCRETIONARY -- 11.1%
20,000 Best Buy Company, Inc.(b)........................... $ 1,071,200
7,000 Dillard's, Inc. .................................... 229,110
25,000 Family Dollar Stores, Inc. ......................... 731,000
15,574 Federated Department Stores, Inc. .................. 672,953
9,600 Gannett Company, Inc. .............................. 545,568
27,000 General Motors Corporation(b) ...................... 898,020
13,000 Kohl's Corporation(a)(b) ........................... 843,960
4,500 Whirlpool Corporation(b) ........................... 378,495
36,000 Wyndham Worldwide Corporation(a) ................... 1,006,920
------------
6,377,226
------------
CONSUMER STAPLES -- 7.7%
12,000 Altria Group, Inc. ................................. 918,600
25,000 CVS Corporation .................................... 803,000
10,000 Kimberly-Clark Corporation ......................... 653,600
41,000 Wal-Mart Stores, Inc. .............................. 2,022,120
------------
4,397,320
------------
ENERGY -- 1.3%
11,000 Royal Dutch Shell PLC - ADR ........................ 727,100
------------
FINANCIALS -- 32.7%
17,000 American Express Company ........................... 953,360
35,400 American International Group, Inc. ................. 2,345,604
47,000 Bank of America Corporation ........................ 2,517,790
47,000 Citigroup, Inc. .................................... 2,334,490
23,000 Fannie Mae ......................................... 1,285,930
10,000 Freddie Mac ........................................ 663,300
50,000 JPMorgan Chase & Company ........................... 2,348,000
17,065 Lincoln National Corporation ....................... 1,059,395
28,750 Realogy Corporation(a) ............................. 652,050
46,200 St. Paul Travelers Companies, Inc. (The) ........... 2,166,318
43,000 Wachovia Corporation ............................... 2,399,400
------------
18,725,637
------------
HEALTH CARE -- 17.2%
15,000 Bristol-Myers Squibb Company ....................... 373,800
32,000 HCA, Inc. .......................................... 1,596,480
29,000 Johnson & Johnson .................................. 1,883,260
43,000 Merck & Company, Inc.(b) ........................... 1,801,700
62,000 Pfizer, Inc. ....................................... 1,758,320
47,000 Watson Pharmaceuticals, Inc.(a) .................... 1,229,990
16,000 WellPoint, Inc.(a) ................................. 1,232,800
------------
9,876,350
------------
7
FBP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.4% (CONTINUED) VALUE
================================================================================
INDUSTRIALS -- 9.4%
12,000 Avery Dennison Corporation ......................... $ 722,040
11,500 Avis Budget Group, Inc. ............................ 210,335
10,300 FedEx Corporation .................................. 1,119,404
51,000 General Electric Company ........................... 1,800,300
55,000 Tyco International Limited ......................... 1,539,450
------------
5,391,529
------------
INFORMATION TECHNOLOGY -- 16.0%
25,000 Agilent Technologies, Inc.(a) ...................... 817,250
34,000 Cisco Systems, Inc.(a) ............................. 782,000
20,400 Computer Sciences Corporation(a) ................... 1,002,048
50,000 Hewlett-Packard Company ............................ 1,834,500
24,800 International Business Machines Corporation ........ 2,032,112
60,000 Microsoft Corporation .............................. 1,639,800
25,000 Sabre Holdings Corporation ......................... 584,750
156,000 Solectron Corporation(a) ........................... 508,560
------------
9,201,020
------------
TELECOMMUNICATION SERVICES -- 4.0%
35,000 Sprint Nextel Corporation .......................... 600,250
45,000 Verizon Communications, Inc. ....................... 1,670,850
------------
2,271,100
------------
TOTAL COMMON STOCKS (Cost $38,782,648).............. $ 56,967,282
------------
================================================================================
PAR VALUE SHORT-TERM CORPORATE NOTES -- 0.8% VALUE
================================================================================
$ 492,567 U.S. Bank N.A., Demand Note, 5.07%
(Cost $492,567).................................... $ 492,567
------------
TOTAL INVESTMENTS AT VALUE -- 100.2%
(Cost $39,275,215)................................. $ 57,459,849
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%)..... ( 125,996)
------------
NET ASSETS -- 100.0%................................ $ 57,333,853
============
(a) Non-income producing security.
(b) Security covers a written call option.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
8
FBP VALUE FUND
SCHEDULE OF OPEN OPTION CONTRACTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
================================================================================
Best Buy Company, Inc.,
100 01/20/2007 at $55 .......................... $ 38,000 $ 42,699
General Motors Corporation,
100 12/16/2006 at $30 .......................... 46,000 32,699
Kohl's Corporation,
40 04/21/2007 at $70 .......................... 15,600 21,879
Merck & Company, Inc.,
80 01/20/2007 at $40 .......................... 26,400 18,774
Whirlpool Corporation,
45 01/20/2007 at $90 .......................... 14,850 23,085
--------- ---------
$ 140,850 $ 139,136
========= =========
See accompanying notes to financial statements.
9
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 71.6% VALUE
================================================================================
CONSUMER DISCRETIONARY -- 7.5%
15,000 Best Buy Company, Inc.(b) .......................... $ 803,400
5,300 Dillard's, Inc. .................................... 173,469
20,000 Family Dollar Stores, Inc. ......................... 584,800
9,344 Federated Department Stores, Inc. .................. 403,754
7,000 Gannett Company, Inc. .............................. 397,810
22,000 General Motors Corporation (b) ..................... 731,720
10,000 Kohl's Corporation(a) (b) .......................... 649,200
4,000 Whirlpool Corporation(b) ........................... 336,440
28,500 Wyndham Worldwide Corporation(a) ................... 797,145
------------
4,877,738
------------
CONSUMER STAPLES -- 6.3%
14,000 Altria Group, Inc. ................................. 1,071,700
27,000 CVS Corporation .................................... 867,240
7,700 Kimberly-Clark Corporation ......................... 503,272
33,000 Wal-Mart Stores, Inc. .............................. 1,627,560
------------
4,069,772
------------
ENERGY -- 0.8%
8,000 Royal Dutch Shell PLC - ADR ........................ 528,800
------------
FINANCIALS -- 23.0%
18,000 American Express Company ........................... 1,009,440
25,400 American International Group, Inc. ................. 1,683,004
40,000 Bank of America Corporation ........................ 2,142,800
36,000 Citigroup, Inc. .................................... 1,788,120
17,000 Fannie Mae ......................................... 950,470
7,000 Freddie Mac ........................................ 464,310
45,000 JPMorgan Chase & Company ........................... 2,113,200
11,676 Lincoln National Corporation ....................... 724,846
23,000 Realogy Corporation(a) ............................. 521,640
37,000 St. Paul Travelers Companies, Inc. (The) ........... 1,734,930
32,800 Wachovia Corporation ............................... 1,830,240
------------
14,963,000
------------
HEALTH CARE -- 13.1%
22,000 Bristol-Myers Squibb Company ....................... 548,240
27,500 HCA, Inc. .......................................... 1,371,975
23,000 Johnson & Johnson .................................. 1,493,620
37,000 Merck & Company, Inc.(b) ........................... 1,550,300
48,000 Pfizer, Inc. ....................................... 1,361,280
36,000 Watson Pharmaceuticals, Inc.(a) .................... 942,120
16,400 WellPoint, Inc.(a) ................................. 1,263,620
------------
8,531,155
------------
10
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS --71.6% (CONTINUED) VALUE
================================================================================
INDUSTRIALS -- 6.3%
9,300 Avery Dennison Corporation ......................... $ 559,581
9,200 Avis Budget Group, Inc. ............................ 168,268
7,400 FedEx Corporation .................................. 804,232
40,000 General Electric Company ........................... 1,412,000
42,000 Tyco International Limited ......................... 1,175,580
------------
4,119,661
------------
INFORMATION TECHNOLOGY -- 11.9%
21,000 Agilent Technologies, Inc.(a) ...................... 686,490
23,000 Cisco Systems, Inc.(a) ............................. 529,000
20,000 Computer Sciences Corporation(a) ................... 982,400
45,000 Hewlett-Packard Company ............................ 1,651,050
20,000 International Business Machines Corporation ........ 1,638,800
51,000 Microsoft Corporation .............................. 1,393,830
20,000 Sabre Holdings Corporation ......................... 467,800
115,000 Solectron Corporation(a) ........................... 374,900
------------
7,724,270
------------
TELECOMMUNICATION SERVICES -- 2.7%
27,000 Sprint Nextel Corporation .......................... 463,050
35,000 Verizon Communications, Inc. ....................... 1,299,550
------------
1,762,600
------------
TOTAL COMMON STOCKS (Cost $28,876,211).............. $ 46,576,996
------------
================================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 8.4% VALUE
================================================================================
U.S. TREASURY NOTES -- 5.0%
$ 500,000 2.50%, due 10/31/2006 ............................. $ 499,024
500,000 3.50%, due 11/15/2006 ............................. 499,141
750,000 4.375%, due 05/15/2007 ............................ 747,158
750,000 3.875%, due 07/31/2007 ............................ 743,379
750,000 4.50%, due 11/15/2010 ............................. 747,421
------------
3,236,123
------------
FEDERAL HOME LOAN BANK -- 2.6%
500,000 4.28%, due 07/14/2008 ............................. 493,862
500,000 4.035%, due 03/09/2009 ............................ 489,344
750,000 5.25%, due 03/17/2010 ............................. 748,687
------------
1,731,893
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.8%
500,000 2.50%, due 04/19/2007 ............................. 492,546
------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $5,499,516).................................. $ 5,460,562
------------
11
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
================================================================================
PAR VALUE CORPORATE BONDS -- 15.3% VALUE
================================================================================
FINANCIALS -- 6.6%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/2008 ............................ $ 775,948
Credit Suisse First Boston USA, Inc.,
750,000 4.70%, due 06/01/2009 ............................. 741,918
John Deere Capital Corporation,
500,000 3.375%, due 10/01/2007 ............................ 489,982
Merrill Lynch & Company, Inc.,
500,000 3.00%, due 04/30/2007 ............................. 493,452
Northern Trust Company,
1,000,000 7.10%, due 08/01/2009 ............................. 1,046,244
Student Loan Marketing Corporation,
750,000 3.625%, due 03/17/2008 ............................ 732,586
------------
4,280,130
------------
HEALTH CARE -- 0.7%
UnitedHealth Group, Inc.,
500,000 3.30%, due 01/30/2008 .............................. 485,858
------------
INDUSTRIALS -- 4.6%
Donnelley (R.R.) & Sons Company,
750,000 3.75%, due 04/01/2009 .............................. 714,314
Raychem Corporation,
1,000,000 7.20%, due 10/15/2008 .............................. 1,033,872
Ryder System, Inc.,
750,000 5.00%, due 04/01/2011 .............................. 734,958
Stanley Works (The),
500,000 3.50%, due 11/01/2007 .............................. 490,240
------------
2,973,384
------------
UTILITIES -- 3.4%
Dominion Resources, Inc.,
750,000 4.125%, due 02/15/2008 ............................ 738,038
Ohio Power Company,
750,000 5.30%, due 11/01/2010 ............................. 748,094
Public Service Electric & Gas Company,
750,000 4.00%, due 11/01/2008 ............................. 730,780
------------
2,216,912
------------
TOTAL CORPORATE BONDS (Cost $9,913,807) ............ $ 9,956,284
------------
================================================================================
PAR VALUE SHORT-TERM CORPORATE NOTES -- 3.6% VALUE
================================================================================
$ 80,000 American Family Financial Services, Demand Note,
4.94%.............................................. $ 80,000
110,081 Wisconsin Corporate Central Credit Union, Demand
Note, 4.99%........................................ 110,081
2,178,917 U.S. Bank N.A., Demand Note, 5.07% ................. 2,178,917
------------
TOTAL SHORT-TERM CORPORATE NOTES (Cost $2,368,998).. $ 2,368,998
------------
12
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKET FUNDS -- 0.9% VALUE
================================================================================
549,568 First American Treasury Obligations Fund - Class A
(Cost $549,568).................................... $ 549,568
-------------
TOTAL INVESTMENTS AT VALUE -- 99.8%
(Cost $47,208,100)................................. $ 64,912,408
OTHER ASSETS IN EXCESS OF LIABILITES -- 0.2% 117,338
-------------
NET ASSETS -- 100.0%................................ $ 65,029,746
=============
(a) Non-income producing security.
(b) Security covers a written call option.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
FBP BALANCED FUND
SCHEDULE OF OPEN OPTION CONTRACTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
================================================================================
Best Buy Company, Inc.,
50 01/20/2007 at $55.......................... $ 19,000 $ 21,349
General Motors Corporation,
66 12/16/2006 at $30 ......................... 30,360 21,581
Kohl's Corporation,
30 04/21/2007 at $70.......................... 11,700 16,410
Merck & Company, Inc.,
60 01/20/2007 at $40.......................... 19,800 14,081
Whirlpool Corporation,
40 01/20/2007 at $90.......................... 13,200 20,520
--------- ---------
$ 94,060 $ 93,941
========= =========
See accompanying notes to financial statements.
13
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
FBP FBP
VALUE BALANCED
FUND FUND
================================================================================
ASSETS
Investments in securities:
At acquisition cost............................ $ 39,275,215 $ 47,208,100
============ ============
At value (Note 1).............................. $ 57,459,849 $ 64,912,408
Dividends and interest receivable ............... 63,311 289,412
Receivable for capital shares sold .............. 6,239 32,576
Other assets .................................... 8,737 6,150
------------ ------------
TOTAL ASSETS 57,538,136 65,240,546
------------ ------------
LIABILITIES
Distributions payable ........................... 6,390 42,006
Payable for capital shares redeemed ............. 4,400 15,365
Accrued investment advisory fees (Note 3) ....... 32,927 36,971
Accrued administration fees (Note 3) ............ 6,300 6,800
Accrued compliance fees (Note 3) ................ 800 800
Other accrued expenses and liabilities .......... 12,616 14,798
Covered call options, at value (Notes 1 and 4)
(premiums received $139,136 and $93,941,
respectively) ................................ 140,850 94,060
------------ ------------
TOTAL LIABILITIES 204,283 210,800
------------ ------------
NET ASSETS ........................................ $ 57,333,853 $ 65,029,746
============ ============
Net assets consist of:
Paid-in capital ................................. $ 36,345,796 $ 45,758,276
Accumulated undistributed net investment income . 10,104 58,483
Accumulated net realized gains from
security transactions .......................... 2,795,033 1,508,798
Net unrealized appreciation on investments ...... 18,182,920 17,704,189
------------ ------------
Net assets ........................................ $ 57,333,853 $ 65,029,746
============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par
value)........................................... 2,040,298 3,395,345
============ ============
Net asset value, offering price and redemption
price per share (Note 1)......................... $ 28.10 $ 19.15
============ ============
See accompanying notes to financial statements.
14
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
FBP FBP
VALUE BALANCED
FUND FUND
================================================================================
INVESTMENT INCOME
Interest ........................................ $ 25,881 $ 455,721
Dividends ....................................... 613,413 472,931
------------ ------------
TOTAL INVESTMENT INCOME ....................... 639,294 928,652
------------ ------------
EXPENSES
Investment advisory fees (Note 3) ............... 202,564 220,540
Administration fees (Note 3) .................... 38,591 40,925
Professional fees ............................... 7,270 7,872
Postage and supplies ............................ 8,102 5,432
Trustees' fees and expenses ..................... 5,413 5,413
Registration fees ............................... 6,404 3,788
Custodian fees .................................. 6,140 5,025
Compliance service fees (Note 3) ................ 4,526 4,653
Printing of shareholder reports ................. 3,405 2,048
Insurance expense ............................... 2,132 2,217
Pricing costs ................................... 714 2,343
Other expenses .................................. 7,129 8,543
------------ ------------
TOTAL EXPENSES ................................ 292,390 308,799
------------ ------------
NET INVESTMENT INCOME ............................. 346,904 619,853
------------ ------------
REALIZED AND UNREALIZED GAINS
ON INVESTMENTS
Net realized gains on security transactions ..... 2,635,053 1,420,863
Net realized gains on option contracts written .. 159,646 99,614
Net change in unrealized appreciation/
depreciation on investments .................... 412,786 1,070,965
------------ ------------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS .................................. 3,207,485 2,591,442
------------ ------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ................................. $ 3,554,389 $ 3,211,295
============ ============
See accompanying notes to financial statements.
15
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================================
FBP FBP
VALUE FUND BALANCED FUND
-----------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
2006 MARCH 31, 2006 MARCH 31,
(UNAUDITED) 2006 (UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income.................... $ 346,904 $ 696,545 $ 619,853 $ 1,065,036
Net realized gains on:
Security transactions.................. 2,635,053 4,111,677 1,420,863 2,973,321
Option contracts written............... 159,646 28,430 99,614 18,671
Net change in unrealized appreciation/
depreciation on investments............ 412,786 1,875,071 1,070,965 1,102,573
----------- ----------- ----------- -----------
Net increase in net assets
from operations.......................... 3,554,389 6,711,723 3,211,295 5,159,601
----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS
From net investment income............... ( 345,236) ( 699,731) ( 636,095) ( 1,054,135)
From realized capital gains on
security transactions.................. -- ( 3,930,094) -- ( 2,978,247)
----------- ----------- ----------- -----------
Net decrease in net assets from
distributions to shareholders............ ( 345,236) ( 4,629,825) ( 636,095) ( 4,032,382)
----------- ----------- ----------- -----------
FROM CAPITAL
SHARE TRANSACTIONS
Proceeds from shares sold................ 3,466,994 5,846,188 1,143,327 3,742,137
Net asset value of shares issued in
reinvestment of distributions
to shareholders........................ 331,955 4,481,385 563,270 3,703,976
Payments for shares redeemed............. ( 9,285,067) (14,011,089) ( 2,032,597) ( 7,259,209)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
from capital share transactions.......... ( 5,486,118) ( 3,683,516) ( 326,000) 186,904
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS............................ ( 2,276,965) ( 1,601,618) 2,249,200 1,314,123
NET ASSETS
Beginning of period...................... 59,610,818 61,212,436 62,780,546 61,466,423
----------- ----------- ----------- -----------
End of period............................ $57,333,853 $59,610,818 $65,029,746 $62,780,546
=========== =========== =========== ===========
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME.................... $ 10,104 $ 8,436 $ 58,483 $ 62,655
=========== =========== =========== ===========
CAPITAL SHARE ACTIVITY
Sold..................................... 131,975 220,216 62,050 202,061
Reinvested............................... 12,240 170,458 30,165 202,709
Redeemed................................. ( 345,312) ( 528,043) ( 109,826) ( 395,037)
----------- ----------- ----------- -----------
Net increase (decrease) in
shares outstanding..................... ( 201,097) ( 137,369) (17,611) 9,733
Shares outstanding at beginning
of period.............................. 2,241,395 2,378,764 3,412,956 3,403,223
----------- ----------- ----------- -----------
Shares outstanding at end of period....... 2,040,298 2,241,395 3,395,345 3,412,956
=========== =========== =========== ===========
See accompanying notes to financial statements.
16
FBP VALUE FUND
FINANCIAL HIGHLIGHTS
===============================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
===============================================================================================================
SIX MONTHS
ENDED YEARS ENDED MARCH 31,
SEPT. 30, 2006 ----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period.... $ 26.60 $ 25.73 $ 24.86 $ 17.12 $ 23.59 $ 21.78
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income................... 0.17 0.32 0.29 0.22 0.20 0.18
Net realized and unrealized gains
(losses) on investments............... 1.50 2.70 0.86 7.74 ( 6.47) 1.81
-------- -------- -------- -------- -------- --------
Total from investment operations.......... 1.67 3.02 1.15 7.96 ( 6.27) 1.99
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income.... ( 0.17) ( 0.32) ( 0.28) ( 0.22) ( 0.20) ( 0.18)
Distributions from net realized gains... -- ( 1.83) -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions....................... ( 0.17) ( 2.15) ( 0.28) ( 0.22) 0.20) ( 0.18)
-------- -------- -------- -------- -------- --------
Net asset value at end of period.......... $ 28.10 $ 26.60 $ 25.73 $ 24.86 $ 17.12 $ 23.59
======== ======== ======== ======== ======== ========
Total return(a)........................... 6.28%(b) 12.03% 4.65% 46.60% ( 26.61%) 9.19%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's)....... $ 57,334 $ 59,611 $ 61,212 $ 50,400 $ 48,552 $ 62,657
======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets... 1.01%(c) 1.01% 1.00% 1.02% 1.00% 0.97%
Ratio of net investment income to
average net assets...................... 1.20%(c) 1.17% 1.17% 0.94% 1.06% 0.80%
Portfolio turnover rate................... 15%(c) 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.
(b) Not annualized.
(c) Annualized.
See accompanying notes to financial statements.
17
FBP BALANCED FUND
FINANCIAL HIGHLIGHTS
===============================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
===============================================================================================================
SIX MONTHS
ENDED YEARS ENDED MARCH 31,
SEPT. 30, 2006 ----------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period.... $ 18.39 $ 18.06 $ 18.40 $ 14.46 $ 17.68 $ 17.26
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income................... 0.18 0.33 0.29 0.29 0.36 0.39
Net realized and unrealized gains
(losses) on investments............... 0.77 1.22 0.28 4.49 ( 3.21) 0.92
-------- -------- -------- -------- -------- --------
Total from investment operations.......... 0.95 1.55 0.57 4.78 ( 2.85) 1.31
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ... ( 0.19) ( 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....................... ( 0.19) ( 1.22) ( 0.91) ( 0.84) ( 0.37) ( 0.89)
-------- -------- -------- -------- -------- --------
Net asset value at end of period.......... $ 19.15 $ 18.39 $ 18.06 $ 18.40 $ 14.46 $ 17.68
======== ======== ======== ======== ======== ========
Total return(a)........................... 5.18%(b) 8.81% 3.20% 33.19% ( 16.16%) 7.73%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's)....... $ 65,030 $ 62,781 $ 61,466 $ 58,290 $ 44,333 $ 52,809
======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets... 0.98%(c) 0.99% 0.96% 0.98% 1.00% 0.98%
Ratio of net investment income to
average net assets...................... 1.97%(c) 1.75% 1.62% 1.68% 2.31% 2.20%(d)
Portfolio turnover rate................... 12%(c) 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) Not annualized.
(c) Annualized.
(d) 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
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
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 periods ended September 30,
2006 and March 31, 2006 are as follows:
- --------------------------------------------------------------------------------
Period Ordinary Long-Term Total
Ended Income Capital Gains Distributions
- --------------------------------------------------------------------------------
FBP Value Fund.............. 9/30/06 $ 345,236 $ -- $ 345,236
3/31/06 $ 840,818 $ 3,789,007 $ 4,629,825
- --------------------------------------------------------------------------------
FBP Balanced Fund........... 9/30/06 $ 636,095 $ -- $ 636,095
3/31/06 $ 1,095,937 $ 2,936,445 $ 4,032,382
- --------------------------------------------------------------------------------
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
September 30, 2006:
- --------------------------------------------------------------------------------
FBP FBP
VALUE FUND BALANCED FUND
Cost of portfolio investments and written options. $ 39,136,079 $ 47,061,472
============= =============
Gross unrealized appreciation .................... $ 18,783,956 $ 18,161,115
Gross unrealized depreciation .................... ( 601,036) ( 404,239)
------------- -------------
Net unrealized appreciation ...................... 18,182,920 17,756,876
Undistributed ordinary income .................... 120,678 105,551
Undistributed long-term gains .................... 2,690,849 1,451,049
Other temporary differences ...................... ( 6,390) ( 42,006)
------------- -------------
Total distributable earnings ..................... $ 20,988,057 $ 19,271,470
============= =============
- --------------------------------------------------------------------------------
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.
For the six months ended September 30, 2006, the FBP Balanced Fund reclassified
$12,070 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 six months ended September 30, 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 $4,196,026 and
$9,795,406 respectively, for the FBP Value Fund and $3,757,720 and $4,186,220
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.
Until August 2006, the Adviser was reimbursed for the estimated costs of
providing a Chief Compliance Officer (CCO) for the Funds. The Adviser received
aggregate fees of $6,000 for providing CCO services during the period ended
September 30, 2006.
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 is compensated by the Adviser (not the Funds) for acting
as principal underwriter.
COMPLIANCE CONSULTING AGREEMENT
Effective August 7, 2006, under the terms of a Compliance Consulting Agreement
between the Trust and Ultimus, Ultimus provides an individual to serve as the
Trust's Chief Compliance Officer and to administer the Trust's compliance
policies and procedures. For these services, the Funds pay Ultimus an annual
base fee of $16,800 plus an asset-based fee equal to 0.01% per annum on total
net assets in excess of $100 million. During the period ended September 30,
2006, the Funds paid aggregate fees of $3,179 to Ultimus for compliance
consulting services.
21
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. COVERED CALL OPTIONS
A summary of covered call option contracts during the six months ended September
30, 2006 is as follows:
- --------------------------------------------------------------------------------------------
FBP FBP
VALUE FUND BALANCED FUND
-----------------------------------------------
OPTION OPTION OPTION OPTION
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- --------------------------------------------------------------------------------------------
Options outstanding at beginning of period.. 305 $ 191,981 190 $ 120,405
Options written ............................ 425 157,556 291 107,755
Options exercised .......................... ( 60) ( 41,219) ( 40) ( 27,479)
Options expired ............................ ( 165) ( 96,559) ( 90) ( 52,568)
Options cancelled in a closing
purchase transaction ...................... ( 140) ( 72,623) ( 105) ( 54,172)
------- --------- ------- ---------
Options outstanding at end of period ....... 365 $ 139,136 246 $ 93,941
======= ========= ======= =========
- --------------------------------------------------------------------------------------------
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.
6. ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 (FIN 48) "Accounting for Uncertainty in Income Taxes". FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken in the course of preparing the Funds' tax
returns to determine whether the tax positions are "more-likely-than-not" of
being sustained by the applicable tax authority. Tax benefits of positions not
deemed to meet the more-likely-than-not threshold would be booked as a tax
expense in the current year and recognized as: a liability for unrecognized tax
benefits; a reduction of an income tax refund receivable; a reduction of
deferred tax asset; an increase in deferred tax liability; or a combination
thereof. Adoption of FIN 48 is required for fiscal years beginning after
December 15, 2006. At this time, management is evaluating the implications of
FIN 48 and its impact on the financial statements has not yet been determined.
22
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
April 1, 2006 Sept. 30, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,062.80 $5.22
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.00 $5.11
- --------------------------------------------------------------------------------
* Expenses are equal to the FBP Value Fund's annualized expense ratio of
1.01% for the period, multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period).
FBP BALANCED FUND
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2006 Sept. 30, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,051.80 $5.04
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.16 $4.96
- --------------------------------------------------------------------------------
* Expenses are equal to the FBP Balanced Fund's annualized expense ratio of
.98% for the period, multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period).
23
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.
24
This page intentionally left blank.
- --------------------------------------------------------------------------------
THE
FLIPPIN, BRUCE & PORTER
FUNDS
-----------------------
INVESTMENT ADVISER
Flippin, Bruce & Porter, Inc.
800 Main Street, Second Floor
P.O. Box 6138
Lynchburg, Virginia 24505
TOLL-FREE 1-800-327-9375
WWW.FBPINC.COM
ADMINISTRATOR
Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
TOLL-FREE 1-866-738-1127
CUSTODIAN
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
One Post Office Square
Boston, Massachusetts 02109
OFFICERS
John T. Bruce, President
and Portfolio Manager
John M. Flippin, Vice President
R. Gregory Porter, III,
Vice President
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
- --------------------------------------------------------------------------------
================================================================================
THE
GOVERNMENT STREET
FUNDS
NO-LOAD MUTUAL FUNDS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 2006
(Unaudited)
================================================================================
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
================================================================================
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX
[GRAPHIC OMITTED]
(% OF NET ASSETS)
THE
GOVERNMENT STREET S&P 500
EQUITY FUND INDEX
-------------------------------------
Consumer Discretionary 7.3% 10.1%
Consumer Staples 7.4% 9.6%
Energy 13.3% 9.4%
Financials 18.6% 22.2%
Health Care 14.8% 12.7%
Industrials 12.4% 10.9%
Information Technology 9.7% 15.3%
Materials 4.3% 2.9%
Telecommunication Services 0.2% 3.5%
Utilities 2.5% 3.4%
Exchange-Traded Funds 7.1% 0.0%
Cash Equivalents 2.4% 0.0%
TOP TEN HOLDINGS
SECURITY DESCRIPTION % OF NET ASSETS
----------------------------------------------------------------------
Bank of America Corporation 3.8%
Rydex S&P Equal Weight ETF 3.4%
UnitedHealth Group, Inc. 3.2%
iShares MSCI EAFE Index Fund 3.1%
Altria Group, Inc. 2.9%
U.S. Bancorp 2.6%
ConocoPhillips 2.6%
WellPoint, Inc. 2.5%
American Express Company 2.4%
Duke Energy Corporation 2.3%
1
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
INDUSTRY CONCENTRATION VS. THE S&P MIDCAP 400 INDEX
[GRAPHIC OMITTED]
(% OF NET ASSETS)
THE
GOVERNMENT STREET S&P MIDCAP
MID-CAP FUND 400 INDEX
-------------------------------------
Consumer Discretionary 5.9% 15.0%
Consumer Staples 4.1% 2.0%
Energy 10.1% 8.1%
Financials 17.0% 18.5%
Health Care 14.5% 10.9%
Industrials 14.7% 15.5%
Information Technology 14.4% 15.9%
Materials 6.3% 5.1%
Telecommunication Services 0.9% 0.5%
Utilities 6.0% 8.4%
Cash Equivalents 6.1% 0.0%
TOP TEN HOLDINGS
SECURITY DESCRIPTION % OF NET ASSETS
----------------------------------------------------------------------
Valero Energy Corporation 1.9%
Covance, Inc. 1.8%
Gilead Sciences, Inc. 1.7%
SanDisk Corporation 1.3%
Coventry Health Care, Inc. 1.3%
AmerUs Group Company 1.3%
Berkley (W.R.) Corporation 1.1%
Equitable Resources, Inc. 1.1%
Cullen/Frost Bankers, Inc. 1.0%
FMC Technologies, Inc. 1.0%
2
THE GOVERNMENT STREET BOND FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION VS. THE LEHMAN INTERMEDIATE
GOVERNMENT/CREDIT BOND INDEX
[GRAPHIC OMITTED]
(% OF NET ASSETS)
THE
GOVERNMENT STREET LEHMAN GOVERNMENT/CORPORATE
BOND FUND INTERMEDIATE BOND INDEX
-----------------------------------------------
U.S. Treasury Obligations 0.3% 41.1%
U.S. Agency Obligations 37.2% 21.7%
Coporate Bonds 34.1% 37.2%
Mortgage-Backed Securities 24.9% 0.0%
Cash Equivalents 3.5% 0.0%
DISTRIBUTION BY MATURITY
- -----------------------------------------------
MATURITY % HOLDINGS
-------- ----------
Under 1 year 13.1%
1-3 Years 23.6%
3-5 Years 32.0%
5-7 Years 27.9%
7-10 Years 3.4%
DISTRIBUTION BY RATING
- -----------------------------------------------
RATING % HOLDINGS
------ ----------
Aaa 64.6%
AA 0.0%
A 32.0%
BBB 3.4%
3
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF HOLDINGS)
[GRAPHIC OMITTED]
Revenue Bonds 26.4%
General Obligation Bonds 49.6%
Pre-Refunded & Escrowed Bonds 14.7%
Cash Equivalents 9.3%
DISTRIBUTION BY RATING
- -----------------------------------------------
RATING % HOLDINGS
------ ----------
AAA 64.8%
AA 34.2%
A 1.0%
4
THE GOVERNMENT STREET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2006 (UNAUDITED)
============================================================================================================
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost ..................... $ 48,524,432 $ 25,602,364 $ 31,001,584 $ 24,968,928
============ ============ ============ ============
At value (Note 1) ....................... $ 87,927,707 $ 32,038,932 $ 30,584,496 $ 25,409,503
Cash ...................................... 2,727 -- -- --
Dividends and interest receivable ......... 93,329 19,674 346,513 289,607
Receivable for investment securities sold . -- 76,867 -- --
Receivable for capital shares sold ........ 894 745 235 --
Other assets .............................. 13,768 8,744 8,724 7,032
------------ ------------ ------------ ------------
TOTAL ASSETS ............................ 88,038,425 32,144,962 30,939,968 25,706,142
------------ ------------ ------------ ------------
LIABILITIES
Distributions payable ..................... 6,214 -- 7,393 23,524
Payable for investment securities purchased -- 314,224 -- --
Payable for capital shares redeemed ....... 76,326 -- 124,247 4,600
Accrued investment advisory fees (Note 3) . 43,218 19,504 11,339 6,435
Accrued administration fees (Note 3) ...... 8,700 4,000 1,900 3,100
Accrued compliance fees (Note 3) .......... 750 550 550 500
Other accrued expenses .................... 5,648 5,094 3,325 3,680
------------ ------------ ------------ ------------
TOTAL LIABILITIES ....................... 140,856 343,372 148,754 41,839
------------ ------------ ------------ ------------
NET ASSETS ................................ $ 87,897,569 $ 31,801,590 $ 30,791,214 $ 25,664,303
============ ============ ============ ============
Net assets consist of:
Paid-in capital ........................... $ 42,630,699 $ 24,593,725 $ 34,223,149 $ 25,287,906
Accumulated undistributed (overdistributed)
net investment income ................... 8,411 102,896 (209,297) 11,704
Accumulated net realized gains (losses)
from security transactions .............. 5,855,184 668,401 (2,805,550) (75,882)
Net unrealized appreciation (depreciation)
on investments .......................... 39,403,275 6,436,568 (417,088) 440,575
------------ ------------ ------------ ------------
Net assets ................................ $ 87,897,569 $ 31,801,590 $ 30,791,214 $ 25,664,303
============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ........................... 1,792,993 2,529,080 1,557,165 2,461,463
============ ============ ============ ============
Net asset value, offering price and
redemption price per share (Note 1) ..... $ 49.02 $ 12.57 $ 19.77 $ 10.43
============ ============ ============ ============
See accompanying notes to financial statements.
5
THE GOVERNMENT STREET FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)
============================================================================================================
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ................................ $ 29,005 $ 23,451 $ 733,181 $ 482,354
Dividends ............................... 763,084 172,222 23 38,808
------------ ------------ ------------ ------------
TOTAL INVESTMENT INCOME ............... 792,089 195,673 733,204 521,162
------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 3) ....... 282,351 126,001 79,572 44,686
Administration fees (Note 3) ............ 56,441 24,616 11,886 19,079
Professional fees ....................... 7,871 6,720 7,271 6,171
Trustees' fees and expenses ............. 5,413 5,413 5,413 5,413
Custodian fees .......................... 10,445 4,309 4,176 2,457
Compliance fees (Note 3) ................ 4,749 2,258 2,615 1,905
Postage and supplies .................... 4,027 2,256 2,821 2,104
Pricing costs ........................... 1,224 2,454 2,684 4,094
Printing of shareholder reports ......... 3,681 1,654 1,652 1,397
Registration fees ....................... 2,625 2,136 1,819 1,459
Insurance expense ....................... 3,574 1,477 1,440 1,104
Account maintenance fees ................ 3,085 2,830 885 490
Other expenses .......................... 3,465 2,678 1,932 1,932
------------ ------------ ------------ ------------
TOTAL EXPENSES ........................ 388,951 184,802 124,166 92,291
Fees waived by the Adviser (Note 3) ..... -- -- (11,175) (9,303)
------------ ------------ ------------ ------------
NET EXPENSES .......................... 388,951 184,802 112,991 82,988
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ..................... 403,138 10,871 620,213 438,174
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses) from
security transactions ................. 5,853,568 659,054 (277,960) 13,785
Net change in unrealized appreciation/
depreciation on investments ........... (7,366,860) (2,836,854) 569,808 61,143
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS ........... (1,513,292) (2,177,800) 291,848 74,928
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS .............. $ (1,110,154) $ (2,166,929) $ 912,061 $ 513,102
============ ============ ============ ============
See accompanying notes to financial statements.
6
THE GOVERNMENT STREET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
============================================================================================================
GOVERNMENT STREET GOVERNMENT STREET
EQUITY FUND MID-CAP FUND
--------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
2006 MARCH 31, 2006 MARCH 31,
(UNAUDITED) 2006 (UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 403,138 $ 1,280,429 $ 10,871 $ 145,958
Net realized gains from
security transactions ................. 5,853,568 7,070,087 659,054 1,116,759
Net change in unrealized appreciation/
depreciation on investments ........... (7,366,860) 7,628,352 (2,836,854) 6,448,351
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
from operations ......................... (1,110,154) 15,978,868 (2,166,929) 7,711,068
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .............. (398,295) (1,289,147) -- (64,987)
From realized capital gains
on security transactions .............. (5,412,040) -- (893,423) --
------------ ------------ ------------ ------------
Net decrease in net assets from
distributions to shareholders ........... (5,810,335) (1,289,147) (893,423) (64,987)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 2,829,394 7,008,051 2,011,619 10,696,669
Net asset value of shares issued in
reinvestment of distributions
to shareholders ....................... 5,645,640 1,259,283 891,793 62,706
Payments for shares redeemed ............ (20,899,824) (48,635,746) (5,660,220) (12,812,121)
------------ ------------ ------------ ------------
Net decrease in net assets from
capital share transactions .............. (12,424,790) (40,368,412) (2,756,808) (2,052,746)
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ........................... (19,345,279) (25,678,691) (5,817,160) 5,593,335
NET ASSETS
Beginning of period ..................... 107,242,848 132,921,539 37,618,750 32,025,415
------------ ------------ ------------ ------------
End of period ........................... $ 87,897,569 $107,242,848 $ 31,801,590 $ 37,618,750
============ ============ ============ ============
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME ....................... $ 8,411 $ 3,568 $ 102,896 $ 92,025
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................... 58,615 142,558 154,523 869,617
Reinvested .............................. 113,927 25,262 67,356 4,914
Redeemed ................................ (425,434) (943,681) (437,258) (963,680)
------------ ------------ ------------ ------------
Net decrease in shares outstanding ...... (252,892) (775,861) (215,379) (89,149)
Shares outstanding, beginning of period . 2,045,885 2,821,746 2,744,459 2,833,608
------------ ------------ ------------ ------------
Shares outstanding, end of period ....... 1,792,993 2,045,885 2,529,080 2,744,459
============ ============ ============ ============
See accompanying notes to financial statements.
7
THE GOVERNMENT STREET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
============================================================================================================
GOVERNMENT STREET ALABAMA TAX FREE
BOND FUND BOND FUND
--------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
2006 MARCH 31, 2006 MARCH 31,
(UNAUDITED) 2006 (UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 620,213 $ 2,189,049 $ 438,174 $ 1,041,473
Net realized gains (losses) from
security transactions ................. (277,960) 88,201 13,785 (1,406)
Net change in unrealized appreciation/
depreciation on investments ........... 1,059,212 (1,219,754) 61,143 (443,003)
------------ ------------ ------------ ------------
Net increase in net assets
from operations ......................... 912,061 1,057,496 513,102 597,064
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDER
From and/or in excess of net
investment income ..................... (746,681) (2,795,083) (436,270) (1,031,750)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 774,678 6,594,193 1,014,605 2,730,197
Net asset value of shares issued in
reinvestment of distributions
to shareholders ....................... 696,161 2,668,658 282,462 748,246
Payments for shares redeemed ............ (7,079,687) (31,209,270) (1,891,387) (11,386,673)
------------ ------------ ------------ ------------
Net decrease in net assets from
capital share transactions .............. (5,608,848) (21,946,419) (594,320) (7,908,230)
------------ ------------ ------------ ------------
TOTAL DECREASE IN NET ASSETS .............. (5,443,468) (23,684,006) (517,488) (8,342,916)
NET ASSETS
Beginning of period ..................... 36,234,682 59,918,688 26,181,791 34,524,707
------------ ------------ ------------ ------------
End of period ........................... $ 30,791,214 $ 36,234,682 $ 25,664,303 $ 26,181,791
============ ============ ============ ============
ACCUMULATED UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME ....................... $ (209,297) $ (703,627) $ 11,704 $ 10,659
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................... 39,462 326,991 97,767 259,561
Reinvested .............................. 35,447 133,172 27,190 71,117
Redeemed ................................ (360,283) (1,570,726) (182,142) (1,085,020)
------------ ------------ ------------ ------------
Net decrease in shares outstanding ...... (285,374) (1,110,563) (57,185) (754,342)
Shares outstanding, beginning of period . 1,842,539 2,953,102 2,518,648 3,272,990
------------ ------------ ------------ ------------
Shares outstanding, end of period ....... 1,557,165 1,842,539 2,461,463 2,518,648
============ ============ ============ ============
See accompanying notes to financial statements.
8
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
=================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ---------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2006 ---------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 52.42 $ 47.11 $ 46.10 $ 34.13 $ 45.55 $ 45.14
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.22 0.50 0.50 0.32 0.28 0.21
Net realized and unrealized
gains (losses) on investments ....... (0.73) 5.31 1.01 11.97 (11.42) 0.41
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations ........ (0.51) 5.81 1.51 12.29 (11.14) 0.62
----------- ----------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income .. (0.22) (0.50) (0.50) (0.32) (0.28) (0.21)
Distributions from net realized gains . (2.67) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions ..................... (2.89) (0.50) (0.50) (0.32) (0.28) (0.21)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period ........ $ 49.02 $ 52.42 $ 47.11 $ 46.10 $ 34.13 $ 45.55
=========== =========== =========== =========== =========== ===========
Total return(a) ......................... (1.02%)(b) 12.39% 3.27% 36.09% (24.47%) 1.38%
=========== =========== =========== =========== =========== ===========
Net assets at end of period (000's) ..... $ 87,898 $ 107,243 $ 132,922 $ 129,719 $ 87,837 $ 105,701
=========== =========== =========== =========== =========== ===========
Ratio of expenses to average net assets . 0.83%(c) 0.78% 0.76% 0.79% 0.81% 0.80%
Ratio of net investment income
to average net assets ................. 0.86%(c) 0.95% 1.08% 0.77% 0.76% 0.47%
Portfolio turnover rate ................. 18%(c) 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.
(b) Not annualized.
(c) Annualized.
See accompanying notes to financial statements.
9
THE GOVERNMENT STREET MID-CAP FUND
FINANCIAL HIGHLIGHTS
===========================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -----------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR PERIOD
SEPTEMBER 30, ENDED ENDED ENDED
2006 MARCH 31, MARCH 31, MARCH 31,
(UNAUDITED) 2006 2005 2004(a)
- -----------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 13.71 $ 11.30 $ 10.33 $ 10.00
----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.01 0.05 0.01 0.01
Net realized and unrealized
gains (losses) on investments ....... (0.82) 2.38 0.97 0.68
----------- ----------- ----------- -----------
Total from investment operations ........ (0.81) 2.43 0.98 0.69
----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income .. -- (0.02) (0.01) (0.01)
Distributions from net realized gains . (0.33) -- (0.00)(b) (0.35)
----------- ----------- ----------- -----------
Total distributions ..................... (0.33) (0.02) (0.01) (0.36)
----------- ----------- ----------- -----------
Net asset value at end of period ........ $ 12.57 $ 13.71 $ 11.30 $ 10.33
=========== =========== =========== ===========
Total return(c) ......................... (6.04%)(d) 21.51% 9.47% 6.83%(d)
=========== =========== =========== ===========
Net assets at end of period (000's) ..... $ 31,802 $ 37,619 $ 32,025 $ 19,227
=========== =========== =========== ===========
Ratio of net expenses to
average net assets(e) ................. 1.10%(f) 1.10% 1.10% 1.09%(f)
Ratio of net investment income
to average net assets ................. 0.06%(f) 0.37% 0.14% 0.11%(f)
Portfolio turnover rate ................. 5%(f) 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.
10
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2006 ----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(a)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 19.67 $ 20.29 $ 21.24 $ 21.55 $ 20.75 $ 20.90
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.32 0.77(b) 0.71 0.81 0.99 1.07
Net realized and unrealized
gains (losses) on investments ....... 0.25 (0.41) (0.71) (0.11) 0.92 (0.06)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations ........ 0.57 0.36 0.00 0.70 1.91 1.01
----------- ----------- ----------- ----------- ----------- -----------
Dividends from and/or in excess of
net investment income ................. (0.47) (0.98) (0.95) (1.01) (1.11) (1.16)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period ........ $ 19.77 $ 19.67 $ 20.29 $ 21.24 $ 21.55 $ 20.75
=========== =========== =========== =========== =========== ===========
Total return(c) ......................... 2.94%(d) 1.80% 0.04% 3.34% 9.36% 4.88%
=========== =========== =========== =========== =========== ===========
Net assets at end of period (000's) ..... $ 30,791 $ 36,235 $ 59,919 $ 64,005 $ 58,665 $ 53,688
=========== =========== =========== =========== =========== ===========
Ratio of net expenses
to average net assets(e) .............. 0.71%(f) 0.71% 0.71% 0.70% 0.71% 0.70%
Ratio of net investment income
to average net assets ................. 3.90%(f) 3.75% 3.44% 3.65% 4.62% 5.06%
Portfolio turnover rate ................. 34%(f) 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) Not annualized.
(e) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 0.78%(f) for the
six months ended September 30, 2006 and 0.74% for the year ended March 31,
2006 (Note 3).
(f) Annualized.
See accompanying notes to financial statements.
11
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
2006 ----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(a)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 10.40 $ 10.55 $ 10.90 $ 10.89 $ 10.40 $ 10.55
----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................. 0.18 0.34 0.35 0.35 0.40 0.42
Net realized and unrealized
gains (losses) on investments ....... 0.03 (0.15) (0.36) 0.01 0.49 (0.15)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations ........ 0.21 0.19 (0.01) 0.36 0.89 0.27
----------- ----------- ----------- ----------- ----------- -----------
Dividends from net investment income .... (0.18) (0.34) (0.34) (0.35) (0.40) (0.42)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value at end of period ........ $ 10.43 $ 10.40 $ 10.55 $ 10.90 $ 10.89 $ 10.40
=========== =========== =========== =========== =========== ===========
Total return(b) ......................... 2.02%(c) 1.80% (0.06%) 3.40% 8.67% 2.61%
=========== =========== =========== =========== =========== ===========
Net assets at end of period (000's) ..... $ 25,664 $ 26,182 $ 34,525 $ 38,702 $ 34,729 $ 31,603
=========== =========== =========== =========== =========== ===========
Ratio of net expenses to
average net assets(d) ................. 0.65%(e) 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of net investment income
to average net assets ................. 3.42%(e) 3.25% 3.21% 3.26% 3.74% 4.02%
Portfolio turnover rate ................. 12%(e) 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) Not annualized.
(d) Absent investment advisory fees voluntarily waived by the Adviser, the
ratios of expenses to average net assets would have been 0.72%(e) for the
six months ended September 30, 2006 and 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).
(e) Annualized.
See accompanying notes to financial statements.
12
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 90.5% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 7.3%
10,000 Harrah's Entertainment, Inc. ................... $ 664,300
50,000 Home Depot, Inc. ............................... 1,813,500
4,000 J.C. Penney Company, Inc. ...................... 273,560
10,000 Johnson Controls, Inc. ......................... 717,400
5,500 NIKE, Inc. - Class B ........................... 481,910
26,000 Starbucks Corporation(a) ....................... 885,300
50,000 Walt Disney Company (The) ...................... 1,545,500
------------
6,381,470
------------
CONSUMER STAPLES -- 7.4%
33,000 Altria Group, Inc. ............................. 2,526,150
15,000 PepsiCo, Inc. .................................. 978,900
30,000 Procter & Gamble Company (The) ................. 1,859,400
25,000 Walgreen Company ............................... 1,109,750
------------
6,474,200
------------
ENERGY -- 13.3%
23,314 Apache Corporation ............................. 1,473,445
15,000 Baker Hughes, Inc. ............................. 1,023,000
20,000 BP plc - ADR ................................... 1,311,600
26,000 Chevron Corporation ............................ 1,686,360
39,000 ConocoPhillips ................................. 2,321,670
26,300 Exxon Mobil Corporation ........................ 1,764,730
476 Hugoton Royalty Trust .......................... 12,542
10,000 Transocean, Inc.(a) ............................ 732,300
20,000 Valero Energy Corporation ...................... 1,029,400
8,000 XTO Energy, Inc. ............................... 337,040
------------
11,692,087
------------
FINANCIALS -- 18.6%
37,080 Aegon N.V. - ARS ............................... 695,992
30,000 AFLAC, Inc. .................................... 1,372,800
37,000 American Express Company ....................... 2,074,960
62,870 Bank of America Corporation .................... 3,367,946
10,000 Charles Schwab Corporation ..................... 179,000
27,200 Colonial Properties Trust ...................... 1,300,432
35,000 Citigroup, Inc. ................................ 1,738,450
7,000 Goldman Sachs Group, Inc. (The) ................ 1,184,190
18,000 Plum Creek Timber Company, Inc. ................ 612,720
40,000 Progressive Corporation ........................ 981,600
15,000 Rayonier, Inc. ................................. 567,000
70,000 U.S. Bancorp ................................... 2,325,400
------------
16,400,490
------------
HEALTH CARE -- 14.8%
16,000 Amgen, Inc.(a) ................................. 1,144,480
17,000 Becton, Dickinson & Company .................... 1,201,390
27,000 Cardinal Health, Inc. .......................... 1,774,980
10,000 Caremark Rx, Inc. .............................. 566,700
4,000 Cerner Corporation(a) .......................... 181,600
13
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 90.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 14.8% (CONTINUED)
28,000 Elan Corporation(a) ............................ $ 430,640
5,000 Fresenius Medical Care AG & Company - ADR ...... 216,100
20,000 Johnson & Johnson .............................. 1,298,800
10,000 Techne Corporation(a) .......................... 508,600
57,000 UnitedHealth Group, Inc. ....................... 2,804,400
16,000 Waters Corporation(a) .......................... 724,480
28,000 WellPoint, Inc.(a) ............................. 2,157,400
------------
13,009,570
------------
INDUSTRIALS -- 12.4%
26,000 Caterpillar, Inc. .............................. 1,710,800
2,500 ChoicePoint, Inc.(a) ........................... 89,500
2,500 C.H. Robinson Worldwide, Inc. .................. 111,450
15,000 Emerson Electric Company ....................... 1,257,900
15,000 Fedex Corporation .............................. 1,630,200
26,000 General Dynamics Corporation ................... 1,863,420
25,000 General Electric Company ....................... 882,500
13,000 Illinois Tool Works, Inc. ...................... 583,700
16,000 Ingersoll-Rand Company Ltd. - Class A .......... 607,680
10,000 Norfolk Southern Corporation ................... 440,500
32,000 Quanta Services, Inc.(a) ....................... 539,520
2,500 Stericycle, Inc.(a) ............................ 174,475
16,000 United Technologies Corporation ................ 1,013,600
------------
10,905,245
------------
INFORMATION TECHNOLOGY -- 9.7%
49,000 Adobe Systems, Inc.(a) ......................... 1,835,050
20,000 Automatic Data Processing, Inc. ................ 946,800
67,000 Cisco Systems, Inc.(a) ......................... 1,541,000
30,000 Corning, Inc.(a) ............................... 732,300
32,000 Hewlett-Packard Company ........................ 1,174,080
25,100 Intel Corporation .............................. 516,307
18,000 Network Appliance, Inc.(a) ..................... 666,180
33,000 Texas Instruments, Inc. ........................ 1,097,250
------------
8,508,967
------------
MATERIALS -- 4.3%
14,000 Alcoa, Inc. .................................... 392,560
30,000 Florida Rock Industries, Inc. .................. 1,161,300
10,000 Inco Ltd. ...................................... 762,700
2,500 Joy Global, Inc. ............................... 94,025
10,000 Newmont Mining Corporation ..................... 427,500
10,000 Nucor Corporation .............................. 494,900
7,000 POSCO - ADR .................................... 454,510
------------
3,787,495
------------
TELECOMMUNICATION SERVICES -- 0.2%
6,000 AT&T, Inc. ..................................... 195,360
------------
14
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 90.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
UTILITIES -- 2.5%
65,980 Duke Energy Corporation ........................ $ 1,992,596
5,000 Wisconsin Energy Corporation ................... 215,700
------------
2,208,296
------------
TOTAL COMMON STOCKS (Cost $40,318,048) ......... $ 79,563,180
------------
================================================================================
SHARES EXCHANGE-TRADED FUNDS -- 7.1% VALUE
- --------------------------------------------------------------------------------
40,500 iShares MSCI EAFE Index Fund ................... $ 2,742,660
67,000 Rydex S&P Equal Weight ETF ..................... 2,976,140
9,000 Vanguard Financials VIPERs ..................... 553,500
------------
TOTAL EXCHANGE-TRADED FUNDS (Cost $6,114,157) .. $ 6,272,300
------------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 2.4% VALUE
- --------------------------------------------------------------------------------
$ 2,091,000 U.S. Bancorp N.A., discount, due 10/02/2006
(Cost $2,090,700) ............................ $ 2,090,700
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
1,527 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $1,527) .......................... $ 1,527
------------
TOTAL INVESTMENTS AT VALUE -- 100.0%
(Cost $48,524,432) ........................... $ 87,927,707
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.0%). (30,138)
------------
NET ASSETS -- 100.0% ........................... $ 87,897,569
============
(a) Non-income producing security.
ADR - American Depositary Receipt
ARS - American Registered Shares
See accompanying notes to financial statements.
15
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 93.9% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 5.9%
1,000 AnnTaylor Stores Corporation(a) ................ $ 41,860
6,500 Barnes & Noble, Inc. ........................... 246,610
5,700 BJ's Wholesale Club, Inc.(a) ................... 166,326
2,000 Bob Evans Farms, Inc. .......................... 60,560
1,700 CBRL Group, Inc. ............................... 68,731
400 GameStop Corporation - Class A(a) .............. 18,512
3,100 GameStop Corporation - Class B(a) .............. 138,601
4,500 Harrah's Entertainment, Inc. ................... 298,935
5,500 Herman Miller, Inc. ............................ 188,155
3,000 Hilton Hotels Corporation ...................... 83,550
2,000 ITT Educational Services, Inc.(a) .............. 132,600
2,000 Limited Brands, Inc. ........................... 52,980
5,000 MSC Industrial Direct Company, Inc. ............ 203,700
5,500 O'Reilly Automotive, Inc.(a) ................... 182,655
------------
1,883,775
------------
CONSUMER STAPLES -- 4.1%
5,400 Church & Dwight Company, Inc. .................. 211,194
8,600 Constellation Brands, Inc.(a) .................. 247,508
4,650 Dean Foods Company(a) .......................... 195,393
6,000 Hormel Foods Corporation ....................... 215,880
5,200 J.M. Smucker Company ........................... 249,340
8,850 PepsiAmericas, Inc. ............................ 188,859
------------
1,308,174
------------
ENERGY -- 10.1%
7,500 Arch Coal, Inc. ................................ 216,825
4,760 Cameron International Corporation(a) ........... 229,956
6,000 FMC Technologies, Inc.(a) ...................... 322,200
4,300 Lone Star Technologies, Inc.(a) ................ 208,034
5,350 Murphy Oil Corporation ......................... 254,393
2,800 Newfield Exploration Company a) ................ 107,912
2,680 Noble Corporation .............................. 172,002
4,900 Patterson-UTI Energy, Inc.(a) .................. 116,424
5,900 Peabody Energy Corporation ..................... 217,002
3,800 Pogo Producing Company ......................... 155,610
5,000 Pride International, Inc.(a) ................... 137,100
6,500 Smith International, Inc. ...................... 252,200
11,600 Valero Energy Corporation ...................... 597,052
5,150 XTO Energy, Inc. ............................... 216,969
------------
3,203,679
------------
FINANCIALS -- 17.0%
5,600 American Financial Group, Inc. ................. 262,808
5,950 AmerUs Group Company ........................... 404,659
7,300 Associated Banc-Corp ........................... 237,250
6,000 Bank of Hawaii Corporation ..................... 288,960
10,050 Berkley (W.R.) Corporation ..................... 355,670
9,000 Brown & Brown, Inc. ............................ 275,040
5,500 Compass Bancshares, Inc. ....................... 313,390
5,600 Cullen/Frost Bankers, Inc. ..................... 323,792
16
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 93.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCIALS -- 17.0% (CONTINUED)
10,250 Eaton Vance Corporation ........................ $ 295,815
2,600 Everest Re Group Ltd. .......................... 253,578
9,300 HCC Insurance Holdings, Inc. ................... 305,784
6,200 Investors Financial Services Corporation ....... 267,096
10,400 Jefferies Group, Inc. .......................... 296,400
2,900 Legg Mason, Inc. ............................... 292,494
4,600 Liberty Property Trust ......................... 219,834
2,700 Mercantile Bankshares Corporation .............. 97,929
6,941 Potlatch Corporation ........................... 257,511
7,000 Rayonier, Inc. ................................. 264,600
3,300 Westamerica Bancorporation ..................... 166,683
5,200 Wilmington Trust Corporation ................... 231,660
------------
5,410,953
------------
HEALTH CARE -- 14.5%
1,400 Alcon, Inc. .................................... 160,300
4,450 Barr Pharmaceuticals, Inc.(a) .................. 231,133
6,000 Cerner Corporation(a) .......................... 272,400
8,000 Community Health Systems, Inc.(a) .............. 298,800
8,700 Covance, Inc.(a) ............................... 577,506
8,250 Coventry Health Care, Inc.(a) .................. 425,040
5,600 DENTSPLY International, Inc. ................... 168,616
1,000 Elan Corporation plc - ADR(a) .................. 15,380
4,000 Fresenius Medical Care AG & Company - ADR ...... 172,880
7,800 Gilead Sciences, Inc.(a) ....................... 535,860
2,800 Henry Schein, Inc.(a) .......................... 140,392
3,000 Invitrogen Corporation(a) ...................... 190,230
500 Millipore Corporation(a) ....................... 30,650
8,700 Mylan Laboratories, Inc. ....................... 175,131
5,100 Omnicare, Inc. ................................. 219,759
5,400 PDL BioPharma, Inc.(a) ......................... 103,680
2,000 ResMed, Inc.(a) ................................ 80,500
4,500 Techne Corporation(a) .......................... 228,870
3,500 Triad Hospitals, Inc.(a) ....................... 154,105
4,186 UnitedHealth Group, Inc. ....................... 205,951
4,600 Varian Medical Systems, Inc.(a) ................ 245,594
------------
4,632,777
------------
INDUSTRIALS -- 14.7%
3,000 Alexander & Baldwin, Inc. ...................... 133,110
5,000 AMETEK, Inc. ................................... 217,750
5,000 ChoicePoint, Inc.(a) ........................... 179,000
6,000 C.H. Robinson Worldwide, Inc. .................. 267,480
3,000 Corporate Executive Board Company .............. 269,730
6,000 Donaldson Company, Inc. ........................ 221,400
3,600 Energizer Holdings, Inc.(a) .................... 259,164
6,000 Expeditors International of Washington, Inc. ... 267,480
7,000 Fastenal Company ............................... 269,990
2,800 Goodrich Corporation ........................... 113,456
6,000 Graco, Inc. .................................... 234,360
3,000 Jacobs Engineering Group, Inc.(a) .............. 224,190
3,000 L-3 Communications Holdings, Inc. .............. 234,990
17
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 93.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 14.7% (CONTINUED)
4,000 Manpower, Inc. ................................. $ 245,080
4,500 Overseas Shipholding Group, Inc. ............... 277,965
5,000 SPX Corporation ................................ 267,200
4,500 Stericycle, Inc.(a) ............................ 314,055
8,000 Swift Transportation Company, Inc.(a) .......... 189,760
2,750 Teleflex, Inc. ................................. 153,010
1,000 Thomas & Betts Corporation(a) .................. 47,710
9,000 Trinity Industries, Inc. ....................... 289,530
------------
4,676,410
------------
INFORMATION TECHNOLOGY -- 14.4%
8,000 Activision, Inc.(a) ............................ 120,800
8,000 Acxiom Corporation ............................. 197,280
8,500 ADC Telecommunications, Inc.(a) ................ 127,500
5,000 ADTRAN, Inc. ................................... 119,200
4,000 Advent Software, Inc.(a) ....................... 144,840
5,000 Alliance Data Systems Corporation(a) ........... 275,950
7,000 Arrow Electronics, Inc.(a) ..................... 192,010
3,500 CDW Corporation ................................ 215,880
4,500 CheckFree Corporation(a) ....................... 185,940
4,000 Cognizant Technology Solutions Corporation(a) .. 296,240
7,500 Cree, Inc.(a) .................................. 150,825
4,000 DST Systems, Inc.(a) ........................... 246,680
5,500 Harris Corporation ............................. 244,695
10,000 Integrated Device Technology, Inc.(a) .......... 160,600
9,000 Jack Henry & Associates, Inc. .................. 195,930
7,000 Lam Research Corporation(a) .................... 317,310
6,000 Macrovision Corporation(a) ..................... 142,140
5,000 Microchip Technology, Inc. ..................... 162,100
7,000 National Instruments Corporation ............... 191,380
5,000 Plantronics, Inc. .............................. 87,650
8,000 SanDisk Corporation(a) ......................... 428,320
2,000 Semtech Corporation(a) ......................... 25,520
4,500 Silicon Laboratories, Inc.(a) .................. 139,590
5,000 Xilinx, Inc. ................................... 109,750
2,500 Zebra Technologies Corporation(a) .............. 89,350
------------
4,567,480
------------
MATERIALS -- 6.3%
5,000 Airgas, Inc. ................................... 180,850
5,000 Albemarle Corporation .......................... 271,650
4,500 Cabot Corporation .............................. 167,400
5,700 Eagle Materials, Inc. .......................... 191,976
1,000 Joy Global, Inc. ............................... 37,610
3,500 Martin Marietta Materials, Inc. ................ 296,170
5,000 Scotts Miracle-Gro Company (The) - Class A ..... 222,450
6,000 Sonoco Products Company ........................ 201,840
4,500 Steel Dynamics, Inc. ........................... 227,025
8,000 Valspar Corporation (The) ...................... 212,800
------------
2,009,771
------------
18
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 93.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 0.9%
3,300 Telephone and Data Systems, Inc. ............... $ 138,930
3,300 Telephone and Data Systems, Inc. - Special
Shares ....................................... 134,805
------------
273,735
------------
UTILITIES -- 6.0%
5,400 AGL Resources, Inc. ............................ 197,100
8,300 Alliant Energy Corporation ..................... 296,559
9,700 Equitable Resources, Inc. ...................... 339,306
8,850 MDU Resources Group, Inc. ...................... 197,709
5,750 ONEOK, Inc. .................................... 217,293
7,900 Pepco Holdings, Inc. ........................... 190,943
6,300 SCANA Corporation .............................. 253,701
5,000 Wisconsin Energy Corporation ................... 215,700
------------
1,908,311
------------
TOTAL COMMON STOCKS (Cost $23,438,497) ......... $ 29,875,065
------------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 6.8% VALUE
- --------------------------------------------------------------------------------
$ 663,000 General Electric Capital, discount,
due 10/02/2006 ............................... $ 662,905
1,500,000 U.S. Bancorp N.A., discount, due 10/02/2006 .... 1,499,785
------------
TOTAL COMMERCIAL PAPER (Cost $2,162,690) ....... $ 2,162,690
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
1,177 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $1,177) .......................... $ 1,177
------------
TOTAL INVESTMENTS AT VALUE -- 100.7%
(Cost $25,602,364) ........................... $ 32,038,932
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%). (237,342)
------------
NET ASSETS -- 100.0% ........................... $ 31,801,590
============
(a) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
19
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
PAR VALUE U.S. TREASURY AND AGENCY OBLIGATIONS -- 37.5% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 0.3%
$ 100,000 5.625%, due 05/15/2008 ......................... $ 101,363
------------
FEDERAL HOME LOAN BANK -- 29.1%
500,000 Discount note, due 11/30/2006 .................. 495,853
1,000,000 5.75%, due 04/20/2010 .......................... 1,000,913
1,000,000 4.875%, due 02/15/2007 ......................... 998,338
1,500,000 5.55%, due 08/28/2008 .......................... 1,499,999
2,000,000 5.00%, due 08/16/2011 .......................... 1,972,538
2,000,000 6.00%, due 12/28/2011 .......................... 2,002,972
1,000,000 5.00%, due 06/13/2012 .......................... 983,452
------------
8,954,065
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 4.9%
1,500,000 5.35%, due 10/20/2008 .......................... 1,498,211
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 3.2%
1,000,000 7.40%, due 10/30/2014 .......................... 1,001,541
------------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(Cost $11,626,194) ........................... $ 11,555,180
------------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 24.9% VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.0%
$ 35 Pool #15032, 7.50%, due 02/15/2007 ............. $ 36
60,882 Pool #438434, 6.50%, due 01/15/2013 ............ 62,139
14,910 Pool #470177, 7.00%, due 03/15/2014 ............ 15,355
28,763 Pool #518403, 7.00%, due 09/15/2014 ............ 29,622
1,046 Pool #181540, 8.00%, due 02/15/2017 ............ 1,107
213,599 Pool #581879, 6.50%, due 03/15/2017 ............ 218,011
16,939 Pool #493659, 6.50%, due 12/15/2018 ............ 17,375
90,799 Pool #476695, 6.50%, due 10/15/2023 ............ 93,133
37,866 Pool #366710, 6.50%, due 02/15/2024 ............ 38,839
29,060 Pool #453826, 7.25%, due 09/15/2027 ............ 30,023
53,890 Pool #412360, 7.00%, due 11/15/2027 ............ 55,639
201,951 Pool #447408, 7.00%, due 01/15/2028 ............ 208,506
15,921 Pool #454162, 7.00%, due 05/15/2028 ............ 16,438
119,231 Pool #780825, 6.50%, due 07/15/2028 ............ 122,296
27,442 Pool #2617, 7.50%, due 07/20/2028 .............. 28,362
25,177 Pool #158794, 7.00%, due 09/15/2028 ............ 25,994
21,891 Pool #486760, 6.50%, due 12/15/2028 ............ 22,454
78,017 Pool #781096, 6.50%, due 12/15/2028 ............ 80,022
78,923 Pool #781136, 7.00%, due 12/15/2028 ............ 81,484
57,945 Pool #506618, 7.00%, due 03/15/2029 ............ 59,826
12,624 Pool #511562, 7.50%, due 07/15/2030 ............ 13,134
87,276 Pool #448316, 6.50% due 04/15/2031 ............. 89,519
55,499 Pool #530606, 6.50% due 04/15/2031 ............. 56,925
36,542 Pool #545820, 7.00% due 06/15/2031 ............. 37,728
211,663 Pool #781330, 6.00%, due 09/15/2031 ............ 214,259
20
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 24.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.0%
(CONTINUED)
$ 79,999 Pool #3228, 6.50%, due 04/20/2032 .............. $ 81,855
117,035 Pool #569903, 6.50%, due 06/15/2032 ............ 120,043
555,894 Pool #595934, 6.00%, due 09/15/2032 ............ 562,711
91,871 Pool #3927, 6.00%, due 11/20/2032 .............. 92,997
------------
2,475,832
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 8.8%
1,032,477 Pool #01173, 5.50%, due 06/01/2017 ............. 1,031,865
1,696,655 Pool #G18056, 5.00%, due 06/01/2020 ............ 1,667,286
------------
2,699,151
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.1%
774,886 Pool #635149, 5.50%, due 07/01/2017 ............ 774,535
1,769,250 Pool #255808, 5.00%, due 07/01/2025 ............ 1,717,527
------------
2,492,062
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $7,834,157) ............................ $ 7,667,045
------------
================================================================================
PAR VALUE CORPORATE BONDS -- 34.1% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 17.5%
American General Finance Corporation,
$ 1,500,000 4.50%, due 11/15/2007 ....................... $ 1,488,222
------------
CIT Group, Inc.,
2,000,000 4.75%, due 12/15/2010 ....................... 1,955,458
------------
JPMorgan Chase & Company,
1,000,000 4.50%, due 01/15/2012 ....................... 965,046
------------
Student Loan Marketing Association,
1,000,000 5.125%, due 08/27/2012 ...................... 985,663
------------
TOTAL FINANCE CORPORATE BONDS .................. 5,394,389
------------
INDUSTRIAL -- 16.6%
Ford Motor Company,
1,000,000 7.25%, due 10/01/2008 ....................... 997,500
------------
General Dynamics Corporation,
1,750,000 4.50%, due 08/15/2010 ....................... 1,710,954
------------
Hewlett-Packard Company,
1,500,000 5.50%, due 07/01/2007 ....................... 1,501,378
------------
Praxair, Inc.,
885,000 4.75%, due 07/15/2007 ....................... 881,292
------------
TOTAL INDUSTRIAL CORPORATE BONDS ............... 5,091,124
------------
TOTAL CORPORATE BONDS (Cost $10,664,481) ....... $ 10,485,513
------------
21
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE COMMERCIAL PAPER -- 2.8% VALUE
- --------------------------------------------------------------------------------
$ 876,000 U.S. Bancorp N.A., discount, due 10/02/2006
(Cost $875,874) .............................. $ 875,874
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
884 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $884) ............................ $ 884
------------
TOTAL INVESTMENTS AT VALUE -- 99.3%
(Cost $31,001,584) ........................... $ 30,584,496
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.7% .. 206,718
------------
NET ASSETS -- 100.0% ........................... $ 30,791,214
============
See accompanying notes to financial statements.
22
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.7% VALUE
- --------------------------------------------------------------------------------
Alabama Special Care Facilities Financing Auth.,
Birmingham, Rev.,
$ 500,000 4.50%, due 11/01/2009, ETM .................. $ 512,440
400,000 5.375%, due 11/01/2012, ETM ................. 404,556
------------
916,996
------------
Alabama Special Care Facilities Financing Auth.,
Mobile Hospital, Rev.,
250,000 4.50%, due 11/01/2010, ETM .................. 257,505
------------
Alabama State, GO,
500,000 3.00%, due 09/01/2007 ....................... 496,545
------------
Alabama State Public School & College Auth.,
Capital Improvements, Rev.,
300,000 5.00%, due 02/01/2010 ....................... 313,377
475,000 5.00%, due 11/01/2012 ....................... 494,670
600,000 5.125%, due 11/01/2013 ...................... 625,722
525,000 5.125%, due 11/01/2015 ...................... 546,861
------------
1,980,630
------------
Alabama State Public School & College Auth., Rev.,
355,000 5.00%, due 05/01/2010 ....................... 372,193
------------
Alabama Water Pollution Control Auth., Rev.,
500,000 5.00%, due 08/15/2010 ....................... 525,990
------------
Athens, AL, Electric Revenue Warrants,
500,000 3.00%, due 06/01/2011 ....................... 477,815
------------
Athens, AL, School Warrants,
335,000 5.05%, due 08/01/2015 ....................... 345,901
------------
Auburn, AL, Capital Improvements, School
Warrants, GO
225,000 5.00%, due 08/01/2012 ....................... 240,442
------------
Auburn, AL, GO,
300,000 4.00%, due 08/01/2007 ....................... 301,161
285,000 4.25%, due 08/01/2009 ....................... 290,176
------------
591,337
------------
Auburn, AL, Water Works Board, Rev.,
335,000 5.00%, due 07/01/2015 ....................... 356,477
------------
Auburn University, AL, General Fee Rev.,
400,000 4.45%, due 06/01/2011 ....................... 408,692
------------
Baldwin Co., AL, Board of Education, Revenue
Warrants,
200,000 5.20%, due 06/01/2009 ....................... 204,242
300,000 5.00%, due 06/01/2010 ....................... 314,103
------------
518,345
------------
23
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Baldwin Co., AL, GO,
$ 500,000 4.50%, due 11/01/2008 ....................... $ 508,965
200,000 5.00%, due 02/01/2015 ....................... 214,150
------------
723,115
------------
Birmingham, AL, Industrial Water Board, Rev.,
100,000 6.00%, due 07/01/2007 ....................... 101,849
------------
Birmingham, AL, Special Care Facilities
Financing Authority, Rev.,
300,000 3.70%, due 06/01/2009 ....................... 300,315
------------
Decatur, AL, GO, Warrants,
300,000 5.00%, due 06/01/2009 ....................... 306,306
------------
Decatur, AL, Water Rev.,
100,000 5.00%, due 05/01/2014 ....................... 104,012
------------
Dothan, AL, GO,
500,000 5.50%, due 09/01/2014 ....................... 531,475
------------
Fairhope, AL, Utilities Rev.,
225,000 2.50%, due 12/01/2006 ....................... 224,363
------------
Fairhope, AL, Warrants,
295,000 5.10%, due 06/01/2014 ....................... 310,579
------------
Florence, AL, School Warrants,
200,000 4.65%, due 12/01/2012 ....................... 207,918
------------
Foley, AL, Utilities Board, Rev.,
500,000 4.00%, due 11/01/2007 ....................... 502,475
------------
Greenville, AL, GO,
300,000 5.10%, due 12/01/2009 ....................... 306,744
------------
Homewood, AL, Board of Education, Capital Outlay
Warrants,
300,000 4.00%, due 02/01/2007 ....................... 300,486
------------
Homewood, AL, GO,
500,000 5.00%, due 09/01/2014 ....................... 532,935
------------
Houston Co., AL, GO,
300,000 5.60%, due 10/15/2014 ....................... 323,076
------------
Huntsville, AL, Capital Improvements, GO,
100,000 3.25%, due 11/01/2010 ....................... 98,130
------------
24
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Huntsville, AL, Electric Systems, Rev.,
$ 250,000 4.80%, due 12/01/2012 ....................... $ 257,875
------------
Huntsville, AL, GO,
200,000 4.50%, due 08/01/2007 ....................... 201,592
400,000 5.50%, due 08/01/2009 ....................... 420,976
500,000 5.00%, due 08/01/2011 ....................... 530,740
250,000 5.25%, due 11/01/2012 ....................... 260,437
------------
1,413,745
------------
Huntsville, AL, Water Systems, Rev.,
200,000 4.70%, due 11/01/2013 ....................... 205,656
------------
Jefferson Co., AL, Sewer Rev.,
225,000 5.00%, due 02/01/2041, Prerefunded 02/01/2011
@ 101 ....................................... 239,373
------------
Madison, AL, Warrants,
200,000 4.40%, due 02/01/2011 ....................... 205,034
400,000 4.85%, due 02/01/2013 ....................... 413,500
------------
618,534
------------
Madison Co., AL, Board of Education, Capital
Outlay Tax Antic. Warrants,
400,000 5.20%, due 03/01/2011 ....................... 423,788
------------
Mobile, AL, GO,
275,000 6.20%, due 02/15/2007, ETM .................. 277,684
100,000 4.50%, due 08/01/2013 ....................... 104,281
------------
381,965
------------
Montgomery, AL, GO,
500,000 5.10%, due 10/01/2008 ....................... 513,850
300,000 5.00%, due 11/01/2015 ....................... 317,130
------------
830,980
------------
Montgomery, AL, Waterworks & Sanitation, Rev.,
500,000 5.00%, due 09/01/2008 ....................... 513,650
350,000 5.25%, due 09/01/2011 ....................... 375,550
------------
889,200
------------
Montgomery Co., AL, GO,
300,000 3.00%, due 11/01/2006 ....................... 299,793
------------
Mountain Brook, AL, City Board of Education,
Capital Outlay Warrants,
405,000 4.80%, due 02/15/2011 ....................... 406,701
------------
Opelika, AL, GO,
210,000 4.00%, due 03/01/2010 ....................... 212,948
------------
Scottsboro, AL, Waterworks Sewer & Gas Board,
Rev.,
200,000 4.35%, due 08/01/2011 ....................... 203,934
------------
25
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 90.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Shelby Co., AL, Board of Education, Rev.
Warrants,
$ 500,000 4.80%, due 02/01/2011 ....................... $ 517,235
------------
St. Clair Co., AL, GO,
145,000 4.00%, due 08/01/2013 ....................... 148,252
205,000 4.00%, due 08/01/2014 ....................... 209,760
------------
358,012
------------
Trussville, AL, Warrants,
400,000 4.30%, due 10/01/2010 ....................... 410,732
------------
Tuscaloosa, AL, Board of Education, GO,
300,000 4.625%, due 08/01/2008 ...................... 301,728
------------
Tuscaloosa, AL, Board of Education, Special Tax
Warrants,
300,000 4.85%, due 02/15/2013 ....................... 301,296
------------
Tuscaloosa, AL, Warrants, GO
300,000 5.00%, due 02/15/2007 ....................... 301,638
145,000 4.25%, due 02/15/2011 ....................... 148,711
500,000 5.45%, due 01/01/2014 ....................... 531,110
------------
981,459
------------
Tuscaloosa Co., AL, Warrants, GO
425,000 4.30%, due 10/01/2009 ....................... 434,499
------------
University of Alabama, AL, General Fee Rev.,
240,000 4.10%, due 12/01/2013 ....................... 245,882
------------
University of Alabama, AL, Series A, Rev.,
375,000 4.00%, due 10/01/2010 ....................... 381,457
------------
Vestavia Hills, AL, Warrants,
565,000 5.00%, due 02/01/2012 ....................... 601,047
------------
TOTAL ALABAMA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDs (Cost $22,839,910) .... $ 23,280,485
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 8.3% VALUE
- --------------------------------------------------------------------------------
1,249,424 Alpine Muncipal Money Market Fund - Class I .... $ 1,249,424
879,594 Fideilty Tax Exempt Portfolio .................. 879,594
------------
TOTAL MONEY MARKET FUNDS (Cost $2,129,018) ..... $ 2,129,018
------------
TOTAL INVESTMENTS AT VALUE -- 99.0%
(Cost $24,968,928) .......................... $ 25,409,503
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0% .. 254,800
------------
NET ASSETS -- 100.0% ........................... $ 25,664,303
============
See accompanying notes to financial statements.
26
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
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.
27
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 periods ended September 30, 2006 and March 31, 2006 are as follows:
- -----------------------------------------------------------------------------------------------------------
PERIODS ORDINARY EXEMPT-INTEREST LONG-TERM TOTAL
ENDED INCOME DIVIDENDS GAINS DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------
Government Street Equity Fund 09/30/06 $ 398,295 $ -- $ 5,412,040 $ 5,810,335
03/31/06 $ 1,289,147 $ -- $ -- $ 1,289,147
- -----------------------------------------------------------------------------------------------------------
Government Street Mid-Cap Fund 09/30/06 $ -- $ -- $ 893,423 $ 893,423
03/31/06 $ 64,987 $ -- $ -- $ 64,987
- -----------------------------------------------------------------------------------------------------------
Government Street Bond Fund 09/30/06 $ 746,681 $ -- $ -- $ 746,681
03/31/06 $ 2,795,083 $ -- $ -- $ 2,795,083
- -----------------------------------------------------------------------------------------------------------
Alabama Tax Free Bond Fund 09/30/06 $ -- $ 436,270 $ -- $ 436,270
03/31/06 $ -- $ 1,031,750 $ -- $ 1,031,750
- -----------------------------------------------------------------------------------------------------------
28
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
September 30, 2006:
- -----------------------------------------------------------------------------------------------------------
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------
Cost of portfolio investments ............ $ 48,524,432 $ 25,606,825 $ 31,217,386 $ 25,025,496
============ ============ ============ ============
Gross unrealized appreciation ............ $ 40,130,788 $ 7,181,735 $ 24,924 $ 465,935
Gross unrealized depreciation ............ (727,513) (749,628) (657,813) (81,928)
------------ ------------ ------------ ------------
Net unrealized appreciation (depreciation) 39,403,275 6,432,107 (632,889) 384,007
Undistributed ordinary income ............ 14,625 122,450 13,897 23,524
Capital loss carryforwards ............... -- -- (1,687,170) (20,713)
Post-October losses ...................... -- -- (219,622) (261)
Other gains (losses) ..................... 5,855,184 653,308 (898,758) 13,364
Other temporary differences .............. (6,214) -- 17,393 (23,524)
------------ ------------ ------------ ------------
Total distributable earnings
(accumulated deficit) ................... $ 45,266,870 $ 7,207,865 $ (3,431,935) $ 376,397
============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------
29
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 September 30, 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 the current and 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 the current and future years to
offset net realized capital gains prior to distributing such gains to
shareholders.
For the six months ended September 30, 2006, The Government Street Bond Fund
reclassified $620,798 of overdistributed net investment income against
accumulated net realized losses and The Alabama Tax Free Bond Fund reclassified
$859 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.
30
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. INVESTMENT TRANSACTIONS
During the six months ended September 30, 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 $8,422,653 and
$27,840,882, respectively, for The Government Street Equity Fund; $791,020 and
$5,945,579, respectively, for The Government Street Mid-Cap Fund; $1,484,010 and
$10,137,015, respectively, for The Government Street Bond Fund; and $1,381,106
and $1,914,000, 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.
For the six months ended September 30, 2006, the Adviser voluntarily undertook
to limit the total operating expenses of The Government Street Bond Fund and The
Alabama Tax Free Bond Fund to .71% and .65%, respectively, of each Fund's
average daily net assets. Accordingly, the Adviser voluntarily waived $11,175
and $9,303, respectively, of its investment advisory fees from The Government
Street Bond Fund and The Alabama Tax Free Bond Fund during the six months ended
September 30, 2006.
Until August 2006, the Adviser was reimbursed for the estimated costs of
providing a Chief Compliance Officer (CCO) for the Funds. The Adviser received
aggregate fees of $6,000 for providing CCO services during the period ended
September 30, 2006. In addition, the Funds paid 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.
31
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
MUTUAL FUND SERVICES AGREEMENT
Under the terms of a Mutual Fund Services Agreement between the Trust and
Ultimus Fund Solutions, LLC (Ultimus), Ultimus provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, Ultimus receives a monthly fee from
The Government Street Equity Fund, 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.
COMPLIANCE CONSULTING AGREEMENT
Effective August 7, 2006, under the terms of a Compliance Consulting Agreement
between the Trust and Ultimus, Ultimus provides an individual to serve as the
Trust's Chief Compliance Officer and to administer the Trust's compliance
policies and procedures. For these services, the Funds pay Ultimus an annual
base fee of $20,400 plus an asset-based fee equal to 0.01% per annum on total
net assets in excess of $100 million. During the period ended September 30,
2006, the Funds paid aggregate fees of $4,703 to Ultimus for compliance
consulting services.
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.
32
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
5. ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 (FIN 48) "Accounting for Uncertainty in Income Taxes". FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken in the course of preparing each funds tax
returns to determine whether the tax positions are "more-likely-than-not" of
being sustained by the applicable tax authority. Tax benefits of positions not
deemed to meet the more-likely-than-not threshold would be booked as a tax
expense in the current year and recognized as: a liability for unrecognized tax
benefits; a reduction of an income tax refund receivable; a reduction of
deferred tax asset; an increase in deferred tax liability; or a combination
thereof. Adoption of FIN 48 is required for fiscal years beginning after
December 15, 2006. At this time, management is evaluating the implications of
FIN 48 and its impact on the financial statements has not yet been determined.
33
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.
34
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
April 1, 2006 Sept. 30, 2006 During Period*
- --------------------------------------------------------------------------------
GOVERNMENT STREET EQUITY FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $989.80 $4.14
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.91 $4.20
- --------------------------------------------------------------------------------
GOVERNMENT STREET MID-CAP FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $939.60 $5.35
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.55 $5.57
- --------------------------------------------------------------------------------
GOVERNMENT STREET BOND FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,029.40 $3.61
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.51 $3.60
- --------------------------------------------------------------------------------
ALABAMA TAX FREE BOND FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,020.20 $3.29
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.81 $3.29
- --------------------------------------------------------------------------------
* 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 183/365 (to reflect the one-half year period).
Government Street Equity Fund 0.83%
Government Street Mid-Cap Fund 1.10%
Government Street Bond Fund 0.71%
Alabama Tax Free Bond Fund 0.65%
35
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.
36
This page intentionally left blank.
================================================================================
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
SEMI-ANNUAL REPORT
SEPTEMBER 30, 2006
(UNAUDITED)
Investment Advisor
LOWE, BROCKENBROUGH & Company, Inc.
RICHMOND, VIRGINIA
================================================================================
THE JAMESTOWN BALANCED FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- ------------------------------- TEN LARGEST EQUITY HOLDINGS NET ASSETS
--------------------------------------------
General Electric Company 2.1%
[GRAPHIC OMITTED] PepsiCo, Inc. 1.7%
Cisco Systems, Inc. 1.7%
Common Stocks 66.5% Bank of America Corporation 1.5%
Fixed Income 30.2% American International Group, Inc. 1.4%
Cash Equivalents 3.3% Amgen, Inc. 1.4%
Microsoft Corporation 1.4%
Dover Corporation 1.3%
Lehman Brothers Holdings, Inc. 1.2%
Oracle Corporation 1.2%
EQUITY INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX (66.5% OF NET ASSETS)
- --------------------------------------------------------------------------
[GRAPHIC OMITTED]
(% OF NET ASSETS)
The Jamestown
Balanced S&P 500
Fund Index
--------- -------
Consumer Discretionary 8.3% 10.1%
Consumer Staples 9.6% 9.6%
Energy 9.4% 9.4%
Financials 20.5% 22.2%
Health Care 13.5% 12.7%
Industrials 13.3% 10.9%
Information Technology 16.5% 15.3%
Materials 3.1% 2.9%
Telecommunication Services 2.6% 3.5%
Utilities 3.2% 3.4%
FIXED-INCOME PORTFOLIO (30.2% OF NET ASSETS) SECTOR BREAKDOWN
- -------------------------------------------- ---------------------------------
Average Weighted Maturity (Years) 4.39 U.S. Treasury 12.7%
Average Duration (Years) 3.46 U.S. Government Agency 23.2%
Average Coupon 5.51% Mortgage-Backed 16.5%
Average Yield to Maturity 5.32% Corporate 44.7%
Municipal 1.6%
Regional Authority 1.3%
CREDIT QUALITY % OF FIXED INCOME PORTFOLIO
-----------------------------------------------
AAA 5%
AA 11%
A 28%
BAA 6%
U.S. Treasury 12%
U.S. Government Agency 38%
1
THE JAMESTOWN EQUITY FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- ------------------------------- TEN LARGEST EQUITY HOLDINGS NET ASSETS
--------------------------------------------
[GRAPHIC OMITTED] General Electric Company 3.0%
PepsiCo, Inc. 2.4%
Stocks 95.4% Cisco Systems, Inc. 2.4%
Cash Equivalents 4.6% American International Group, Inc. 2.1%
Amgen, Inc. 2.0%
Bank of America Corporation 2.0%
Microsoft Corporation 2.0%
Dover Corporation 1.9%
Lehman Brothers Holdings, Inc. 1.7%
Oracle Corporation 1.7%
SECTOR CONCENTRATION VS. THE S&P 500 INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
(% OF NET ASSETS)
The Jamestown S&P 500
Equity Fund Index
----------- -------
Consumer Discretionary 8.0% 10.1%
Consumer Staples 8.7% 9.6%
Energy 8.9% 9.4%
Financials 20.3% 22.2%
Health Care 13.1% 12.7%
Industrials 12.7% 10.9%
Information Technology 15.6% 15.3%
Materials 3.0% 2.9%
Telecommunication Services 2.4% 3.5%
Utilities 2.9% 3.4%
Cash Equivalents 4.6% 0.0%
2
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
CHARACTERISTICS MATURITY BREAKDOWN (% OF PORTFOLIO)
(WEIGHTED AVERAGE) ---------------------------------------
- ------------------------------------
Current Yield 3.40% [GRAPHIC OMITTED]
Tax-Equivalent Yield 5.23%*
Average Maturity 4.7 years 25% 31% 44%
Average Duration 4.0 years --------- --------- ----------
Average Quality AA+ 0-2 Years 2-5 Years 5-10 Years
Number of Issues 38
* Assumes a maximum 35.0% federal tax rate.
CREDIT QUALITY (% OF PORTFOLIO) SECTOR DIVERSIFICATION (% OF PORTFOLIO)
- ------------------------------ ---------------------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
AAA 62.3% Revenues 56.5%
AA 37.7% Government Guaranteed 29.3%
Floating Rate Notes 11.6%
General Obligations 2.6%
3
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO INFORMATION
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- -------------------------- TEN LARGEST HOLDINGS COUNTRY NET ASSETS
----------------------------------------------------
GlaxoSmithKline PLC United Kingdom 2.4%
[GRAPHIC OMITTED] Mitsubishi UFJ Financial
Group, Inc. Japan 2.4%
Stocks 98.0% Repsol YPF SA Spain 2.3%
Cash Equivalents 2.0% Koninkijke (Royal) KPN NV Netherlands 2.2%
Sumitomo Mitsui
Financial Group, Inc. Japan 2.0%
Mitsubishi Estate
Company Ltd. Japan 2.0%
ENI SpA Italy 2.0%
Land Securities Group PLC United Kingdom 1.9%
Royal Dutch Shell
PLC - Class A Netherlands 1.9%
Suez SA France 1.9%
GEOGRAPHIC DIVERSIFICATION VS. THE MORGAN STANLEY EAFE INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
The Jamestown Morgan
International Stanley
Equity EAFE
Fund Index
------------ ---------
Finland 1.2% 1.4%
France 10.2% 10.0%
Germany 10.1% 7.1%
Greece 1.1% 0.6%
Italy 4.9% 3.9%
Japan 27.1% 23.6%
Netherlands 7.6% 3.5%
Norway 1.0% 0.8%
Singapore 1.4% 0.8%
South Korea 1.2% 0.0%
Spain 3.2% 4.0%
Sweden 2.3% 2.4%
Switzerland 5.9% 7.1%
United Kingdom 19.1% 23.9%
Other 1.7% 0.0%
Cash Equivalents 2.0% 0.0%
4
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2006 (UNAUDITED)
===============================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost ................... $ 43,274,385 $ 32,497,278 $ 29,824,134 $ 16,588,948
============= ============= ============= =============
At value (Note 1) ..................... $ 50,970,677 $ 40,209,155 $ 30,421,131 $ 22,325,897
Cash .................................... -- -- -- 429,064
Cash denominated in
foreign currency(a) (Note 5) .......... -- -- -- 31,760
Dividends and interest receivable ....... 225,219 31,393 383,487 46,059
Receivable for investment securities sold -- -- 204,190 --
Receivable for capital shares sold ...... 15,668 8,418 -- 3
Other assets ............................ 3,581 8,980 6,388 3,253
------------- ------------- ------------- -------------
TOTAL ASSETS .......................... 51,215,145 40,257,946 31,015,196 22,836,036
------------- ------------- ------------- -------------
LIABILITIES
Distributions payable ................... 23,115 6,486 18,194 2,325
Payable for securities purchased ........ -- -- 552,210 --
Payable for capital shares redeemed ..... 10,592 6,906 19,008 1,235
Accrued investment advisory fees (Note 3) 27,377 21,220 8,486 14,697
Accrued administration fees (Note 3) .... 5,800 4,600 3,600 3,700
Accrued compliance fees (Note 3) ........ 550 525 500 650
Other accrued expenses .................. 8,252 3,121 753 21,182
------------- ------------- ------------- -------------
TOTAL LIABILITIES ..................... 75,686 42,858 602,751 43,789
------------- ------------- ------------- -------------
NET ASSETS ............................... $ 51,139,459 $ 40,215,088 $ 30,412,445 $ 22,792,247
============= ============= ============= =============
Net assets consist of:
Paid-in capital ......................... $ 41,845,223 $ 31,188,201 $ 29,766,789 $ 32,844,979
Accumulated undistributed net
investment income ..................... 11,368 2,541 11,998 77,805
Accumulated net realized gains (losses)
from security transactions ............ 1,586,576 1,312,469 36,661 (15,866,865)
Net unrealized appreciation
on investments ........................ 7,696,292 7,711,877 596,997 5,736,949
Net unrealized depreciation on
translation of assets and
liabilities in foreign currencies ..... -- -- -- (621)
------------- ------------- ------------- -------------
Net assets ............................... $ 51,139,459 $ 40,215,088 $ 30,412,445 $ 22,792,247
============= ============= ============= =============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ........................... 3,421,027 2,192,356 3,004,178 1,744,629
============= ============= ============= =============
Net asset value, offering price and
redemption price per share(b) ........... $ 14.95 $ 18.34 $ 10.12 $ 13.06
============= ============= ============= =============
(a) For Jamestown International Equity Fund, the cost of cash denominated in
foreign currency is $32,091.
(b) For Jamestown International Equity Fund, redemption price varies based on
length of time held (Note 1).
See accompanying notes to financial statements.
5
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)
===============================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ............................... $ 256,503 $ 264,664 $ 12,470 $ 338,039
Foreign withholding taxes on dividends .. -- -- -- (42,059)
Interest ................................ 454,420 8,710 653,712 11,360
------------- ------------- ------------- -------------
TOTAL INVESTMENT INCOME ............... 710,923 273,374 666,182 307,340
------------- ------------- ------------- -------------
EXPENSES
Investment advisory fees (Note 3) ....... 172,975 131,297 60,607 110,709
Administration fees (Note 3) ............ 36,004 28,356 22,019 22,110
Custodian fees .......................... 5,627 3,849 2,345 20,440
Professional fees ....................... 8,512 7,320 6,220 8,360
Pricing costs ........................... 4,552 1,022 2,794 15,580
Trustees' fees and expenses ............. 5,413 5,413 5,413 5,413
Compliance consulting fees (Note 3) ..... 3,548 2,692 2,183 2,023
Postage and supplies .................... 2,578 3,308 1,934 2,161
Printing of shareholder reports ......... 2,169 3,217 1,269 1,611
Registration fees ....................... 1,821 2,010 665 2,264
Insurance expense ....................... 2,059 1,614 1,217 914
Other expenses .......................... 2,984 5,717 6,972 2,084
------------- ------------- ------------- -------------
TOTAL EXPENSES ........................ 248,242 195,815 113,638 193,669
Fees waived by the Adviser (Note 3) ..... -- -- (9,091) (34,247)
Expenses reimbursed through a directed
brokerage arrangement (Note 4) ........ (12,000) (12,000) -- --
------------- ------------- ------------- -------------
NET EXPENSES .......................... 236,242 183,815 104,547 159,422
------------- ------------- ------------- -------------
NET INVESTMENT INCOME .................... 474,681 89,559 561,635 147,918
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTE 5)
Net realized gains from:
Security transactions ................. 1,761,676 1,380,516 26,203 508,624
Foreign currency transactions ......... -- -- -- 1,650
Net change in unrealized appreciation/
depreciation on:
Investments ........................... (1,967,495) (1,673,842) 167,283 (52,437)
Foreign currency translation .......... -- -- -- (668)
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES .................. (205,819) (293,326) 193,486 457,169
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS .................. $ 268,862 $ (203,767) $ 755,121 $ 605,087
============= ============= ============= =============
See accompanying notes to financial statements.
6
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================================================
JAMESTOWN JAMESTOWN
BALANCED FUND EQUITY FUND
------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
2006 MARCH 31, 2006 MARCH 31,
(UNAUDITED) 2006 (UNAUDITED) 2006
- ---------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 474,681 $ 1,074,156 $ 89,559 $ 152,092
Net realized gains on
security transactions ................. 1,761,676 3,960,067 1,380,516 3,030,933
Net change in unrealized appreciation/
depreciation on investments ........... (1,967,495) 475,466 (1,673,842) 1,861,077
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from operations ......................... 268,862 5,509,689 (203,767) 5,044,102
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .............. (492,288) (1,102,478) (88,463) (151,097)
From net realized gains from
security transactions ................. -- (3,872,793) -- (3,031,520)
------------- ------------- ------------- -------------
Net decrease in net assets from
distributions to shareholders ........... (492,288) (4,975,271) (88,463) (3,182,617)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 403,230 2,477,785 671,653 1,520,283
Net asset value of shares issued in
reinvestment of distributions to
shareholders .......................... 449,133 4,684,832 78,114 2,887,949
Payments for shares redeemed ............ (6,368,507) (13,052,698) (3,012,141) (5,752,829)
------------- ------------- ------------- -------------
Net decrease in net assets from
capital share transactions .............. (5,516,144) (5,890,081) (2,262,374) (1,344,597)
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ........................... (5,739,570) (5,355,663) (2,554,604) 516,888
NET ASSETS
Beginning of period ..................... 56,879,029 62,234,692 42,769,692 42,252,804
------------- ------------- ------------- -------------
End of period ........................... $ 51,139,459 $ 56,879,029 $ 40,215,088 $ 42,769,692
============= ============= ============= =============
ACCUMULATED UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME ....................... $ 11,368 $ (37,454) $ 2,541 $ 1,445
============= ============= ============= =============
CAPITAL SHARE ACTIVITY
Sold .................................... 27,317 165,132 37,364 82,920
Reinvested .............................. 30,576 313,505 4,331 160,456
Redeemed ................................ (435,303) (850,187) (166,897) (314,377)
------------- ------------- ------------- -------------
Net decrease in shares outstanding ...... (377,410) (371,550) (125,202) (71,001)
Shares outstanding, beginning of period . 3,798,437 4,169,987 2,317,558 2,388,559
------------- ------------- ------------- -------------
Shares outstanding, end of period ....... 3,421,027 3,798,437 2,192,356 2,317,558
============= ============= ============= =============
See accompanying notes to financial statements.
7
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================================================
JAMESTOWN TAX EXEMPT JAMESTOWN
VIRGINIA FUND INTERNATIONAL EQUITY FUND
------------------------------------------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
2006 MARCH 31, 2006 MARCH 31,
(UNAUDITED) 2006 (UNAUDITED) 2006
- ---------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 561,635 $ 1,091,469 $ 147,918 $ 175,330
Net realized gains (losses) from:
Security transactions ................. 26,203 26,160 508,624 939,193
Foreign currency transactions ......... -- -- 1,650 (2,031)
Net change in unrealized appreciation/
depreciation on:
Investments ........................... 167,283 (554,553) (52,437) 3,281,131
Foreign currency translation .......... -- -- (668) 62
------------- ------------- ------------- -------------
Net increase in net assets
from operations ......................... 755,121 563,076 605,087 4,393,685
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .............. (544,052) (1,089,001) (87,099) (164,170)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 1,262,246 1,971,725 1,545,212 764,281
Net asset value of shares issued in
reinvestment of distributions to
shareholders .......................... 430,194 867,903 84,210 161,289
Proceeds from redemption fees collected -- -- -- 5
Payments for shares redeemed ............ (1,912,555) (3,451,665) (955,085) (3,820,953)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from
capital share transactions .............. (220,115) (612,037) 674,337 (2,895,378)
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS .............................. (9,046) (1,137,962) 1,192,325 1,334,137
NET ASSETS
Beginning of period ..................... 30,421,491 31,559,453 21,599,922 20,265,785
------------- ------------- ------------- -------------
End of period ........................... $ 30,412,445 $ 30,421,491 $ 22,792,247 $ 21,599,922
============= ============= ============= =============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME ................... $ 11,998 $ 10,932 $ 77,805 $ 15,336
============= ============= ============= =============
CAPITAL SHARE ACTIVITY
Sold .................................... 125,796 193,535 119,730 64,093
Reinvested .............................. 42,836 85,055 6,489 14,029
Redeemed ................................ (190,735) (338,953) (74,676) (347,821)
------------- ------------- ------------- -------------
Net increase (decrease) in shares
outstanding ........................... (22,103) (60,363) 51,543 (269,699)
Shares outstanding, beginning of period . 3,026,281 3,086,644 1,693,086 1,962,785
------------- ------------- ------------- -------------
Shares outstanding, end of period ....... 3,004,178 3,026,281 1,744,629 1,693,086
============= ============= ============= =============
See accompanying notes to financial statements.
8
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEARS ENDED MARCH 31,
2006 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(a)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 14.97 $ 14.92 $ 15.40 $ 13.76 $ 15.66 $ 16.78
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income .................. 0.13 0.26 0.29 0.27 0.31 0.32
Net realized and unrealized gains
(losses) on investments .............. (0.01) 1.06 0.14 2.48 (1.88) (0.86)
--------- --------- --------- --------- --------- ---------
Total from investment operations ........ 0.12 1.32 0.43 2.75 (1.57) (0.54)
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ... (0.14) (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 ..................... (0.14) (1.27) (0.91) (1.11) (0.33) (0.58)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period ........ $ 14.95 $ 14.97 $ 14.92 $ 15.40 $ 13.76 $ 15.66
========= ========= ========= ========= ========= =========
Total return(b) ......................... 0.82%(c) 9.14% 2.83% 20.29% (10.06%) (3.22%)
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 51,139 $ 56,879 $ 62,235 $ 63,838 $ 65,339 $ 96,824
========= ========= ========= ========= ========= =========
Ratio of gross expenses to
average net assets ..................... 0.93%(d) 0.93% 0.92% 0.91% 0.90% 0.86%
Ratio of net expenses to
average net assets(e) .................. 0.89%(d) 0.89% 0.88% 0.88% 0.87% 0.83%
Ratio of net investment income to
average net assets ..................... 1.78%(d) 1.72% 1.87% 1.77% 2.12% 1.97%
Portfolio turnover rate ................. 40%(d) 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) Not annualized.
(d) Annualized.
(e) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
9
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEARS ENDED MARCH 31,
2006 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(a)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 18.45 $ 17.69 $ 18.28 $ 14.47 $ 18.40 $ 19.94
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income .................. 0.04 0.07 0.12 0.05 0.04 0.06
Net realized and unrealized gains
(losses) on investments .............. (0.11) 2.11 0.65 4.30 (3.93) (1.54)
--------- --------- --------- --------- --------- ---------
Total from investment operations ........ (0.07) 2.18 0.77 4.35 (3.89) (1.48)
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ... (0.04) (0.07) (0.12) (0.05) (0.04) (0.06)
Distributions from net realized gains .. -- (1.35) (1.24) (0.49) -- --
--------- --------- --------- --------- --------- ---------
Total distributions ..................... (0.04) (1.42) (1.36) (0.54) (0.04) (0.06)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period ........ $ 18.34 $ 18.45 $ 17.69 $ 18.28 $ 14.47 $ 18.40
========= ========= ========= ========= ========= =========
Total return(a) ......................... (0.38%)(b) 12.69% 4.34% 30.10% (21.15%) (7.42%)
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 40,215 $ 42,770 $ 42,253 $ 50,187 $ 38,619 $ 54,807
========= ========= ========= ========= ========= =========
Ratio of gross expenses to
average net assets ..................... 0.97%(c) 0.97% 0.95% 0.94% 0.96% 0.90%
Ratio of net expenses to
average net assets(d) .................. 0.91%(c) 0.92% 0.90% 0.88% 0.89% 0.86%
Ratio of net investment income
to average net assets .................. 0.44%(c) 0.36% 0.63% 0.27% 0.25% 0.31%
Portfolio turnover rate ................. 55%(c) 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) Not annualized.
(c) Annualized.
(d) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
10
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEARS ENDED MARCH 31,
2006 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002(a)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 10.05 $ 10.22 $ 10.57 $ 10.56 $ 10.12 $ 10.22
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income .................. 0.19 0.36 0.37 0.37 0.38 0.41
Net realized and unrealized gains
(losses) on investments .............. 0.06 (0.17) (0.35) 0.00(b) 0.44 (0.10)
--------- --------- --------- --------- --------- ---------
Total from investment operations ........ 0.25 0.19 0.02 0.37 0.82 0.31
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ... (0.18) (0.36) (0.37) (0.36) (0.38) (0.41)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period ........ $ 10.12 $ 10.05 $ 10.22 $ 10.57 $ 10.56 $ 10.12
========= ========= ========= ========= ========= =========
Total return(c) ......................... 2.52%(d) 1.83% 0.19% 3.61% 8.24% 3.04%
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 30,412 $ 30,421 $ 31,559 $ 33,602 $ 36,424 $ 33,896
========= ========= ========= ========= ========= =========
Ratio of net expenses to
average net assets(f) .................. 0.69%(e) 0.69% 0.69% 0.69% 0.69% 0.68%
Ratio of net investment income to
average net assets ..................... 3.71%(e) 3.50% 3.60% 3.46% 3.68% 4.02%
Portfolio turnover rate ................. 14%(e) 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) Not annualized.
(e) Annualized.
(f) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 0.75%(e) for the
six months ended September 30, 2006 and 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.
11
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
==================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
SEPT. 30, YEARS ENDED MARCH 31,
2006 -----------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .. $ 12.76 $ 10.33 $ 9.42 $ 6.31 $ 8.98 $ 10.56
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income .................. 0.09 0.10 0.08 0.05 0.06 0.01
Net realized and unrealized gains
(losses) on investments and
foreign currencies ................... 0.26 2.43 0.91 3.12 (2.69) (1.47)
--------- --------- --------- --------- --------- ---------
Total from investment operations ........ 0.35 2.53 0.99 3.17 (2.63) (1.46)
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ... (0.05) (0.10) (0.08) (0.05) (0.05) (0.05)
Return of capital ...................... -- -- -- -- -- (0.08)
Distributions from net realized gains .. -- -- -- (0.01) -- --
--------- --------- --------- --------- --------- ---------
Total distributions ..................... (0.05) (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 period ........ $ 13.06 $ 12.76 $ 10.33 $ 9.42 $ 6.31 $ 8.98
========= ========= ========= ========= ========= =========
Total return(b) ......................... 2.75%(c) 24.54% 10.51% 50.22% (29.18%) (13.66%)
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) ..... $ 22,792 $ 21,600 $ 20,266 $ 21,158 $ 21,308 $ 44,022
========= ========= ========= ========= ========= =========
Ratio of net expenses to
average net assets(e) .................. 1.44%(d) 1.44% 1.43% 1.38% 1.38% 1.38%
Ratio of net investment income
to average net assets .................. 1.34%(d) 0.89% 0.78% 0.57% 0.60% 0.12%
Portfolio turnover rate ................. 15%(d) 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) Not annualized.
(d) Annualized.
(e) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 1.75%(d) for the
six months ended September 30, 2006 and 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.
12
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 66.5% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 5.5%
11,700 Home Depot, Inc. ................................ $ 424,359
6,000 J.C. Penney Company, Inc. ....................... 410,340
13,800 Lowe's Companies, Inc. .......................... 387,228
14,100 McDonald's Corporation .......................... 551,592
22,000 Staples, Inc. ................................... 535,260
9,500 Target Corporation .............................. 524,875
------------
2,833,654
------------
CONSUMER STAPLES -- 6.4%
8,500 Archer-Daniels-Midland Company .................. 321,980
9,900 Coca-Cola Company (The) ......................... 442,332
19,500 Constellation Brands, Inc.(a) ................... 561,210
9,900 CVS Corporation ................................. 317,988
13,500 PepsiCo, Inc. ................................... 881,010
9,000 Procter & Gamble Company (The) .................. 557,820
6,000 Sysco Corporation ............................... 200,700
------------
3,283,040
------------
ENERGY -- 6.2%
7,500 Chevron Corporation ............................. 486,450
6,000 ConocoPhillips .................................. 357,180
7,700 Exxon Mobil Corporation ......................... 516,670
15,500 Nabors Industries Ltd.(a) ....................... 461,125
5,300 Noble Corporation ............................... 340,154
7,500 Noble Energy, Inc. .............................. 341,925
5,500 Schlumberger Ltd ................................ 341,165
9,000 Smith International, Inc. ....................... 349,200
------------
3,193,869
------------
FINANCIALS -- 13.6%
11,000 American International Group, Inc. .............. 728,860
14,000 Bank of America Corporation ..................... 749,980
9,500 Chubb Corporation (The) ......................... 493,620
10,500 CIT Group, Inc. ................................. 510,615
5,500 Franklin Resources, Inc. ........................ 581,625
8,500 Lehman Brothers Holdings, Inc. .................. 627,810
7,200 Merrill Lynch & Company, Inc. ................... 563,184
9,000 MetLife, Inc. ................................... 510,120
8,000 Morgan Stanley .................................. 583,280
4,500 PNC Financial Services Group, Inc. .............. 325,980
6,150 Prudential Financial, Inc. ...................... 468,937
11,000 St. Paul Travelers Companies, Inc. (The) ........ 515,790
5,500 Wachovia Corporation ............................ 306,900
------------
6,966,701
------------
HEALTH CARE -- 9.0%
12,000 Aetna, Inc. ..................................... 474,600
10,000 Amgen, Inc.(a) .................................. 715,300
7,500 Fisher Scientific International, Inc.(a) ........ 586,800
6,000 Gilead Sciences, Inc.(a) ........................ 412,200
8,000 Johnson & Johnson ............................... 519,520
18,000 Pfizer, Inc. .................................... 510,480
14,800 Teva Pharmaceutical Industries Ltd. - ADR ....... 504,532
13
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 66.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 9.0% (CONTINUED)
6,850 WellPoint, Inc.(a) .............................. $ 527,793
5,000 Zimmer Holdings, Inc.(a) ........................ 337,500
------------
4,588,725
------------
INDUSTRIALS -- 8.9%
7,500 Caterpillar, Inc. ............................... 493,500
14,000 Dover Corporation ............................... 664,160
4,000 General Dynamics Corporation .................... 286,680
30,000 General Electric Company ........................ 1,059,000
12,800 Ingersoll-Rand Company Ltd. - Class A ........... 486,144
10,600 ITT Industries, Inc. ............................ 543,462
12,000 Norfolk Southern Corporation .................... 528,600
5,400 Textron, Inc. ................................... 472,500
------------
4,534,046
------------
INFORMATION TECHNOLOGY -- 11.0%
12,900 Accenture Ltd. - Class A ........................ 409,059
22,000 Applied Materials, Inc. ......................... 390,060
38,000 Cisco Systems, Inc.(a) .......................... 874,000
700 Google, Inc.(a) ................................. 281,330
11,400 Harris Corporation .............................. 507,186
6,000 International Business Machines Corporation ..... 491,640
26,000 Microsoft Corporation ........................... 710,580
24,000 Motorola, Inc. .................................. 600,000
34,000 Oracle Corporation(a) ........................... 603,160
10,000 Qualcomm, Inc. .................................. 363,500
21,200 Western Digital Corporation(a) .................. 383,720
------------
5,614,235
------------
MATERIALS -- 2.0%
12,000 Alcoa, Inc. ..................................... 336,480
5,600 Alleghany Technologies, Inc. .................... 348,264
6,000 Praxair, Inc. ................................... 354,960
------------
1,039,704
------------
TELECOMMUNICATIONS SERVICES -- 1.7%
16,900 AT&T, Inc. ...................................... 550,264
8,300 America Movil S.A. de C.V. - Series L - ADR ..... 326,771
------------
877,035
------------
UTILITIES -- 2.2%
12,000 FPL Group, Inc. ................................. 540,000
9,000 TXU Corporation ................................. 562,680
------------
1,102,680
------------
TOTAL COMMON STOCKS (Cost $26,468,800) .......... $ 34,033,689
------------
14
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE U.S. TREASURY OBLIGATIONS -- 3.8% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 3.3%
$ 500,000 4.00%, due 02/15/2014 ........................... $ 480,762
1,250,000 4.25%, due 11/15/2014 ........................... 1,219,043
------------
1,699,805
------------
U.S. TREASURY INFLATION-PROTECTION NOTES -- 0.5%
263,284 3.375%, due 01/15/2007 .......................... 261,000
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $2,011,748) $ 1,960,805
------------
================================================================================
PAR VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.0% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK -- 2.0%
$ 1,000,000 4.125%, due 11/15/2006 .......................... $ 998,507
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 3.6%
1,000,000 6.625%, due 09/15/2009 .......................... 1,045,459
300,000 5.125%, due 07/15/2012 .......................... 302,803
500,000 5.25%, due 07/18/2016 ........................... 510,273
------------
1,858,535
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.4%
250,000 4.00%, due 12/14/2007 ........................... 246,675
250,000 7.25%, due 01/15/2010 ........................... 267,575
200,000 5.50%, due 03/15/2011 ........................... 204,706
------------
718,956
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $3,499,600) ............................. $ 3,575,998
------------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 5.0% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 1.3%
$ 29,147 Pool #1471, 7.00%, due 03/01/2008 ............... $ 29,094
103,872 Pool #E00616, 6.00%, due 01/01/2014 ............. 105,337
34,909 Pool #E90624, 6.00%, due 08/01/2017 ............. 35,401
493,574 Pool #43942, 5.50%, 03/01/2036 .................. 486,809
------------
656,641
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 3.6%
269,141 Pool #618465, 5.00%, due 12/01/2016 ............. 264,477
357,137 Pool #684231, 5.00%, due 01/01/2018 ............. 350,948
319,335 Pool #255455, 5.00%, due 10/01/2024 ............. 310,221
517,437 Pool #255702, 5.00%, due 05/01/2025 ............. 502,310
70,633 Pool #489757, 6.00%, due 04/01/2029 ............. 70,959
343,681 Pool #808413, 5.50%, due 01/01/2035 ............. 338,607
------------
1,837,522
------------
GOVERNMENT NATIONAL MORTAGE ASSOCIATION -- 0.1%
49,736 Pool #781344, 6.50%, due 10/01/2031 ............. 51,014
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $2,580,567) ............................. $ 2,545,177
------------
15
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 13.5% VALUE
- --------------------------------------------------------------------------------
Alcoa, Inc.,
$ 250,000 6.50%, due 06/01/2011 ......................... $ 262,638
American Express Company,
150,000 4.875%, due 07/15/2013 ........................ 146,202
Anheuser-Busch Companies, Inc.,
249,000 5.375%, due 09/15/2008 ........................ 250,036
BB&T Corporation,
325,000 6.50%, due 08/01/2011 ......................... 342,207
Burlington Resources, Inc.,
350,000 6.68%, due 02/15/2011 ......................... 369,265
Citigroup, Inc.,
200,000 5.00%, due 03/06/2007 ......................... 199,676
ConocoPhillips,
200,000 4.75%, due 10/15/2012 ......................... 195,880
Deutsche Telekom AG,
300,000 8.00%, due 06/15/2010 ......................... 327,268
Dover Corporation,
345,000 6.50%, due 02/15/2011 ......................... 361,187
Duke Realty L.P., Medium Term Notes,
390,000 6.75%, due 05/30/2008 ......................... 398,605
FPL Group Capital, Inc.,
300,000 7.375%, due 06/01/2009 ........................ 315,619
General Dynamics Corporation,
125,000 4.25%, due 05/15/2013 ......................... 118,361
Goldman Sachs Group, Inc.,
350,000 6.65%, due 05/15/2009 ......................... 362,899
GTE Northwest, Inc.,
300,000 6.30%, due 06/01/2010 ......................... 304,862
HSBC Finance Corporation,
300,000 6.40%, due 06/17/2008 ......................... 305,674
Illinois Tool Works, Inc.,
216,000 5.75%, due 03/01/2009 ......................... 219,330
International Business Machines Corporation,
175,000 4.375%, due 06/01/2009 ........................ 172,073
Jefferson-Pilot Corporation,
100,000 4.75%, due 01/30/2014 ......................... 95,502
JPMorgan Chase & Company,
300,000 6.75%, due 02/01/2011 ......................... 317,259
May Department Stores Company,
260,000 5.95%, due 11/01/2008 ......................... 262,105
Morgan Stanley,
250,000 5.30%, due 03/01/2013 ......................... 249,615
SunTrust Banks, Inc.
300,000 6.00%, due 01/15/2028 ......................... 314,171
Union Camp Corporation,
300,000 6.50%, due 11/15/2007 ......................... 302,267
United Technologies Corporation,
250,000 6.10%, due 05/15/2012 ......................... 261,235
U.S. Bank, N.A.,
200,000 4.80%, due 04/15/2015 ......................... 192,502
16
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 13.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Wachovia Corporation,
$ 250,000 5.25%, due 08/01/2014 ......................... $ 247,243
------------
TOTAL CORPORATE BONDS (Cost $6,759,215) ......... $ 6,893,681
------------
================================================================================
PAR VALUE MUNICIPAL DEBT SECURITIES -- 0.5% VALUE
- --------------------------------------------------------------------------------
$ 230,000 Virginia State Resources Authority,
Infrastructure, Revenue,
5.90%, due 05/01/2011 (Cost $233,472) ......... $ 237,907
------------
================================================================================
PAR VALUE REGIONAL AUTHORITY BONDS -- 0.4% VALUE
- --------------------------------------------------------------------------------
$ 205,000 Manitoba (Province of), Medium Term Notes,
5.50%, due 10/01/2008 (Cost $204,679) ......... $ 207,116
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 3.0% VALUE
- --------------------------------------------------------------------------------
1,516,304 Fidelity Institutional Money Market Portfolio
(Cost $1,516,304) ............................. $ 1,516,304
------------
TOTAL INVESTMENTS AT VALUE -- 99.7%
(Cost $43,274,385) ............................ $ 50,970,677
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3% ... 168,782
------------
NET ASSETS -- 100.0% ............................ $ 51,139,459
============
(a) Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
17
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 95.4% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.0%
13,100 Home Depot, Inc. ................................ $ 475,137
7,000 J.C. Penney Company, Inc. ....................... 478,730
15,400 Lowe's Companies, Inc. .......................... 432,124
15,800 McDonald's Corporation .......................... 618,096
25,000 Staples, Inc. ................................... 608,250
11,000 Target Corporation .............................. 607,750
------------
3,220,087
------------
CONSUMER STAPLES -- 8.7%
9,900 Archer-Daniels-Midland Company .................. 375,012
11,600 Coca- Cola Company .............................. 518,288
21,000 Constellation Brands, Inc.(a) ................... 604,380
11,300 CVS Corporation ................................. 362,956
15,000 PepsiCo, Inc. ................................... 978,900
10,500 Procter & Gamble Company (The) .................. 650,790
------------
3,490,326
------------
ENERGY -- 8.9%
8,700 Chevron Corporation ............................. 564,282
6,700 ConocoPhillips .................................. 398,851
8,850 Exxon Mobil Corporation ......................... 593,835
17,000 Nabors Industries Ltd.(a) ....................... 505,750
6,200 Noble Corporation ............................... 397,916
8,000 Noble Energy, Inc. .............................. 364,720
6,300 Schlumberger Ltd. ............................... 390,789
9,000 Smith International, Inc. ....................... 349,200
------------
3,565,343
------------
FINANCIALS -- 20.2%
12,650 American International Group, Inc. .............. 838,189
15,000 Bank of America Corporation ..................... 803,550
11,200 Chubb Corporation (The) ......................... 581,952
11,200 CIT Group, Inc. ................................. 544,656
6,200 Franklin Resources, Inc. ........................ 655,650
9,500 Lehman Brothers Holdings, Inc. .................. 701,670
8,000 Merrill Lynch & Company, Inc. ................... 625,760
11,000 Metlife, Inc. ................................... 623,480
9,000 Morgan Stanley .................................. 656,190
7,000 PNC Financial Services Group, Inc. .............. 507,080
7,050 Prudential Financial, Inc. ...................... 537,562
11,500 St. Paul Travelers Companies, Inc. (The) ........ 539,235
9,500 Wachovia Corporation ............................ 530,100
------------
8,145,074
------------
HEALTH CARE -- 13.1%
13,200 Aetna, Inc. ..................................... 522,060
11,500 Amgen, Inc.(a) .................................. 822,595
8,700 Fisher Scientific International, Inc.(a) ........ 680,688
7,000 Gilead Sciences, Inc.(a) ........................ 480,900
9,000 Johnson & Johnson ............................... 584,460
21,000 Pfizer, Inc. .................................... 595,560
17,200 Teva Pharmaceutical Industries Ltd. - ADR ....... 586,348
7,850 WellPoint, Inc.(a) .............................. 604,843
5,800 Zimmer Holdings, Inc.(a) ........................ 391,500
------------
5,268,954
------------
18
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 95.4% (Continued) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 12.7%
8,500 Caterpillar, Inc. ............................... $ 559,300
16,500 Dover Corporation ............................... 782,760
4,500 General Dynamics Corporation .................... 322,515
34,000 General Electric Company ........................ 1,200,200
14,200 Ingersoll-Rand Company Ltd. - Class A ........... 539,316
11,500 ITT Industries, Inc. ............................ 589,605
13,000 Norfolk Southern Corporation .................... 572,650
6,200 Textron, Inc. ................................... 542,500
------------
5,108,846
------------
INFORMATION TECHNOLOGY -- 15.6%
14,000 Accenture Ltd. - Class A ........................ 443,940
24,000 Applied Materials, Inc. ......................... 425,520
42,000 Cisco Systems, Inc.(a) .......................... 966,000
750 Google, Inc.(a) ................................. 301,425
12,600 Harris Corporation .............................. 560,574
7,000 International Business Machines Corporation ..... 573,580
29,000 Microsoft Corporation ........................... 792,570
27,000 Motorola, Inc. .................................. 675,000
39,000 Oracle Corporation(a) ........................... 691,860
10,500 Qualcomm, Inc. .................................. 381,675
24,600 Western Digital Corporation (a) ................. 445,260
------------
6,257,404
------------
MATERIALS -- 3.0%
13,500 Alcoa, Inc. ..................................... 378,540
6,400 Alleghany Techologies, Inc. ..................... 398,016
7,100 Praxair, Inc. ................................... 420,036
------------
1,196,592
------------
TELECOMMUNICATIONS SERVICES -- 2.3%
18,000 AT&T, Inc. ...................................... 586,080
9,200 America Movil S.A. de C.V. - Series L - ADR ..... 362,204
------------
948,284
------------
UTILITIES -- 2.9%
13,000 FPL Group, Inc. ................................. 585,000
9,500 TXU Corporation ................................. 593,940
------------
1,178,940
------------
TOTAL COMMON STOCKS (Cost $30,667,973) .......... $ 38,379,850
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 4.6% VALUE
- --------------------------------------------------------------------------------
1,829,305 Fidelity Institutional Money Market Portfolio
(Cost $1,829,305) ............................. $ 1,829,305
------------
TOTAL INVESTMENTS AT VALUE -- 100.0%
(Cost $32,497,278) ............................ $ 40,209,155
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.0% ... 5,933
------------
NET ASSETS -- 100.0% ............................ $ 40,215,088
============
(a) Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
19
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 98.2% VALUE
- --------------------------------------------------------------------------------
Alexandria, Virginia, GO,
$ 1,000,000 5.00%, due 06/15/2011, prerefunded 06/15/2010
@ 101 ......................................... $ 1,061,670
Arlington Co., Virginia, GO,
500,000 4.10%, due 11/01/2018 ......................... 509,370
Chesterfield Co., Virginia, GO,
1,000,000 4.75%, due 01/01/2013, prerefunded 01/01/2008
@ 100 ......................................... 1,014,930
Fairfax Co., Virginia, Economic Dev. Authority,
Revenue,
1,000,000 5.00%, due 06/01/2018 ......................... 1,074,800
Fairfax Co., Virginia, GO,
700,000 5.00%, due 10/01/2011 ......................... 747,663
Fauquier Co., Virginia, GO,
500,000 5.00%, due 07/01/2017 ......................... 548,500
Hampton, Virginia, GO,
1,000,000 5.50%, due 02/01/2012, prerefunded 02/01/2010
@ 102 ......................................... 1,080,700
Hanover Co., Virginia, GO,
1,000,000 5.125%, due 07/15/2013 ........................ 1,049,190
Hanover Co., Virginia, Industrial Dev. Authority,
Revenue,
1,000,000 6.50%, due 08/15/2009 ......................... 1,076,850
Henrico Co., Virginia, Economic Dev. Authority,
Revenue,
1,000,000 5.50%, due 11/01/2008 ......................... 1,039,510
James City, Virginia, School District, GO,
500,000 5.00%, due 12/15/2018 ......................... 543,400
James City, Virginia, Service Authority, Water
and Sewer, Revenue,
1,000,000 5.125%, due 01/15/2017 ........................ 1,080,810
Loudoun Co., Virginia, GO,
500,000 5.00%, due 07/01/2012 ......................... 537,685
Loudoun Co., Virginia, Industrial Dev. Authority,
Public Facility Lease, Revenue,
1,000,000 5.00%, due 03/01/2019 ......................... 1,064,850
Loudoun Co., Virginia, Industrial Dev. Authority,
Revenue,
800,000 3.78%, floating rate, due 02/15/2038 .......... 800,000
Lynchburg, Virginia, GO,
500,000 5.00%, due 06/01/2015 ......................... 546,150
Medical College of Virginia, Hospitals Authority,
Revenue,
700,000 5.00%, due 07/01/2013 ......................... 727,685
New Kent Co., Virginia, Economic Dev. Authority,
Revenue,
500,000 5.00%, due 02/01/2019 ......................... 543,255
Norfolk, Virginia, Water, Revenue,
1,000,000 5.00%, due 11/01/2016 ......................... 1,059,770
Portsmouth, Virginia, GO,
290,000 5.00%, due 08/01/2017 ......................... 295,786
310,000 5.00%, due 08/01/2017, prerefunded 08/01/07
@101 .......................................... 316,841
Richmond, Virginia, GO,
1,000,000 5.45%, due 01/15/2008 ......................... 1,024,280
Richmond, Virginia, Industrial Dev. Authority,
Government Facilities, Revenue,
1,010,000 4.75%, due 07/15/2010 ......................... 1,052,945
Richmond, Virginia, Metropolitan Authority,
Revenue,
1,000,000 5.25%, due 07/15/2014 ......................... 1,104,000
20
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VIRGINIA FIXED RATE REVENUE AND GENERAL
VALUE OBLIGATION (GO) BONDS -- 98.2% VALUE
- --------------------------------------------------------------------------------
Southeastern Public Service Authority,
Virginia, Revenue,
$ 1,000,000 5.00%, due 07/01/2015 ......................... $ 1,081,470
Spotsylvania Co., Virginia, GO,
500,000 5.00%, due 01/15/2016 ......................... 539,835
Suffolk, Virginia, GO,
1,000,000 5.00%, due 12/01/2015 ......................... 1,033,850
University of Virginia, Revenue,
1,000,000 5.25%, due 06/01/2012 ......................... 1,052,030
Upper Occoquan, Virginia, Sewer Authority,
Revenue,
250,000 5.15%, due 07/01/2020 ......................... 279,893
Virginia Beach, Virginia, GO,
800,000 5.25%, due 08/01/2010 ......................... 831,464
Virginia College Building Authority, Educational
Facilities, Revenue,
500,000 5.00%, due 02/01/2017 ......................... 537,360
500,000 5.00%, due 04/01/2017 ......................... 542,315
Virginia Commonwealth Transportation Board,
Federal Highway Reimbursement Anticipation
Note, Revenue,
500,000 5.00%, due 09/28/2015 ......................... 547,555
Virginia Commonwealth Transportation Board,
Transportation Revenue,
850,000 7.25%, due 05/15/2020 ......................... 877,021
Virginia Polytechnic Institute & State
University, Revenue,
500,000 5.00%, due 06/01/2016 ......................... 544,095
Virginia State, GO,
500,000 5.00%, due 06/01/2012 ......................... 537,245
Virginia State Public School Authority, Revenue,
995,000 5.25%, due 08/01/2009 ......................... 1,041,069
Virginia State Resource Authority, Revenue,
500,000 5.50%, due 05/01/2017 ......................... 533,830
------------
TOTAL VIRGINIA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (Cost $29,270,675) ...... $ 29,879,672
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 1.8% VALUE
- --------------------------------------------------------------------------------
541,459 Fidelity Institutional Tax-Exempt Portfolio
(Cost $541,459) ............................... $ 541,459
------------
TOTAL INVESTMENTS AT VALUE -- 100.0%
(Cost $29,824,134) ............................ $ 30,421,131
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.0%) . (8,686)
------------
NET ASSETS -- 100.0% ............................ $ 30,412,445
============
See accompanying notes to financial statements.
21
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 98.0% VALUE
- --------------------------------------------------------------------------------
CHINA -- 0.2%
112,538 Air China Ltd. - Class H(a)(b) .................. $ 48,412
------------
DENMARK -- 0.8%
2,326 Novo Nordisk A/S - Class B(b) ................... 172,875
------------
FINLAND -- 1.2%
9,617 Nokia Oyj(a)(b) ................................. 189,250
4,119 Nokia Oyj - ADR ................................. 81,103
------------
270,353
------------
FRANCE -- 10.2%
16,134 Alcatel SA (b) .................................. 196,565
4,451 Carrefour SA .................................... 280,957
1,487 Casino Guichard-Perrachon SA(b) ................. 119,530
3,027 Compagnie de Saint-Gobain (a)(b) ................ 219,228
4,488 France Telecom SA(b) ............................ 103,116
1,698 PPR SA(b) ....................................... 251,345
2,260 Sanofi-Aventis(b) ............................... 200,719
9,716 Suez SA(b) ...................................... 426,464
4,997 Total SA(b) ..................................... 327,419
5,591 Vivendi Universal SA(b) ......................... 201,150
------------
2,326,493
------------
GERMANY -- 10.1%
1,861 Allianz AG(b) ................................... 321,028
1,482 Altana AG(b) .................................... 81,756
4,368 Bayer AG(b) ..................................... 221,705
2,940 Deustche Bank AG(b) ............................. 354,212
1,597 Deustche Postbank AG(b) ......................... 121,011
5,571 Infineon Technologies AG(a)(b) .................. 65,892
2,866 KarstadtQuelle AG(b) ............................ 68,193
2,757 Metro AG(b) ..................................... 160,469
1,477 Muencher Rueckversicherungs-Gesellschaft AG (b) . 232,918
1,409 SAP AG(b) ....................................... 278,870
4,260 Siemens AG(b) ................................... 370,345
92 Wacker Chemie AG(a)(b) .......................... 10,812
------------
2,287,211
------------
GREECE -- 1.1%
9,986 Hellenic Telecommunications Organization SA(b) .. 244,211
------------
ITALY -- 4.9%
6,433 Assicurazioni Generali SpA(b) ................... 240,176
25,108 Enel SpA(b) ..................................... 228,956
15,022 ENI SpA(b) ...................................... 445,898
22,966 UniCredito Italiano SpA(b) ...................... 190,398
------------
1,105,428
------------
22
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.0% VALUE
- --------------------------------------------------------------------------------
JAPAN -- 27.1%
9,300 Bridgestone Corporation(b) ...................... $ 188,422
3,750 Canon, Inc.(b) .................................. 196,072
14,000 Daiwa Securities Group, Inc.(b) ................. 163,873
39 East Japan Railway Company(b) ................... 272,928
600 Electric Power Development Company Ltd.(b) ...... 21,417
2,800 FAST RETAILING COMPANY Ltd.(b) .................. 263,414
8,400 JSR Corporation(b) .............................. 185,309
550 KEYENCE CORPORATION(b) .......................... 126,649
9,200 MARUI COMPANY LTD.(b) ........................... 135,107
12,000 Matsushita Electric Industrial Company Ltd.(b) .. 253,886
18 Millea Holdings, Inc. ........................... 314,064
21,000 Mitsubishi Estate Company Ltd.(b) ............... 459,506
42 Mitsubishi UFJ Financial Group, Inc. ............ 540,719
10,500 Nikko Cordial Corporation(b) .................... 122,093
20,400 Nomura Holdings, Inc.(b) ........................ 359,329
78 NTT Data Corporation(b) ......................... 360,589
112 NTT DoCoMo, Inc.(b) ............................. 172,634
14,200 PIONEER Corporation(b) .......................... 250,067
4,000 SECOM Company Ltd.(b) ........................... 198,317
8,600 Seven & I Holdings Company Ltd.(a)(b) ........... 277,215
13,000 Sharp Corporation(b) ............................ 223,208
500 SUMCO CORPORATION ............................... 37,056
44 Sumitomo Mitsui Financial Group, Inc.(b) ........ 462,273
3,550 T&D Holdings, Inc.(b) ........................... 257,320
1,800 TDK CORPORATION(b) .............................. 144,251
2,700 Tokyo Electron Ltd.(b) .......................... 199,696
------------
6,185,414
------------
NETHERLANDS -- 7.6%
4,120 ABN AMRO Holdings NV(b) ......................... 120,008
7,561 Aegon NV(b) ..................................... 141,621
3,469 Akzo Nobel NV(b) ................................ 213,374
6,780 Fortis(b) ....................................... 274,644
6,893 ING Groep NV(b) ................................. 302,613
39,009 Koninklijke (Royal) KPN NV(a)(b) ................ 496,527
5,253 Koninklijke (Royal) Philips Electronics NV(b) ... 183,673
------------
1,732,460
------------
NORWAY -- 1.0%
9,456 Statoil ASA(b) .................................. 225,450
------------
POLAND -- 0.2%
4,833 Powszechna Kasa Oszczednosci Bank Polski SA(a)(b) 56,270
------------
PORTUGAL -- 0.5%
27,846 EDP - Energias de Portugal SA(b) ................ 120,489
------------
SINGAPORE -- 1.4%
26,000 DBS Group Holdings Ltd.(b) ...................... 314,210
------------
SOUTH KOREA -- 1.2%
2,890 Hyundai Motor Company ........................... 247,322
1,579 Lotte Shopping Company Ltd.(a) .................. 27,943
------------
275,265
------------
23
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 98.0% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
SPAIN -- 3.2%
17,925 Repsol YPF SA(b) ................................ $ 532,307
11,276 Telefonica SA(a)(b) ............................. 194,999
------------
727,306
------------
SWEDEN -- 2.3%
24,467 Nordea Bank AB(b) ............................... 320,442
61,565 Telefonaktiebolaget LM Ericsson(a)(b) ........... 212,694
------------
533,136
------------
SWITZERLAND -- 5.9%
4,603 Credit Suisse Group(b) .......................... 265,430
582 Nestle SA(b) .................................... 202,231
6,812 Novartis AG(b) .................................. 396,325
1,661 Roche Holdings AG(b) ............................ 286,165
1,065 Swiss Re(b) ..................................... 81,180
469 Zurich Financial Services AG(b) ................. 114,828
------------
1,346,159
------------
UNITED KINGDOM -- 19.1%
26,092 BAE Systems PLC(b) .............................. 192,395
5,304 Berkeley Group (The) PLC(a)(b) .................. 133,904
19,725 Cadbury Schweppes PLC ........................... 209,464
2,271 Carnival PLC(b) ................................. 108,345
20,817 GlaxoSmithKline PLC(b) .......................... 552,710
28,888 Imperial Chemical Industries PLC(b) ............. 214,144
36,140 J Sainsbury PLC(b) .............................. 253,326
9,414 Kesa Electricals PLC(a)(b) ...................... 57,428
41,187 Kingfisher PLC(b) ............................... 188,961
12,009 Land Securities Group PLC(b) .................... 441,279
24,321 Lloyds TSB Group PLC(b) ......................... 245,552
22,147 Prudential PLC(b) ............................... 273,996
24,122 Rolls-Royce Group PLC(b) ........................ 203,727
13,187 Royal Dutch Shell PLC - Class A(a)(b) ........... 435,061
7,113 Royal Dutch Shell PLC - Class B(a)(b) ........... 241,537
10,215 Smiths Group PLC(b) ............................. 170,981
392 United Utilities PLC(b) ......................... 5,160
8,211 Whitbread PLC(b) ................................ 198,624
35,432 William Morrison Supermarkets PLC(b) ............ 160,956
101,239 Woolworths Group PLC(b) ......................... 67,205
------------
4,354,755
------------
TOTAL COMMON STOCKS -- 98.0% (Cost $16,588,948) . $ 22,325,897
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.0% ... 466,350
------------
NET ASSETS -- 100.0% ............................ $ 22,792,247
============
(a) Non-income producing security.
(b) Fair value priced (Note 1). Fair valued securities totalled $20,833,789 at
September 30, 2006, representing 90.4% of net assets.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
24
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2006 (UNAUDITED)
================================================================================
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.
25
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 periods ended
September 30, 2006 and March 31, 2006, proceeds from redemption fees totaled $0
and $5, 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.
26
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributions paid during the periods ended September 30,
2006 and March 31, 2006 was as follows:
EXEMPT-
PERIODS ORDINARY LONG-TERM INTEREST TOTAL
ENDED INCOME CAPITAL GAINS DIVIDENDS DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------
Jamestown Balanced Fund 9/30/06 $ 492,288 $ -- $ -- $ 492,288
3/31/06 $ 1,775,891 $ 3,199,380 $ -- $ 4,975,271
- -----------------------------------------------------------------------------------------------------------------
Jamestown Equity Fund 9/30/06 $ 88,463 $ -- $ -- $ 88,463
3/31/06 $ 632,226 $ 2,550,391 $ -- $ 3,182,617
- -----------------------------------------------------------------------------------------------------------------
Jamestown Tax Exempt Virginia Fund 9/30/06 $ -- $ -- $ 544,052 $ 544,052
3/31/06 $ -- $ -- $ 1,089,001 $ 1,089,001
- -----------------------------------------------------------------------------------------------------------------
Jamestown International Equity Fund 9/30/06 $ 87,099 $ -- $ -- $ 87,099
3/31/06 $ 164,170 $ -- $ -- $ 164,170
- -----------------------------------------------------------------------------------------------------------------
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.
27
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributable earnings at September 30, 2006 was as
follows:
- ---------------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------
Cost of portfolio investments ............ $ 43,362,101 $ 32,543,617 $ 29,812,136 $ 16,609,408
============= ============= ============= =============
Gross unrealized appreciation ............ $ 8,135,486 $ 8,035,685 $ 641,076 $ 5,920,805
Gross unrealized depreciation ............ (526,910) (370,147) (32,081) (204,316)
------------- ------------- ------------- -------------
Net unrealized appreciation on investments $ 7,608,576 $ 7,665,538 $ 608,995 $ 5,716,489
------------- ------------- ------------- -------------
Net unrealized depreciation on translation
of assets and liabilities in foreign
currencies .............................. -- -- -- (621)
Undistributed ordinary income ............ 31,420 9,077 18,194 80,130
Undistributed long-term gains ............ 1,671,355 1,358,758 36,661 --
Capital loss carryforwards ............... -- -- -- (15,846,405)
Other temporary differences .............. (23,115) (6,486) (18,194) (2,325)
------------- ------------- ------------- -------------
Total distributable earnings
(accumulated deficit) ................... $ 9,294,236 $ 9,026,887 $ 645,656 $ (10,052,732)
============= ============= ============= =============
- ---------------------------------------------------------------------------------------------------------------
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.
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 the current and future years
to offset net realized capital gains, if any, prior to distribution to
shareholders.
28
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the six months ended September 30, 2006, The Jamestown Balanced Fund
reclassified $66,429 of overdistributed net investment income against
accumulated net realized loss and The Jamestown Tax Exempt Virginia Fund
reclassified $16,517 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 asset value per share.
Additionally, for the six months ended September 30, 2006, The Jamestown
International Equity Fund reclassified $1,650 of net realized gains 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 six months ended September 30, 2006:
- ---------------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY VIRGINIA EQUITY
FUND FUND FUND FUND
- ---------------------------------------------------------------------------------------------------------------
Purchases of investment securities ....... $ 8,911,890 $ 10,784,260 $ 2,188,115 $ 2,591,388
============= ============= ============= =============
Proceeds from sales and maturities
of investment securities ............... $ 14,549,727 $ 14,937,442 $ 1,938,190 $ 1,625,616
============= ============= ============= =============
- ---------------------------------------------------------------------------------------------------------------
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
Each Fund's 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.
29
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the six months ended September 30, 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 its average daily net assets. Accordingly, the Adviser
voluntarily waived $9,091 and $34,247, respectively, of such Funds' investment
advisory fees during the six months ended September 30, 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.
Until August 2006, the Adviser was reimbursed for the estimated costs of
providing a Chief Compliance Officer (CCO) for the Funds. The Adviser received
aggregate fees of $6,000 for providing CCO services during the period ended
September 30, 2006.
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.
COMPLIANCE CONSULTING AGREEMENT
Effective August 7, 2006, under the terms of a Compliance Consulting Agreement
between the Trust and Ultimus, Ultimus provides an individual to serve as the
Trust's Chief Compliance Officer and to administer the Trust's compliance
policies and procedures. For these services, the Funds pay Ultimus an annual
base fee of $22,200 plus an asset-based fee equal to 0.01% per annum on total
net assets in excess of $100 million. During the period ended September 30,
2006, the Funds paid aggregate fees of $4,446 to Ultimus for compliance
consulting services.
30
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
4. BROKERAGE ARRANGEMENT
In order to reduce the total operating expenses of The Jamestown Balanced Fund
and The Jamestown Equity Fund, a portion of each Fund's other operating expenses
have been paid through an arrangement with a third-party broker-dealer who is
compensated through commission trades. Payment of expenses by the broker-dealer
is based on a percentage of commissions earned.
Expenses reimbursed through the brokerage arrangement totaled $12,000 for each
of The Jamestown Balanced Fund and The Jamestown Equity Fund for the six months
ended September 30, 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.
31
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Jamestown International Equity Fund enters into forward foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The Fund may
enter into these contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific transactions or portfolio positions. The objective of the Fund's
foreign currency hedging transactions is to reduce risk that the U.S. dollar
value of the Fund's securities denominated in foreign currency will decline in
value due to changes in foreign currency exchange rates. All foreign currency
exchange contracts are "marked-to-market" daily at the applicable translation
rates resulting in unrealized gains or losses. Realized and unrealized gains or
losses are included in the Fund's Statement of Assets and Liabilities and
Statement of Operations. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar.
As of September 30, 2006, The Jamestown International Equity Fund had no
outstanding forward foreign currency exchange contracts.
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.
8. ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 (FIN 48) "Accounting for Uncertainty in Income Taxes". FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken in the course of preparing the Funds' tax
returns to determine whether the tax positions are "more-likely-than-not" of
being sustained by the applicable tax authority. Tax benefits of positions not
deemed to meet the more-likely-than-not threshold would be booked as a tax
expense in the current year and recognized as: a liability for unrecognized tax
benefits; a reduction of an income tax refund receivable; a reduction of
deferred tax asset; an increase in deferred tax liability; or a combination
thereof. Adoption of FIN 48 is required for fiscal years beginning after
December 15, 2006. At this time, management is evaluating the implications of
FIN 48 and its impact on the financial statements has not yet been determined.
32
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.
33
THE JAMESTOWN FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses
April 1, September 30, Paid During
2006 2006 Period*
- --------------------------------------------------------------------------------
THE JAMESTOWN BALANCED FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,008.20 $4.48
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.61 $4.51
- --------------------------------------------------------------------------------
THE JAMESTOWN EQUITY FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 996.20 $4.55
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.51 $4.61
- --------------------------------------------------------------------------------
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,025.20 $3.50
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.61 $3.50
- --------------------------------------------------------------------------------
THE JAMESTOWN INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,027.50 $7.32
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,017.85 $7.28
- --------------------------------------------------------------------------------
* 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 183/365 (to reflect the one-half year period).
The Jamestown Balanced Fund 0.89%
The Jamestown Equity Fund 0.91%
The Jamestown Tax Exempt Virginia Fund 0.69%
The Jamestown International Equity Fund 1.44%
34
THE JAMESTOWN 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 1-866-738-1126, 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 Trust files a complete listing of portfolio holdings of 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 1-866-738-1126. 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.
35
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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.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
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: Not required
(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.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 December 8, 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 December 8, 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 December 8, 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 December 8, 2006
-----------------------------------------
By (Signature and Title)* /s/ Joseph A. Jennings III
------------------------------------------------------
Joseph A. Jennings III, President (The Jamestown
Tax Exempt Virginia Fund)
Date December 8, 2006
-----------------------------------------
By (Signature and Title)* /s/ Joseph L. Antrim III
------------------------------------------------------
Joseph L. Antrim III, President (The Davenport
Equity Fund)
Date December 8, 2006
-----------------------------------------
By (Signature and Title)* /s/ Mark J. Seger
------------------------------------------------------
Mark J. Seger, Treasurer
Date December 8, 2006
-----------------------------------------
* Print the name and title of each signing officer under his or her signature.