----------------------------
OMB APPROVAL
----------------------------
OMB Number: 3235-0570
Expires: September 30, 2007
Estimated average burden
hours per response: 19.4
----------------------------
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 811-09000
----------------------------------------------
Oak Value Trust
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
3100 Tower Boulevard, Suite 700 Durham, North Carolina 27707
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Larry D. Coats, Jr.
Oak Value Capital Management, Inc. 3100 Tower Boulevard Durham, NC 27707
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (919) 419-1900
---------------------------
Date of fiscal year end: June 30, 2007
---------------------------------------------
Date of reporting period: December 31, 2006
---------------------------------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL REPORT
DECEMBER 31, 2006
(UNAUDITED)
[LOGO]
================
OAK VALUE FUND
----------------
WWW.OAKVALUEFUND.COM
LETTER TO SHAREHOLDERS February, 2007
================================================================================
Dear Fellow Oak Value Fund Shareholders,
We have included the Oak Value Fund's (the "Fund") financial statements for the
six month period ended December 31, 2006 as well as other financial and
portfolio data in the pages that follow. The Fund's performance for this period
outpaced that of the broader market as measured by the S&P 500 Index. During
this period the Fund added seven new holdings and eliminated four holdings. As
required by law, the Fund made capital gains and income distributions during the
period as well.
On the mutual fund governance front, many in the mutual fund industry have gone
to great lengths to trumpet the extent to which they view themselves as acting
in the best interest of shareholders with regard to non-portfolio matters.
Though it has been our practice to use the pages of this and other Fund related
communications to focus on the investments to which our collective capital has
been allocated, a few shareholders have recently inquired as to our position on
matters of media attention. To that end, we offer the following summary points
of information which will hopefully serve to confirm that which you would have
reasonably expected of us:
o The Oak Value Fund's Board of Trustees is comprised of four
independent trustees and one affiliated trustee.
o The Board of Trustees operates under the direction of an independent
Chairman.
o The Board of Trustee's Governance, Nominating and Compensation
Committee is comprised of the four independent trustees.
o The Board of Trustees has appointed an experienced person to serve
as the Fund's Chief Compliance Officer and this person reports
directly to the Board.
o The independent trustees, as well as the affiliated trustee are all
shareholders in the Fund.
o The Portfolio Managers of the Fund each have more than $1 million
invested in the Fund.
o As a group, the Board of Trustees and the employees of the
Investment Adviser are one of the largest shareholders in the Fund.
Consistent with the practice we established in prior years, the portfolio
commentary contained in this semi-annual report is limited to a few basic
1
observations. A detailed summary of the Fund's investment activities is provided
in the Investment Adviser's Review posted on the Fund's website -
www.oakvaluefund.com. We encourage you to review this and other information
posted to the site on a regular basis.
We thank you for your continued interest and partnership and welcome your
questions and comments.
Oak Value Fund Co-Managers,
/s/ David R. Carr, Jr. /s/ Larry D. Coats, Jr.
David R. Carr, Jr. Larry D. Coats, Jr.
2
- --------------------------------------------------------------------------------------------------------
TOP TEN HOLDINGS(1)
AS OF DECEMBER 31, 2006
- --------------------------------------------------------------------------------------------------------
COMPANY PRIMARY BUSINESS S&P SECTOR
- --------------------------------------------------------------------------------------------------------
AFLAC Supplemental Heath & Life Insurance Financials
- --------------------------------------------------------------------------------------------------------
Apollo Group Education & Training Services Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
Berkshire Hathaway Insurance, Reinsurance & Capital Allocation Financials
- --------------------------------------------------------------------------------------------------------
Cadbury Schweppes PLC Int'l Confectionery & Beverages Manufacturer /Licensor Consumer Staples
- --------------------------------------------------------------------------------------------------------
E.W. Scripps Entertainment & Information/Media Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
Fidelity National Financial Transaction Processing Information Technology
- --------------------------------------------------------------------------------------------------------
Praxair Industrial Use Atmospheric and Process Gases Materials
- --------------------------------------------------------------------------------------------------------
Time Warner Entertainment & Information / Media Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
United Technologies Diversified Manufacturing and Service Industrials
- --------------------------------------------------------------------------------------------------------
Willis Group Holdings Commercial Insurance Brokerage Services Financials
- --------------------------------------------------------------------------------------------------------
1 Top Ten Holdings are presented to illustrate examples of the securities in
which the Fund may invest. Because they are presented as of the dates
indicated and change from time to time, they may not be representative of
the Fund's current or future investments. Top Ten Holdings do not include
money market instruments.
- --------------------------------------------------------------------------------------------------------
JULY 1 - DECEMBER 31, 2006 PURCHASE/SALE ACTIVITY
- --------------------------------------------------------------------------------------------------------
POSITION (SYMBOL) PRIMARY BUSINESS SECTOR CLASSIFICATION
- --------------------------------------------------------------------------------------------------------
PURCHASED: American Express (AXP) Global Payments, Network, Financials
and Travel Services
- --------------------------------------------------------------------------------------------------------
PURCHASED: Apollo Group (APOL) Education and Training Services Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
PURCHASED: CBS (CBS) Diversified Media Broadcasting Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
PURCHASED: Capital One (COF) Financial Services Financials
- --------------------------------------------------------------------------------------------------------
PURCHASED: eBay (EBAY) Online Marketplace, Payment Information Technology
Services, and Communications
- --------------------------------------------------------------------------------------------------------
PURCHASED: Fidelity National (FIS) Financial Transaction Processing Information Technology
- --------------------------------------------------------------------------------------------------------
PURCHASED: Tiffany (TIF) Fine Jewelry Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
SOLD: Diageo (DEO) Global Premium Alcohol Business Consumer Staples
- --------------------------------------------------------------------------------------------------------
SOLD: Entercom Communications (ETM) Radio Broadcasting Consumer Discretionary
- --------------------------------------------------------------------------------------------------------
SOLD: Equifax (EFX) Credit Reporting Services Industrials
- --------------------------------------------------------------------------------------------------------
SOLD: Estee Lauder (EL) Beauty/Skin Care Products Consumer Staples
- --------------------------------------------------------------------------------------------------------
IMPORTANT INFORMATION:
THE OAK VALUE FUND IS DISTRIBUTED BY ULTIMUS FUND DISTRIBUTORS, LLC. THE
INFORMATION PRESENTED ABOVE IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION
TO PURCHASE THE OAK VALUE FUND (THE "FUND"), WHICH IS OFFERED ONLY BY
PROSPECTUS. AN INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS,
CHARGES AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE FUND'S
PROSPECTUS CONTAINS THIS AND OTHER IMPORTANT INFORMATION. TO OBTAIN A COPY OF
THE OAK VALUE FUND'S PROSPECTUS PLEASE VISIT OUR WEBSITE AT WWW.OAKVALUEFUND.COM
OR CALL 1-800-622-2474 AND A COPY WILL BE SENT TO YOU FREE OF CHARGE. PLEASE
READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
3
OAK VALUE FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
Comparison of the Change in Value of a $10,000 Investment
in the Oak Value Fund and the S&P 500 Index
[LINE GRAPH OMITTED]
OAK VALUE FUND: S&P 500 INDEX:
-------------------- --------------------
12/31/96 $10,000 12/31/96 $10,000
06/30/97 12,024 06/30/97 12,061
12/31/97 13,770 12/31/97 13,336
06/30/98 16,179 06/30/98 15,698
12/31/98 16,376 12/31/98 17,148
06/30/99 17,279 06/30/99 19,271
12/31/99 15,865 12/31/99 20,756
06/30/00 15,912 06/30/00 20,668
12/31/00 18,747 12/31/00 18,866
06/30/01 19,624 06/30/01 17,603
12/31/01 18,659 12/31/01 16,624
06/30/02 16,325 06/30/02 14,436
12/31/02 14,117 12/31/02 12,950
06/30/03 16,757 06/30/03 14,473
12/31/03 18,651 12/31/03 16,664
06/30/04 19,011 06/30/04 17,238
12/31/04 20,138 12/31/04 18,478
06/30/05 20,190 06/30/05 18,328
12/31/05 19,862 12/31/05 19,385
06/30/06 19,854 06/30/06 19,910
12/31/06 22,678 12/31/06 22,447
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------------------------------------------------
TOTAL RETURNS(A)
- --------------------------------------------------------------------------------------------------------------------------
SINCE
CALENDAR CALENDAR CALENDAR CALENDAR CALENDAR CALENDAR CALENDAR CALENDAR CALENDAR CALENDAR INCEPTION*
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (AS OF 12/31/06)
- --------------------------------------------------------------------------------------------------------------------------
Oak Value Fund 37.70% 18.93% -3.12% 18.17% -0.47% -24.34% 32.11% 7.97% -1.37% 14.18% 353.02%(B)
S&P 500 Index 33.36% 28.58% 21.04% -9.12% -11.90% -22.10% 28.68% 10.88% 4.91% 15.79% 322.05%(B)
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS(A)
- --------------------------------------------------------------------------------
FOR THE PERIODS ENDED DECEMBER 31, 2006
--------------------------------------------------------
SINCE
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS INCEPTION*
- --------------------------------------------------------------------------------
Oak Value Fund ...... 14.18% 6.74% 3.98 8.53 11.44%
- --------------------------------------------------------------------------------
S&P 500 Index ....... 15.79% 10.44% 6.19 8.42 10.87%
- --------------------------------------------------------------------------------
* Inception date of the Oak Value Fund was January 18, 1993.
(A) The returns shown do not reflect the deduction of taxes a shareholder
would pay on Fund distributions or the redemption of Fund shares.
(B) Not annualized.
4
OAK VALUE FUND
PORTFOLIO INFORMATION
DECEMBER 31, 2006 (UNAUDITED)
================================================================================
DISTRIBUTION BY BUSINESS CATEGORY (% OF NET ASSETS)
[PIE CHART OMITTED]
Basic Materials - 10.5%
Consumer Related - 19.8%
Diversified - 18.7%
Finance Related - 12.0%
Health Care - 2.6%
Insurance - 5.4%
Media - 14.1%
Technology - 16.2%
Cash Equivalents - 0.7%
TEN LARGEST HOLDINGS
% OF
COMPANY NET ASSETS
------------------------------------------------------
Berkshire Hathaway, Inc.(A) 9.40%
Praxair, Inc. 6.37%
E.W. Scripps Co. (The) - Class A 5.82%
AFLAC, Inc. 5.41%
Time Warner, Inc. 5.19%
Willis Group Holdings Ltd. 5.04%
Fidelity National Information Services, Inc. 4.97%
United Technologies Corp. 4.96%
Apollo Group, Inc. - Class A 4.57%
Cadbury Schweppes PLC - ADR 4.50%
(A) Class A and Class B shares combined.
5
OAK VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2006 (UNAUDITED)
================================================================================
ASSETS
Investments in securities:
At cost .................................................... $ 117,760,080
=============
At market value (Note 1) ................................... $ 164,183,910
Receivable for investment securities sold ..................... 2,423,504
Receivable for capital shares sold ............................ 29,754
Dividends receivable .......................................... 95,458
Other assets .................................................. 63,720
-------------
TOTAL ASSETS ............................................... 166,796,346
-------------
LIABILITIES
Dividends payable ............................................. 3,260
Payable for investment securities purchased ................... 4,113,843
Payable for capital shares redeemed ........................... 976,748
Accrued investment advisory fees (Note 3) ..................... 125,918
Payable to affiliate (Note 3) ................................. 21,141
Other accrued expenses and liabilities ........................ 27,979
-------------
TOTAL LIABILITIES .......................................... 5,268,889
-------------
NET ASSETS .................................................... $ 161,527,457
=============
Net assets consist of:
Paid-in capital ............................................... $ 108,020,531
Accumulated undistributed net investment loss ................. (285,392)
Undistributed net realized gains from security transactions ... 7,368,488
Net unrealized appreciation on investments .................... 46,423,830
-------------
Net assets .................................................... $ 161,527,457
=============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ....... 5,735,955
=============
Net asset value, offering price and redemption price
per share (A) ............................................... $ 28.16
=============
(A) Redemption price may differ from the net asset value per share depending
upon the length of time the shares are held (Note 1).
See accompanying notes to financial statements.
6
OAK VALUE FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
================================================================================
INVESTMENT INCOME
Dividends ...................................................... $ 1,027,469
------------
EXPENSES
Investment advisory fees (Note 3) .............................. 778,721
Transfer agent and shareholder services fees (Note 3) .......... 86,340
Administration fees (Note 3) ................................... 70,639
Trustees' fees and expenses .................................... 59,912
Postage and supplies ........................................... 36,828
Professional fees .............................................. 34,815
Insurance expense .............................................. 27,125
Fund accounting fees (Note 3) .................................. 20,630
Registration fees .............................................. 18,505
Compliance service fees (Note 3) ............................... 12,558
Printing of shareholder reports ................................ 12,197
Custodian fees ................................................. 10,134
Interest expense (Note 4) ...................................... 1,796
Other expenses ................................................. 13,393
------------
TOTAL EXPENSES .............................................. 1,183,593
------------
NET INVESTMENT LOSS ............................................ (156,124)
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains from security transactions .................. 27,126,867
Net change in unrealized appreciation/depreciation
on investments ............................................... (5,389,961)
------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ............... 21,736,906
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ..................... $ 21,580,782
============
See accompanying notes to financial statements.
7
OAK VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
=========================================================================================================
SIX MONTHS
ENDED YEAR
DECEMBER 31, ENDED
2006 JUNE 30,
(UNAUDITED) 2006
------------- -------------
FROM OPERATIONS
Net investment income (loss) ........................................ $ (156,124) $ 566,488
Net realized gains from security transactions ....................... 27,126,867 15,683,448
Net change in unrealized appreciation/depreciation on investments ... (5,389,961) (20,219,133)
------------- -------------
Net increase (decrease) in net assets from operations .................. 21,580,782 (3,969,197)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income .......................................... (129,714) (566,042)
From net realized gains from security transactions .................. (19,758,400) (15,290,172)
------------- -------------
Net decrease in net assets from distributions to shareholders .......... (19,888,114) (15,856,214)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................................... 14,236,672 37,744,165
Reinvestment of distributions to shareholders ....................... 19,464,212 14,515,519
Proceeds from redemption fees collected (Note 1) ................... 61,900 11,580
Payments for shares redeemed ........................................ (74,951,626) (80,204,484)
------------- -------------
Net decrease in net assets from capital share transactions ............. (41,188,842) (27,933,220)
------------- -------------
NET DECREASE IN NET ASSETS ............................................. (39,496,174) (47,758,631)
NET ASSETS
Beginning of period ................................................. 201,023,631 248,782,262
------------- -------------
End of period ....................................................... $ 161,527,457 $ 201,023,631
============= =============
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) ............................................ $ (285,392) $ 446
============= =============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold ......................................................... 483,665 1,242,359
Shares reinvested ................................................... 696,608 514,088
Shares redeemed ..................................................... (2,623,906) (2,647,888)
------------- -------------
Net decrease in shares outstanding .................................. (1,443,633) (891,441)
Shares outstanding, beginning of peirod ............................. 7,179,588 8,071,029
------------- -------------
Shares outstanding, end of period ................................... 5,735,955 7,179,588
============= =============
See accompanying notes to financial statements.
8
OAK VALUE FUND
FINANCIAL HIGHLIGHTS
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
================================================================================================================================
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
DECEMBER 31, ENDED ENDED ENDED ENDED ENDED
2006 JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
(UNAUDITED) 2006 2005 2004 2003 2002
--------- --------- --------- --------- --------- ---------
Net asset value at
beginning of period ...................... $ 28.00 $ 30.82 $ 29.02 $ 25.58 $ 24.92 $ 30.74
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss) ............. (0.03) 0.08 (0.12) (0.15) (0.07) (0.10)
Net realized and unrealized gains
(losses) on investments ................ 3.97 (0.60) 1.92 3.59 0.73 (5.05)
--------- --------- --------- --------- --------- ---------
Total from investment operations ........... 3.94 (0.52) 1.80 3.44 0.66 (5.15)
--------- --------- --------- --------- --------- ---------
Less distributions:
From net investment income ............... (0.02) (0.08) -- -- -- --
From net realized gains from
security transactions .................. (3.77) (2.22) -- -- -- (0.67)
--------- --------- --------- --------- --------- ---------
Total distributions ........................ (3.79) (2.30) -- -- -- (0.67)
--------- --------- --------- --------- --------- ---------
Proceeds from redemption
fees collected (Note 1) .................. 0.01 0.00(A) 0.00(A) 0.00(A) -- --
--------- --------- --------- --------- --------- ---------
Net asset value at end of period ........... $ 28.16 $ 28.00 $ 30.82 $ 29.02 $ 25.58 $ 24.92
========= ========= ========= ========= ========= =========
Total return(B) ............................ 14.23%(C) (1.66%) 6.20% 13.45% 2.65% (16.81%)
========= ========= ========= ========= ========= =========
Net assets at end of period (000's) ........ $ 161,527 $ 201,024 $ 248,782 $ 259,488 $ 272,582 $ 279,736
========= ========= ========= ========= ========= =========
Ratio of expenses to
average net assets ....................... 1.37%(E) 1.29% 1.25% 1.25% 1.36% 1.23%(D)
Ratio of net investment income
(loss) to average net assets ............. (0.18%)(E) 0.24% (0.39%) (0.52%) (0.33%) (0.36%)
Portfolio turnover rate .................... 20% 29% 29% 24% 28% 63%
(A) Amount rounds to less than $0.01 per share.
(B) 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 shown 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 the use of earnings credits on cash balances, the ratio of expenses
to average net assets would have been 1.24% for the year ended June 30,
2002.
(E) Annualized.
See accompanying notes to financial statements.
9
OAK VALUE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2006 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS -- 99.3% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS -- 10.5%
136,475 E.I. du Pont de Nemours and Co...................... $ 6,647,697
173,400 Praxair, Inc. ...................................... 10,287,822
-------------
16,935,519
-------------
CONSUMER RELATED -- 19.8%
189,425 Apollo Group, Inc. - Class A (A).................... 7,381,892
169,350 Cadbury Schweppes PLC - ADR......................... 7,270,196
150,850 Constellation Brands, Inc. - Class A (A)............ 4,377,667
69,025 Harley-Davidson, Inc................................ 4,864,192
182,500 Masco Corp. ........................................ 5,451,275
69,625 Tiffany & Co........................................ 2,732,085
-------------
32,077,307
-------------
DIVERSIFIED -- 18.7%
96 Berkshire Hathaway, Inc. - Class A (A).............. 10,559,040
1,263 Berkshire Hathaway, Inc. - Class B (A).............. 4,630,158
227,650 Tyco International Ltd.............................. 6,920,560
128,200 United Technologies Corp. .......................... 8,015,064
-------------
30,124,822
-------------
FINANCE RELATED -- 12.0%
118,000 American Express Co................................. 7,159,060
52,600 Capital One Financial Corp.......................... 4,040,732
205,125 Willis Group Holdings Ltd........................... 8,145,514
-------------
19,345,306
-------------
HEALTH CARE -- 2.6%
64,700 Johnson & Johnson................................... 4,271,494
-------------
INSURANCE -- 5.4%
190,000 AFLAC, Inc.......................................... 8,740,000
-------------
MEDIA -- 14.1%
13,575 CBS Corp. - Class B................................. 423,269
188,245 E.W. Scripps Co. (The) - Class A.................... 9,400,955
385,175 Time Warner, Inc. .................................. 8,389,111
110,262 Viacom, Inc. - Class B (A).......................... 4,524,050
-------------
22,737,385
-------------
TECHNOLOGY -- 16.2%
151,625 eBay, Inc. (A)...................................... 4,559,364
200,149 Fidelity National Information Services, Inc. ....... 8,023,973
235,175 IMS Health, Inc..................................... 6,462,609
414,300 Oracle Corp. (A).................................... 7,101,102
-------------
26,147,048
-------------
TOTAL COMMON STOCKS (Cost $113,955,051)............. $ 160,378,881
-------------
10
OAK VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES CASH EQUIVALENTS -- 2.3% VALUE
- --------------------------------------------------------------------------------
3,805,029 First American Government Obligations Fund -
Class Y (Cost $3,805,029).......................... $ 3,805,029
-------------
TOTAL INVESTMENTS AT VALUE -- 101.6%
(Cost $117,760,080)............................... $ 164,183,910
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.6%)..... (2,656,453)
-------------
NET ASSETS -- 100.0%................................ $ 161,527,457
=============
(A) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
11
OAK VALUE FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 (UNAUDITED)
================================================================================
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Oak Value Fund (the "Fund") is a diversified series of Oak Value Trust (the
"Trust"). The Trust, registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), was
organized as a Massachusetts business trust on March 3, 1995. The Fund began
operations on January 18, 1993 as a series of the Albemarle Investment Trust.
The Fund's investment objective is to seek capital appreciation primarily
through investments in equity securities, consisting of common and preferred
stocks and securities convertible into common stocks traded in domestic and
foreign markets.
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 principal exchange where the
security is traded. 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. In the
event that market quotations are not readily available, securities are valued at
fair value as determined in accordance with procedures adopted in good faith by
the Board of Trustees. Such methods of fair valuation may include, but are not
limited to: multiple of earnings, discount from market of a similar freely
traded security, or a combination of these or other methods. The fair value of
securities with remaining maturities of 60 days or less has been determined in
good faith by the Board of Trustees to be represented by amortized cost value,
absent unusual circumstances.
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, except that shares of the
Fund are subject to a redemption fee of 2.00% if redeemed within 90 days of the
date of purchase. For the periods ended December 31, 2006 and June 30, 2006,
proceeds from redemption fees totaled $61,899 and $11,580, respectively.
REPURCHASE AGREEMENTS -- The Fund may enter into repurchase agreements from
financial institutions such as banks and broker-dealers that the Trust's
investment adviser deems creditworthy under the guidelines approved by the Board
of Trustees, subject to the seller's agreement to repurchase such securities at
a mutually agreed-upon date and price. The repurchase price generally equals the
price paid by the Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
portfolio securities. The seller, under a repurchase agreement, is required to
maintain the value of collateral held pursuant to the agreement at not less than
the repurchase price (including accrued interest).
INVESTMENT INCOME -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS -- Dividends arising from net investment income,
if any, are declared and paid semi-annually 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 capital gains are determined in accordance with federal income tax
regulations which may differ from accounting principles generally accepted in
the United States of America ("GAAP"). These "book/tax" differences are either
12
OAK VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
temporary or permanent in nature and are primarily due to losses deferred due to
wash sales. The tax character of distributions paid during the six months ended
December 31, 2006 was $880,533 of ordinary income and $19,007,581 of long-term
capital gains. The tax character of distributions paid during the year ended
June 30, 2006 was $566,042 of ordinary income and $15,290,172 of long-term
capital gains.
SECURITY TRANSACTIONS -- Security transactions are accounted for on trade date.
Gains and losses on securities sold are determined on a specific identification
basis.
ESTIMATES -- The preparation of financial statements in conformity with GAAP
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 the Fund
so qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is computed on a tax basis for each item as December
31, 2006:
- --------------------------------------------------------------------------------
Cost of portfolio investments ............................... $ 117,771,956
=============
Gross unrealized appreciation ............................... $ 46,723,047
Gross unrealized depreciation ............................... (311,093)
-------------
Net unrealized appreciation ................................. $ 46,411,954
Undistributed ordinary income ............................... 1,067,058
Undistributed long-term gains ............................... 6,027,914
-------------
Total distributable earnings ................................ $ 53,506,926
=============
- --------------------------------------------------------------------------------
2. INVESTMENT TRANSACTIONS
During the six months ended December 31, 2006, cost of purchases and proceeds
from sales and maturities of investment securities, excluding short-term
investments, amounted to $34,621,496 and $94,475,087, respectively.
3. TRANSACTIONS WITH AFFILIATES
The Fund's investments are managed by Oak Value Capital Management, Inc. (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 0.90% of the
Fund's average daily net assets.
Certain trustees and officers of the Trust are also officers of the Adviser or
of Ultimus Fund Solutions, LLC ("Ultimus"), the Fund's administrator, transfer
agent and fund accounting services agent. Such trustees and officers receive no
direct payments or fees from the Trust for serving as officers.
13
OAK VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Under the terms of an Administration Agreement with the Trust, Ultimus provides
internal regulatory compliance services and executive and administrative
services. Ultimus supervises the preparation of tax returns, reports to
shareholders of the Fund, reports to and filings with the Securities and
Exchange Commission and state securities commissions, and materials for meetings
of the Board of Trustees. For the performance of these services, the Fund pays
Ultimus a fee at the annual rate of .10% of the average value of its daily net
assets up to $50 million, .075% of such assets from $50 million to $200 million
and .05% of such assets in excess of $200 million, provided, however, that the
minimum fee is $2,000 per month. For the six months ended December 31, 2006,
Ultimus was paid $70,639 for administration fees.
Under the terms of a Transfer Agent and Shareholder Services Agreement with the
Trust, Ultimus maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution disbursing
agent and performs other shareholder service functions. Ultimus receives from
the Fund for its services as transfer agent a fee payable monthly at an annual
rate of $16 per account, provided, however, that the minimum fee is $2,000 per
month. In addition, the Fund pays out-of-pocket expenses, including but not
limited to, postage and supplies. Accordingly, during the six months ended
December 31, 2006, Ultimus was paid $29,243 for transfer agent and shareholder
services fees.
The Fund has entered into agreements with certain financial intermediaries to
provide record keeping, processing, shareholder communications and other
services to the Fund. These services would be provided by the Fund if the shares
were held in accounts registered directly with the Fund's transfer agent.
Accordingly, the Fund pays a fee to such service providers in an amount
equivalent to or less than the per account fee paid to the transfer agent.
During the six months ended December 31, 2006, the Fund paid $57,097 for such
services. These fees are included as "Transfer agent and shareholder services
fees" on the Statement of Operations.
Under the terms of a Fund Accounting Agreement with the Trust, Ultimus
calculates the daily net asset value per share and maintains such books and
records as are necessary to enable Ultimus to perform its duties. For these
services, the Fund pays Ultimus a base fee of $2,000 per month, plus an
asset-based fee at the annual rate of .01% of the average value of its daily net
assets up to $500 million and .005% of such assets in excess of $500 million.
During the six months ended December 31, 2006, the Fund paid Ultimus $20,630 in
fund accounting fees. In addition, the Fund pays all costs of external pricing
services.
Under the terms of a Compliance Consulting Agreement with the Trust, Ultimus
provides an individual with the requisite background and familiarity with the
Federal Securities Laws to serve as the Chief Compliance Officer and to
administer the Trust's compliance policies and procedures. For these services,
the Fund pays Ultimus a base fee of $1,500 per month, plus an asset-based fee at
the annual rate of .01% of the average value of its daily net assets from $100
million to $500 million, .005% of such assets from $500 million to $1 billion
and .0025% of such assets in excess of $1 billion. During the six months ended
December 31, 2006, Ultimus was paid $12,558 for such services. In addition, the
Fund reimburses Ultimus for its reasonable out-of-pocket expenses relating to
these compliance services.
4. BANK LINE OF CREDIT
The Fund has an unsecured $25,000,000 bank line of credit. Borrowings under this
arrangement bear interest at a rate per annum equal to Prime Rate minus 0.50%.
During the six months ended December 31, 2006, the Fund incurred $1,796 of
interest expense related to borrowings under the line of credit. Average debt
outstanding during the six months ended December 31, 2006, was $45,337. As of
December 31, 2006, the Fund had no outstanding borrowings.
14
OAK VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
5. 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.
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 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 in the financial statements has not yet been determined.
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. As of December 31 2006, the Fund does not believe the
adoption of SFAS No. 157 will impact the amounts reported in the financial
statements, however, additional disclosures may be required about the inputs
used to develop the measurements and the effect of certain of the measurements
reported on the statement of changes in net assets for a fiscal period.
15
OAK VALUE FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. As a shareholder of the Fund, you 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 Fund 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 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
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 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 impose any sales charges. However,
a redemption fee of 2% is applied on the sale of shares sold within 90 days of
the date of purchase. The redemption fee does not apply to the redemption of
shares acquired through reinvestment of dividends and other distributions.
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 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 Fund's prospectus.
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
July 1, 2006 December 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,142.30 $7.40
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.30 $6.97
- --------------------------------------------------------------------------------
* Expenses are equal to the annualized expense ratio of 1.37% for the
period, multiplied by the average account value over the period,
multiplied by 184/365 (to reflect the one-half year period).
16
OAK VALUE FUND
OTHER INFORMATION (UNAUDITED)
================================================================================
A description of the policies and procedures the Fund uses to determine how to
vote proxies relating to portfolio securities is available without charge upon
request by calling toll-free 1-800-622-2474, 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 1-800-622-2474, or on the SEC's website http://www.sec.gov.
The Trust files a complete listing of portfolio holdings for the Fund with the
SEC as of the end of the first and third quarters of each fiscal year on Form
N-Q. The filings are available upon request, by calling 1-800-622-2474.
Furthermore, you will be able to obtain a copy of the filing 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.
17
OAK VALUE FUND
APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
================================================================================
The Board of Trustees of the Trust, with the Independent Trustees voting
separately, has approved the continuance of the Fund's Investment Advisory
Agreement (the "Agreement") with the Adviser. Approval took place at a meeting
held on November 14, 2006, at which all of the Trustees were present.
The Independent Trustees were advised by counsel of their fiduciary obligations
in approving the Agreement, and the Trustees requested such information from the
Adviser as they deemed reasonably necessary to evaluate the terms of the
Agreement and whether the Agreement will continue to be in the best interests of
the Fund and its shareholders. The Trustees reviewed: (i) the nature, extent and
quality of the services provided by the Adviser; (ii) the investment performance
of the Fund and the Adviser; (iii) the costs of the services provided and the
profits realized by the Adviser from its relationship with the Fund; (iv) the
extent to which economies of scale would be realized as the Fund grows; and (v)
whether fee levels reflect these economies of scale for the benefit of the
Fund's shareholders. The Trustees reviewed the background, qualifications,
education and experience of the Adviser's portfolio managers, research staff and
support personnel and the operations and ownership of the Adviser. The Trustees
also reviewed the responsibilities of the Adviser under the Agreement and
considered the quality of the advisory services provided to the Trust, including
the Adviser's intensive research process and its practices with regards to
shareholder protection, shareholder services and communications, and compliance.
The Independent Trustees were advised and supported by counsel experienced in
securities matters throughout the process. Prior to voting, the Independent
Trustees reviewed and discussed the proposed continuance of the Agreement with
management of the Adviser.
The Adviser provided the Board with extensive information to assist the Trustees
with analyzing the Fund's performance over various periods. The Fund's returns
for periods ended September 30, 2006 were compared to the returns of relevant
indices and similarly managed mutual funds. These analyses and comparisons
showed that, although the more recent performance of the Fund has lagged its
benchmark (the S&P 500 Index), the Fund's long-term (i.e., 10-year) performance
has been superior to both the S&P 500 Index and the average of Large Cap Blend
Funds as categorized by Morningstar. Based upon their review, the Trustees found
that the Adviser has provided high-quality advisory services and has
consistently adhered to the stated investment objective and strategies of the
Fund.
In reviewing the advisory fees and the total expense ratio of the Fund, the
Trustees were provided with comparative expense and advisory fee information for
other similarly situated mutual funds, categorized both by fund size and by
investment style. The Trustees also considered the "fallout benefits" received
by the Adviser in its management of the Fund, including certain research
services received as a result of placement of the Fund's brokerage, but, given
the amounts involved, viewed these as secondary factors in connection with the
reasonableness of the advisory fees being paid by the Fund. The Trustees
concluded that, based upon the investment strategies and the long-term
performance of the Fund, the advisory fees paid by the Fund are reasonable.
The Trustees reviewed a recent balance sheet of the Adviser and a statement of
the Adviser's revenues and expenses with respect to its management of the Fund
during the Fund's fiscal year ended June 30, 2006. The Trustees also reviewed
the Fund's brokerage costs and determined that the brokerage commissions
negotiated by the Adviser on behalf of the Fund are competitive with industry
averages.
18
OAK VALUE FUND
APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
(CONTINUED)
================================================================================
The Independent Trustees concluded that: (i) based on the long-term performance
and risk characteristics of the Fund, the effectiveness of the Fund in achieving
its stated objective, and the Adviser's proactive stance regarding shareholder
protections, compliance and communication to shareholders, they believe the
Adviser has provided high quality services; (ii) given the goals of the
investment program of the Fund to provide attractive returns over a full market
cycle, and the fact that the Adviser does not manage the Fund to "track" the
market and has consistently adhered to its mandate and stated strategy in
managing the Fund, the short-term performance of the Fund relative to mutual
fund industry averages and broad market indices is generally not of significant
relevance to the assessment of the overall quality of services provided by the
Adviser to the Fund; (iii) in their view, the nature of the research services
provided by the Adviser, which are broad and sophisticated, are necessary to
manage the Fund; (iv) although the advisory fees and overall operating expenses
of the Fund are in the higher range of fees and expenses for mutual funds of
similar size investing in similar securities, the Trustees believe that the
scope and quality of services provided by the Adviser, which exceed the norm,
support the appropriateness of the advisory fees payable by the Fund; and (v) at
current assets levels, it would not be relevant to consider the extent to which
economies of scale would be realized as the Fund grows, and whether fee levels
reflect these economies of scale. The Independent Trustees also reviewed and
considered the profitability of the Adviser with regards to its management of
the Fund, concluding that the Adviser's profitability was not excessive given
the high quality and scope of services provided by the Adviser and the long-term
investment performance of the Fund. The Independent Trustees also agreed that it
is not appropriate to introduce fee breakpoints at the present time. The
Trustees noted, however, that if the Fund grows significantly in assets, it may
become necessary for the Adviser to consider adding fee breakpoints to the
Agreement.
No single factor was considered in isolation or to be determinative to the
decision of the Independent Trustees to approve continuance of the Agreement.
Rather, the Independent Trustees concluded, in light of a weighing and balancing
of all factors considered, that the advisory fees payable by the Fund under the
Agreement are fair and reasonable. The Independent Trustees determined that it
would be in the best interests of the Fund and its shareholders for the Adviser
to continue to serve as investment adviser and voted to renew the Agreement for
an additional annual period.
19
This page intentionally left blank.
This page intentionally left blank.
OAK VALUE FUND
INVESTMENT ADVISER
Oak Value Capital Management, Inc.
3100 Tower Boulevard, Suite 700
Durham, North Carolina 27707
1-800-680-4199
www.oakvaluefund.com
ADMINISTRATOR
Ultimus Fund Solutions, LLC
225 Pictoria Drive, Suite 450
Cincinnati, Ohio 45246
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Deloitte & Touche LLP
250 East Fifth Street
Suite 1900
Cincinnati, Ohio 45202
CUSTODIAN
US Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
BOARD OF TRUSTEES
Joseph T. Jordan, Jr., Chairman
C. Russell Bryan
Larry D. Coats, Jr.
John M. Day
Charles T. Manatt
OFFICERS
Larry D. Coats, Jr., President
Robert G. Dorsey, Vice President
Mark J. Seger, Treasurer
John F. Splain, Secretary
THIS REPORT IS FOR THE INFORMATION OF THE SHAREHOLDERS OF THE OAK
VALUE FUND. IT MAY NOT BE DISTRIBUTED TO PROSPECTIVE INVESTORS
UNLESS IT IS PRECEDED OR ACCOMPANIED BY THE CURRENT FUND PROSPECTUS.
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 governance, nomination and compensation committee will consider
shareholder recommendations to fill vacancies on the registrant's board of
trustees if such recommendations are submitted in writing and addressed to the
committee at the registrant's offices. 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 officer 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) Oak Value Trust
--------------------------------------------------
By (Signature and Title)* /s/ Larry D. Coats, Jr.
-------------------------------------
Larry D. Coats, Jr., President
Date February 27, 2007
------------------------------------------
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/ Larry D. Coats, Jr.
-------------------------------------
Larry D. Coats, Jr., President
Date February 27, 2007
------------------------------------------
By (Signature and Title)* /s/ Mark J. Seger
-------------------------------------
Mark J. Seger, Treasurer
Date February 27, 2007
------------------------------------------
* Print the name and title of each signing officer under his or her signature.