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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: March 31, 2007
--------------
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. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
-----------------------------
D A V E N P O R T
EQUITY FUND
-----------------------------
ANNUAL REPORT
MARCH 31, 2007
THE DAVENPORT EQUITY FUND
LETTER TO SHAREHOLDERS MAY 11, 2007
================================================================================
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 periods
ended March 31, 2007.
Since Inception **
Q1 2007 1 Year 3 Years** 5 Years** (1/15/98)
-----------------------------------------------------------
DAVPX 0.74% 10.02% 8.80% 6.44% 5.44%
S&P 500 Index* 0.64% 11.83% 10.06% 6.27% 6.12%
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance data quoted. Performance
data, current to the most recent month end, may be obtained by calling
1-888-285-1863.
* The S&P 500 Index is comprised of 500 U.S. stocks and is an indicator of
the performance of the overall U.S. stock market. An investor cannot
invest in an index and its returns are not indicative of the performance
of any specific investment.
** Annualized.
MARKET COMMENTARY
The first quarter of 2007 began on a strong note with the S&P 500 Index up 2.5%,
before the run was abruptly halted on February 27th. Former Fed Chief Alan
Greenspan, via teleconference broadcast in Shanghai, hinted at the possibility
of a U.S. recession in the latter half of 2007. Overnight, the Shanghai Market
declined over 8% spurred by talk of tax increases by the Chinese government.
This coupled with increasing news of problems for sub-prime mortgage originators
and a weak durable goods number the next morning, was more than the market could
withstand and the Dow fell 416 points. However, in late March the markets
rebounded to finish the quarter in slightly positive territory. The S&P 500
ended the quarter up 0.6% and the smaller capitalization stocks led the way
again as the Russell Midcap Index was up 4.4%.
Debate continues around the impact that sub-prime mortgage defaults will have on
the overall economy, and in turn the equity markets. While the fate of many of
the sub-prime originators was decided quickly, concern continues to linger over
these problems spilling over to the market and the economy in general. While
these borrowers represent only a small percentage of overall mortgage holders,
some analysts worry that they are only the first to begin to default, and that
other collateral damage will surface.
This undoubtedly will fuel continued concerns for housing and related sectors.
Throughout this economic cycle the ability of the consumer to borrow against
their home equity has been cited as one of the significant boosters to spending
throughout the economy. Lending Tree's advertisements portraying the family man
with all of the trappings of success and pleads "Somebody help me," only
reinforces this view. Undoubtedly tighter credit requirements and the prospect
of the depreciation of one's largest asset, whether real or perceived, will
dampen the spirit of the shopper, but low unemployment and continued wage growth
will help to offset the damage done by housing concerns.
1
As we see it, the ability of the markets to shrug off the news of failures of
sub-prime mortgage originators illustrates the significant and widespread
appetite for risk. In today's financial markets, just about anything can be
securitized and sold. Portfolios of sub-prime mortgages and other liabilities
have been gobbled up by hedge funds, investment banks, and other financial
institutions, spreading the risk around the globe and limiting the damage for
any individual institution. Analysts have connected all corners of the financial
world to the mortgage woes and the waves of selling crashing across continents
as markets reacted to the Shanghai fall lent them credence. This possible
contagion for the market in general has many investors worried. So far, we have
seen no signs of more widespread issues, and believe many of the concerns while
real, have been blown out of proportion. Without a doubt, financial reporters
will scour the earnings reports of the first quarter to glean some hint of
greater concern.
Despite this trepidation, there continues to be a pervasive enthusiasm for risk
which has in many cases pushed risk premiums too low. Fixed income investors,
hungry for yield have reached to lower rated bonds, driving spreads over
treasury yields lower. Daily reports of buyouts led by private equity firms
confirm that there is plenty of capital available for these alternative funds.
Should we wonder why those in the business of taking companies private, sensing
the demand by investors to participate, decide to go public themselves?
This low cost debt and lurking "impatient capital" has spurred companies to
engage in shareholder friendly activities. According to Standard & Poor's, 105
companies in the S&P 500 Index announced dividend increases in the first
quarter. The average increase was 13.3%. Share buyback announcements continued
at a record pace with $432 billion shares repurchased by S&P 500 companies last
year ($25 billion worth of shares were purchased by Exxon alone). It stands to
reason that the most financially sound companies have engaged in the lion's
share of these activities, yet investment grade companies have traded at a
healthy discount to the P/E ratios of their junk rated peers. Risk is in vogue
and high quality is undervalued.
We have spent time discussing the risk in the Fund over the last several months.
Areas of the market that are traditionally viewed as lower risk investments have
exhibited signs of higher volatility. Utilities, normally eyed for income, have
become one of the best performing groups of late. According to the National
Association of Real Estate Investment Trusts ("REITs"), yields for REITs are
between 3-4%, a discount to 10 year Treasury yields. Throughout most of the
1990's, yields were between 6-8%, a premium to 10 year Treasury yields. And
value stocks, which have been thought to be more defensive in nature, sport
valuations in line with their growth stock counterparts. We own and continue to
like companies that fall into all of these categories, but remain watchful that
their fundamentals justify their valuations.
CEO Jeff Immelt asks the question in General Electric's 2006 Annual Report "Has
reliable growth gone out of style?" We believe that investing in high quality
companies with dependable track records is one of the best ways to mitigate
risk. We discussed risk in a letter written during the tough equity markets
earlier this decade. We offered that one of the most important duties we have
for our clients is to preserve what they have. Control risk. Win the game
slowly. Mr. Immelt continues, "This is a long-term investment. There are no
short-term tricks." We are not suggesting that there is an impending gloomy
market, but we are mindful as we assess new stocks and review our existing ones
that one of our most important tasks is to keep risk in check and to understand
the risk reward characteristics of the investments we make.
We hope you have a great summer. Thank you for your trust and confidence.
2
THE FUND
During the fiscal year ended March 31, 2007, the Davenport Equity Fund performed
roughly in line with the S&P 500 Index, finishing up a little over 10%. In late
February, an overnight decline in the Chinese market, coupled with unease about
overextended sub-prime lenders in a cooling housing market conspired to send the
Dow down 416 points in one day. After a prolonged rally which has seen the S&P
500 gain more than 10% annually for the past three years, this sort of
correction was not wholly unexpected. Our diversification limited the downside
and a few stocks we own performed quite well, in spite of the market's
headwinds.
In the Technology sector we remained underweighted relative to the S&P 500
which, combined with good relative stock performance late in the fiscal year,
helped boost returns offsetting weaker performance from the Consumer Staples
sector. Financial stocks outperformed the group in general, as we have little
exposure to the sub-prime lending group, which we have long viewed as an
unacceptably high risk. Health Care had another difficult year as a changing
political climate continued to cloud an otherwise sunny demographic future, as
the U.S. population ages and demand for health services and pharmaceuticals
increases.
Some of the best performing stocks in the portfolio have been niche leaders that
are not widely known to the investing public. These companies comprise a diverse
line of businesses including: a used car dealer, a maker of mid-size jets, a
wireless provider in Latin American and a specialty insurer.
The stock market has had a nice run the past couple of years, but we continue to
find attractive investment opportunities. Valuation levels remain reasonable as
earnings per share growth since 2002 has outpaced market appreciation. Interest
rates remain low, the job market is strong and there seems to be a healthy
amount of concern in the market. With this backdrop, we remain optimistic in the
coming months.
RECENT PURCHASES
BANK OF AMERICA CORP. (BAC) is one of the nation's largest banking franchises,
offering over 55 million customers a wide range of services including mortgage,
brokerage, asset management and investment banking. The bank has a solid track
record of successfully integrating acquisitions and we believe the recent MBNA
acquisition with its 24 million "card-only" households offers numerous cross
selling opportunities. Bank of America trades at only 11x our earnings estimate
of $4.95, cheaper than its peer group, offers a 4.4% yield and has increased its
dividend at a 13% annual rate the last five years.
COMCAST CORP. (CMCSA) is the largest U.S. cable operator, offering digital
service, high speed internet and data, and phone service. The popularity of
Comcast Digital Voice and the ability to bundle services onto one bill with
lower cost to the consumer (the "triple play" - video, audio and internet)
creates a marketing platform which should continue to be successful. We expect
revenue to increase 11%, operating cash flow to jump 14% and for free cash flow
to total $2.6 billion in 2007. We are attracted to Comcast's robust growth
outlook, attractive valuation and up to $4 billion in free cash flow in 2008.
CORNING, INC. (GLW) manufactures a number of technology products, including
glass substrates for liquid crystal displays (LCD), emission control systems for
diesel engines, and fiber optic cable for telecommunications networks. Corning,
with its 50% market share in glass substrates is well positioned to benefit from
the 66% expected increase in LCD televisions sales during 2007. New product
innovations could add another $1 billion plus in annual revenue within three to
five years. We believe the shares are attractive trading at 15.6x times our 2008
estimate.
3
OWENS AND MINOR, INC. (OMI) is a Richmond-based medical and surgical supply
company. A recent acquisition of a similar business from McKesson should boost
earnings once transition costs have alleviated, which is expected later this
year. We believe this company should earn $1.85 per share this year and $2.30
per share in 2008, an earnings growth rate of over 24%. Management has also
raised the dividend by 13% and currently the stock yields about 1.8%.
PENN NATIONAL GAMING, INC. (PENN) owns and operates thirteen casinos and three
pari-mutuel facilities (horse racing), located primarily in local "drive-to"
markets, rather than in premier locations like Las Vegas. Penn has a very
impressive expansion pipeline that should drive substantial growth over the next
few years. Penn is well-positioned to take advantage of these new markets and
trading at under 9x its 2008 cash flow, we believe these shares are undervalued
given a healthy growing pipeline of new projects.
SMITHFIELD FOODS, INC. (SFD) is the leading processor and marketer of fresh pork
and processed meats in the U.S. Smithfield has spent the past 12-18 months
rightsizing its business including rationalizing plants on the East Coast,
improving capacity utilization and focusing on driving improved margins on both
products and customers. Their international operations reported a Q3 (FY07)
profit, and we expect continued improved results. Given the high feed costs, we
expect farmers to either reduce the number of hogs grown or deliver lighter
hogs. Smithfield is vertically integrated, and we expect this strategy to work
towards their advantage particularly if the supply of hogs declines.
Sincerely,
Joseph L. Antrim, III
President
Davenport Equity Fund
This report is submitted for the general information of the shareholders of the
Fund. The report is not authorized for distribution to prospective investors in
the Fund unless it is accompanied by a current prospectus.
This report reflects our views, opinions and portfolio holdings as of March 31,
2007, the end of the reporting period. These views are subject to change at any
time based upon market or other conditions. For more current information
throughout the year please visit www.investdavenport.com.
4
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
[LINE GRAPH OMITTED]
STANDARD & POOR'S 500 INDEX: THE DAVENPORT EQUITY FUND
- ----------------------------- -------------------------
DATE VALUE DATE VALUE
- -------- ------- -------- -------
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
12/31/06 17,172 12/31/06 16,158
03/31/07 17,282 03/31/07 16,279
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS SINCE INCEPTION*
The Davenport Equity Fund 10.02% 6.44% 5.44%
Standard & Poor's 500 Index 11.83% 6.27% 6.12%
- --------------------------------------------------------------------------------
* 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.
5
THE DAVENPORT EQUITY FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
SECTOR CONCENTRATION VS. THE STANDARD & POOR'S 500 INDEX
[BAR CHART OMITTED]
The Davenport Equity Standard & Poor's 500
Fund Index
-------------------- ---------------------
Consumer Discretionary 8.7% 10.5%
Consumer Staples 10.5% 9.6%
Energy 11.1% 10.1%
Financials 22.3% 21.6%
Health Care 8.1% 11.9%
Industrials 12.2% 10.9%
Information Technology 12.1% 14.9%
Materials 5.6% 3.1%
Telecommunications Services 4.3% 3.7%
Utilities 2.2% 3.7%
Cash Equivalents 2.9% 0.0%
TOP TEN HOLDINGS
% OF
SECURITY DESCRIPTION NET ASSETS
- ------------------------------------------------- ----------
General Electric Company 3.2%
Markel Corporation 3.0%
Capital One Financial Corporation 2.6%
Chevron Corporation 2.4%
America Movil, S.A. de C.V. - Series L - ADR 2.4%
Johnson & Johnson 2.4%
Eli Lilly & Company 2.4%
Microsoft Corporation 2.3%
Wachovia Corporation 2.3%
Sysco Corporation 2.2%
6
THE DAVENPORT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2007
================================================================================
ASSETS
Investments in securities:
At acquisition cost........................................ $117,969,321
============
At market value (Note 1)................................... $150,866,752
Dividends receivable......................................... 163,392
Receivable for investment securities sold.................... 3,173,137
Receivable for capital shares sold........................... 125,348
Other assets................................................. 11,174
------------
TOTAL ASSETS............................................... 154,339,803
------------
LIABILITIES
Payable for investment securities purchased.................. 2,307,110
Payable for capital shares redeemed.......................... 249,685
Accrued investment advisory fees (Note 3).................... 101,900
Accrued administration fees (Note 3)......................... 17,500
Accrued compliance fees (Note 3)............................. 1,700
Other accrued expenses ...................................... 6,808
------------
TOTAL LIABILITIES.......................................... 2,684,703
------------
NET ASSETS .................................................... $151,655,100
============
Net assets consist of:
Paid-in capital................................................ $114,090,791
Accumulated undistributed net investment income................ 2,808
Accumulated net realized gains from security transactions...... 4,664,070
Net unrealized appreciation on investments..................... 32,897,431
------------
Net assets..................................................... $151,655,100
============
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value)................... 10,284,655
============
Net asset value, offering price and redemption price
per share (Note 1)........................................... $ 14.75
============
See accompanying notes to financial statements.
7
THE DAVENPORT EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2007
================================================================================
INVESTMENT INCOME
Dividends.................................................... $ 2,401,673
Interest..................................................... 45,974
------------
TOTAL INVESTMENT INCOME.................................... 2,447,647
------------
EXPENSES
Investment advisory fees (Note 3)............................ 1,111,843
Administration fees (Note 3)................................. 205,892
Custodian fees............................................... 19,443
Compliance service fees (Note 3)............................. 19,307
Professional fees............................................ 16,631
Postage and supplies......................................... 13,312
Registration fees............................................ 13,289
Trustees' fees and expenses.................................. 12,513
Printing of shareholder reports.............................. 10,206
Insurance expense............................................ 9,377
Other expenses............................................... 15,998
------------
TOTAL EXPENSES............................................. 1,447,811
------------
NET INVESTMENT INCOME ......................................... 999,836
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions................ 10,206,688
Net change in unrealized appreciation/depreciation
on investments............................................. 2,884,979
------------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS .............. 13,091,667
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS .................... $ 14,091,503
============
See accompanying notes to financial statements.
8
THE DAVENPORT EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================
YEAR YEAR
ENDED ENDED
MARCH 31, MARCH 31,
2007 2006
- ------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................ $ 999,836 $ 717,981
Net realized gains from security transactions .... 10,206,688 8,334,845
Net change in unrealized appreciation/depreciation
on investments ................................. 2,884,979 4,083,467
------------ ------------
Net increase in net assets from operations ......... 14,091,503 13,136,293
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ....................... (1,012,305) (711,074)
From net realized capital gains on security
transactions ................................... (5,238,825) (2,709,239)
------------ ------------
Net decrease in net assets from distributions to
sharesholders .................................... (6,251,130) (3,420,313)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................ 11,901,066 19,222,183
Net asset value of shares issued in
reinvestment of distributions to shareholders .. 5,939,200 3,209,394
Payments for shares redeemed ..................... (22,948,178) (21,405,847)
------------ ------------
Net increase (decrease) in net assets from capital
share transactions ............................... (5,107,912) 1,025,730
------------ ------------
TOTAL INCREASE IN NET ASSETS ....................... 2,732,461 10,741,710
NET ASSETS
Beginning of year ................................ 148,922,639 138,180,929
------------ ------------
End of year ...................................... $151,655,100 $148,922,639
============ ============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME .... $ 2,808 $ 15,277
============ ============
CAPITAL SHARE ACTIVITY
Sold ............................................. 830,191 1,421,580
Reinvested ....................................... 416,381 230,611
Redeemed ......................................... (1,606,678) (1,570,649)
------------ ------------
Net increase (decrease) in shares outstanding .... (360,106) 81,542
Shares outstanding at beginning of year .......... 10,644,761 10,563,219
------------ ------------
Shares outstanding at end of year ................ 10,284,655 10,644,761
============ ============
See accompanying notes to financial statements.
9
THE DAVENPORT EQUITY FUND
FINANCIAL HIGHLIGHTS
================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
-----------------------------------------------------
2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ................... $ 13.99 $ 13.08 $ 12.30 $ 9.23 $ 11.71
-------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income ................................ 0.10 0.07 0.07 0.04 0.06
Net realized and unrealized gains
(losses) on investments ............................ 1.28 1.17 0.78 3.07 (2.48)
-------- -------- -------- -------- -------
Total from investment operations ....................... 1.38 1.24 0.85 3.11 (2.42)
-------- -------- -------- -------- -------
Less distributions:
Dividends from net investment income ................. (0.10) (0.07) (0.07) (0.04) (0.06)
Distributions from net realized gains ................ (0.52) (0.26) -- -- --
-------- -------- -------- -------- -------
Total distributions .................................... (0.62) (0.33) (0.07) (0.04) (0.06)
-------- -------- -------- -------- -------
Net asset value at end of year ......................... $ 14.75 $ 13.99 $ 13.08 $ 12.30 $ 9.23
======== ======== ======== ======== =======
Total return (a) ....................................... 10.02% 9.48% 6.91% 33.72% (20.66%)
======== ======== ======== ======== =======
Net assets at end of year (000's) ...................... $151,655 $148,923 $138,181 $121,769 $76,473
======== ======== ======== ======== =======
Ratio of net expenses to average net assets ............ 0.98% 0.98% 0.98% 1.00% 1.04%
Ratio of net investment income to average net assets ... 0.67% 0.50% 0.57% 0.35% 0.62%
Portfolio turnover rate ................................ 26% 39% 28% 25% 18%
(a) Total returns are a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See accompanying notes to financial statements.
10
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 97.1% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.7%
109,772 CarMax, Inc. (a)................................. $ 2,693,805
56,400 Comcast Corporation (a).......................... 1,463,580
75,067 Honda Motor Company Ltd.......................... 2,617,586
67,354 Lowe's Companies, Inc. .......................... 2,120,977
34,600 Penn National Gaming, Inc. (a)................... 1,467,732
82,028 Walt Disney Company (The)........................ 2,824,224
------------
13,187,904
------------
CONSUMER STAPLES -- 10.5%
44,834 Colgate-Palmolive Company........................ 2,994,463
44,000 PepsiCo, Inc. ................................... 2,796,640
35,125 Proctor & Gamble Company (The)................... 2,218,495
53,800 Smithfield Foods, Inc. (a)....................... 1,611,310
100,166 Sysco Corporation................................ 3,388,616
62,205 Walgreen Company................................. 2,854,587
------------
15,864,111
------------
ENERGY -- 11.1%
50,000 Chevron Corporation.............................. 3,698,000
41,715 ConocoPhillips................................... 2,851,220
25,276 EOG Resources, Inc............................... 1,803,190
39,716 Exxon Mobil Corporation.......................... 2,996,572
39,494 GlobalSantaFe Corporation........................ 2,435,990
43,517 Schlumberger Ltd................................. 3,007,025
------------
16,791,997
------------
FINANCIALS -- 22.3%
48,383 American International Group, Inc. .............. 3,252,305
48,700 Bank of America Corporation...................... 2,484,674
59,614 BB&T Corporation................................. 2,445,366
806 Berkshire Hathaway, Inc. - Class B (a)........... 2,933,840
48,908 Brookfield Asset Management, Inc................. 2,555,932
51,664 Capital One Financial Corporation................ 3,898,565
58,650 Citigroup, Inc. ................................. 3,011,091
28,650 Hartford Financial Services Group, Inc. (The).... 2,738,367
9,347 Markel Corporation (a)........................... 4,531,706
62,362 Wachovia Corporation............................. 3,433,028
52,824 T. Rowe Price Group, Inc......................... 2,492,765
------------
33,777,639
------------
HEALTH CARE -- 8.1%
66,784 Eli Lilly & Company.............................. 3,586,969
60,102 Johnson & Johnson................................ 3,621,747
56,075 Owens & Minor, Inc............................... 2,059,635
35,717 Zimmer Holdings, Inc. (a)........................ 3,050,589
------------
12,318,940
------------
11
THE DAVENPORT EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 97.1% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 12.2%
47,240 Danaher Corporation.............................. $ 3,375,298
55,838 Empresa Brasileira de Aeronautica S.A. - ADR..... 2,560,731
137,516 General Electric Company......................... 4,862,566
27,919 L-3 Communications Holdings, Inc................. 2,442,075
27,421 United Parcel Service, Inc. - Class B............ 1,922,212
51,428 United Technologies Corporation.................. 3,342,820
------------
18,505,702
------------
INFORMATION TECHNOLOGY -- 12.1%
29,347 Apple Computer, Inc. (a)......................... 2,726,630
100,000 Corning, Inc. (a)................................ 2,274,000
5,265 Google, Inc. (a)................................. 2,412,212
126,848 Microsoft Corporation............................ 3,535,254
119,051 Nokia Oyj - ADR.................................. 2,728,649
46,900 SanDisk Corporation (a).......................... 2,054,220
90,075 Texas Instruments, Inc........................... 2,711,257
------------
18,442,222
------------
MATERIALS -- 5.6%
53,744 Dow Chemical Company (The)....................... 2,464,700
42,635 Praxair, Inc. ................................... 2,684,300
14,784 Rio Tinto PLC - ADR.............................. 3,367,943
------------
8,516,943
------------
TELECOMMUNICATIONS SERVICES -- 4.3%
75,882 America Movil S.A. de C.V. - Series L - ADR...... 3,626,401
75,033 Verizon Communications, Inc. .................... 2,845,251
------------
6,471,652
------------
UTILITIES -- 2.2%
37,991 Dominion Resources, Inc.......................... 3,372,461
------------
TOTAL COMMON STOCKS (Cost $114,352,140).......... $147,249,571
------------
================================================================================
SHARES MONEY MARKET FUNDS -- 2.4% VALUE
- --------------------------------------------------------------------------------
3,617,181 First American Treasury Obligations Fund - Class Y
(Cost $3,617,181).............................. $ 3,617,181
------------
TOTAL INVESTMENTS AT VALUE -- 99.5%
(Cost $117,969,321)............................ $150,866,752
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%.... 788,348
------------
NET ASSETS -- 100.0%............................. $151,655,100
============
(a) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
12
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007
================================================================================
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, 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 or are considered to be unreliable due to
significant market or other events 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.
13
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 years ended March 31, 2007 and
March 31, 2006 was as follows:
- --------------------------------------------------------------------------------
YEAR ENDED ORDINARY INCOME LONG-TERM CAPITAL GAINS TOTAL
- --------------------------------------------------------------------------------
March 31, 2007 $1,012,305 $5,238,825 $6,251,130
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 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 of March
31, 2007:
- -------------------------------------------------------------------------------
Cost of portfolio investments .................................. $118,273,641
============
Gross unrealized appreciation .................................. $ 34,179,115
Gross unrealized depreciation .................................. (1,586,004)
------------
Net unrealized appreciation .................................... $ 32,593,111
Undistributed ordinary income .................................. 141,541
Undistributed long-term gains .................................. 4,829,657
------------
Accumulated earnings ........................................... $ 37,564,309
============
- -------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the Fund is due to certain timing differences
in the recognition of capital gains and losses under income tax regulations and
accounting principles generally accepted in the United States. Theses "book/tax"
differences are temporary in nature and are primarily due to the tax deferral of
losses on wash sales.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2007, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments and
U.S. government securities, amounted to $37,288,944 and $50,622,111,
respectively.
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by Davenport & Company LLC (the Adviser)
under the terms of an Investment Advisory Agreement. Under the Investment
Advisory Agreement, the Fund pays the Adviser a fee, which is computed and
accrued daily and paid monthly, at an annual rate of .75% of its average daily
net assets. Certain officers of the Trust are also officers of the Adviser.
14
THE DAVENPORT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 from the Fund for providing CCO services during the year ended
March 31, 2007.
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 year ended March 31, 2007, the Fund
paid fees of $13,307 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 positions not deemed to
meet the more-likely-than-not threshold would be recorded as a tax benefit or
expense in the current year. Adoption of FIN 48 is required for fiscal years
beginning after December 15, 2006 and is to be applied to all open tax years as
of the effective date. Recent SEC guidance allows implementing FIN 48 in fund
NAV calculations as late as the fund's last NAV calculation in the first
required financial statement reporting period. As a result, the Fund will
incorporate FIN 48 in its Semi-Annual Report on September 30, 2007. The Fund
does not believe the adoption of FIN 48 will have a material impact on the
financial statements.
In September 2006, the Financial Accounting Standards Board 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 March 31, 2007, 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
THE DAVENPORT EQUITY FUND
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
===============================================================================
To the Shareholders and Board of Trustees of The Davenport Equity Fund of the
Williamsburg Investment Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Davenport Equity Fund (the "Fund") (a
series of Williamsburg Investment Trust) as of March 31, 2007, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights presented for the year ended March 31, 2003 were audited by other
auditors whose report dated April 25, 2003, expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Fund's internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2007 by correspondence with the custodian
and broker. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Davenport Equity Fund as of March 31, 2007, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the four years
in the period then ended in conformity with U.S. generally accepted accounting
principles.
/S/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 16, 2007
16
THE DAVENPORT EQUITY FUND
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED)
================================================================================
Overall responsibility for management of the Fund rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Fund. The officers have been elected for an
annual term. The following are the Trustees and executive officers of the Fund:
POSITION HELD LENGTH OF
TRUSTEE ADDRESS AGE WITH THE TRUST TIME SERVED
- -----------------------------------------------------------------------------------------------------------------------------------
* Charles M. Caravati, Jr. 931 Broad Street Road, Manakin-Sabot, VA 70 Chairman and Trustee Since June 1991
* Austin Brockenbrough III 1802 Bayberry Court, Suite 400, Richmond, VA 70 Trustee Since September 1988
* John T. Bruce 800 Main Street, Lynchburg, VA 53 Trustee Since September 1988
Robert S. Harris 100 Darden Boulevard, Charlottesville, VA 57 Trustee Since January 2007
J. Finley Lee, Jr. 448 Pond Apple Drive North, Naples, FL 67 Trustee Since September 1988
Richard L. Morrill University of Richmond, Richmond, VA 67 Trustee Since March 1993
Harris V. Morrissette 100 Jacintoport Boulevard, Saraland, AL 47 Trustee Since March 1993
Erwin H. Will, Jr. 47 Willway Avenue, Richmond, VA 74 Trustee Since July 1997
Samuel B. Witt III 302 Clovelly Road, Richmond, VA 71 Trustee Since November 1988
Joseph L. Antrim III One James Center, 901 E. Cary Street, Richmond, VA 61 President Since November 1997
John P. Ackerly IV One James Center, 901 E. Cary Street, Richmond, VA 43 Vice President Since November 1997
Robert G. Dorsey 225 Pictoria Drive, Suite 450, Cincinnati, OH 50 Vice President Since November 2000
Mark J. Seger 225 Pictoria Drive, Suite 450, Cincinnati, OH 45 Treasurer Since November 2000
John F. Splain 225 Pictoria Drive, Suite 450, Cincinnati, OH 50 Secretary Since November 2000
Tina H. Bloom 225 Pictoria Drive, Suite 450, Cincinnati, OH 38 Chief Compliance Officer Since August 2006
* Messrs. Bruce, Brockenbrough and Caravati are "interested persons" of the
Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati
III, an officer of The Jamestown Funds, which are other portfolios of the
Trust.
Each Trustee oversees twelve portfolios of the Trust, including the Fund. The
principal occupations of the Trustees and executive officers of the Fund during
the past five years and public directorships held by the Trustees are set forth
below:
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of Lowe,
Brockenbrough & Company, Inc. (an investment advisory firm). He is a member of
the Board of Directors of Tredegar Corporation (a plastics manufacturer) and
Wilkinson O'Grady & Co., Inc. (a global asset manager).
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
Robert S. Harris is the C. Stewart Sheppard Professor of Business Administration
at The Darden Graduate School of Business Administration at the University of
Virginia. He was previously the dean at Darden. Professor Harris has published
widely on corporate finance, financial markets and mergers and acquisitions and
has served as a consultant to corporations and government agencies.
J. Finley Lee, Jr. is a financial consultant and the Julian Price Professor
Emeritus at the University of North Carolina.
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (polymers and chemical manufacturer).
17
THE DAVENPORT EQUITY FUND
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED) (CONTINUED)
================================================================================
Harris V. Morrissette is Chief Executive Officer of Marshall Biscuit Co., Inc.
He is a member of the Board of Directors of BancTrust Financial Group, Inc. (a
bank holding company) and EnergySouth, Inc. In addition, he is Chairman of
Azalea Aviation, Inc. (an airplane fueling company).
Erwin H. Will, Jr. is the retired Chief Investment Officer of Equities of
Virginia Retirement System (VRS). Subsequent to his retirement, he temporarily
served as Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired Senior Vice President and General Counsel of
Stateside Associates, Inc. He is also a member of the Board of Directors of The
Swiss Helvetia Fund, Inc. (a closed-end investment company).
Joseph L. Antrim III is Executive Vice President of the Adviser.
John P. Ackerly IV is Vice President and Portfolio Manager of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Tina H. Bloom is Vice President of Administration of Ultimus Fund Solutions,
LLC.
Additional information about members of the Board of Trustees and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-800-281-3217.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
For the fiscal year ended March 31, 2007 certain dividends paid by the Fund may
be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth
Tax Relief Reconciliation Act of 2003. The Fund intends to designate up to a
maximum amount of $1,012,305 as taxed at a maximum rate of 15%, as well as
$5,238,825 as long-term capital gain distributions. For the fiscal year ended
March 31, 2007, 100% of the dividends paid from ordinary income by the Fund
qualified for the dividends received deduction for corporations. Complete
information will be computed and reported in conjunction with your 2007 Form
1099-DIV.
18
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 ongoing costs are expressed as a percentage of its average net assets.
This figure is known as the expense ratio. The following examples are intended
to help you understand the ongoing costs (in dollars) of investing in the Fund
and to compare these costs with the ongoing costs of investing in other mutual
funds. The examples below are based on an investment of $1,000 made at the
beginning of the period shown and held for the entire period.
The table below illustrates the Fund's costs in two ways:
Actual fund return - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from the
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Fund. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Fund under the heading "Expenses Paid During Period."
Hypothetical 5% return - This section is intended to help you compare the Fund's
costs with those of other mutual funds. It assumes that the Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the return used is not the Fund's actual
return, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess the
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Fund does not charge transaction fees, such as
purchase or redemption fees, nor does it carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
More information about the Fund's expenses, including annual expense ratios
since inception, can be found in this report. For additional information on
operating expenses and other shareholder costs, please refer to the Fund's
prospectus.
- ------------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2006 March 31, 2007 During Period*
- ------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,070.70 $5.01
- ------------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.09 $4.89
- ------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio of 0.97% for the
period, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
19
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.
20
THE DAVENPORT EQUITY FUND
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
================================================================================
At an in-person meeting held on February 5, 2007, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance for a
one-year period of the Investment Advisory Agreement with the Adviser on behalf
of The Davenport Equity Fund. Below is a discussion of the factors considered by
the Board of Trustees along with the conclusions with respect thereto that
formed the basis for the Board's approval.
In selecting the Adviser and approving the continuance of the Investment
Advisory Agreement, the Trustees considered all information they deemed
reasonably necessary to evaluate the terms of the Agreement. The principal areas
of review by the Trustees were the nature, extent and quality of the services
provided by the Adviser and the reasonableness of the fees charged for those
services. These matters were considered by the Independent Trustees consulting
with experienced counsel for the Independent Trustees, who is independent of the
Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Fund was considered. The
Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives and to the Adviser's
comparably managed private accounts. The Trustees also considered the scope and
quality of the in-house capabilities of the Adviser and other resources
dedicated to performing services for the Fund. The quality of administrative and
other services, including the Adviser's role in coordinating the activities of
the Fund's other service providers, were considered in light of the Fund's
compliance with investment policies and applicable laws and regulations and of
related reports by management and the Fund's independent public accountants in
periodic meetings with the Trust's Audit Committee. The Trustees also considered
the business reputation of the Adviser, the qualifications of its key investment
and compliance personnel, and its financial resources.
In reviewing the fees payable under the Investment Advisory Agreement, the
Trustees compared the advisory fees and overall expense levels of the Fund with
those of competitive funds with similar investment objectives as well as the
private accounts managed by the Adviser. The Trustees considered information
provided by the Adviser concerning the Adviser's profitability with respect to
the Fund, including the assumptions and methodology used in preparing the
profitability information, in light of applicable case law relating to advisory
fees. For these purposes, the Trustees took into account not only the fees paid
by the Fund, but also so-called "fallout" benefits to the Adviser. The Trustees
also considered the fact that all of the Fund's portfolio trades were executed
by the Adviser at no cost to the Fund. In evaluating the Fund's advisory fees,
the Trustees took into account the complexity and quality of the investment
management of the Fund.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the long-term performance of the Fund (which exceeded both
its primary benchmark (the S&P 500 Index) and the average of funds within its
Lipper category for the most recent 5-year period) and other services provided
under the Investment Advisory Agreement, they believe that the Adviser has
provided quality services to the Fund; (ii) although the advisory fees payable
to the Adviser are in the higher range of fees for other comparably managed
funds, they believe the fees to be reasonable given the quality of services
provided by the Adviser; and (iii) the total operating expense ratio of the Fund
is competitive with comparably managed funds, according to statistics calculated
and published by Morningstar, Inc., and the Adviser has further benefited the
shareholders by executing portfolio transactions at no cost to the Fund. Given
the size of the Fund and its expected growth, the Independent Trustees did not
believe that at the present time it would be relevant to consider the extent to
which economies of scale would be realized as the Fund grows, and whether fee
levels reflect these economies of scale. The Independent Trustees also
considered the "fallout" benefits to, and the profitability of, the Adviser but
given the amounts involved viewed these as secondary factors in connection with
the evaluation of the reasonableness of the advisory fees paid by the Fund.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreement. Rather the Trustees concluded, in light of a weighing and balancing
of all factors considered, that it was in the best interests of the Fund and its
shareholders to continue the Investment Advisory Agreement without modification
to its terms, including the fees charged for services thereunder.
21
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================================================================================
THE DAVENPORT EQUITY FUND
INVESTMENT ADVISER
Davenport & Company LLC
One James Center
901 East Cary Street
Richmond, Virginia 23219-4037
ADMINISTRATOR
Ultimus Fund Solutions, LLC
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
One Post Office Square
Boston, Massachusetts 02109
BOARD OF TRUSTEES
Austin Brockenbrough III
John T. Bruce
Charles M. Caravati, Jr.
Robert S. Harris
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt III
OFFICERS
Joseph L. Antrim III, President
John P. Ackerly IV, Vice President
================================================================================
================================================================================
THE
JAMESTOWN
FUNDS
NO-LOAD FUNDS
THE JAMESTOWN BALANCED FUND
THE JAMESTOWN EQUITY FUND
THE JAMESTOWN SELECT FUND
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
THE JAMESTOWN INTERNATIONAL EQUITY FUND
ANNUAL REPORT
MARCH 31, 2007
Investment Advisor
LOWE, BROCKENBROUGH & COMPANY, INC.
RICHMOND, VIRGINIA
================================================================================
LETTER TO SHAREHOLDERS MAY 14, 2007
================================================================================
THE JAMESTOWN BALANCED FUND
For the fiscal year ended March 31, 2007, The Jamestown Balanced Fund returned
6.6% versus a return of 9.8% for the Lipper Balanced Fund Index and a return of
9.6% for a blend of 60% S&P 500 and 40% Lehman Intermediate Government/Credit
Index. The outperformance of value based equity strategies (led by Utilities,
Energy, and Telecom Services) continued for a seventh year as the Russell 1000
Value Index returned 16.8% over the past year compared to 7.1% for the Russell
1000 Growth Index. While the equity portion of the Balanced Fund remains
diversified across sectors, we believe that growth stocks look more attractive
at this point in the market cycle. For the first time that we can measure, going
back to 1977, stocks in the Russell 1000 Growth Index are cheaper than stocks in
the Russell 1000 Value Index on a price-to-cash flow basis.
Given the modest level of interest rates and inflation, we continue to believe
that equities are likely to outperform bonds. The equity portion of the Fund
emphasizes companies that are more exposed to capital spending and faster
growing international economies. As a result, the Fund is overweight in the
Industrial and Technology sectors. In addition, we find Health Care stocks
attractively priced for their potential growth. This also provides some cushion
to the Fund as economic and earnings growth slows. The equity portion of the
Fund trades at 15.3X 2007 estimated earnings, which are forecast to grow 15.6%.
This compares to the S&P 500's estimated earnings growth of 6.9% trading at
15.4X estimated earnings.
The Lehman Intermediate Government/Credit Bond Index rose 6.1% during the twelve
month period. The fixed income portion of the portfolio has a duration that is
essentially in line with the Lehman Intermediate Government/Credit Index. The
portfolio continues to be overweight in corporate and agency bonds and
underweight U.S. Treasury securities. The Federal Reserve is likely to hold
interest rates steady until inflation begins to moderate or the economy slows
more sharply.
The underperformance of the equity portion of the Fund was driven primarily by
sector selection. The Fund was hurt by overweighting the Technology sector and
underweighting the Utility sector. Stock selection was strong in the Utility
sector, but this was offset by selection in the Energy and Consumer Staples
sectors. The fixed income portion of the Fund slightly outperformed the Lehman
Intermediate Government Credit Bond Index due to our overweight in corporate and
agency bonds, as spreads relative to Treasury securities remained very tight.
The domestic economy has slowed in recent quarters as higher energy prices and a
significant slowdown in the housing market have taken their toll. However,
corporate earnings growth continues at a respectable, more modest pace than we
have seen in recent years. International economies are growing faster than the
domestic economy and companies with a greater foreign presence are showing more
resilient earnings.
As of March 31, 2007, the Fund had 30.1% of its portfolio in fixed income
securities, 69.0% in equity securities and 0.9% in cash equivalents.
THE JAMESTOWN EQUITY FUND
For the fiscal year ended March 31, 2007, The Jamestown Equity Fund returned
6.9% versus a return of 11.8% for the S&P 500 Index. The outperformance of value
based equity strategies (led by Utilities, Energy, and Telecom Services)
continued for a seventh year as the Russell Value Index returned 16.8% compared
to 7.1% over the past year. While the Fund remains diversified across sectors,
we believe that growth stocks look more attractive at this point in the market
cycle. For the first time that we can measure, going back to 1977, stocks in the
Russell 1000 Growth Index are cheaper than stocks in the Russell 1000 Value
Index on a price-to-cash flow basis.
The underperformance of the Fund was driven primarily by sector selection. The
Fund was hurt by overweighting the Technology sector and under weighting the
Utility sector. Stock selection was strong in the Utility sector, but this was
offset by selection in the Energy and Consumer Staples sectors.
The domestic economy has slowed in recent quarters as higher energy prices and a
significant slowdown in the housing market have taken their toll. However,
corporate earnings growth continues at a respectable, more modest pace than we
have seen in recent years. International economies are growing
1
faster than the domestic economy and companies with a greater foreign presence
are showing more resilient earnings.
The Fund emphasizes companies that are more exposed to capital spending and
faster growing international economies. As a result, the Fund is overweight in
the Industrial and Technology sectors. In addition, we find Health Care stocks
attractively priced for their potential growth. This also provides some cushion
to the Fund as economic and earnings growth slows. The portfolio trades at 15.3X
2007 estimated earnings, which are forecast to grow 15.6%. This compares to the
S&P 500's estimated earnings growth of 6.9% trading at 15.4X estimated earnings.
THE JAMESTOWN SELECT FUND
The Jamestown Select Fund commenced operations on October 31, 2006 and the Fund
performed well during the first five months, with a return of 7.6% compared to
4.0% over that period for the S&P 500 Index. The outperformance of the Fund was
driven by strong stock selection. Stock selection was positive in all of the
sectors, except for a slight negative selection in Finance stocks. The
Industrial and Consumer Staples sectors have experienced the best stock
selection over the short life of the Fund.
The domestic economy has slowed in recent quarters as higher energy prices and a
significant slowdown in the housing market have taken their toll. However,
corporate earnings growth continues at a respectable, more modest pace than we
have seen in recent years. International economies are growing faster than the
domestic economy and companies with a greater foreign presence are showing more
resilient earnings.
The Fund will continue to focus on stocks identified by the Adviser as having
the best earnings profile and are trading reasonable valuations. The Fund is
overweight in the Technology, Consumer Discretionary, Health Care, and Materials
sectors. The largest underweights in the portfolio are in the Energy,
Telecommunications, and Utilities sectors. The portfolio trades at 14.1X 2007
estimated earnings, which are forecast to grow 14.4%. This compares to the S&P
500's estimated earnings growth of 6.9% trading at 15.4X estimated earnings.
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
For the fiscal year ended March 31, 2007, The Jamestown Tax Exempt Virginia Fund
recorded a total return of 3.9% compared to 4.3% for the Lehman 5-Year Municipal
Index.
Following two years of increasing short-term interest rates, the Federal Reserve
has kept monetary policy steady since its last rate hike in June 2006. Treasury
bond yields peaked at that time, and sensing that the tightening cycle was over,
bonds rallied during the last two quarters of 2006. The rally was marked by an
inversion of the Treasury yield curve, with yields on longer maturities dropping
below those of short maturities. Municipal bond yields also peaked in June 2006,
and though the municipal yield curve did not invert, the flattening trend
continued. The yield on AAA-rated municipals with maturities of 5, 10, and 30
years fell 7, 22, and 36 basis points, respectively, during the fiscal year
ended March 31, 2007.
The municipal market has attracted non-traditional investors such as hedge
funds, arbitrage programs and leveraged accounts, some of which do not benefit
from the tax exempt nature of the interest payments. Instead, alternative
accounts pursue strategies based on yield curve steepness, credit spreads, or
attractive swap rates in the rapidly growing municipal derivatives market. This
incremental demand, especially for the longest maturities, helped flatten the
municipal yield curve.
The Fund was positioned for higher interest rates for most of the 2004-2006
tightening cycle, with a shorter average maturity and duration than that of its
benchmarks. With the conclusion of the Federal Reserve's tightening cycle, the
Fund's duration was lengthened modestly and is now considered neutral versus
benchmarks. The Fund remains conservatively postured with its emphasis on high
quality, intermediate maturities, which normally display lower price sensitivity
due to changes in market yields than bonds with the longest maturities.
As of March 31, 2007, the Fund had an average effective maturity of 4.5 years,
an effective duration of 3.8 years, and a 30-day yield of 3.42%, which produced
a tax equivalent yield of 5.26% (assuming a maximum 35% federal tax rate).
Total assets of the Fund were $29 million as of March 31, 2007.
2
THE JAMESTOWN INTERNATIONAL EQUITY FUND
For the fiscal year ended March 31, 2007, The Jamestown International Equity
Fund returned 13.9% and the Morgan Stanley EAFE Index rose 20.2%. International
equity markets continued to outperform their domestic counterparts as they have
since the recovery that began in global equity markets in early 2003. Oechlse
International Advisors LLC ("Oechsle"), the Fund's sub-advisor, is generally a
growth-oriented manager; unfortunately, similar to the trends seen in domestic
equities, value securities have continued to outperform growth oriented
securities in the international market. As economic growth begins to moderate,
Oechsle believes that the markets will return to companies that can continue to
show earnings growth in a slower growth environment.
A string of positive surprises among leading economic indicators pointed to
accelerating growth across Europe and Japan. Materials, Financials, and
Industrial stocks continued to outperform. The Fund was hurt over the past
twelve months by overweighting the Finance sector, with a particular emphasis on
Japanese Financial stocks. The Fund has been underweight Materials and
Industrials, which also detracted from performance over the period.
While Oechsle believes that the U.S. economy will likely slow behind weaker
consumer spending, economic activity in the rest of the world is broadly
improving. Both European and Japanese consumers appear poised to pick up any
demand slack from the U.S. consumer. Business around the world appears healthy
as trends in globalization, privatization, and corporate restructuring are
boosting global economic activity.
Market volatility should pick up as investors differentiate between slow and
fast growing companies.
Sustained moderate inflation remains a key component of Oechsle's favorable
economic and investment perspective. While their outlook is broadly positive
from both an economic and investment perspective, Oechsle acknowledges that
there are several risks that include a sharper than expected slowdown in U.S.
consumer spending, a continued sharp rise in oil and other commodities, and a
surge in terrorist activities or global health risks.
The Fund currently has 49.7% invested in Continental Europe, 19.7% in the United
Kingdom, 24.7% in Japan, 1.5% in the Pacific Basin outside of Japan, and 1.1% in
Emerging Markets.
Sincerely,
/s/ Charles M. Caravati, III /s/ Lawrence B. Whitlock
Charles M. Caravati, III, CFA Lawrence B. Whitlock, Jr.
President President
Jamestown Balanced Fund Jamestown Select Fund
Jamestown Equity Fund
Jamestown International Equity Fund
/s/ Joseph A. Jennings, III
Joseph A. Jennings, III
President
Jamestown Tax Exempt Virginia Fund
This report is submitted for the general information of the shareholders of the
Funds. The report is not authorized for distribution to prospective investors in
the Funds unless it is accompanied by a current prospectus.
This report reflects our views, opinions and portfolio holdings as of March 31,
2007, the end of the reporting period. These views are subject to change at any
time based upon market or other conditions. For more current information
throughout the year please visit www.jamestownfunds.com.
3
THE JAMESTOWN BALANCED FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE JAMESTOWN
BALANCED FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX THE JAMESTOWN BALANCED FUND CONSUMER PRICE INDEX
---------------------------- ---------------------------- ---------------------
DATE VALUE DATE VALUE DATE VALUE
---- ----- ---- ----- ---- -----
03/31/97 $10,000 03/31/97 $10,000 03/31/97 $10,000
06/30/97 11,746 06/30/97 11,131 06/30/97 10,019
09/30/97 12,626 09/30/97 11,684 09/30/97 10,063
12/31/97 12,988 12/31/97 11,967 12/31/97 10,125
03/31/98 14,800 03/31/98 13,242 03/31/98 10,137
06/30/98 15,289 06/30/98 13,312 06/30/98 10,194
09/30/98 13,768 09/30/98 12,141 09/30/98 10,237
12/31/98 16,700 12/31/98 14,154 12/31/98 10,280
03/31/99 17,532 03/31/99 14,242 03/31/99 10,305
06/30/99 18,768 06/30/99 14,683 06/30/99 10,399
09/30/99 17,596 09/30/99 14,266 09/30/99 10,455
12/31/99 20,214 12/31/99 15,777 12/31/99 10,537
03/31/00 20,678 03/31/00 16,507 03/31/00 10,637
06/30/00 20,128 06/30/00 16,734 06/30/00 10,743
09/30/00 19,933 09/30/00 16,246 09/30/00 10,825
12/31/01 18,376 12/31/00 15,911 12/31/00 10,906
03/31/01 16,197 03/31/01 14,418 03/31/01 11,013
06/30/01 17,144 06/30/01 14,563 06/30/01 11,132
09/30/01 14,628 09/30/01 13,181 09/30/01 11,119
12/31/01 16,191 12/31/01 14,117 12/31/01 11,113
03/31/02 16,235 03/31/02 13,955 03/31/02 11,138
06/30/02 14,060 06/30/02 13,335 06/30/02 11,263
09/30/02 11,630 09/30/02 12,350 09/30/02 11,319
12/31/02 12,612 12/31/02 12,648 12/31/02 11,357
03/31/03 12,214 03/31/03 12,551 03/31/03 11,469
06/30/03 14,095 06/30/03 13,710 06/30/03 11,494
09/30/03 14,468 09/30/03 13,792 09/30/03 11,563
12/31/03 16,229 12/31/03 14,725 12/31/03 11,558
03/31/04 16,504 03/31/04 15,098 03/31/04 11,664
06/30/04 16,788 06/30/04 15,225 06/30/04 11,846
09/30/04 16,475 09/30/04 15,102 09/30/04 11,871
12/31/04 17,995 12/31/04 15,739 12/31/04 11,965
03/31/05 17,609 03/31/05 15,525 03/31/05 12,109
06/30/05 17,850 06/30/05 15,717 06/30/05 12,274
09/30/05 18,493 09/30/05 16,234 09/30/05 12,400
12/31/05 18,879 12/31/05 16,526 12/31/05 12,476
03/31/06 19,674 03/31/06 16,943 03/31/06 12,546
06/30/06 19,390 06/30/06 16,394 06/30/06 12,786
09/30/06 20,489 09/30/06 17,082 09/30/06 12,874
12/31/06 21,861 12/31/06 17,874 12/31/06 12,722
03/31/07 22,001 03/31/07 18,056 03/31/07 12,848
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Jamestown Balanced Fund 6.57% 5.29% 6.09%
Standard & Poor's 500 Index 11.83% 6.27% 8.20%
Consumer Price Index 2.41% 2.90% 2.54%
- --------------------------------------------------------------------------------
(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 shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
4
THE JAMESTOWN EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE JAMESTOWN
EQUITY FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX THE JAMESTOWN EQUITY FUND CONSUMER PRICE INDEX
---------------------------- -------------------------- ---------------------
DATE VALUE DATE VALUE DATE VALUE
---- ----- ---- ----- ---- -----
03/31/97 $10,000 03/31/97 $10,000 03/31/97 $10,000
06/30/97 11,746 06/30/97 11,533 06/30/97 10,019
09/30/97 12,626 09/30/97 12,223 09/30/97 10,063
12/31/97 12,988 12/31/97 12,553 12/31/97 10,125
03/31/98 14,800 03/31/98 14,374 03/31/98 10,137
06/30/98 15,289 06/30/98 14,353 06/30/98 10,194
09/30/98 13,768 09/30/98 12,263 09/30/98 10,237
12/31/98 16,700 12/31/98 15,562 12/31/98 10,280
03/31/99 17,532 03/31/99 15,571 03/31/99 10,305
06/30/99 18,768 06/30/99 16,419 06/30/99 10,399
09/30/99 17,596 09/30/99 15,660 09/30/99 10,455
12/31/99 20,214 12/31/99 18,153 12/31/99 10,537
03/31/00 20,678 03/31/00 19,314 03/31/00 10,637
06/30/00 20,128 06/30/00 19,633 06/30/00 10,743
09/30/00 19,933 09/30/00 18,542 09/30/00 10,825
12/31/00 18,376 12/31/00 17,842 12/31/00 10,906
03/31/01 16,197 03/31/01 15,163 03/31/01 11,013
06/30/01 17,144 06/30/01 15,368 06/30/01 11,132
09/30/01 14,628 09/30/01 12,859 09/30/01 11,119
12/31/01 16,191 12/31/01 14,313 12/31/01 11,113
03/31/02 16,235 03/31/02 14,039 03/31/02 11,138
06/30/02 14,060 06/30/02 12,848 06/30/02 11,263
09/30/02 11,630 09/30/02 10,966 09/30/02 11,319
12/31/02 12,612 12/31/02 11,322 12/31/02 11,357
03/31/03 12,214 03/31/03 11,070 03/31/03 11,469
06/30/03 14,095 06/30/03 12,577 06/30/03 11,494
09/30/03 14,468 09/30/03 12,676 09/30/03 11,563
12/31/03 16,229 12/31/03 14,002 12/31/04 11,558
03/31/04 16,504 03/31/04 14,402 03/31/04 11,664
06/30/04 16,788 06/30/04 14,725 06/30/04 11,846
09/30/04 16,475 09/30/04 14,413 09/30/04 11,871
12/31/04 17,995 12/31/04 15,276 12/31/04 11,965
03/31/05 17,609 03/31/05 15,027 03/31/05 12,109
06/30/05 17,850 06/30/05 15,146 06/30/05 12,274
09/30/05 18,493 09/30/05 15,924 09/30/05 12,400
12/31/05 18,879 12/31/05 16,302 12/31/05 12,476
03/31/06 19,674 03/31/06 16,933 03/31/06 12,546
06/30/06 19,390 06/30/06 16,139 06/30/06 12,786
09/30/06 20,489 09/30/06 16,869 09/30/06 12,874
12/31/06 21,861 12/31/06 17,929 12/31/06 12,722
03/31/07 22,001 03/31/07 18,105 03/31/07 12,848
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Jamestown Equity Fund 6.92% 5.22% 6.12%
Standard & Poor's 500 Index 11.83% 6.27% 8.20%
Consumer Price Index 2.41% 2.90% 2.54%
- --------------------------------------------------------------------------------
(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 shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
5
THE JAMESTOWN SELECT FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
COMPARISION OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE JAMESTOWN SELECT FUND AND THE STANDARD & POOR'S 500 INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX THE JAMESTOWN SELECT FUND
---------------------------- --------------------------
DATE VALUE DATE VALUE
---- ----- ---- -----
10/31/06 $10,000 10/31/06 $10,000
12/31/06 10,333 12/31/06 10,435
03/31/07 10,399 03/31/07 10,755
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Total Return(a)
(for period ended March 31, 2007)
SINCE INCEPTION*
The Jamestown Select Fund 7.55%
Standard & Poor's 500 Index 3.99%
- --------------------------------------------------------------------------------
(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. Return shown does not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
* Commencement of operations was October 31, 2006.
6
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND, THE LIPPER INTERMEDIATE MUNICIPAL FUND
INDEX AND THE LEHMAN MUNICIPAL BOND INDEX
[GRAPHIC OMITTED]
LEHMAN MUNICIPAL BOND INDEX THE JAMESTOWN TAX EXEMPT VIRGINIA FUND LIPPER INTERMEDIATE MUNICIPAL FUND INDEX
---------------------------- --------------------------------------- ----------------------------------------
DATE VALUE DATE VALUE
---- ----- ---- ----- DATE VALUE
03/31/97 $10,000 03/31/97 $10,000 ---- -----
06/30/97 10,344 06/30/97 10,269 03/31/97 $10,000
09/30/97 10,656 09/30/97 10,486 06/30/97 10,264
12/31/97 10,945 12/31/97 10,717 09/30/97 10,516
03/31/98 11,071 03/31/98 10,800 12/31/97 10,743
06/30/98 11,240 06/30/98 10,928 03/31/98 10,846
09/30/98 11,585 09/30/98 11,250 6/30/1998 10,978
12/31/98 11,655 12/31/98 11,296 9/30/1998 11,282
03/31/99 11,758 03/31/99 11,332 12/31/98 11,346
06/30/99 11,550 06/30/99 11,158 03/31/99 11,410
09/30/99 11,504 09/30/99 11,151 06/30/99 11,219
12/31/99 11,415 12/31/99 11,100 09/30/99 11,226
03/31/00 11,749 03/31/00 11,337 12/31/99 11,191
06/30/00 11,926 06/30/00 11,463 03/31/00 11,388
09/30/00 12,215 09/30/00 11,695 6/30/2000 11,526
12/31/00 12,749 12/31/00 12,097 09/30/00 11,767
03/31/01 13,032 03/31/01 12,354 12/31/00 12,161
06/30/01 13,117 06/30/01 12,412 03/31/01 12,436
09/30/01 13,485 09/30/01 12,697 06/30/01 12,528
12/31/01 13,403 12/31/01 12,635 09/30/01 12,852
03/31/02 13,529 03/31/02 12,732 12/31/01 12,744
06/30/02 14,024 06/30/02 13,131 03/31/02 12,836
09/30/02 14,690 09/30/02 13,676 06/30/02 13,291
12/31/02 14,690 12/31/02 13,688 09/30/02 13,805
03/31/03 14,866 03/31/03 13,781 12/31/02 13,808
06/30/03 15,250 06/30/03 14,061 03/31/03 13,944
09/30/03 15,262 09/30/03 14,048 06/30/03 14,251
12/31/03 15,470 12/31/03 14,142 09/30/03 14,280
03/31/04 15,738 03/31/04 14,279 12/31/03 14,410
06/30/04 15,365 06/30/04 13,999 03/31/04 14,577
09/30/04 15,961 09/30/04 14,373 06/30/04 14,289
12/31/04 16,161 12/31/04 14,445 09/30/04 14,716
03/31/05 16,155 03/31/05 14,305 12/31/04 14,820
06/30/05 16,628 06/30/05 14,600 03/31/05 14,711
09/30/05 16,608 09/30/05 14,540 06/30/05 15,063
12/31/05 16,729 12/31/05 14,597 09/30/05 15,034
03/31/06 16,770 03/31/06 14,567 12/31/05 15,119
06/30/06 16,775 06/30/06 14,583 03/31/06 15,134
09/30/06 17,347 09/30/06 14,934 06/30/06 15,140
12/31/06 17,539 12/31/06 15,025 09/30/06 15,588
03/31/07 17,681 03/31/07 15,128 12/31/06 15,703
03/31/07 15,822
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Jamestown Tax Exempt Virginia Fund 3.85% 3.51% 4.23%
Lipper Intermediate Municipal Fund Index 4.55% 4.27% 4.69%
Lehman Municipal Bond Index 5.43% 5.50% 5.86%
- --------------------------------------------------------------------------------
(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 shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
7
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE JAMESTOWN
INTERNATIONAL EQUITY FUND AND THE MORGAN STANLEY EUROPE, AUSTRALIA AND FAR
EAST INDEX (EAFE INDEX)
[GRAPHIC OMITTED]
MORGAN STANLEY EUROPE, AUSTRALIA AND THE JAMESTOWN INTERNATIONAL
FAR EAST INDEX (EAFE INDEX) EQUITY FUND
------------------------------------ ---------------------------
DATE VALUE DATE VALUE
---- ----- ---- -----
03/31/97 $10,000 03/31/97 $10,000
06/30/97 11,297 06/30/97 11,580
09/30/97 11,217 09/30/97 12,080
12/31/97 10,339 12/31/97 11,151
03/31/98 11,859 03/31/98 12,967
06/30/98 11,985 06/30/98 13,574
09/30/98 10,282 09/30/98 11,702
12/31/98 12,406 12/31/98 13,822
03/31/99 12,579 03/31/99 14,090
06/30/99 12,898 06/30/99 14,711
09/30/99 13,466 09/30/99 15,600
12/31/99 15,753 12/31/99 19,297
03/31/00 15,738 03/31/00 19,635
06/30/00 15,115 06/30/00 17,950
09/30/00 13,896 09/30/00 16,492
12/31/00 13,522 12/31/00 15,358
03/31/01 11,664 03/31/01 13,098
06/30/01 11,542 06/30/01 12,676
09/30/01 9,926 09/30/01 10,386
12/31/01 10,618 12/31/01 11,170
03/31/02 10,672 03/31/02 11,309
06/30/02 10,446 06/30/02 10,805
09/30/02 8,384 09/30/02 8,488
12/31/02 8,926 12/31/02 8,916
03/31/03 8,193 03/31/03 8,009
06/30/03 9,772 06/30/03 9,520
09/30/03 10,565 09/30/03 10,116
12/31/03 12,368 12/31/03 11,571
03/31/04 12,904 03/31/04 12,031
06/30/04 12,932 06/30/04 11,980
09/30/04 12,896 09/30/04 11,660
12/31/04 14,872 12/31/04 13,491
03/31/05 14,848 03/31/05 13,295
06/30/05 14,700 06/30/05 12,884
09/30/05 16,225 09/30/05 14,327
12/31/05 16,887 12/31/05 15,222
03/31/06 18,475 03/31/06 16,559
06/30/06 18,604 06/30/06 16,442
09/30/06 19,335 09/30/06 17,013
12/31/06 21,337 12/31/06 18,384
03/31/07 22,207 03/31/07 18,854
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Jamestown International Equity Fund 13.86% 10.76% 6.55%
Morgan Stanley Europe, Australia and
Far East Index (EAFE Index) 20.20% 15.78% 8.31%
- --------------------------------------------------------------------------------
(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 shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
8
THE JAMESTOWN BALANCED FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- -------------------------------- TEN LARGEST EQUITY HOLDINGS NET ASSETS
-------------------------------------------
[GRAPHIC OMITTED] Cisco Systems, Inc. 1.9%
General Electric Company 1.8%
Cash Equivalents 0.9% PepsiCo, Inc. 1.6%
Fixed Income 30.1% Microsoft Corporation 1.5%
Common Stocks 69.0% American International Group 1.3%
AT&T, Inc. 1.3%
Bank of America Corporation 1.3%
Thermo Fisher Scientific, Inc. 1.2%
Oracle Corporation 1.1%
ITT Corporation 1.1%
EQUITY INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX (69.0% OF NET ASSETS)
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
THE
JAMESTOWN
BALANCED S&P 500
FUND INDEX
- ------------------------------------------------
Consumer Discretionary 9.4% 10.5%
Consumer Staples 7.4% 9.6%
Energy 7.6% 10.1%
Financials 20.5% 21.6%
Health Care 14.5% 11.9%
Industrials 14.4% 10.9%
Information Technology 19.7% 14.9%
Materials 3.5% 3.1%
Telecommunication Services 3.0% 3.7%
Utilities 0.0% 3.7%
FIXED-INCOME PORTFOLIO ( 30.1% OF NET ASSETS) SECTOR BREAKDOWN
- --------------------------------------------- -------------------------------
Average Weighted Maturity (Years) 4.54 U.S. Treasury 8.9%
Average Duration (Years) 3.55 U.S. Government Agency 20.7%
Average Coupon 5.71% Mortgage-Backed 20.5%
Average Yield to Maturity 5.18% Corporate 46.7%
Municipal 1.7%
Regional Authority 1.5%
CREDIT QUALITY % OF FIXED INCOME PORTFOLIO
----------------------------------------------------
AAA 2.5%
AA 9.4%
A 30.6%
BAA 8.7%
U.S. Treasury 8.7%
U.S. Government Agency 40.1%
9
THE JAMESTOWN EQUITY FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- -------------------------------- TEN LARGEST HOLDINGS NET ASSETS
-------------------------------------------
[GRAPHIC OMITTED] Cisco Systems, Inc. 2.7%
General Electric Company 2.6%
Cash Equivalents 0.4% PepsiCo, Inc. 2.3%
Stocks 99.6% Microsoft Corporation 2.1%
AT&T, Inc. 2.0%
American International Group 1.8%
Thermo Fisher Scientific, Inc. 1.8%
Bank of America Corporation 1.8%
Oracle Corporation 1.7%
ITT Corporation 1.6%
SECTOR CONCENTRATION VS. THE S&P 500 INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
THE
JAMESTOWN
EQUITY S&P 500
FUND INDEX
- --------------------------------------------------------------------------------
Consumer Discretionary 9.5% 10.5%
Consumer Staples 6.8% 9.6%
Energy 7.5% 10.1%
Financials 20.4% 21.6%
Health Care 14.5% 11.9%
Industrials 14.2% 10.9%
Information Technology 19.4% 14.9%
Materials 3.6% 3.1%
Telecommunication Services 3.1% 3.7%
Utilities 0.0% 3.7%
Cash Equivalents 1.0% 0.0%
10
THE JAMESTOWN SELECT FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- ------------------------------- TEN LARGEST HOLDINGS NET ASSETS
--------------------------------------------
[GRAPHIC OMITTED] Medco Health Solutions, Inc. 1.8%
Goldman Sachs Group, Inc. 1.7%
Cash Equivalents 0.5% J.C. Penney Company, Inc. 1.7%
Stocks 99.5% Terex Corporation 1.6%
Kroger Company 1.6%
Sherwin-Williams Company 1.6%
Grant Prideco, Inc. 1.6%
CIGNA Corporation 1.5%
Morgan Stanley 1.5%
MEMC Electronic Materials, Inc. 1.5%
SECTOR CONCENTRATION VS. THE S&P 500 INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
THE
JAMESTOWN
SELECT S&P 500
FUND INDEX
- --------------------------------------------------------------------------------
Consumer Discretionary 14.0% 10.5%
Consumer Staples 8.4% 9.6%
Energy 7.2% 10.1%
Financials 18.7% 21.6%
Health Care 12.2% 11.9%
Industrials 10.9% 10.9%
Information Technology 19.8% 14.9%
Materials 5.5% 3.1%
Telecommunication Services 1.5% 3.7%
Utilities 1.3% 3.7%
Cash Equivalents 0.5% 0.0%
11
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
CHARACTERISTICS MATURITY BREAKDOWN (% OF PORTFOLIO)
(WEIGHTED AVERAGE) --------------------------------------------
- -------------------------------
Current Yield 3.42% [GRAPHIC OMITTED]
Tax-Equivalent Yield* 5.26%
Average Maturity 4.5 years 0-2 Years 25%
Average Duration 3.8 years 2-5 Years 31%
Average Quality AA+ 5-10 Years 44%
Number of Issues 40
* 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 2.6%
General Obligations 11.6%
12
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
ASSET ALLOCATION % OF
- ------------------------------- TEN LARGEST HOLDINGS COUNTRY NET ASSETS
----------------------------------------------
[GRAPHIC OMITTED] Mitsubishi Estate
Company Ltd. Japan 2.8%
Cash Equivalents 3.3% Koninkijke (Royal)
Stocks 96.7% KPN NV Netherlands 2.4%
Repsol YPF SA Spain 2.3%
GlaxoSmithKline PLC United Kingdom 2.2%
Suez SA France 2.0%
Land Securities
Group PLC United Kingdom 2.0%
ENI SpA Italy 1.9%
SAP AG Germany 1.9%
Siemens AG Germany 1.8%
Mitsubishi UFJ Financial
Group, Inc. Japan 1.8%
GEOGRAPHIC DIVERSIFICATION VS. THE MORGAN STANLEY EAFE INDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
THE JAMESTOWN MORGAN
INTERNATIONAL STANLEY
EQUITY EAFE
FUND INDEX
-----------------------
Denmark 0.8% 8.9%
Finland 1.2% 1.5%
France 10.3% 10.0%
Germany 10.8% 7.7%
Greece 1.1% 0.7%
Italy 4.8% 3.8%
Japan 24.7% 22.5%
Netherlands 7.7% 3.5%
Norway 1.0% 1.0%
Poland 0.3% 0.0%
Portugal 0.6% 0.4%
Singapore 1.5% 1.0%
South Korea 0.8% 0.0%
Spain 3.3% 4.0%
Sweden 2.4% 2.6%
Switzerland 5.7% 6.6%
United Kingdom 19.7% 23.6%
Other 0.0% 2.2%
Cash Equivalents 3.3% 0.0%
13
THE JAMESTOWN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2007
==========================================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY SELECT VIRGINIA EQUITY
FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost........................ $37,251,479 $ 28,661,238 $19,001,275 $ 28,203,746 $ 17,279,454
=========== ============= =========== ============ =============
At value (Note 1).......................... $45,486,799 $ 37,359,283 $19,789,306 $ 28,646,667 $ 25,143,381
Cash......................................... -- -- -- -- 768,891
Cash denominated in
foreign currency(a) (Note 5)............... -- -- -- -- 62,062
Dividends and interest receivable............ 202,662 35,676 14,124 376,739 61,679
Receivable for investment securities sold.... 349,543 414,711 240,152 -- --
Receivable for capital shares sold........... -- 12,910 -- -- --
Other assets................................. 1,190 5,767 8,397 6,376 1,306
----------- ------------- ----------- ------------ -------------
TOTAL ASSETS............................... 46,040,194 37,828,347 20,051,979 29,029,782 26,037,319
----------- ------------- ----------- ------------ -------------
LIABILITIES
Distributions payable........................ 117,436 170,157 -- 14,391 --
Payable for securities purchased............. 412,868 487,184 824,739 -- 11,893
Payable for capital shares redeemed.......... 11,953 17,875 -- 22,037 --
Accrued investment advisory fees (Note 3).... 25,054 20,373 11,803 8,380 18,460
Accrued administration fees (Note 3)......... 5,300 4,400 4,000 3,600 4,300
Accrued compliance fees (Note 3)............. 550 500 400 450 600
Net unrealized depreciation on
forward foreign currency
exchange contracts (Note 6)................ -- -- -- -- 9
Other accrued expenses....................... 6,777 3 1,891 -- 12,243
----------- ------------- ----------- ------------ -------------
TOTAL LIABILITIES........................ 579,938 700,492 842,833 48,858 47,505
----------- ------------- ----------- ------------ -------------
NET ASSETS..................................... $45,460,256 $ 37,127,855 $19,209,146 $ 28,980,924 $ 25,989,814
=========== ============= =========== ============ =============
Net assets consist of:
Paid-in capital.............................. $37,253,297 $ 28,460,644 $18,376,352 $ 28,518,201 $ 33,584,050
Accumulated undistributed net
investment income.......................... 14,151 3,383 -- 13,101 --
Accumulated net realized gains (losses)
from security transactions................. (42,512) (34,217) 44,763 6,701 (15,459,107)
Net unrealized appreciation on investments... 8,235,320 8,698,045 788,031 442,921 7,863,927
Net unrealized appreciation on translation
of assets and liabilities in foreign
currencies................................. -- -- -- -- 944
----------- ------------- ----------- ------------ -------------
Net assets..................................... $45,460,256 $ 37,127,855 $19,209,146 $ 28,980,924 $ 25,989,814
=========== ============= =========== ============ =============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value)................................ 3,128,473 2,049,287 1,789,132 2,880,038 1,799,722
=========== ============= =========== ============ =============
Net asset value, offering price and redemption
price per share(b)........................... $ 14.53 $ 18.12 $ 10.74 $ 10.06 $ 14.44
=========== ============= =========== ============ =============
(a) For Jamestown International Equity Fund, the cost of cash denominated in
foreign currency is $61,676.
(b) For Jamestown International Equity Fund, redemption price varies based on
length of time held (Note 1).
See accompanying notes to financial statements.
14
THE JAMESTOWN FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2007 (a)
=============================================================================================================
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY SELECT VIRGINIA EQUITY
FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ............................ $ 526,627 $ 556,151 $ 93,381 $ 18,541 $ 503,731
Foreign withholding taxes on dividends (705) (798) -- -- (62,190)
Interest ............................. 857,023 8,751 -- 1,289,700 18,045
----------- ---------- -------- ----------- ----------
TOTAL INVESTMENT INCOME ............ 1,382,945 564,104 93,381 1,308,241 459,586
----------- ---------- -------- ----------- ----------
EXPENSES
Investment advisory fees (Note 3) .... 333,469 256,100 44,864 120,199 234,799
Administration fees (Note 3) ......... 69,796 55,408 14,000 43,775 46,886
Professional fees .................... 19,087 16,783 1,257 14,583 18,382
Trustees' fees and expenses .......... 12,513 12,513 6,703 12,513 12,513
Custodian fees ....................... 11,004 8,381 11,776 5,056 43,233
Pricing costs ........................ 8,764 2,018 810 5,792 31,693
Compliance consulting fees (Note 3) .. 6,740 5,662 2,043 4,977 5,623
Postage and supplies ................. 5,680 6,672 1,939 4,696 5,011
Registration fees .................... 3,159 3,837 1,833 1,343 4,412
Printing of shareholder reports ...... 3,147 4,734 825 1,868 2,393
Insurance expense .................... 4,118 3,229 -- 2,434 1,828
Other expenses ....................... 4,518 7,199 2,517 8,137 5,380
----------- ---------- -------- ----------- ----------
TOTAL EXPENSES ..................... 481,995 382,536 88,567 225,373 412,153
Fees waived by the Adviser (Note 3) .. -- -- (13,793) (18,030) (74,042)
Expenses reimbursed through a directed
brokerage arrangement (Note 4) ..... (24,000) (24,000) -- -- --
----------- ---------- -------- ----------- ----------
NET EXPENSES ....................... 457,995 358,536 74,774 207,343 338,111
----------- ---------- -------- ----------- ----------
NET INVESTMENT INCOME .................. 924,950 205,568 18,607 1,100,898 121,475
----------- ---------- -------- ----------- ----------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCIES (NOTE 5)
Net realized gains from:
Security transactions .............. 3,640,165 3,061,081 47,884 20,776 916,382
Foreign currency transactions ...... -- -- -- -- 1,717
Net change in unrealized appreciation/
depreciation on:
Investments ........................ (1,428,467) (687,674) 788,031 13,207 2,074,541
Foreign currency translation ....... -- -- -- -- 897
----------- ---------- -------- ----------- ----------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS
AND FOREIGN CURRENCIES ............... 2,211,698 2,373,407 835,915 33,983 2,993,537
----------- ---------- -------- ----------- ----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ..................... $ 3,136,648 $2,578,975 $854,522 $ 1,134,881 $3,115,012
=========== ========== ======== =========== ==========
(a) Except for the Jamestown Select Fund, which represents the period from the
commencement of operations (October 31, 2006) through March 31, 2007.
See accompanying notes to financial statements.
15
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
========================================================================================================
JAMESTOWN JAMESTOWN
BALANCED FUND EQUITY FUND
--------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006
- --------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ..................... $ 924,950 $ 1,074,156 $ 205,568 $ 152,092
Net realized gains on security transactions 3,640,165 3,960,067 3,061,081 3,030,933
Net change in unrealized appreciation/
depreciation on investments ............. (1,428,467) 475,466 (687,674) 1,861,077
------------ ------------ ------------ -----------
Net increase in net assets from operations .. 3,136,648 5,509,689 2,578,975 5,044,102
------------ ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ................ (956,689) (1,102,478) (203,630) (151,097)
From net realized gains from
security transactions ................... (3,490,662) (3,872,793) (3,027,251) (3,031,520)
------------ ------------ ------------ -----------
Net decrease in net assets from
distributions to shareholders ............. (4,447,351) (4,975,271) (3,230,881) (3,182,617)
------------ ------------ ------------ -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ................. 733,118 2,477,785 1,955,767 1,520,283
Net asset value of shares issued in
reinvestment of distributions to
shareholders ............................ 4,156,986 4,684,832 2,926,496 2,887,949
Payments for shares redeemed .............. (14,998,174) (13,052,698) (9,872,194) (5,752,829)
------------ ------------ ------------ -----------
Net decrease in net assets from
capital share transactions ................ (10,108,070) (5,890,081) (4,989,931) (1,344,597)
------------ ------------ ------------ -----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................. (11,418,773) (5,355,663) (5,641,837) 516,888
NET ASSETS
Beginning of year ......................... 56,879,029 62,234,692 42,769,692 42,252,804
------------ ------------ ------------ -----------
End of year ............................... $ 45,460,256 $ 56,879,029 $ 37,127,855 $42,769,692
============ ============ ============ ===========
ACCUMULATED UNDISTRIBUTED (OVERDISTRIBUTED)
NET INVESTMENT INCOME ..................... $ 14,151 $ (37,454) $ 3,383 $ 1,445
============ ============ ============ ===========
CAPITAL SHARE ACTIVITY
Sold ...................................... 49,158 165,132 105,603 82,920
Reinvested ................................ 283,046 313,505 160,560 160,456
Redeemed .................................. (1,002,168) (850,187) (534,434) (314,377)
------------ ------------ ------------ -----------
Net decrease in shares outstanding ........ (669,964) (371,550) (268,271) (71,001)
Shares outstanding, beginning of year ..... 3,798,437 4,169,987 2,317,558 2,388,559
------------ ------------ ------------ -----------
Shares outstanding, end of year ........... 3,128,473 3,798,437 2,049,287 2,317,558
============ ============ ============ ===========
See accompanying notes to financial statements.
16
THE JAMESTOWN SELECT FUND
STATEMENTS OF CHANGES IN NET ASSETS
======================================================================================================
PERIOD
ENDED
MARCH 31,
2007 (a)
- ------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................................................................ $ 18,607
Net realized gains on security transactions .......................................... 47,884
Net change in unrealized appreciation/depreciation on investments .................... 788,031
-----------
Net increase in net assets from operations ............................................. 854,522
-----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ........................................................... (18,607)
From net realized gain from security transaction ..................................... (3,121)
-----------
Net decrease in net assets from distributions to shareholders ........................ (21,728)
-----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............................................................ 18,357,722
Net asset value of shares issued in reinvestment of distributions to shareholders .... 21,278
Payments for shares redeemed ......................................................... (2,648)
-----------
Net increase in net assets from capital share transactions ............................. 18,376,352
-----------
TOTAL INCREASE IN NET ASSETS ........................................................... 19,209,146
NET ASSETS
Beginning of period .................................................................. --
-----------
End of period ........................................................................ $19,209,146
===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME ........................................ $ --
===========
CAPITAL SHARE ACTIVITY
Sold ................................................................................. 1,787,340
Reinvested ........................................................................... 2,042
Redeemed ............................................................................. (250)
-----------
Net increase in shares outstanding ................................................... 1,789,132
Shares outstanding, beginning of period .............................................. --
-----------
Shares outstanding, end of period .................................................... 1,789,132
===========
(a) Represents the period from the commencement of operations (October 31,
2006) through March 31, 2007.
See accompanying notes to financial statements.
17
THE JAMESTOWN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
============================================================================================================
JAMESTOWN TAX EXEMPT JAMESTOWN
VIRGINIA FUND INTERNATIONAL EQUITY FUND
------------------------- -------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006
- ------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................ $ 1,100,898 $ 1,091,469 $ 121,475 $ 175,330
Net realized gains (losses) from:
Security transactions .......................... 20,776 26,160 916,382 939,193
Foreign currency transactions .................. -- -- 1,717 (2,031)
Net change in unrealized appreciation/
depreciation on:
Investments .................................... 13,207 (554,553) 2,074,541 3,281,131
Foreign currency translation ................... -- -- 897 62
----------- ----------- ----------- -----------
Net increase in net assets from operations ......... 1,134,881 563,076 3,115,012 4,393,685
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ....................... (1,070,348) (1,089,001) (138,528) (164,170)
From net realized gains from
security transactions .......................... (36,397) -- -- --
In excess of net investment income ............... -- -- (6,400) --
----------- ----------- ----------- -----------
Net decrease in net assets from distributions
to shareholders .................................. (1,106,745) (1,089,001) (144,928) (164,170)
----------- ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ........................ 2,492,050 1,971,725 3,834,061 764,281
Net asset value of shares issued in reinvestment
of distributions to shareholders ............... 879,398 867,903 138,102 161,289
Proceeds from redemption
fees collected (Note 1) ........................ -- -- 290 5
Payments for shares redeemed ..................... (4,840,151) (3,451,665) (2,552,645) (3,820,953)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets from
capital share transactions ....................... (1,468,703) (612,037) 1,419,808 (2,895,378)
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ....................................... (1,440,567) (1,137,962) 4,389,892 1,334,137
NET ASSETS
Beginning of year ................................ 30,421,491 31,559,453 21,599,922 20,265,785
----------- ----------- ----------- -----------
End of year ...................................... $28,980,924 $30,421,491 $25,989,814 $21,599,922
=========== =========== =========== ===========
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME ................................ $ 13,101 $ 10,932 $ -- $ 15,336
=========== =========== =========== ===========
CAPITAL SHARE ACTIVITY
Sold ............................................. 247,500 193,535 284,512 64,093
Reinvested ....................................... 87,361 85,055 10,317 14,029
Redeemed ......................................... (481,104) (338,953) (188,193) (347,821)
----------- ----------- ----------- -----------
Net increase (decrease) in shares outstanding .... (146,243) (60,363) 106,636 (269,699)
Shares outstanding, beginning of year ............ 3,026,281 3,086,644 1,693,086 1,962,785
----------- ----------- ----------- -----------
Shares outstanding, end of year .................. 2,880,038 3,026,281 1,799,722 1,693,086
=========== =========== =========== ===========
See accompanying notes to financial statements.
18
THE JAMESTOWN BALANCED FUND
FINANCIAL HIGHLIGHTS
====================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
-----------------------------------------------
2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............. $ 14.97 $ 14.92 $ 15.40 $ 13.76 $ 15.66
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income .......................... 0.27 0.26 0.29 0.27 0.31
Net realized and unrealized gains
(losses) on investments .................... 0.69 1.06 0.14 2.48 (1.88)
------- ------- ------- ------- -------
Total from investment operations ................. 0.96 1.32 0.43 2.75 (1.57)
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income ........... (0.29) (0.27) (0.30) (0.29) (0.33)
Distributions from net realized gains .......... (1.11) (1.00) (0.61) (0.82) --
------- ------- ------- ------- -------
Total distributions .............................. (1.40) (1.27) (0.91) (1.11) (0.33)
------- ------- ------- ------- -------
Net asset value at end of year ................... $ 14.53 $ 14.97 $ 14.92 $ 15.40 $ 13.76
======= ======= ======= ======= =======
Total return (a) ................................. 6.57% 9.14% 2.83% 20.29% (10.06%)
======= ======= ======= ======= =======
Net assets at end of year (000's) ................ $45,460 $56,879 $62,235 $63,838 $65,339
======= ======= ======= ======= =======
Ratio of gross expenses to average net assets .... 0.94% 0.93% 0.92% 0.91% 0.90%
Ratio of net expenses to average net assets(b) ... 0.89% 0.89% 0.88% 0.88% 0.87%
Ratio of net investment income to
average net assets ............................. 1.80% 1.72% 1.87% 1.77% 2.12%
Portfolio turnover rate .......................... 40% 49% 29% 36% 38%
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
19
THE JAMESTOWN EQUITY FUND
FINANCIAL HIGHLIGHTS
====================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
-----------------------------------------------
2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............. $ 18.45 $ 17.69 $ 18.28 $ 14.47 $ 18.40
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income .......................... 0.10 0.07 0.12 0.05 0.04
Net realized and unrealized gains
(losses) on investments ...................... 1.15 2.11 0.65 4.30 (3.93)
------- ------- ------- ------- -------
Total from investment operations ................. 1.25 2.18 0.77 4.35 (3.89)
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income ........... (0.10) (0.07) (0.12) (0.05) (0.04)
Distributions from net realized gains .......... (1.48) (1.35) (1.24) (0.49) --
------- ------- ------- ------- -------
Total distributions .............................. (1.58) (1.42) (1.36) (0.54) (0.04)
------- ------- ------- ------- -------
Net asset value at end of year ................... $ 18.12 $ 18.45 $ 17.69 $ 18.28 $ 14.47
======= ======= ======= ======= =======
Total return(a) .................................. 6.92% 12.69% 4.34% 30.10% (21.15%)
======= ======= ======= ======= =======
Net assets at end of year (000's) ................ $37,128 $42,770 $42,253 $50,187 $38,619
======= ======= ======= ======= =======
Ratio of gross expenses to average net assets .... 0.97% 0.97% 0.95% 0.94% 0.96%
Ratio of net expenses to average net assets(b) ... 0.91% 0.92% 0.90% 0.88% 0.89%
Ratio of net investment income
to average net assets .......................... 0.52% 0.36% 0.63% 0.27% 0.25%
Portfolio turnover rate .......................... 53% 60% 34% 52% 60%
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(b) Ratios were determined based on net expenses after expense reimbursements
through a directed brokerage arrangement (Note 4).
See accompanying notes to financial statements.
20
THE JAMESTOWN SELECT FUND
FINANCIAL HIGHLIGHTS
================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
- --------------------------------------------------------------------------------
PERIOD
ENDED
MARCH 31,
2007 (a)
- -----------------------------------------------------------------------------
Net asset value at beginning of period .......................... $ 10.00
-------
Income (loss) from investment operations:
Net investment income ......................................... 0.01
Net realized and unrealized gains on investments .............. 0.75
-------
Total from investment operations ................................ 0.76
-------
Less distributions:
Dividends from net investment income .......................... (0.02)
-------
Net asset value at end of period ................................ $ 10.74
=======
Total return(b) ................................................. 7.55%(c)
=======
Net assets at end of year (000's) ............................... $19,209
=======
Ratio of net expenses to average net assets(e) .................. 1.25%(d)
Ratio of net investment income to average net assets ............ 0.31%(d)
Portfolio turnover rate ......................................... 46%(c)
(a) Represents the period from the commencement of operations (October 31,
2006) through March 31, 2007.
(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. The return shown does
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 1.47%(d) for the
period ended March 31, 2007.
See accompanying notes to financial statements.
21
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
FINANCIAL HIGHLIGHTS
=======================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- -------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
--------------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............. $ 10.05 $ 10.22 $ 10.57 $ 10.56 $ 10.12
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income .......................... 0.37 0.36 0.37 0.37 0.38
Net realized and unrealized gains
(losses) on investments ...................... 0.01 (0.17) (0.35) 0.00(a) 0.44
------- ------- ------- ------- -------
Total from investment operations ................. 0.38 0.19 0.02 0.37 0.82
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income ........... (0.36) (0.36) (0.37) (0.36) (0.38)
Distributions from net realized gains .......... (0.01) -- -- -- --
------- ------- ------- ------- -------
Total distributions .............................. (0.37) (0.36) (0.37) (0.36) (0.38)
------- ------- ------- ------- -------
Net asset value at end of year ................... $ 10.06 $ 10.05 $ 10.22 $ 10.57 $ 10.56
======= ======= ======= ======= =======
Total return(b) .................................. 3.85% 1.83% 0.19% 3.61% 8.24%
======= ======= ======= ======= =======
Net assets at end of year (000's) ................ $28,981 $30,421 $31,559 $33,602 $36,424
======= ======= ======= ======= =======
Ratio of net expenses to average net assets(c) ... 0.69% 0.69% 0.69% 0.69% 0.69%
Ratio of net investment income to
average net assets ............................. 3.66% 3.50% 3.60% 3.46% 3.68%
Portfolio turnover rate .......................... 10% 22% 15% 43% 28%
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(c) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 0.75%, 0.73%,
0.72%, 0.74% and 0.70% for the years ended March 31, 2007, 2006, 2005,
2004 and 2003, respectively.
See accompanying notes to financial statements.
22
THE JAMESTOWN INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
============================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31,
-----------------------------------------------------
2007 2006 2005 2004 2003
- ------------------------------------------------------------------------------------------------------------
Net asset value at beginning of year ............... $ 12.76 $ 10.33 $ 9.42 $ 6.31 $ 8.98
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ............................ 0.07 0.10 0.08 0.05 0.06
Net realized and unrealized gains (losses)
on investments and foreign currencies .......... 1.69 2.43 0.91 3.12 (2.69)
------- ------- ------- ------- -------
Total from investment operations ................... 1.76 2.53 0.99 3.17 (2.63)
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income ............. (0.08) (0.10) (0.08) (0.05) (0.05)
Distributions from net realized gains ............ -- -- -- (0.01) --
------- ------- ------- ------- -------
Total distributions ................................ (0.08) (0.10) (0.08) (0.06) (0.05)
------- ------- ------- ------- -------
Proceeds from redemption fees collected (Note 1) ... 0.00(a) 0.00(a) -- 0.00(a) 0.01
------- ------- ------- ------- -------
Net asset value at end of year ..................... $ 14.44 $ 12.76 $ 10.33 $ 9.42 $ 6.31
======= ======= ======= ======= =======
Total return(b) .................................... 13.86% 24.54% 10.51% 50.22% (29.18%)
======= ======= ======= ======= =======
Net assets at end of year (000's) .................. $25,990 $21,600 $20,266 $21,158 $21,308
======= ======= ======= ======= =======
Ratio of net expenses to average net assets(c) ..... 1.44% 1.44% 1.43% 1.38% 1.38%
Ratio of net investment income
to average net assets ............................ 0.52% 0.89% 0.78% 0.57% 0.60%
Portfolio turnover rate ............................ 13% 13% 111% 78% 56%
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(c) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 1.75%, 1.87%,
1.92%, 1.77% and 1.70% for the years ended March 31, 2007, 2006, 2005,
2004 and 2003, respectively.
See accompanying notes to financial statements.
23
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 69.0% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 6.5%
4,500 J.C. Penney Company, Inc. ................................ $ 369,720
10,000 Lowe's Companies, Inc. ................................... 314,900
11,000 McDonald's Corporation.................................... 495,550
2,200 Sears Holdings Corporation (a)............................ 396,352
19,000 Staples, Inc. ............................................ 490,960
8,000 Target Corporation........................................ 474,080
12,000 Walt Disney Company (The)................................. 413,160
-----------
2,954,722
-----------
CONSUMER STAPLES -- 5.1%
8,700 Coca-Cola Company (The)................................... 417,600
15,000 CVS Corporation........................................... 512,100
11,300 PepsiCo, Inc. ............................................ 718,228
7,500 Procter & Gamble Company (The)............................ 473,700
6,000 Sysco Corporation......................................... 202,980
-----------
2,324,608
-----------
ENERGY -- 5.3%
6,500 Chevron Corporation....................................... 480,740
4,500 Exxon Mobil Corporation................................... 339,525
5,300 GlobalSantaFe Corporation................................. 326,904
5,000 Noble Corporation......................................... 393,400
7,200 Schlumberger Ltd. ........................................ 497,520
7,500 Smith International, Inc. ................................ 360,375
-----------
2,398,464
-----------
FINANCIALS -- 14.2%
8,800 American International Group, Inc. ....................... 591,536
11,500 Bank of America Corporation............................... 586,730
9,200 Chubb Corporation (The)................................... 475,364
8,200 CIT Group, Inc. .......................................... 433,944
3,950 Franklin Resources, Inc. ................................. 477,279
1,500 Goldman Sachs Group, Inc. ................................ 309,945
8,800 JPMorgan Chase & Company ................................. 425,744
5,775 Lehman Brothers Holdings, Inc. ........................... 404,654
6,000 Merrill Lynch & Company, Inc. ............................ 490,020
7,500 MetLife, Inc. ............................................ 473,625
5,900 Morgan Stanley............................................ 464,684
5,250 Prudential Financial, Inc. .............................. 473,865
8,500 Travelers Companies, Inc. (The)........................... 440,045
7,000 Wachovia Corporation...................................... 385,350
-----------
6,432,785
-----------
HEALTH CARE -- 10.0%
9,500 Aetna, Inc. .............................................. 416,005
5,000 Express Scripts, Inc. (a)................................. 403,600
5,000 Genentech, Inc. (a)....................................... 410,600
5,000 Gilead Sciences, Inc. (a)................................. 382,500
6,000 Johnson & Johnson......................................... 361,560
5,600 McKesson Corporation...................................... 327,824
13,000 Teva Pharmaceutical Industries Ltd. - ADR................. 486,590
9,500 UnitedHealth Group, Inc. ................................. 503,215
6,200 WellPoint, Inc. (a)....................................... 502,820
24
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 69.0% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 10.0% (CONTINUED)
8,500 Wyeth .................................................. $ 425,255
4,000 Zimmer Holdings, Inc. (a)................................ 341,640
-----------
4,561,609
-----------
INDUSTRIALS -- 9.9%
9,900 Dover Corporation........................................ 483,219
23,450 General Electric Company................................. 829,192
8,500 ITT Corporation ......................................... 512,720
3,200 Lockheed Martin Corporation.............................. 310,464
9,900 Norfolk Southern Corporation............................. 500,940
4,900 Parker Hannifin Corporation.............................. 422,919
4,600 Textron, Inc. ........................................... 413,080
12,000 Thermo Fisher Scientific, Inc. (a)....................... 561,000
7,200 United Technologies Corporation.......................... 468,000
-----------
4,501,534
-----------
INFORMATION TECHNOLOGY -- 13.6%
9,000 Accenture Ltd. - Class A ................................ 346,860
23,200 Applied Materials, Inc. ................................. 425,024
33,000 Cisco Systems, Inc.(a)................................... 842,490
20,000 Corning, Inc. (a)........................................ 454,800
900 Google, Inc. (a)......................................... 412,344
8,600 Harris Corporation....................................... 438,170
10,600 Hewlett-Packard Company.................................. 425,484
5,200 International Business Machines Corporation.............. 490,152
6,400 MEMC Electronic Materials, Inc. (a)...................... 387,712
24,000 Microsoft Corporation .................................. 668,880
28,500 Oracle Corporation (a)................................... 516,705
11,000 Qualcomm, Inc. .......................................... 469,260
18,000 Western Digital Corporation (a).......................... 302,580
-----------
6,180,461
-----------
MATERIALS -- 2.4%
3,200 Allegheny Technologies, Inc. ............................ 341,408
8,000 du Pont (E.I.) de Nemours and Company.................... 395,440
5,500 Praxair, Inc. ........................................... 346,280
-----------
1,083,128
-----------
TELECOMMUNICATIONS SERVICES -- 2.0%
7,000 America Movil S.A. de C.V. - Series L - ADR.............. 334,530
15,000 AT&T, Inc. .............................................. 591,450
-----------
925,980
-----------
TOTAL COMMON STOCKS (Cost $23,298,203)................... $31,363,291
-----------
25
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE U.S. TREASURY OBLIGATIONS -- 2.7% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 2.7%
$ 500,000 4.00%, due 02/15/2014................................. $ 482,344
750,000 4.25%, due 11/15/2014................................. 732,187
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,242,630)..... 1,214,531
-----------
================================================================================
PAR VALUE U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.2% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 5.2%
$ 500,000 4.625%, due 12/19/2008................................ $ 497,805
1,000,000 6.625%, due 09/15/2009................................ 1,040,501
300,000 5.125%, due 07/15/2012................................ 304,038
500,000 5.25% due 04/18/2016.................................. 509,278
-----------
2,351,622
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.0%
250,000 7.25%, due 01/15/2010................................. 265,675
200,000 5.50%, due 03/15/2011................................. 204,565
-----------
470,240
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,744,186)................................... $ 2,821,862
-----------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 6.2% VALUE
- --------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 1.3%
$ 15,796 Pool #1471, 7.00%, due 03/01/2008..................... $ 15,764
90,752 Pool #E00616, 6.00%, due 01/01/2014................... 92,258
32,297 Pool #E90624, 6.00%, due 08/01/2017................... 32,833
458,349 Pool #A43942, 5.50%, due 03/01/2036................... 453,558
-----------
594,413
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 4.8%
250,442 Pool #618465, 5.00%, due 12/01/2016................... 246,963
328,740 Pool #684231, 5.00%, due 01/01/2018................... 324,174
297,416 Pool #255455, 5.00%, due 10/01/2024................... 290,149
485,673 Pool #255702, 5.00%, due 05/01/2025................... 473,479
66,554 Pool #489757, 6.00%, due 04/01/2029................... 67,047
318,098 Pool #808413, 5.50%, due 01/01/2035................... 314,755
453,019 Pool #255813, 5.00%, due 08/01/2035................... 438,127
-----------
2,154,694
-----------
GOVERNMENT NATIONAL MORTAGE ASSOCIATION -- 0.1%
45,680 Pool #781344, 6.50%, due 10/01/2031................... 46,868
-----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $2,822,769).... $ 2,795,975
-----------
26
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 14.0% VALUE
- --------------------------------------------------------------------------------
Alcoa, Inc.,
$250,000 6.50%, due 06/01/2011................................ $ 261,517
American Express Company,
150,000 4.875%, due 07/15/2013............................... 147,622
American International Group, Inc.,
200,000 5.60%, due 10/18/2016................................ 203,395
Anheuser-Busch Companies, Inc.,
249,000 5.375%, due 09/15/2008............................... 249,588
BB&T Corporation,
325,000 6.50%, due 08/01/2011............................... 341,246
Burlington Resources, Inc.,
350,000 6.68%, due 02/15/2011................................ 369,299
ConocoPhillips,
200,000 4.75%, due 10/15/2012................................ 197,417
Deutsche Telekom AG,
300,000 8.00%, due 06/15/2010................................ 325,205
Dover Corporation,
345,000 6.50%, due 02/15/2011................................ 361,255
Duke Realty L.P., Medium Term Notes,
390,000 6.75%, due 05/30/2008................................ 395,128
FPL Group Capital, Inc.,
300,000 7.375%, due 06/01/2009............................... 313,703
General Dynamics Corporation,
125,000 4.25%, due 05/15/2013................................ 119,425
Goldman Sachs Group, Inc.,
350,000 6.65%, due 05/15/2009................................ 360,861
GTE Northwest, Inc.,
300,000 6.30%, due 06/01/2010................................ 308,471
HSBC Finance Corporation,
300,000 6.40%, due 06/17/2008................................ 303,875
International Business Machines Corporation,
175,000 4.375%, due 06/01/2009............................... 173,024
JPMorgan Chase & Company,
300,000 6.75%, due 02/01/2011................................ 315,482
May Department Stores Company,
260,000 5.95%, due 11/01/2008................................ 262,626
Morgan Stanley,
250,000 5.30%, due 03/01/2013................................ 249,686
SunTrust Banks, Inc.
300,000 6.00%, due 01/15/2028................................ 311,929
Union Camp Corporation,
300,000 6.50%, due 11/15/2007................................ 301,119
United Technologies Corporation,
250,000 6.10%, due 05/15/2012................................ 261,758
Wachovia Corporation,
250,000 5.25%, due 08/01/2014................................ 247,085
-----------
TOTAL CORPORATE BONDS (Cost $6,239,493)................ $ 6,380,716
-----------
27
THE JAMESTOWN BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MUNICIPAL DEBT SECURITIES -- 0.5% VALUE
- --------------------------------------------------------------------------------
Virginia State Resources Authority, Infrastructure,
$230,000 Revenue, 5.90%, due 05/01/2011 (Cost $233,321)....... $ 237,666
================================================================================
PAR VALUE REGIONAL AUTHORITY BONDS -- 0.5% VALUE
- --------------------------------------------------------------------------------
Manitoba (Province of), Medium Term Notes,
$205,000 5.50%, due 10/01/2008 (Cost $204,755)................ $ 206,636
================================================================================
SHARES MONEY MARKET FUNDS -- 1.0% VALUE
- --------------------------------------------------------------------------------
466,122 Fidelity Institutional Money Market Portfolio
(Cost $466,122).................................... $ 466,122
-----------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $37,251,479)................................. $45,486,799
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) ..... (26,543)
-----------
NET ASSETS -- 100.0%................................. $45,460,256
===========
(a) Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
28
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 99.6% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 9.5%
5,500 J.C. Penney Company, Inc. ............................. $ 451,880
12,000 Lowe's Companies, Inc. ................................ 377,880
13,000 McDonald's Corporation................................. 585,650
2,750 Sears Holdings Corporation (a)......................... 495,440
22,200 Staples, Inc. ......................................... 573,648
9,500 Target Corporation..................................... 562,970
14,175 Walt Disney Company (The).............................. 488,045
-----------
3,535,513
-----------
CONSUMER STAPLES -- 6.8%
10,500 Coca-Cola Company (The)................................ 504,000
17,400 CVS Corporation........................................ 594,036
13,500 PepsiCo, Inc. ......................................... 858,060
9,100 Procter & Gamble Company (The)......................... 574,756
-----------
2,530,852
-----------
ENERGY -- 7.5%
7,700 Chevron Corporation.................................... 569,492
5,000 Exxon Mobil Corporation................................ 377,250
6,300 GlobalSantaFe Corporation.............................. 388,584
5,500 Noble Corporation...................................... 432,740
8,500 Schlumberger Ltd. ..................................... 587,350
9,000 Smith International, Inc. ............................. 432,450
-----------
2,787,866
-----------
FINANCIALS -- 20.5%
10,200 American International Group, Inc. .................... 685,644
13,200 Bank of America Corporation ........................... 673,464
11,000 Chubb Corporation (The)................................ 568,370
9,500 CIT Group, Inc. ....................................... 502,740
4,700 Franklin Resources, Inc. .............................. 567,901
1,800 Goldman Sachs Group, Inc. ............................. 371,934
10,400 JPMorgan Chase & Company .............................. 503,152
6,825 Lehman Brothers Holdings, Inc. ........................ 478,228
7,200 Merrill Lynch & Company, Inc. ......................... 588,024
9,000 MetLife, Inc. ......................................... 568,350
6,975 Morgan Stanley......................................... 549,351
6,200 Prudential Financial, Inc. ........................... 559,612
10,300 Travelers Companies, Inc. (The)........................ 533,231
8,500 Wachovia Corporation................................... 467,925
-----------
7,617,926
-----------
HEALTH CARE -- 14.7%
12,000 Aetna, Inc. ........................................... 525,480
5,900 Express Scripts, Inc. (a).............................. 476,248
5,900 Genentech, Inc. (a).................................... 484,508
6,300 Gilead Sciences, Inc. (a).............................. 481,950
7,200 Johnson & Johnson...................................... 433,872
6,600 McKesson Corporation................................... 386,364
14,900 Teva Pharmaceutical Industries Ltd. - ADR.............. 557,707
10,900 UnitedHealth Group, Inc. .............................. 577,373
7,300 WellPoint, Inc. (a).................................... 592,030
29
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 14.7% (CONTINUED)
10,000 Wyeth................................................. $ 500,300
5,000 Zimmer Holdings, Inc. (a)............................. 427,050
-----------
5,442,882
-----------
INDUSTRIALS -- 14.3%
11,600 Dover Corporation..................................... 566,196
27,700 General Electric Company.............................. 979,472
10,000 ITT Corporation....................................... 603,200
3,800 Lockheed Martin Corporation........................... 368,676
11,500 Norfolk Southern Corporation.......................... 581,900
5,800 Parker Hannifin Corporation........................... 500,598
14,600 Thermo Fisher Scientific, Inc. (a).................... 682,550
5,700 Textron, Inc. ........................................ 511,860
7,900 United Technologies Corporation....................... 513,500
-----------
5,307,952
-----------
INFORMATION TECHNOLOGY -- 19.6%
10,150 Accenture Ltd. - Class A ............................. 391,181
27,450 Applied Materials, Inc. .............................. 502,884
39,000 Cisco Systems, Inc. (a)............................... 995,670
24,800 Corning, Inc. (a)..................................... 563,952
1,050 Google, Inc. (a)...................................... 481,068
10,200 Harris Corporation.................................... 519,690
12,200 Hewlett-Packard Company............................... 489,708
6,200 International Business Machines Corporation........... 584,412
7,200 MEMC Electronic Materials, Inc. (a)................... 436,176
28,000 Microsoft Corporation ............................... 780,360
34,000 Oracle Corporation (a)................................ 616,420
13,000 Qualcomm, Inc. ....................................... 554,580
21,000 Western Digital Corporation (a)....................... 353,010
-----------
7,269,111
-----------
MATERIALS -- 3.6%
4,100 Allegheny Technologies, Inc. ......................... 437,429
10,000 du Pont (E.I.) de Nemours and Company................. 494,300
6,500 Praxair, Inc. ........................................ 409,240
-----------
1,340,969
-----------
TELECOMMUNICATIONS SERVICES -- 3.1%
8,500 America Movil S.A. de C.V. - Series L - ADR........... 406,215
19,000 AT&T, Inc. ........................................... 749,170
-----------
1,155,385
-----------
TOTAL COMMON STOCKS (Cost $28,290,411)................ $36,988,456
-----------
30
THE JAMESTOWN EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKET FUNDS -- 1.0% VALUE
- --------------------------------------------------------------------------------
370,827 Fidelity Institutional Money Market Portfolio
(Cost $370,827).................................... $ 370,827
-----------
TOTAL INVESTMENTS AT VALUE -- 100.6%
(Cost $28,661,238)................................. $37,359,283
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.6%)...... (231,428)
-----------
NET ASSETS -- 100.0%................................. $37,127,855
===========
(a) Non-income producing security.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
31
THE JAMESTOWN SELECT FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 99.5% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 14.0%
7,477 American Eagle Outfitters, Inc. ..................... $ 224,235
3,950 J.C. Penney Company, Inc. ........................... 324,532
10,310 Mattel, Inc. ........................................ 284,247
6,290 McDonald's Corporation............................... 283,365
4,895 OfficeMax, Inc. ..................................... 258,162
1,460 Sears Holdings Corporation (a)....................... 263,034
4,535 Sherwin-Williams Company (The)....................... 299,491
4,390 Stanley Works (The).................................. 243,030
4,280 Target Corporation................................... 253,633
7,460 Walt Disney Company (The)............................ 256,848
-----------
2,690,577
-----------
CONSUMER STAPLES -- 8.4%
3,070 Altria Group, Inc. .................................. 269,577
7,120 Archer-Daniels-Midland Company....................... 261,304
7,590 CVS Corporation...................................... 259,123
10,670 Kroger Company (The)................................. 301,428
3,000 Molson Coors Brewing Company - Class B............... 283,860
3,800 Procter & Gamble Company (The)....................... 240,008
-----------
1,615,300
-----------
ENERGY -- 7.2%
4,530 Cameron International Corporation (a)................ 284,439
4,900 ENSCO International, Inc. ........................... 266,560
4,140 GlobalSantaFe Corporation............................ 255,355
5,990 Grant Prideco, Inc. (a).............................. 298,541
4,020 Schlumberger, Ltd.................................... 277,782
-----------
1,382,677
-----------
FINANCIALS -- 18.7%
3,350 American International Group, Inc. .................. 225,187
7,260 Berkley (W.R.) Corporation........................... 240,451
4,700 Chubb Corporation (The).............................. 242,849
4,560 CIT Group, Inc. ..................................... 241,315
1,605 Goldman Sachs Group, Inc. (The)...................... 331,641
2,700 Hartford Financial Services Group, Inc. (The) ....... 258,066
4,770 JPMorgan Chase & Company............................. 230,773
3,420 Lehman Brothers Holdings, Inc. ...................... 239,639
2,995 Merrill Lynch & Company, Inc. ....................... 244,601
4,535 MetLife, Inc. ....................................... 286,385
3,655 Morgan Stanley....................................... 287,868
4,000 ProLogis............................................. 259,720
2,670 Prudential Financial, Inc. .......................... 240,994
4,985 Travelers Companies, Inc. (The)...................... 258,074
-----------
3,587,563
-----------
HEALTH CARE -- 12.2%
4,845 Aetna, Inc. ......................................... 212,163
2,050 CIGNA Corporation.................................... 292,453
3,240 Express Scripts, Inc. (a)............................ 261,532
3,420 Johnson & Johnson.................................... 206,089
4,750 McKesson Corporation................................. 278,065
32
THE JAMESTOWN SELECT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 99.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 12.2% (CONTINUED)
4,750 Medco Health Solutions, Inc. (a)..................... $ 344,518
11,390 Mylan Laboratories, Inc. ............................ 240,785
4,900 UnitedHealth Group, Inc. ............................ 259,553
3,020 WellPoint, Inc. (a).................................. 244,922
-----------
2,340,080
-----------
INDUSTRIALS -- 10.9%
5,120 Dover Corporation.................................... 249,907
2,780 Lockheed Martin Corporation.......................... 269,716
3,580 Northrop Grumman Corporation......................... 265,708
2,855 Parker Hannifin Corporation.......................... 246,415
4,275 Ryder System, Inc. .................................. 210,929
4,310 Terex Corporation (a)................................ 309,286
5,845 Thermo Fisher Scientific, Inc. (a)................... 273,254
2,630 Union Pacific Corporation............................ 267,076
-----------
2,092,291
-----------
INFORMATION TECHNOLOGY -- 19.8%
7,460 Accenture Ltd. - Class A ............................ 287,508
3,950 Alliance Data Systems Corporation (a)................ 243,399
13,105 Applied Materials, Inc. ............................. 240,084
8,405 BMC Software, Inc. (a)............................... 258,790
9,440 Cisco Systems, Inc. (a).............................. 241,003
5,550 Harris Corporation................................... 282,772
6,720 Hewlett-Packard Company.............................. 269,741
5,040 KLA-Tencor Corporation............................... 268,733
5,145 Lam Research Corporation (a)......................... 243,564
4,750 MEMC Electronic Materials, Inc. (a).................. 287,755
8,920 Novellus Systems, Inc. (a)........................... 285,618
14,615 Oracle Corporation (a)............................... 264,970
12,350 QLogic Corporation (a)............................... 209,950
9,685 Western Digital Corporation (a)...................... 162,805
15,030 Xerox Corporation (a)................................ 253,857
-----------
3,800,549
-----------
MATERIALS -- 5.5%
2,600 Allegheny Technologies, Inc. ........................ 277,394
6,170 Ball Corporation..................................... 282,894
12,180 Hercules, Inc. (a)................................... 237,997
2,460 Precision Castparts Corporation...................... 255,963
-----------
1,054,248
-----------
TELECOMMUNICATIONS SERVICES -- 1.5%
7,175 AT&T, Inc. .......................................... 282,910
-----------
UTILITIES -- 1.3%
5,040 Consolidated Edison, Inc. ........................... 257,342
-----------
TOTAL COMMON STOCKS (Cost $18,315,506)............... $19,103,537
-----------
33
THE JAMESTOWN SELECT FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKET FUNDS -- 3.5% VALUE
- --------------------------------------------------------------------------------
685,769 Fidelity Institutional Money Market Portfolio
(Cost $685,769).................................... $ 685,769
-----------
TOTAL INVESTMENTS AT VALUE -- 103.0%
(Cost $19,001,275)................................. $19,789,306
LIABILITIES IN EXCESS OF OTHER ASSETS -- (3.0%)...... (580,160)
-----------
NET ASSETS -- 100.0%................................. $19,209,146
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
34
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
VIRGINIA REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.9% VALUE
- --------------------------------------------------------------------------------
Alexandria, Virginia, GO,
5.00%, due 06/15/2011, prerefunded
$1,000,000 06/15/2010 @ 101.................................. $ 1,050,620
Arlington Co., Virginia, GO,
500,000 4.10%, due 11/01/2018............................. 504,600
Fairfax Co., Virginia, Economic Dev. Authority,
1,000,000 Revenue, 5.00%, due 06/01/2018.................... 1,068,840
Fairfax Co., Virginia, GO,
700,000 5.00%, due 10/01/2011............................. 741,300
Fauquier Co., Virginia, GO,
500,000 5.00%, due 07/01/2017............................. 545,595
Hampton, Virginia, GO,
5.50%, due 02/01/2012, prerefunded
1,000,000 02/01/2010 @ 102.................................. 1,068,170
Hanover Co., Virginia, GO,
1,000,000 5.125%, due 07/15/2013............................ 1,042,870
Hanover Co., Virginia, Industrial Dev. Authority,
1,000,000 Revenue, 6.50%, due 08/15/2009.................... 1,062,110
Henrico Co., Virginia, Economic Dev. Authority,
1,000,000 Revenue, 5.50%, due 11/01/2008.................... 1,028,850
James City, Virginia, School District, GO,
500,000 5.00%, due 12/15/2018............................. 539,105
James City, Virginia, Service Authority, Water and
1,000,000 Sewer, Revenue, 5.125%, due 01/15/2017............ 1,076,290
Leesburg, Virginia, GO,
500,000 5.00%, due 09/15/2016............................. 547,540
Loudoun Co., Virginia, GO,
500,000 5.00%, due 07/01/2012............................. 533,205
Loudoun Co., Virginia, Industrial Dev. Authority,
Public Facility Lease, Revenue, 5.00%, due
1,000,000 03/01/2019........................................ 1,061,410
Loudoun Co., Virginia, Industrial Dev. Authority,
500,000 Revenue, 3.77%, floating rate, due 02/15/2038..... 500,000
Lynchburg, Virginia, GO,
500,000 5.00%, due 06/01/2015............................. 542,945
Medical College of Virginia, Hospitals Authority,
700,000 Revenue, 5.00%, due 07/01/2013.................... 724,458
New Kent Co., Virginia, Economic Dev. Authority,
500,000 Revenue, 5.00%, due 02/01/2019.................... 538,995
Norfolk, Virginia, Water, Revenue,
1,000,000 5.00%, due 11/01/2016............................. 1,052,190
Portsmouth, Virginia, GO,
310,000 5.00%, due 08/01/2017, prerefunded 08/01/07 @101.. 314,433
290,000 5.00%, due 08/01/2017............................. 294,086
Richmond, Virginia, GO,
1,000,000 5.45%, due 01/15/2008............................. 1,014,180
Richmond, Virginia, Industrial Dev. Authority,
Government Facilities, Revenue, 4.75%, due
510,000 07/15/2010........................................ 527,707
Richmond, Virginia, Metropolitan Authority, Revenue,
1,000,000 5.25%, due 07/15/2014............................. 1,095,470
35
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
VIRGINIA REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 97.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Southeastern Public Service Authority, Virginia,
$1,000,000 Revenue, 5.00%, due 07/01/2015.................... $ 1,070,960
Spotsylvania Co., Virginia, GO,
500,000 5.00%, due 01/15/2016............................. 536,490
Suffolk, Virginia, GO,
1,000,000 5.00%, due 12/01/2015............................. 1,027,980
University of Virginia, Revenue,
1,000,000 5.25%, due 06/01/2012............................. 1,042,490
Upper Occoquan, Virginia, Sewer Authority, Revenue,
250,000 5.15%, due 07/01/2020............................. 277,703
Virginia Beach, Virginia, GO,
800,000 5.25%, due 08/01/2010............................. 824,232
Virginia College Building Authority, Educational
500,000 Facilities, Revenue, 5.00%, due 02/01/2017........ 535,175
500,000 5.00%, due 04/01/2017............................. 539,280
Virginia Commonwealth Transportation Board, Federal
Highway Reimbursement Anticipation Note,
500,000 Revenue, 5.00%, due 09/28/2015.................... 544,155
Virginia Commonwealth Transportation Board,
Transportation Revenue, 7.25%, due 05/15/2020,
850,000 prerefunded 05/15/2007 @ 101...................... 862,155
Virginia Polytechnic Institute & State University,
500,000 Revenue, 5.00%, due 06/01/2016.................... 541,530
Virginia State, GO
500,000 5.00%, due 06/01/2012............................. 532,725
Virginia State Public School Authority, Revenue,
995,000 5.25%, due 08/01/2009............................. 1,031,417
Virginia State Resource Authority, Revenue,
400,000 5.50%, due 05/01/2017, prerefunded
05/01/2010 @ 101.................................. 425,220
100,000 5.50%, due 05/01/2017............................. 106,124
-----------
TOTAL VIRGINIA REVENUE AND GENERAL OBLIGATION (GO)
BONDS (Cost $27,929,684).......................... $28,372,605
-----------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.9% VALUE
- --------------------------------------------------------------------------------
274,062 Fidelity Institutional Tax-Exempt Portfolio
(Cost $274,062)................................... $ 274,062
-----------
TOTAL INVESTMENTS AT VALUE -- 98.8%
(Cost $28,203,746)................................ $28,646,667
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2%....... 334,257
-----------
NET ASSETS -- 100.0%................................ $28,980,924
===========
See accompanying notes to financial statements.
36
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 96.7% VALUE
- --------------------------------------------------------------------------------
DENMARK -- 0.8%
2,347 Novo Nordisk A/S - Class B (b)....................... $ 213,236
-----------
FINLAND -- 1.2%
9,704 Nokia Oyj (a) (b).................................... 222,814
4,162 Nokia Oyj - ADR...................................... 95,393
-----------
318,207
-----------
FRANCE -- 10.3%
17,706 Alcatel SA (b)....................................... 208,444
4,491 Carrefour SA (b)..................................... 328,020
1,500 Casino Guichard-Perrachon SA (b)..................... 151,526
3,054 Compagnie de Saint-Gobain (a) (b).................... 298,793
4,528 France Telecom SA (b)................................ 119,565
1,714 PPR SA (b)........................................... 274,206
2,280 Sanofi-Aventis (b) ................................. 197,694
9,804 Suez SA (b).......................................... 517,581
5,042 Total SA (b)......................................... 350,999
5,641 Vivendi Universal SA (b)............................. 229,097
-----------
2,675,925
-----------
GERMANY -- 10.8%
1,878 Allianz AG (b)....................................... 383,591
4,407 Bayer AG (b)......................................... 280,880
2,967 Deustche Bank AG (b)................................. 397,795
1,612 Deustche Postbank AG (b) ............................ 139,496
5,621 Infineon Technologies AG (a) (b)..................... 87,301
2,893 KarstadtQuelle AG (b) .............................. 105,781
2,782 Metro AG (b)......................................... 196,576
1,490 Muencher Rueckversicherungs-Gesellschaft AG (b)...... 250,720
10,937 SAP AG (b)........................................... 486,347
4,448 Siemens AG (b)....................................... 474,645
-----------
2,803,132
-----------
GREECE -- 1.1%
10,075 Hellenic Telecommunications Organization SA (b)...... 273,852
-----------
ITALY -- 4.8%
6,491 Assicurazioni Generali SpA (b)....................... 275,490
25,334 Enel SpA (b)......................................... 270,359
15,157 ENI SpA (b).......................................... 491,503
23,174 UniCredito Italiano SpA (b).......................... 219,892
-----------
1,257,244
-----------
JAPAN -- 24.7%
31,000 Bank of Yokohama Ltd. (The) (b)...................... 229,988
9,400 Bridgestone Corporation (b).......................... 186,431
3,750 Canon, Inc. (b) .................................... 200,953
14,000 Daiwa Securities Group, Inc. (b)..................... 167,910
39 East Japan Railway Company (b)....................... 302,735
1,300 FANUC LTD. (b)....................................... 120,212
2,900 FAST RETAILING COMPANY Ltd. (b)...................... 223,897
8,500 JSR Corporation (b).................................. 195,000
37
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 96.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
JAPAN -- 24.7% (CONTINUED)
850 KEYENCE CORPORATION (b).............................. $ 190,865
9,200 MARUI COMPANY LTD. (b)............................... 112,120
12,000 Matsushita Electric Industrial Company Ltd. ......... 241,372
9,100 Millea Holdings, Inc. (b)............................ 334,669
22,000 Mitsubishi Estate Company Ltd. (b)................... 718,057
42 Mitsubishi UFJ Financial Group, Inc. (b) ............ 472,260
20,600 Nomura Holdings, Inc. (b) .......................... 426,239
79 NTT Data Corporation (b)............................. 399,210
113 NTT DoCoMo, Inc. (b)................................. 207,755
14,300 PIONEER Corporation (b).............................. 186,019
4,000 SECOM Company Ltd. (b)............................... 184,455
8,700 Seven & I Holdings Company Ltd. (a) (b).............. 263,224
13,000 Sharp Corporation (b)................................ 249,489
44 Sumitomo Mitsui Financial Group, Inc. (b)............ 397,561
3,600 T&D Holdings, Inc. (b)............................... 246,755
1,900 TDK CORPORATION (b).................................. 164,175
-----------
6,421,351
-----------
NETHERLANDS -- 7.7%
4,158 ABN AMRO Holdings NV (b)............................. 178,531
7,629 Aegon NV (b)......................................... 151,799
3,500 Akzo Nobel NV (b).................................... 264,921
6,842 Fortis (b)........................................... 311,230
6,955 ING Groep NV (b)..................................... 293,210
39,361 Koninklijke (Royal) KPN NV (a) (b) ................. 611,153
5,300 Koninklijke (Royal) Philips Electronics NV (b) ...... 201,302
-----------
2,012,146
-----------
NORWAY -- 1.0%
9,542 Statoil ASA (b)...................................... 256,551
-----------
POLAND -- 0.3%
4,877 Powszechna Kasa Oszczednosci Bank Polski SA (a)(b)... 80,324
-----------
PORTUGAL -- 0.6%
28,097 EDP - Energias de Portugal SA (b).................... 150,769
-----------
SINGAPORE -- 1.5%
27,000 DBS Group Holdings Ltd. (b).......................... 379,667
9,000 Synear Food Holdings Ltd. .......................... 11,855
-----------
391,522
-----------
SOUTH KOREA -- 0.8%
2,910 Hyundai Motor Company (b)............................ 203,777
-----------
SPAIN -- 3.3%
18,087 Repsol YPF SA (b) ................................... 607,327
11,378 Telefonica SA (a) (b)................................ 251,077
-----------
858,404
-----------
SWEDEN -- 2.4%
24,687 Nordea Bank AB (b)................................... 392,529
62,119 Telefonaktiebolaget LM Ericsson - B Shares (a) (b)... 229,200
-----------
621,729
-----------
38
THE JAMESTOWN INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 96.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
SWITZERLAND -- 5.7%
4,644 Credit Suisse Group (b).............................. $ 332,768
587 Nestle SA (b)........................................ 227,683
6,873 Novartis AG (b)...................................... 382,191
1,676 Roche Holdings AG (b)................................ 296,341
1,074 Swiss Re (b)......................................... 97,818
472 Zurich Financial Services AG (b)..................... 135,859
-----------
1,472,660
-----------
UNITED KINGDOM -- 19.7%
26,327 BAE Systems PLC (b).................................. 238,125
5,351 Berkeley Group (The) PLC (a) (b)..................... 164,829
23,141 Cadbury Schweppes PLC (b)............................ 296,673
2,292 Carnival PLC (b)..................................... 110,245
21,005 GlaxoSmithKline PLC (b).............................. 577,894
29,148 Imperial Chemical Industries PLC (b)................. 285,618
36,466 J Sainsbury PLC (b).................................. 393,236
9,498 Kesa Electricals PLC (a) (b)......................... 63,187
41,558 Kingfisher PLC (b)................................... 227,545
12,117 Land Securities Group PLC (b)........................ 510,394
24,540 Lloyds TSB Group PLC (b)............................. 270,392
22,347 Prudential PLC (b)................................... 314,953
24,339 Rolls-Royce Group PLC (b)............................ 236,748
1,440,868 Rolls-Royce Group PLC - Class B...................... 2,897
13,306 Royal Dutch Shell PLC - Class A (a) (b) ............ 441,120
7,177 Royal Dutch Shell PLC - Class B (a) (b) ............. 238,126
10,307 Smiths Group PLC (b)................................. 207,468
7,404 Whitbread PLC (b).................................... 274,492
35,751 William Morrison Supermarkets PLC (b)................ 216,532
102,151 Woolworths Group PLC (b)............................. 62,078
-----------
5,132,552
-----------
TOTAL COMMON STOCKS -- 96.7% (Cost $17,279,454)...... $25,143,381
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.3%........ 846,433
-----------
NET ASSETS -- 100.0%................................. $25,989,814
===========
(a) Non-income producing security.
(b) Fair value priced (Note 1). Fair valued securities totalled $24,791,864 at
March 31, 2007, representing 95.4% of net assets.
ADR - American Depositary Receipt.
See accompanying notes to financial statements.
39
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Select
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 Select Fund commenced operations on October 31, 2006.
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 Select 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
40
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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.
When market quotations are not readily available, securities may be valued on
the basis of prices provided by an independent pricing service. The prices
provided by the pricing service are determined with consideration given to
institutional bid and last sale prices and take into account securities prices,
yields, maturities, call features, ratings, institutional trading in similar
groups of securities and developments related to specific securities. If a
pricing service cannot provide a valuation, securities will be valued in good
faith at fair value using methods consistent with those determined by the Board
of Trustees. Such methods of fair valuation may include, but are not limited to:
multiple of earnings, multiple of book value, discount from market of a similar
freely traded security, purchase price of security, subsequent private
transactions in the security or related securities, or a combination of these
and other factors.
Repurchase agreements -- The Funds may enter into joint repurchase agreements
with each other and with other funds within the Trust. The joint repurchase
agreement, which is collateralized by U.S. Government obligations, is valued at
cost which, together with accrued interest, approximates market. At the time the
Funds enter into the joint repurchase agreement, the seller agrees that the
value of the underlying securities, including accrued interest, will at all
times be equal to or exceed the face amount of the repurchase agreement. In
addition, each Fund actively monitors and seeks additional collateral, as
needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share, except that shares
of The Jamestown International Equity Fund are subject to a redemption fee of 2%
if redeemed within 90 days of the date of purchase. For the years ended March
31, 2007 and March 31, 2006, proceeds from redemption fees totaled $290 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, The Jamestown Select 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.
41
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributions paid during the periods ended March 31, 2007
and March 31, 2006 was as follows:
EXEMPT-
PERIODS ORDINARY LONG-TERM INTEREST TOTAL
ENDED INCOME CAPITAL GAINS DIVIDENDS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------
Jamestown Balanced Fund 3/31/07 $1,479,338 $2,968,013 $ -- $4,447,351
3/31/06 $1,775,891 $3,199,380 $ -- $4,975,271
- -------------------------------------------------------------------------------------------------------
Jamestown Equity Fund 3/31/07 $ 639,252 $2,591,629 $ -- $3,230,881
3/31/06 $ 632,226 $2,550,391 $ -- $3,182,617
- -------------------------------------------------------------------------------------------------------
Jamestown Select Fund 3/31/07 $ 21,728 $ -- $ -- $ 21,728
- -------------------------------------------------------------------------------------------------------
Jamestown Tax Exempt Virginia Fund 3/31/07 $ -- $ 36,397 $1,070,348 $1,106,745
3/31/06 $ -- $ -- $1,089,001 $1,089,001
- -------------------------------------------------------------------------------------------------------
Jamestown International Equity Fund 3/31/07 $ 144,928 $ -- $ -- $ 144,928
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.
42
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The tax character of distributable earnings at March 31, 2007 was as follows:
- ----------------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY SELECT VIRGINIA EQUITY
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------
Cost of portfolio investments $ 37,285,641 $28,695,589 $19,005,268 $28,190,645 $ 17,301,742
============ =========== =========== =========== ============
Gross unrealized appreciation $ 8,429,767 $ 8,805,714 $ 1,109,415 $ 509,829 $ 8,038,411
Gross unrealized depreciation (228,609) (142,020) (325,377) (53,807) (196,772)
------------ ----------- ----------- ----------- ------------
Net unrealized appreciation
on investments 8,201,158 8,663,694 784,038 456,022 7,841,639
------------ ----------- ----------- ----------- ------------
Net unrealized appreciation on
translation of assets and liabilities
in foreign currencies -- -- -- -- 944
Undistributed ordinary income 51,990 49,673 48,756 14,391 --
Undistributed long-term gains 71,247 124,001 -- 6,701 --
Capital loss carryforwards -- -- -- -- (15,436,819)
Other temporary differences (117,436) (170,157) -- (14,391) --
------------ ----------- ----------- ----------- ------------
Total distributable earnings
(accumulated deficit) $ 8,206,959 $ 8,667,211 $ 832,794 $ 462,723 $ (7,594,236)
============ =========== =========== =========== ============
- ----------------------------------------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the Funds is due to certain timing differences
in the recognition of capital gains or losses under income tax regulations and
accounting principles generally accepted in the United States. These "book/tax"
differences are temporary in nature and are primarily due to the tax deferral of
losses on wash sales and/or differing methods in the amortization of discounts
and premiums on fixed income securities.
During the year ended March 31, 2007, The Jamestown Tax Exempt Virginia Fund and
The Jamestown International Equity Fund utilized capital loss carryforwards of
$6,059 and $916,766, respectively, to offset current year realized gains.
As of March 31, 2007, The Jamestown International Equity Fund had the following
capital loss carryforwards for federal income tax purposes:
- -------------------------------------------------------------
EXPIRES
AMOUNT MARCH 31,
- -------------------------------------------------------------
Jamestown International Equity Fund $ 937,547 2010
13,878,931 2011
620,341 2012
-----------
$15,436,819
===========
- -------------------------------------------------------------
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains, if any, prior to distribution to shareholders.
43
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the year ended March 31, 2007, The Jamestown Balanced Fund reclassified
$83,344 of overdistributed net investment income against accumulated net
realized loss and The Jamestown Tax Exempt Virginia Fund reclassified $28,381 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.
For the year ended March 31, 2007, The Jamestown International Equity Fund
reclassified $1,717 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. Additionally, for the year ended
March 31, 2007, the Fund reclassified $6,400 of distributions in excess of net
investment income against paid-in capital on the Statement of Assets and
Liabilities due to permanent differences between the financial statement and
income tax reporting requirements. Such reclassifications have 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 period ended March 31, 2007:
- ----------------------------------------------------------------------------------------------------------
JAMESTOWN JAMESTOWN
JAMESTOWN JAMESTOWN JAMESTOWN TAX EXEMPT INTERNATIONAL
BALANCED EQUITY SELECT VIRGINIA EQUITY
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------
Purchases of investment securities $17,533,877 $20,527,931 $25,397,152 $2,744,290 $4,329,176
=========== =========== =========== ========== ==========
Proceeds from sales and maturities
of investment securities $28,768,943 $28,737,454 $ 7,129,530 $3,765,915 $3,033,818
=========== =========== =========== ========== ==========
- ----------------------------------------------------------------------------------------------------------
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 Select Fund pays the Adviser a
fee at an annual rate of .75% of its average daily net assets. 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
44
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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.
For the period ended March 31, 2007, the Adviser voluntarily undertook to limit
the total operating expenses of The Jamestown Select Fund, The Jamestown Tax
Exempt Virginia Fund and The Jamestown International Equity Fund to 1.25%, .69%
and 1.44%, respectively, of each Fund's average daily net assets. Accordingly,
the Adviser voluntarily waived $13,793, $18,030 and $74,042, respectively, of
such Funds' investment advisory fees during the period ended March 31, 2007.
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
fees of $2,440, $1,640, $1,180 and $740 from The Jamestown Balanced Fund, The
Jamestown Equity Fund, The Jamestown Tax Exempt Virginia Fund and The Jamestown
International Equity Fund, respectively, for providing CCO services during the
year ended March 31, 2007.
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, The Jamestown
Select 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. Additionally, The Jamestown Select Fund is subject to a minimum monthly
fee of $4,000. 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.
45
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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 March 31, 2007,
Ultimus received fees of $4,300, $4,022, $2,043, $3,797 and $4,883 from The
Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Select Fund,
The Jamestown Tax Exempt Virginia Fund and The Jamestown International Equity
Fund, respectively, for compliance consulting services.
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 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 $24,000 for each
of The Jamestown Balanced Fund and The Jamestown Equity Fund for the year ended
March 31, 2007.
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.
46
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The Jamestown International Equity Fund enters into forward foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The Fund may
enter into these contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date as a hedge or cross-hedge against
either specific transactions or portfolio positions. The objective of the Fund's
foreign currency hedging transactions is to reduce risk that the U.S. dollar
value of the Fund's securities denominated in foreign currency will decline in
value due to changes in foreign currency exchange rates. All foreign currency
exchange contracts are "marked-to-market" daily at the applicable translation
rates resulting in unrealized gains or losses. Realized and unrealized gains or
losses are included in the Fund's Statement of Assets and Liabilities and
Statement of Operations. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar.
As of March 31, 2007, The Jamestown International Equity Fund had forward
foreign currency exchange contracts outstanding as follows:
- --------------------------------------------------------------------------------
INITIAL MARKET NET UNREALIZED
SETTLEMENT DATE TO RECEIVE VALUE VALUE DEPRECIATION
- --------------------------------------------------------------------------------
Contracts To Buy
4/4/07 .............. 18,058 SGD $11,906 $11,897 $(9)
------- ------- ---
Total Buy Contracts.... $11,906 $11,897 $(9)
======= ======= ===
- --------------------------------------------------------------------------------
SGD - Singapore Dollar
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 positions not deemed to
meet the more-likely-than-not threshold would be recorded as a tax benefit or
expense in the current year. Adoption of FIN 48 is required for fiscal years
beginning after
47
THE JAMESTOWN FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
December 15, 2006 and is to be applied to all open tax years as of the effective
date. Recent SEC guidance allows implementing FIN 48 in fund NAV calculations as
late as the fund's last NAV calculation in the first required financial
statement reporting period. As a result, the Funds will incorporate FIN 48 in
their Semi-Annual Report on September 30, 2007. Management is in the process of
determining the impact of the adoption of FIN 48.
In September 2006, the Financial Accounting Standards Board 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 SFAS No. 157 relate to
the definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. As of March 31, 2007, the
Funds do 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.
48
THE JAMESTOWN FUNDS
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
Jamestown Balanced Fund, Jamestown Equity Fund,
Jamestown Tax Exempt Virginia Fund, Jamestown International Equity Fund,
and Jamestown Select Fund of the Williamsburg Investment Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Jamestown Balanced Fund, Jamestown Equity
Fund, Jamestown Tax Exempt Virginia Fund, Jamestown International Equity Fund,
and Jamestown Select Fund (the "Funds") (each a series of Williamsburg
Investment Trust) as of March 31, 2007, and the related statements of operations
for the year or period then ended, the statements of changes in net assets for
each of the two years or periods in the period then ended, and the financial
highlights for each of the four years or periods in the period then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights presented for the year ended March 31, 2003 were audited by other
auditors whose report dated April 25, 2003, expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2007 by correspondence with the custodians
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Jamestown Balanced Fund, Jamestown Equity Fund, Jamestown Tax Exempt Virginia
Fund, Jamestown International Equity Fund, and Jamestown Select Fund as of March
31, 2007, the results of their operations for the year or period then ended, the
changes in their net assets for each of the two years or periods in the period
then ended, and the financial highlights for each of the four years or periods
in the period then ended in conformity with U.S. generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 16, 2007
49
THE JAMESTOWN FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED)
================================================================================
Overall responsibility for management of the Funds rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Funds. The officers have been elected for an
annual term. The following are the Trustees and executive officers of the Funds:
POSITION HELD LENGTH OF
TRUSTEE ADDRESS AGE WITH THE TRUST TIME SERVED
- -------------------------------------------------------------------------------------------------------------------
* Charles M. Caravati, Jr. 931 Broad Street Road 70 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- -------------------------------------------------------------------------------------------------------------------
* Austin Brockenbrough III 1802 Bayberry Court, Suite 400 70 Trustee and Since
Richmond, VA Vice President September 1988
- -------------------------------------------------------------------------------------------------------------------
* John T. Bruce 800 Main Street 53 Trustee Since
Lynchburg, VA September 1988
- -------------------------------------------------------------------------------------------------------------------
Robert S. Harris 100 Darden Boulevard 57 Trustee Since
Charlottsville, VA January 2007
- -------------------------------------------------------------------------------------------------------------------
J. Finley Lee, Jr. 4488 Pond Apple Drive North 67 Trustee Since
Naples, FL September 1988
- -------------------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 67 Trustee Since
Richmond, VA March 1993
- -------------------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintopport Boulevard 47 Trustee Since
Saraland, AL March 1993
- -------------------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 74 Trustee Since
Richmond, VA July 1997
- -------------------------------------------------------------------------------------------------------------------
Samuel B. Witt III 302 Clovelly Road 71 Trustee Since
Richmond, VA November 1988
- -------------------------------------------------------------------------------------------------------------------
Charles M. Caravati III 1802 Bayberry Court, Suite 400 42 President, Jamestown Since
Richmond, VA Balanced Fund, Equity January 1996
Fund and International
Equity Fund; Vice President,
Jamestown Select Fund
- -------------------------------------------------------------------------------------------------------------------
Joseph A. Jennings, III 1802 Bayberry Court, Suite 400 44 President, Jamestown Since
Richmond, VA Tax Exempt Virginia Fund July 2005
- -------------------------------------------------------------------------------------------------------------------
Lawrence B. Whitlock, Jr. 1802 Bayberry Court, Suite 400 59 President, Jamestown Select Since
Richmond, VA Fund; Vice President, February 2002
Jamestown Balanced Fund
and Equity Fund
- -------------------------------------------------------------------------------------------------------------------
Austin Brockenbrough IV 1802 Bayberry Court, Suite 400 37 Vice President, Jamestown Since
Richmond, VA Select Fund August 2006
- -------------------------------------------------------------------------------------------------------------------
Peter L. Gibbes 1802 Bayberry Court, Suite 400 49 Vice President, Jamestown Since
Richmond, VA Select Fund August 2006
- -------------------------------------------------------------------------------------------------------------------
Connie R. Taylor 1802 Bayberry Court, Suite 400 57 Vice President, Jamestown Since
Richmond, VA Balanced Fund and March 1993
Equity Fund
- -------------------------------------------------------------------------------------------------------------------
Robert G. Dorsey 225 Pictoria Drive, Suite 450 50 Vice President Since
Cincinnati, OH November 2000
- -------------------------------------------------------------------------------------------------------------------
Mark J. Seger 225 Pictoria Drive, Suite 450 45 Treasurer Since
Cincinnati, OH November 2000
- -------------------------------------------------------------------------------------------------------------------
John F. Splain 225 Pictoria Drive, Suite 450 50 Secretary Since
Cincinnati, OH November 2000
- -------------------------------------------------------------------------------------------------------------------
Tina H. Bloom 225 Pictoria Drive, Suite 450 38 Chief Compliance Officer Since
Cincinnati, OH August 2006
- -------------------------------------------------------------------------------------------------------------------
* Messrs. Bruce, Brockenbrough are Caravati are "interested persons" of the
Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati
III.
50
THE JAMESTOWN FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED) (CONTINUED)
================================================================================
Each Trustee oversees twelve portfolios of the Trust, including the Funds. The
principal occupations of the Trustees and executive officers of the Funds during
the past five years and public directorships held by the Trustees are set forth
below:
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of the Adviser. He
is a member of the Board of Directors of Tredegar Corporation (a plastics
manufacturer) and Wilkinson O'Grady & Co., Inc. (a global asset manager).
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
Robert S. Harris is the C. Stewart Sheppard Professor of Business Administration
at The Darden Graduate School of Business Administration at the University of
Virginia. He was previously the dean at Darden. Professor Harris has published
widely on corporate finance, financial markets and mergers and acquisitions and
has served as a consultant to corporations and government agencies.
J. Finley Lee, Jr. is a financial consultant and the Julian Price Professor
Emeritus at the University of North Carolina.
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (polymers and chemicals manufacturer).
Harris V. Morrissette is Chief Executive Officer of Marshall Biscuit Co., Inc.
He is a member of the Board of Directors of BancTrust Financial Group, Inc. (a
bank holding company) and EnergySouth, Inc. In addition, he is Chairman of
Azalea Aviation, Inc. (an airplane fueling company).
Erwin H. Will, Jr. is the retired Chief Investment Officer of Equities of
Virginia Retirment System (VRS). Subsequent to his retirement, he temporarily
served as Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired Senior Vice President and General Counsel of
Stateside Associates, Inc. He is also a member of the Board of Directors of The
Swiss Helvetia Fund, Inc. (a closed-end investment company).
Charles M. Caravati III is a Managing Director of the Adviser.
Joseph A. Jennings, III is Vice President and a Portfolio Manager of the
Adviser.
Lawrence B. Whitlock, Jr. is a Managing Director of the Adviser.
Austin Brockenbrough IV is a Manager Director of the Adviser.
Peter L. Gibbes is the Manager of Quantitative Analysis of the Adviser.
Connie R. Taylor is an Administrator of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
51
THE JAMESTOWN FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED) (CONTINUED)
================================================================================
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Tina H. Bloom is Vice President of Administration of Ultimus Fund Solutions, LLC
and Ultimus Fund Distributors, LLC.
Additional information about member of the Board of Trustees and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-866-738-1126.
52
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 ongoing costs 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.
53
THE JAMESTOWN FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
- -------------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses
October 1, March 31, Paid During
2006* 2007 Period*
- -------------------------------------------------------------------------------------
THE JAMESTOWN BALANCED FUND
- -------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,057.00 $4.62
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.44 $4.53
- -------------------------------------------------------------------------------------
THE JAMESTOWN EQUITY FUND
- -------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,073.30 $4.70
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.39 $4.58
- -------------------------------------------------------------------------------------
THE JAMESTOWN SELECT FUND
- -------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,075.50 $5.40
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,015.62 $5.25
- -------------------------------------------------------------------------------------
THE JAMESTOWN TAX EXEMPT VIRGINIA FUND
- -------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,013.00 $3.46
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.49 $3.48
- -------------------------------------------------------------------------------------
THE JAMESTOWN INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,108.20 $7.57
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,017.75 $7.24
- -------------------------------------------------------------------------------------
* Expenses are equal to the Funds' annualized expense ratios for the period
as stated below, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period), except for
the Jamestown Select Fund which was multiplied by 152/365 to reflect its
inception date of October 31, 2006.
The Jamestown Balanced Fund 0.90%
The Jamestown Equity Fund 0.91%
The Jamestown Select Fund 1.25%
The Jamestown Tax Exempt Virginia Fund 0.69%
The Jamestown International Equity Fund 1.44%
54
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.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from ordinary income and net realized
gains made by the Funds during the fiscal year ended March 31, 2007. Certain
dividends paid by the Funds may be subject to a maximum tax rate of 15%, as
provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The
Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown Select Fund
and The Jamestown International Equity Fund intend to designate up to a maximum
amount of $1,479,338, $639,252, $21,728 and $144,928, respectively, as taxed at
a maximum rate of 15%. The Jamestown Balanced Fund, The Jamestown Equity Fund
and The Jamestown Tax Exempt Virginia Fund designate $2,968,013, $2,591,629 and
$36,397, respectively, as long-term gain distributions. For the fiscal year
ended March 31, 2007, 52%, 100% and 100% of the dividends paid from ordinary
income by The Jamestown Balanced Fund, The Jamestown Equity Fund and The
Jamestown Select Fund, respectively, qualified for the dividends received
deduction for corporations.
As required by federal regulations, complete information will be computed and
reported in conjunction with your 2007 Form 1099-DIV.
55
THE JAMESTOWN FUNDS
DISCLOSURE REGARDING APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED)
================================================================================
At an in-person meeting held on February 5, 2007, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance for a
one-year period of the Investment Advisory Agreements with the Adviser on behalf
of The Jamestown Balanced Fund, The Jamestown Equity Fund, The Jamestown
International Equity Fund and The Jamestown Tax Exempt Virginia Fund, as well as
the Sub-Advisory Agreement with Oechsle on behalf of The Jamestown International
Equity Fund. Below is a discussion of the factors considered by the Board of
Trustees along with their conclusions with respect thereto that formed the basis
for the Board's approvals.
In selecting the Adviser and approving the most recent annual continuance of the
Investment Advisory Agreements and the Sub-Advisory Agreement, the Trustees
considered all information they deemed reasonably necessary to evaluate the
terms of the Agreements. The principal areas of review by the Trustees were the
nature, extent and quality of the services provided by the Adviser and Oechsle
and the reasonableness of the fees charged for those services. These matters
were considered by the Independent Trustees consulting with experienced counsel
for the Independent Trustees, who is independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Funds was considered.
Each Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives and to the Adviser's
comparably managed private accounts. The Trustees also considered the scope and
quality of the in-house capabilities of the Adviser and other resources
dedicated to performing services for the Funds. The quality of administrative
and other services, including the Adviser's role in coordinating the activities
of the Funds' other service providers, were considered in light of the Funds'
compliance with investment policies and applicable laws and regulations and of
related reports by management and the Funds' independent public accountants in
periodic meetings with the Trust's Audit Committee. The Trustees also considered
the business reputation of the Adviser and Oechsle, the qualifications of their
key investment and compliance personnel, and the Adviser's financial resources.
In reviewing the fees payable under the Investment Advisory Agreements, the
Trustees compared the advisory fees and overall expense levels of each Fund with
those of competitive funds with similar investment objectives as well as the
private accounts managed by the Adviser. The Trustees considered information
provided by the Adviser concerning the Adviser's profitability with respect to
each Fund, including the assumptions and methodology used in preparing the
profitability information, in light of applicable case law relating to advisory
fees. For these purposes, the Trustees took into account not only the fees paid
by the Funds, but also so-called "fallout" benefits to the Adviser and Oechsle,
such as the benefits of
56
THE JAMESTOWN FUNDS
DISCLOSURE REGARDING APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
================================================================================
research made available to the Adviser and Oechsle by reason of brokerage
commissions generated by the Funds' securities transactions. The Trustees also
reviewed the revenue sharing arrangements relating to the Funds, whereby fees
are paid by the Adviser to various intermediaries that direct assets to the
Funds. In evaluating the Funds' advisory fees, the Trustees took into account
the complexity and quality of the investment management of the Funds.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the long-term returns of each Fund as compared to similarly
managed funds and comparable private accounts managed by the Adviser, and the
other services provided under the Investment Advisory Agreements, they believe
that the Adviser has provided quality services to such Funds; (ii) the
investment advisory fees of The Jamestown Balanced Fund, The Jamestown Equity
Fund and The Jamestown Tax-Exempt Virginia Fund are competitive and their total
expense ratios are lower than the average of comparably managed funds, as
calculated and published by Morningstar; and (iii) the Adviser's voluntary
commitment to cap overall operating expenses by waiving a significant portion of
its advisory fees has enabled The Jamestown International Equity Fund to
increase returns for shareholders of the Fund and maintain an overall expense
ratio that is competitive with the average of similarly managed funds, despite
the small size of the Fund. Given the current size of the Funds and their
expected growth, the Independent Trustees did not believe that at the present
time it would be relevant to consider the extent to which economies of scale
would be realized as the Funds grow, and whether fee levels reflect these
economies of scale. The Independent Trustees also considered the "fallout"
benefits to, and the profitability of, the Adviser with respect to the Funds,
but given the amounts involved viewed these as secondary factors in connection
with the evaluation of the reasonableness of the advisory fees paid by the
Funds.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreements and the Sub-Advisory Agreement. Rather the Trustees concluded, in
light of a weighing and balancing of all factors considered, that it was in the
best interests of each Fund and its shareholders to continue its Investment
Advisory Agreement (and, with respect to the The Jamestown International Equity
Fund, the Sub-Advisory Agreement) without modification to its terms, including
the fees charged for services thereunder.
57
================================================================================
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.
Robert S. Harris
J. Finley Lee, Jr.
Richard L. Morrill
Harris V. Morrissette
Erwin H. Will, Jr.
Samuel B. Witt, III
================================================================================
================================================================================
THE
FLIPPIN, BRUCE & PORTER
FUNDS
----------
FBP VALUE FUND
FBP BALANCED FUND
ANNUAL REPORT
MARCH 31, 2007
NO-LOAD FUNDS
================================================================================
LETTER TO SHAREHOLDERS MAY 11, 2007
================================================================================
We are pleased to report on the investment results of the FBP Value Fund and the
FBP Balanced Fund (the "Funds") for the fiscal year ending March 31, 2007.
Illustrated below are the returns over the past year and longer time periods.
% Average Annual Returns
Periods Ended March 31, 2007
----------------------------
One Three Five Ten
Year Year Year Year
- --------------------------------------------------------------------------------
FBP Value Fund 11.57 9.36 7.07 8.83
FBP Balanced Fund 9.70 7.20 6.58 8.25
The economy is now clearly slowing after several years of excellent growth, with
GDP estimated to be 2.0% to 2.5% for the full year. Escalating defaults in the
subprime mortgage market and declining home prices in selected markets, combined
with continued high energy costs, have depleted consumer purchasing power.
Inflation has also been a concern of the Federal Reserve, thus they have kept
short-term interest rates above 5% to constrain economic growth and potential
inflation increases. Corporations have performed quite well in the face of these
challenges, as corporate profit growth has continued to exceed expectations,
although at a slower rate than the last several years, providing support to the
economy and the stock market.
For virtually all of calendar 2006, the equity market appreciated and overall
volatility decreased. Stocks were weak in May and early June last year, but
since then have rallied strongly. The Federal Reserve decision last June to stop
raising short-term interest rates was a signal to investors that economic
momentum was slowing, inflationary pressures which had been building would
moderate, and stocks could well enjoy a nice period of appreciation. This "Mid
Cycle Slowdown," which the U.S.economy is currently experiencing, has multiple
long-term benefits assuming the slowdown doesn't accelerate into a recession.
Should the economy slow much more than we expect, then both monetary and fiscal
actions would be initiated in an effort to re-accelerate the economy.
Performance in the Funds over the past year was driven by strong equity returns
which were generally in line with the S&P 500 Index total return of 11.83% for
the period. Information Technology was the Funds' best sector, with Hewlett
Packard, IBM and Sabre Holdings producing excellent gains. Consumer
Discretionary was also a good sector, as General Motors staged a strong recovery
as their cost saving efforts and new product platform improved profitability,
and Kohl's continued to execute on successful store opening and growing same
store sales. Holding back potential returns for the Funds were under-weights in
Materials, Telecommunication Services and Utilities, as these were the three
strongest sectors last year.
During the first quarter of 2007, volatility of stock prices increased. We took
advantage of market weakness to purchase several industry-leading companies at
valuation levels that are very attractive compared to their historical averages.
We expect EMC, the market leader in data storage hardware and software, to
benefit from its move into higher margin software products. Its virtualization
software division in particular has strong growth potential. The company also
has an aggressive share repurchase program and should be able to implement cost
savings as well. LEGGETT & PLATT is a leading supplier of component products
with an emphasis on furniture and bedding markets. Management is highly
motivated to generate earnings growth by its heavy stock ownership levels.
Current and retired employees, along with former merger partners, own about 20%
of the stock. A management change at HOME DEPOT should be a catalyst
1
for improvement at the world's largest home improvement retailer. We believe the
new CEO, Frank Blake, is implementing changes that will allow the company to
refocus on its core retail store base. The company has announced that it is
pursuing strategic alternatives, including potential divestiture, for its HD
Supply division. Employee attrition problems and store appearance will likely be
addressed with the new emphasis on retailing. PIONEER NATURAL RESOURCES, an
independent oil and gas exploration and production company was also added. We
believe earnings are poised to grow at a double digit clip from current levels,
driven by a positive natural gas commodity price environment and reduced
drilling costs. The stock sells at a substantial discount to its peers on an
enterprise value/proven reserves basis. We expect improving investor sentiment
and valuation as earnings bottom and reaccelerate. Recent eliminations from the
Funds are HCA, which was acquired through a cash tender offer from a private
investor group, and DILLARDS and BRISTOL-MYERS SQUIBB both sold due to
valuation.
As we wrote to you in the Funds most recent quarterly update, when we analyze
the overall valuation of each Fund's equity portfolio we believe there to be
compelling opportunity. At quarter-end, each Fund's equity portfolio was selling
at approximately 13 times forecasted earnings compared to 15 times for the S&P
500. We believe that the market has the opportunity for modest P/E expansion as
the slowdown in growth runs its course, and since each Fund's portfolio is
trading at a discount to the market, we believe the stocks held have added
potential. We also see opportunity for the portfolio based on its weighted
market capitalization. Approximately 50% of each Fund's portfolio is allocated
to the 25 largest stocks in the market. In the last few quarters, each Fund's
overweighting in these mega cap stocks has held back relative performance, yet
in the last few weeks as economic slowing is more apparent these larger issues
are performing better. We believe history matters, and history tells us that we
should anticipate strong relative performance when the large cap/small cap cycle
rotates to favor large caps again. Our internal price target work also suggests
upside potential for each Fund's portfolio of equities.
We believe these uncertain times will provide opportunities to acquire
additional high quality, well managed companies selling at attractive valuation
levels. We appreciate your continued support and look forward to answering any
questions you may have.
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, CFA
John T. Bruce, CFA
President - Portfolio Manager
May 11, 2007
This report is submitted for the general information of the shareholders of the
Funds. The report is not authorized for distribution to prospective investors in
the Funds unless it is accompanied by a current prospectus.
This report reflects our views, opinions and portfolio holdings as of March 31,
2007, the end of the reporting period. These views are subject to change at any
time based upon market or other conditions. For more current information
throughout the year please visit www.fbpinc.com.
2
THE FLIPPIN, BRUCE & PORTER FUNDS
COMPARATIVE PERFORMANCE CHARTS
(UNAUDITED)
================================================================================
Performance for each Fund is compared to the most appropriate broad-based index,
the S&P 500, an unmanaged index of 500 large common stocks. Over time, this
index has the potential to outpace the FBP Balanced Fund, which normally
maintains at least 25% in bonds. Balanced funds have the growth potential to
outpace inflation, but they will typically lag a 100% stock index over the long
term because of the bond portion of their portfolios. However, the advantage of
the bond portion is that it can make the return and principal of a balanced fund
more stable than a portfolio completely invested in stocks. Results are also
compared to the Consumer Price Index, a measure of inflation.
FBP VALUE FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FBP VALUE FUND,
THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX FBP VALUE FUND CONSUMER PRICE INDEX
- ---------------------------- ------------------ ---------------------
DATE VALUE DATE VALUE DATE VALUE
---- ----- ---- ----- ---- -----
03/31/97 $10,000 03/31/97 $10,000 03/31/97 $10,000
06/30/97 11,746 06/30/97 11,393 06/30/97 10,019
09/30/97 12,626 09/30/97 12,472 09/30/97 10,063
12/31/97 12,988 12/31/97 12,381 12/31/97 10,125
03/31/98 14,800 03/31/98 13,890 03/31/98 10,137
06/30/98 15,289 06/30/98 13,841 06/30/98 10,194
09/30/98 13,768 09/30/98 11,716 09/30/98 10,237
12/31/98 16,700 12/31/98 14,599 12/31/98 10,280
03/31/99 17,532 03/31/99 14,965 03/31/99 10,305
06/30/99 18,768 06/30/99 16,981 06/30/99 10,399
09/30/99 17,596 09/30/99 14,746 09/30/99 10,455
12/31/99 20,214 12/31/99 15,143 12/31/99 10,537
03/31/00 20,678 03/31/00 14,157 03/31/00 10,637
06/30/00 20,128 06/30/00 13,648 06/30/00 10,743
09/30/00 19,933 09/30/00 14,194 09/30/00 10,825
12/31/00 18,374 12/31/00 14,853 12/31/00 10,906
03/31/01 16,195 03/31/01 15,172 03/31/01 11,013
06/30/01 17,143 06/30/01 16,297 06/30/01 11,132
09/30/01 14,627 09/30/01 14,322 09/30/01 11,119
12/31/01 16,190 12/31/01 16,543 12/31/01 11,113
03/31/02 16,234 03/31/02 16,566 03/31/02 11,138
06/30/02 14,059 06/30/02 14,456 06/30/02 11,263
09/30/02 11,630 09/30/02 12,020 09/30/02 11,319
12/31/02 12,612 12/31/02 12,952 12/31/02 11,357
03/31/03 12,215 03/31/03 12,157 03/31/03 11,469
06/30/03 14,095 06/30/03 14,563 06/30/03 11,494
09/30/03 14,468 09/30/03 15,228 09/30/03 11,563
12/31/03 16,229 12/31/03 17,086 12/31/03 11,558
03/31/04 16,504 03/31/04 17,823 03/31/04 11,664
06/30/04 16,788 06/30/04 18,033 06/30/04 11,846
09/30/04 16,475 09/30/04 17,379 09/30/04 11,871
12/31/04 17,996 12/31/04 18,934 12/31/04 11,965
03/31/05 17,609 03/31/05 18,652 03/31/05 12,109
06/30/05 17,850 06/30/05 19,085 06/30/05 12,274
09/30/05 18,493 09/30/05 19,405 09/30/05 12,400
12/31/05 18,879 12/31/05 20,042 12/31/05 12,476
03/31/06 19,674 03/31/06 20,896 03/31/06 12,546
06/30/06 19,390 06/30/06 20,644 06/30/06 12,786
09/30/06 20,489 09/30/06 22,208 09/30/06 12,874
12/31/06 21,861 12/31/06 23,583 12/31/06 12,722
03/31/07 22,001 03/31/07 23,313 03/31/07 12,848
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
3
THE FLIPPIN, BRUCE & PORTER FUNDS
COMPARATIVE PERFORMANCE CHARTS
(CONTINUED) (UNAUDITED)
================================================================================
FBP BALANCED FUND
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FBP BALANCED
FUND, THE STANDARD & POOR'S 500 INDEX AND THE CONSUMER PRICE INDEX
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX FBP BALANCED FUND CONSUMER PRICE INDEX
- ---------------------------- ------------------ ---------------------
DATE VALUE DATE VALUE DATE VALUE
---- ----- ---- ----- ---- -----
03/31/97 $10,000 03/31/97 $10,000 03/31/97 $10,000
06/30/97 11,746 06/30/97 11,141 06/30/97 10,019
09/30/97 12,626 09/30/97 11,990 09/30/97 10,063
12/31/97 12,988 12/31/97 11,954 12/31/97 10,125
03/31/98 14,800 03/31/98 13,022 03/31/98 10,137
06/30/98 15,289 06/30/98 13,140 06/30/98 10,194
09/30/98 13,768 09/30/98 11,820 09/30/98 10,237
12/31/98 16,700 12/31/98 13,763 12/31/98 10,280
03/31/99 17,532 03/31/99 14,160 03/31/99 10,305
06/30/99 18,768 06/30/99 15,403 06/30/99 10,399
09/30/99 17,596 09/30/99 13,996 09/30/99 10,455
12/31/99 20,214 12/31/99 14,494 12/31/99 10,537
03/31/00 20,678 03/31/00 13,894 03/31/00 10,637
06/30/00 20,128 06/30/00 13,468 06/30/00 10,743
09/30/00 19,933 09/30/00 14,011 09/30/00 10,825
12/31/00 18,374 12/31/00 14,647 12/31/00 10,906
03/31/01 16,195 03/31/01 14,914 03/31/01 11,013
06/30/01 17,143 06/30/01 15,665 06/30/01 11,132
09/30/01 14,627 09/30/01 14,584 09/30/01 11,119
12/31/01 16,190 12/31/01 16,100 12/31/01 11,113
03/31/02 16,234 03/31/02 16,066 03/31/02 11,138
06/30/02 14,059 06/30/02 14,666 06/30/02 11,263
09/30/02 11,630 09/30/02 13,086 09/30/02 11,319
12/31/02 12,612 12/31/02 13,891 12/31/02 11,357
03/31/03 12,215 03/31/03 13,469 03/31/03 11,469
06/30/03 14,095 06/30/03 15,407 06/30/03 11,494
09/30/03 14,468 09/30/03 15,922 09/30/03 11,563
12/31/03 16,229 12/31/03 17,352 12/31/03 11,558
03/31/04 16,504 03/31/04 17,940 03/31/04 11,664
06/30/04 16,788 06/30/04 18,050 06/30/04 11,846
09/30/04 16,475 09/30/04 17,595 09/30/04 11,871
12/31/04 17,996 12/31/04 18,747 12/31/04 11,965
03/31/05 17,609 03/31/05 18,514 03/31/05 12,109
06/30/05 17,850 06/30/05 18,829 06/30/05 12,274
09/30/05 18,493 09/30/05 19,050 09/30/05 12,400
12/31/05 18,879 12/31/05 19,526 12/31/05 12,476
03/31/06 19,674 03/31/06 20,145 03/31/06 12,546
06/30/06 19,390 06/30/06 20,035 06/30/06 12,786
09/30/06 20,489 09/30/06 21,189 09/30/06 12,874
12/31/06 21,861 12/31/06 22,194 12/31/06 12,722
03/31/07 22,001 03/31/07 22,099 03/31/07 12,848
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (a)
(FOR PERIODS ENDED MARCH 31, 2007)
1 YEAR 5 YEARS 10 YEARS
FBP Value Fund 11.57% 7.07% 8.83%
FBP Balanced Fund 9.70% 6.58% 8.25%
Standard & Poor's 500 Index 11.83% 6.27% 8.20%
Consumer Price Index 2.41% 2.90% 2.54%
- --------------------------------------------------------------------------------
(a) Total returns are a measure of the change in value of an investment in the
Funds over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Funds. Returns do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
4
FBP VALUE FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
GENERAL INFORMATION ASSET ALLOCATION
- ---------------------------------------- -------------------------------------
Net Asset Value Per Share $27.30
Total Net Assets (Millions) $ 60.2 [PIE CHART OMITTED]
Current Expense Ratio 1.01%
Portfolio Turnover 16% Cash Equivalents 0.2%
Fund Inception Date 7/30/1993 Stocks 99.8%
FBP VALUE S&P 500
STOCK CHARACTERISTICS FUND INDEX
- -------------------------------------------------
Number of Stocks 48 500
Weighted Avg Market
Capitalization (Billions) 107.8 96.9
Price-to-Earnings Ratio
(IBES 1 Yr. Forecast EPS) 13.2 14.9
Price-to-Book Value 2.3 2.8
INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX (% OF PORTFOLIO)
- --------------------------------------------------------------------------------
[BAR CHART OMITTED]
FBP VALUE S&P 500
SECTOR DIVERSIFICATION FUND INDEX
- --------------------------------------------------------------------------------
Consumer Discretionary 13.7% 10.5%
Consumer Staples 8.5% 9.6%
Energy 2.3% 10.1%
Financials 31.1% 21.6%
Health Care 12.7% 11.9%
Industrials 9.3% 10.9%
Information Technology 17.5% 14.9%
Materials 0.0% 3.1%
Telecommunication Services 4.7% 3.7%
Utilities 0.0% 3.7%
TEN LARGEST HOLDINGS % OF NET ASSETS
- ------------------------------------------- ---------------
J.P. Morgan Chase & Company 4.0%
Citigroup, Inc. 4.0%
Bank of America Corporation 4.0%
Travelers Companies, Inc. (The) 4.0%
American International Group, Inc. 4.0%
Wachovia Corporation 3.9%
International Business Machines Corporation 3.9%
Wal-Mart Stores Inc. 3.5%
Pfizer Inc. 3.0%
Hewlett-Packard Company 3.0%
5
FBP BALANCED FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
GENERAL INFORMATION ASSET ALLOCATION
- ---------------------------------------- -------------------------------------
Net Asset Value Per Share $18.95
Total Net Assets (Millions) $ 66.4 [PIE CHART OMITTED]
Current Expense Ratio 0.97%
Portfolio Turnover 17% Cash Equivalents 0.8%
Fund Inception Date 7/3/89 Fixed Income 26.4%
Stocks 72.8%
STOCK PORTFOLIO (73.1% OF FUND)
- --------------------------------------------------------------------------------------------------------
Number of Stocks 48 TEN LARGEST HOLDINGS % OF NET ASSETS
Weighted Avg Market ------------------------------------------- ---------------
Capitalization (Billions) 109.2 J.P. Morgan Chase & Company 3.3%
Price-to-Earnings Ratio Bank of America Corporation 3.1%
(IBES 1 Yr. Forecast EPS) 13.2 Travelers Companies, Inc. (The) 2.9%
Price-to-Book Value 2.3 International Business Machines Corporation 2.8%
Citigroup, Inc. 2.8%
FIVE LARGEST SECTORS % OF NET ASSETS Wachovia Corporation 2.7%
- ---------------------------------------- American International Group, Inc. 2.6%
Financials 22.7% Wal-Mart Stores 2.5%
Information Tech. 13.2% Hewlett-Packard Company 2.4%
Health Care 10.0% Johnson & Johnson 2.4%
Consumer Discretionary 9.3%
Consumer Staples 6.6%
FIXED-INCOME PORTFOLIO ( 26.4% OF FUND)
- -------------------------------------------------------------------------------
Number of Fixed-Income Securities 25 SECTOR BREAKDOWN % OF NET ASSETS
Average Quality AA ----------------- ----------------
Average Stated Maturity 2.0 U.S. Treasury 3.4%
Average Effective Duration 1.9 Government Agency 7.9%
Corporate 15.1%
6
FBP VALUE FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
===============================================================================
SHARES COMMON STOCKS -- 99.8% VALUE
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 13.7%
20,000 Best Buy Company, Inc................................ $ 974,400
20,000 Family Dollar Stores, Inc............................ 592,400
18,000 Federated Department Stores, Inc..................... 810,900
9,600 Gannett Company, Inc................................. 540,384
35,000 General Motors Corporation (b)....................... 1,072,400
15,000 Home Depot, Inc. (The)............................... 551,100
13,000 Kohl's Corporation (a) (b)........................... 995,930
39,000 Leggett & Platt, Inc................................. 884,130
4,500 Whirlpool Corporation................................ 382,095
42,000 Wyndham Worldwide Corporation (a).................... 1,434,300
-----------
8,238,039
-----------
CONSUMER STAPLES -- 8.5%
12,000 Altria Group, Inc.................................... 1,053,720
37,000 CVS Caremark Corporation............................. 1,263,180
10,000 Kimberly-Clark Corporation........................... 684,900
45,200 Wal-Mart Stores, Inc................................. 2,122,140
-----------
5,123,940
-----------
ENERGY -- 2.3%
15,000 Pioneer Natural Resources Company.................... 646,650
11,000 Royal Dutch Shell PLC - Class A - ADR................ 729,300
-----------
1,375,950
-----------
FINANCIALS -- 31.1%
17,000 American Express Company............................. 958,800
35,400 American International Group, Inc.................... 2,379,588
47,000 Bank of America Corporation.......................... 2,397,940
47,000 Citigroup, Inc. ..................................... 2,412,980
16,000 Fannie Mae........................................... 873,280
17,700 Freddie Mac.......................................... 1,052,973
50,000 JPMorgan Chase & Company............................. 2,419,000
17,065 Lincoln National Corporation......................... 1,156,836
11,500 Realogy Corporation (a) ............................. 340,515
46,200 Travelers Companies, Inc. (The)...................... 2,391,774
43,000 Wachovia Corporation................................. 2,367,150
-----------
18,750,836
-----------
HEALTH CARE -- 12.7%
29,000 Johnson & Johnson.................................... 1,747,540
35,000 Merck & Company, Inc................................. 1,545,950
72,000 Pfizer, Inc.......................................... 1,818,720
47,000 Watson Pharmaceuticals, Inc. (a)..................... 1,242,210
16,000 WellPoint, Inc. (a).................................. 1,297,600
-----------
7,652,020
-----------
7
FBP VALUE FUND
PORTFOLIO OF INVESTMENTS
===============================================================================
SHARES COMMON STOCKS - 99.8% (CONTINUED) VALUE
- -------------------------------------------------------------------------------
INDUSTRIALS -- 9.3%
12,000 Avery Dennison Corporation........................... $ 771,120
5,700 Avis Budget Group, Inc............................... 155,724
10,300 FedEx Corporation ................................... 1,106,529
51,000 General Electric Company............................. 1,803,360
55,000 Tyco International Ltd............................... 1,735,250
-----------
5,571,983
-----------
INFORMATION TECHNOLOGY -- 17.5%
25,000 Agilent Technologies, Inc. (a)....................... 842,250
34,000 Cisco Systems, Inc. (a).............................. 868,020
20,400 Computer Sciences Corporation (a).................... 1,063,452
45,000 EMC Corporation (a).................................. 623,250
45,000 Hewlett-Packard Company.............................. 1,806,300
24,800 International Business Machines Corporation.......... 2,337,648
60,000 Microsoft Corporation................................ 1,672,200
25,000 Sabre Holdings Corporation........................... 818,750
156,000 Solectron Corporation (a)............................ 491,400
-----------
10,523,270
-----------
TELECOMMUNICATIONS SERVICES -- 4.7%
70,000 Sprint Nextel Corporation............................ 1,327,200
40,000 Verizon Communications, Inc.......................... 1,516,800
-----------
2,844,000
-----------
TOTAL COMMON STOCKS (Cost $40,733,078)............... $60,080,038
-----------
===============================================================================
SHARES MONEY MARKET FUNDS -- 0.3% VALUE
- -------------------------------------------------------------------------------
194,231 Fidelity Institutional Government
Portfolio -- Class I (Cost $194,231)............... $ 194,231
-----------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $40,927,309)................................. $60,274,269
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%)...... ( 41,359)
-----------
NET ASSETS -- 100.0%................................. $60,232,910
===========
(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
MARCH 31, 2007
===============================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- -------------------------------------------------------------------------------
General Motors Corporation,
50 09/22/2007 at $40....................... $ 3,750 $ 11,600
Kohl's Corporation,
40 04/21/2007 at $70....................... 28,000 21,879
-------- -----------
$ 31,750 $ 33,479
======== ===========
See accompanying notes to financial statements.
9
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
===============================================================================
SHARES COMMON STOCKS -- 73.1% VALUE
- -------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 9.3%
15,000 Best Buy Company, Inc................................ $ 730,800
16,000 Family Dollar Stores, Inc............................ 473,920
13,500 Federated Department Stores, Inc..................... 608,175
7,000 Gannett Company, Inc................................. 394,030
26,000 General Motors Corporation (b)....................... 796,640
12,000 Home Depot, Inc. (The)............................... 440,880
10,000 Kohl's Corporation (a) (b)........................... 766,100
25,000 Leggett & Platt, Inc................................. 566,750
4,000 Whirlpool Corporation................................ 339,640
31,000 Wyndham Worldwide Corporation (a).................... 1,058,650
-----------
6,175,585
-----------
CONSUMER STAPLES -- 6.6%
14,000 Altria Group, Inc.................................... 1,229,340
29,500 CVS Caremark Corporation............................. 1,007,130
7,700 Kimberly-Clark Corporation........................... 527,373
35,000 Wal-Mart Stores, Inc................................. 1,643,250
-----------
4,407,093
-----------
ENERGY -- 1.6%
12,000 Pioneer Natural Resources Company.................... 517,320
8,000 Royal Dutch Shell PLC - Class A - ADR................ 530,400
-----------
1,047,720
-----------
FINANCIALS -- 22.7%
18,000 American Express Company............................. 1,015,200
25,400 American International Group, Inc.................... 1,707,388
40,000 Bank of America Corporation.......................... 2,040,800
36,000 Citigroup, Inc....................................... 1,848,240
13,000 Fannie Mae........................................... 709,540
13,400 Freddie Mac.......................................... 797,166
45,000 JPMorgan Chase & Company............................. 2,177,100
11,676 Lincoln National Corporation......................... 791,516
9,400 Realogy Corporation (a).............................. 278,334
37,000 Travelers Companies, Inc. (The)...................... 1,915,490
32,800 Wachovia Corporation................................. 1,805,640
-----------
15,086,414
-----------
HEALTH CARE -- 10.0%
26,000 Johnson & Johnson.................................... 1,566,791
31,000 Merck & Company, Inc................................. 1,369,270
55,100 Pfizer, Inc.......................................... 1,391,826
36,000 Watson Pharmaceuticals, Inc. (a)..................... 951,480
16,400 WellPoint, Inc. (a).................................. 1,330,040
-----------
6,609,407
-----------
10
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================
SHARES COMMON STOCKS -- 73.1% (CONTINUED) VALUE
- -------------------------------------------------------------------------------
INDUSTRIALS -- 6.4%
9,300 Avery Dennison Corporation........................... $ 597,618
4,600 Avis Budget Group, Inc............................... 125,672
7,400 FedEx Corporation .................................. 794,982
40,000 General Electric Company............................. 1,414,400
42,000 Tyco International Ltd............................... 1,325,100
-----------
4,257,772
-----------
INFORMATION TECHNOLOGY -- 13.2%
21,000 Agilent Technologies, Inc. (a)....................... 707,490
23,000 Cisco Systems, Inc. (a).............................. 587,190
20,000 Computer Sciences Corporation (a).................... 1,042,600
35,000 EMC Corporation (a).................................. 484,750
40,000 Hewlett-Packard Company.............................. 1,605,600
20,000 International Business Machines Corporation.......... 1,885,200
51,000 Microsoft Corporation ............................... 1,421,370
20,000 Sabre Holdings Corporation........................... 655,000
115,000 Solectron Corporation (a)............................ 362,250
-----------
8,751,450
-----------
TELECOMMUNICATIONS SERVICES -- 3.3%
53,000 Sprint Nextel Corporation............................ 1,004,880
31,000 Verizon Communications, Inc.......................... 1,175,520
-----------
2,180,400
-----------
TOTAL COMMON STOCKS (Cost $30,049,491)............... $48,515,841
-----------
===============================================================================
PAR VALUE U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 11.3% VALUE
- -------------------------------------------------------------------------------
U.S. TREASURY NOTES - 3.4%
$750,000 4.375%, due 05/15/2007............................. $ 749,326
750,000 3.875%, due 07/31/2007............................. 747,100
750,000 4.50%, due 11/15/2010.............................. 749,414
-----------
2,245,840
-----------
FEDERAL HOME LOAN BANK -- 4.9%
500,000 4.28%, due 07/14/2008.............................. 495,715
500,000 4.035%, due 03/09/2009............................. 492,240
750,000 5.25%, due 03/17/2010.............................. 748,898
750,000 5.125%, due 05/28/2010............................. 747,967
750,000 5.05%, due 08/24/2011.............................. 749,620
-----------
3,234,440
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 1.1%
750,000 5.25%, due 10/06/2011.............................. 748,697
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.9%
500,000 2.50%, due 04/19/2007.............................. 499,340
750,000 5.375%, due 10/11/2011............................. 749,536
-----------
1,248,876
-----------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $7,500,272).................................. $ 7,477,853
-----------
11
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================
PAR VALUE CORPORATE BONDS -- 15.1% VALUE
- -------------------------------------------------------------------------------
FINANCIALS -- 6.5%
Bankers Trust New York Corporation,
$ 750,000 7.375%, due 05/01/2008............................ $ 763,816
Credit Suisse First Boston USA, Inc.,
750,000 4.70%, due 06/01/2009............................. 745,054
John Deere Capital Corporation,
500,000 3.375%, due 10/01/2007............................ 495,245
Merrill Lynch & Company, Inc.,
500,000 3.00%, due 04/30/2007............................. 499,108
Northern Trust Company,
1,000,000 7.10%, due 08/01/2009............................. 1,042,056
Student Loan Marketing Corporation,
750,000 3.625%, due 03/17/2008............................ 738,066
-----------
4,283,345
-----------
HEALTH CARE -- 0.7%
UnitedHealth Group, Inc.,
500,000 3.30%, due 01/30/2008............................. 491,370
-----------
INDUSTRIALS -- 4.5%
Donnelley (R.R.) & Sons Company,
750,000 3.75%, due 04/01/2009............................. 729,404
Raychem Corporation,
1,000,000 7.20%, due 10/15/2008............................. 1,026,300
Ryder System, Inc.,
750,000 5.00%, due 04/01/2011............................. 738,297
Stanley Works (The),
500,000 3.50%, due 11/01/2007............................. 494,433
-----------
2,988,434
-----------
UTILITIES -- 3.4%
Dominion Resources, Inc.,
750,000 4.125%, due 02/15/2008............................ 742,191
Ohio Power Company,
750,000 5.30%, due 11/01/2010............................. 754,474
Public Service Electric & Gas Company,
750,000 4.00%, due 11/01/2008............................. 736,887
-----------
2,233,552
-----------
TOTAL CORPORATE BONDS (Cost $9,932,203)............. $ 9,996,701
-----------
12
FBP BALANCED FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
===============================================================================
SHARES MONEY MARKET FUNDS -- 0.7% VALUE
- -------------------------------------------------------------------------------
454,206 Fidelity Institutional Government
Portfolio -- Class I (Cost $454,206).............. $ 454,206
-----------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $47,936,172)................................ $66,444,601
LIABILITES IN EXCESS OF OTHER ASSETS -- (0.1%)...... (87,012)
-----------
NET ASSETS -- 100.0%................................ $66,357,589
===========
(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
MARCH 31, 2007
===============================================================================
OPTION VALUE OF PREMIUMS
CONTRACTS COVERED CALL OPTIONS OPTIONS RECEIVED
- -------------------------------------------------------------------------------
General Motors Corporation,
66 09/22/2007 at $40...................... $ 4,950 $ 15,312
Kohl's Corporation,
30 04/21/2007 at $70...................... 21,000 16,409
-------- -----------
$ 25,950 $ 31,721
======== ===========
See accompanying notes to financial statements.
13
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2007
=========================================================================================
FBP FBP
VALUE BALANCED
FUND FUND
- -----------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost..................................... $40,927,309 $ 47,936,172
=========== ============
At value (Note 1)....................................... $60,274,269 $ 66,444,601
Dividends and interest receivable......................... 81,294 349,169
Receivable for capital shares sold........................ 969 900
Other assets.............................................. 6,030 4,114
----------- ------------
TOTAL ASSETS............................................ 60,362,562 66,798,784
----------- ------------
LIABILITIES
Distributions payable..................................... 41,075 138,818
Payable for investment securities purchased............... -- 180,811
Payable for capital shares redeemed....................... 500 32,547
Accrued investment advisory fees (Note 3)................. 35,676 39,297
Accrued administration fees (Note 3)...................... 6,700 7,200
Accrued compliance fees (Note 3).......................... 800 800
Other accrued expenses and liabilities.................... 13,151 15,772
Covered call options, at value (Notes 1 and 4)
(premiums received $33,479 and $31,721, respectively)... 31,750 25,950
----------- ------------
TOTAL LIABILITIES....................................... 129,652 441,195
----------- ------------
NET ASSETS ................................................. $60,232,910 $ 66,357,589
=========== ============
Net assets consist of:
Paid-in capital........................................... $40,875,773 $ 47,761,654
Accumulated undistributed net investment income........... 8,299 81,506
Accumulated net realized gains from
security transactions................................... 149 229
Net unrealized appreciation on investments................ 19,348,689 18,514,200
----------- ------------
Net assets.................................................. $60,232,910 $ 66,357,589
=========== ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value)..... 2,206,440 3,501,546
=========== ============
Net asset value, offering price and redemption
price per share (Note 1).................................. $ 27.30 $ 18.95
=========== ============
See accompanying notes to financial statements.
14
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2007
======================================================================================
FBP FBP
VALUE BALANCED
FUND FUND
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest.................................................. $ 45,726 $ 893,392
Dividends................................................. 1,252,629 1,000,800
---------- ----------
TOTAL INVESTMENT INCOME................................ 1,298,355 1,894,192
---------- ----------
EXPENSES
Investment advisory fees (Note 3)......................... 414,554 452,725
Administration fees (Note 3).............................. 78,258 83,467
Professional fees......................................... 16,754 17,951
Postage and supplies...................................... 16,597 11,460
Trustees' fees and expenses............................... 12,513 12,513
Custodian fees............................................ 11,634 9,850
Registration fees......................................... 12,860 7,522
Compliance service fees (Note 3).......................... 9,353 9,541
Insurance expense......................................... 4,264 4,434
Printing of shareholder reports........................... 5,365 3,213
Pricing costs............................................. 1,518 4,653
Other expenses............................................ 11,563 13,212
---------- ----------
TOTAL EXPENSES......................................... 595,233 630,541
---------- ----------
NET INVESTMENT INCOME ...................................... 703,122 1,263,651
---------- ----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains on security transactions............... 3,893,568 2,661,939
Net realized gains on option contracts written............ 269,755 180,970
Net change in unrealized appreciation/
depreciation on investments............................. 1,578,555 1,880,976
---------- ----------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS ........................................... 5,741,878 4,723,885
---------- ----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS .......................................... $6,445,000 $5,987,536
========== ==========
See accompanying notes to financial statements.
15
THE FLIPPIN, BRUCE & PORTER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
======================================================================================================
FBP FBP
VALUE FUND BALANCED FUND
-------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006
- ------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .................... $ 703,122 $ 696,545 $ 1,263,651 $ 1,065,036
Net realized gains on:
Security transactions .................. 3,893,568 4,111,677 2,661,939 2,973,321
Option contracts written ............... 269,755 28,430 180,970 18,671
Net change in unrealized appreciation/
depreciation on investments ............ 1,578,555 1,875,071 1,880,976 1,102,573
------------ ------------ ----------- -----------
Net increase in net assets
from operations .......................... 6,445,000 6,711,723 5,987,536 5,159,601
------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............... (703,259) (699,731) (1,261,402) (1,054,135)
From realized capital gains on
security transactions .................. (4,163,508) (3,930,094) (2,826,469) (2,978,247)
------------ ------------ ----------- -----------
Net decrease in net assets from
distributions to shareholders ............ (4,866,767) (4,629,825) (4,087,871) (4,032,382)
------------ ------------ ----------- -----------
FROM CAPITAL
SHARE TRANSACTIONS
Proceeds from shares sold ................ 7,533,124 5,846,188 2,955,850 3,742,137
Net asset value of shares issued in
reinvestment of distributions
to shareholders ........................ 4,724,181 4,481,385 3,694,969 3,703,976
Payments for shares redeemed ............. (13,213,446) (14,011,089) (4,973,441) (7,259,209)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets
from capital share transactions ......... (956,141) (3,683,516) 1,677,378 186,904
------------ ------------ ----------- -----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................ 622,092 (1,601,618) 3,577,043 1,314,123
NET ASSETS
Beginning of year ........................ 59,610,818 61,212,436 62,780,546 61,466,423
------------ ------------ ----------- -----------
End of year .............................. $ 60,232,910 $ 59,610,818 $66,357,589 $62,780,546
============ ============ =========== ===========
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME .................... $ 8,299 $ 8,436 $ 81,506 $ 62,655
============ ============ =========== ===========
CAPITAL SHARE ACTIVITY
Sold ..................................... 276,657 220,216 155,242 202,061
Reinvested ............................... 171,718 170,458 194,182 202,709
Redeemed ................................. (483,330) (528,043) (260,834) (395,037)
------------ ------------ ----------- -----------
Net increase (decrease) in
shares outstanding ..................... (34,955) (137,369) 88,590 9,733
Shares outstanding at beginning of year .. 2,241,395 2,378,764 3,412,956 3,403,223
------------ ------------ ----------- -----------
Shares outstanding at end of year ........ 2,206,440 2,241,395 3,501,546 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 YEAR
=============================================================================================
YEARS ENDED MARCH 31,
-----------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------
Net asset value at beginning of year ...... $ 26.60 $ 25.73 $ 24.86 $ 17.12 $ 23.59
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ................... 0.33 0.32 0.29 0.22 0.20
Net realized and unrealized gains
(losses) on investments ............... 2.71 2.70 0.86 7.74 (6.47)
------- ------- ------- ------- -------
Total from investment operations .......... 3.04 3.02 1.15 7.96 (6.27)
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income .... (0.33) (0.32) (0.28) (0.22) (0.20)
Distributions from net realized gains ... (2.01) (1.83) -- -- --
------- ------- ------- ------- -------
Total distributions ....................... (2.34) (2.15) (0.28) (0.22) (0.20)
------- ------- ------- ------- -------
Net asset value at end of year ............ $ 27.30 $ 26.60 $ 25.73 $ 24.86 $ 17.12
======= ======= ======= ======= =======
Total return (a) .......................... 11.57% 12.03% 4.65% 46.60% (26.61%)
======= ======= ======= ======= =======
Net assets at end of year (000's) ......... $60,233 $59,611 $61,212 $50,400 $48,552
======= ======= ======= ======= =======
Ratio of expenses to average net assets ... 1.01% 1.01% 1.00% 1.02% 1.00%
Ratio of net investment income to
average net assets ...................... 1.19% 1.17% 1.17% 0.94% 1.06%
Portfolio turnover rate ................... 16% 15% 15% 19% 12%
(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 shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See accompanying notes to financial statements.
17
FBP BALANCED FUND
FINANCIAL HIGHLIGHTS
=============================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
=============================================================================================
YEARS ENDED MARCH 31,
-----------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------
Net asset value at beginning of year ...... $ 18.39 $ 18.06 $ 18.40 $ 14.46 $ 17.68
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ................... 0.37 0.33 0.29 0.29 0.36
Net realized and unrealized gains
(losses) on investments ............... 1.39 1.22 0.28 4.49 (3.21)
------- ------- ------- ------- -------
Total from investment operations .......... 1.76 1.55 0.57 4.78 (2.85)
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income .... (0.37) (0.32) (0.30) (0.31) (0.37)
Distributions from net realized gains ... (0.83) (0.90) (0.61) (0.53) --
------- ------- ------- ------- -------
Total distributions ....................... (1.20) (1.22) (0.91) (0.84) (0.37)
------- ------- ------- ------- -------
Net asset value at end of year ............ $ 18.95 $ 18.39 $ 18.06 $ 18.40 $ 14.46
======= ======= ======= ======= =======
Total return (a) .......................... 9.70% 8.81% 3.20% 33.19% (16.16%)
======= ======= ======= ======= =======
Net assets at end of year (000's) ......... $66,358 $62,781 $61,466 $58,290 $44,333
======= ======= ======= ======= =======
Ratio of expenses to average net assets ... 0.97% 0.99% 0.96% 0.98% 1.00%
Ratio of net investment income to
average net assets ...................... 1.95% 1.75% 1.62% 1.68% 2.31%
Portfolio turnover rate ................... 17% 24% 17% 21% 21%
(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 shown do
not reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See accompanying notes to financial statements.
18
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007
================================================================================
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, 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
or are considered to be unreliable due to significant market or other events
will be valued in good faith at fair value using methods determined by the Board
of Trustees. Such methods of fair valuation may include, but are not limited to:
multiple of earnings, multiple of book value, discount from market of a similar
freely traded security, purchase price of security, subsequent private
transactions in the security or related securities, or a combination of these
and other factors.
Repurchase agreements -- The Funds may enter into joint repurchase agreements
with other funds within the Trust. The joint repurchase agreement, which is
collateralized by U.S. Government obligations, is valued at cost which, together
with accrued interest, approximates market value. At the time the Funds enter
into the joint repurchase agreement, the Funds take possession of the underlying
securities and the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the face
amount of the repurchase agreement. In addition, each Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on fixed income
securities purchased are amortized using the interest method.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of each Fund. Net realized
short-term capital gains, if any, may be distributed throughout the year and net
realized long-term capital gains, if any, are distributed at least once each
year. The amount of distributions from net investment income and net realized
gains are determined in accordance with federal income tax regulations which may
differ from accounting principles generally accepted in the United States. These
"book/tax" differences are either temporary or permanent in nature.
19
THE FLIPPIN, BRUCE & PORTER FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The tax character of distributions paid during the years ended March 31, 2007
and March 31, 2006 are as follows:
- -----------------------------------------------------------------------------
Year Ordinary Long-Term Total
Ended Income Capital Gains Distributions
- -----------------------------------------------------------------------------
FBP Value Fund........ 3/31/07 $ 952,036 $3,914,731 $4,866,767
3/31/06 $ 840,818 $3,789,007 $4,629,825
- -----------------------------------------------------------------------------
FBP Balanced Fund..... 3/31/07 $1,457,134 $2,630,737 $4,087,871
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 March
31, 2007:
- ------------------------------------------------------------------------------
FBP FBP
VALUE FUND BALANCED FUND
- ------------------------------------------------------------------------------
Cost of portfolio investments
and written options .......................... $40,893,830 $47,832,237
=========== ===========
Gross unrealized appreciation .................. $20,096,285 $19,129,267
Gross unrealized depreciation .................. (747,596) (542,853)
----------- -----------
Net unrealized appreciation .................... 19,348,689 18,586,414
Undistributed ordinary income .................. 18,748 58,626
Undistributed long-term gains .................. 30,775 89,713
Other temporary differences .................... (41,075) (138,818)
----------- -----------
Total distributable earnings ................... $19,357,137 $18,595,935
=========== ===========
- ------------------------------------------------------------------------------
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 year ended March 31, 2007, the FBP Balanced Fund reclassified $16,602 of
undistributed net investment income against accumulated net realized gains from
security transactions on the Statement of Assets and Liabilities due to
permanent differences in the recognition of capital gains and losses under
income tax regulations and accounting principles generally accepted in the
United States. These differences are primarily due to the tax treatment of
certain debt obligations. Such reclassification has no effect on the Fund's net
assets or net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2007, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments and
U.S. government securities, amounted to $9,303,769 and $14,117,661,
respectively, for the FBP Value Fund and $7,502,360 and $7,938,761,
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
fees of $2,940 and $3,060 from the FBP Value Fund and the FBP Balanced Fund,
respectively, for providing CCO services during the year ended March 31, 2007.
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 year ended March 31, 2007,
Ultimus received fees of $6,413 and $6,481 from the FBP Value Fund and the FBP
Balanced Fund, respectively, 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 year ended March 31, 2007
is as follows:
- ------------------------------------------------------------------------------------------
FBP FBP
VALUE FUND BALANCED FUND
--------------------------------------------
OPTION OPTION OPTION OPTION
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ------------------------------------------------------------------------------------------
Options outstanding at beginning of year .. 305 $ 191,981 190 $120,405
Options written ........................... 575 194,937 463 151,940
Options exercised ......................... (190) (69,913) (140) (49,496)
Options expired ........................... (315) (155,119) (206) (94,854)
Options cancelled in a closing
purchase transaction .................... (285) (128,407) (211) (96,274)
---- --------- ---- --------
Options outstanding at end of year ........ 90 $ 33,479 96 $ 31,721
==== ========= ==== ========
- ------------------------------------------------------------------------------------------
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 positions not deemed to
meet the more-likely-than-not threshold would be recorded as a tax benefit or
expense in the current year. Adoption of FIN 48 is required for fiscal years
beginning after December 15, 2006 and is to be applied to all open tax years as
of the effective date. Recent SEC guidance allows implementing FIN 48 in fund
NAV calculations as late as the fund's last NAV calculation in the first
required financial statement reporting period. As a result, the Funds will
incorporate FIN 48 in their Semi-Annual Report on September 30, 2007. Management
is in the process of determining the impact of the adoption of FIN 48.
In September 2006, the Financial Accounting Standards Board 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 SFAS No. 157 relate to
the definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. As of March 31, 2007, the
Funds do 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.
22
THE FLIPPIN, BRUCE & PORTER FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
the FBP Value Fund and the FBP Balanced Fund
of the Williamsburg Investment Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of the FBP Value Fund and the FBP Balanced Fund
(the "Funds") (each a series of the Williamsburg Investment Trust) as of March
31, 2007, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the four years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights presented for the year ended March 31, 2003
were audited by other auditors whose report dated April 25, 2003, expressed an
unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2007 by correspondence with the custodian
and by other appropriate auditing procedures where replies from brokers were not
received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
FBP Value Fund and the FBP Balanced Fund as of March 31, 2007, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
each of the four years in the period then ended in conformity with U.S.
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 16, 2007
23
THE FLIPPIN, BRUCE & PORTER FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED)
================================================================================
Overall responsibility for management of the Funds rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Funds. The officers have been elected for an
annual term. The following are the Trustees and executive officers of the Funds:
- ----------------------------------------------------------------------------------------------------
POSITION HELD LENGTH OF
TRUSTEE ADDRESS AGE WITH THE TRUST TIME SERVED
- ----------------------------------------------------------------------------------------------------
*Charles M. Caravati, Jr. 931 Broad Street Road, 70 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- ----------------------------------------------------------------------------------------------------
*Austin Brockenbrough III 1802 Bayberry Court, Suite 400 70 Trustee Since
Richmond, VA September 1988
- ----------------------------------------------------------------------------------------------------
*John T. Bruce 800 Main Street 53 President and Since
Lynchburg, VA Trustee September 1988
- ----------------------------------------------------------------------------------------------------
Robert S. Harris 100 Darden Boulevard 57 Trustee Since
Charlottsville, VA January 2007
- ----------------------------------------------------------------------------------------------------
J. Finley Lee, Jr. 4488 Pond Apple Drive North 67 Trustee Since
Naples, FL September 1988
- ----------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 67 Trustee Since
Richmond, VA March 1993
- ----------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintoport Boulevard 47 Trustee Since
Saraland, AL March 1993
- ----------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 74 Trustee Since
Richmond, VA July 1997
- ----------------------------------------------------------------------------------------------------
Samuel B. Witt III 302 Clovelly Road 71 Trustee Since
Richmond, VA November 1988
- ----------------------------------------------------------------------------------------------------
John M. Flippin 800 Main Street 65 Vice President Since
Lynchburg, VA September 1988
- ----------------------------------------------------------------------------------------------------
R. Gregory Porter III 800 Main Street 65 Vice President Since
Lynchburg, VA September 1988
- ----------------------------------------------------------------------------------------------------
John H. Hanna IV 800 Main Street 51 Vice President Since
Lynchburg, VA February 2007
- ----------------------------------------------------------------------------------------------------
David J. Marshall 800 Main Street 50 Vice President Since
Lynchburg, VA February 2007
- ----------------------------------------------------------------------------------------------------
Robert G. Dorsey 225 Pictoria Drive, Suite 450 50 Vice President Since
Cincinnati, OH November 2000
- ----------------------------------------------------------------------------------------------------
Mark J. Seger 225 Pictoria Drive, Suite 450 45 Treasurer Since
Cincinnati, OH November 2000
- ----------------------------------------------------------------------------------------------------
John F. Splain 225 Pictoria Drive, Suite 450 50 Secretary Since
Cincinnati, OH November 2000
- ----------------------------------------------------------------------------------------------------
Tina H. Bloom 225 Pictoria Drive, Suite 450 38 Chief Compliance Since
Cincinnati, OH Officer August 2006
- ----------------------------------------------------------------------------------------------------
* Messrs. Bruce, Brockenbrough and Caravati are "interested persons" of the
Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati
III, an officer of The Jamestown Funds, which are other portfolios of the
Trust.
Each Trustee oversees twelve portfolios of the Trust, including the Funds. The
principal occupations of the Trustees and executive officers of the Funds during
the past five years and public directorships held by the Trustees are set forth
below:
24
THE FLIPPIN, BRUCE & PORTER FUNDS
BOARD OF TRUSTEES AND EXECUTIVE OFFICERS
(UNAUDITED) (CONTINUED)
================================================================================
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of Lowe,
Brockenbrough & Company, Inc. (an investment advisory firm). He is a member of
the Board of Directors of Tredegar Corporation (a plastics manufacturer) and
Wilkinson O'Grady & Co., Inc. (a global asset manager).
John T. Bruce is a Principal of the Adviser.
Robert S. Harris is the C. Stewart Sheppard Professor of Business Administration
at The Darden Graduate School of Business Administration at the University of
Virginia. He was previously the dean at Darden. Professor Harris has published
widely on corporate finance, financial markets and mergers and acquisitions and
has served as a consultant to corporations and government agencies.
J. Finley Lee, Jr. is a financial consultant and the Julian Price Professor
Emeritus at the University of North Carolina.
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (polymers and chemical manufacturer).
Harris V. Morrissette is Chief Executive Officer of Marshall Biscuit Co., Inc.
He is a member of the Board of Directors of BancTrust Financial Group, Inc. (a
bank holding company) and EnergySouth, Inc. In addition, he is Chairman of
Azalea Aviation, Inc. (an airplane fueling company).
Erwin H. Will, Jr. is the retired Chief Investment Officer of Equities of
Virginia Retirement System (VRS). Subsequent to his retirement, he temporarily
served as Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired Senior Vice President and General Counsel of
Stateside Associates, Inc. He is also a member of the Board of Directors of The
Swiss Helvetia Fund, Inc. (a closed-end investment company).
John M. Flippin is a Principal of the Adviser.
R. Gregory Porter III is a Principal of the Adviser.
John H. Hanna IV is a Principal of the Adviser.
David J. Marshall is a Principal of the Adviser.
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Tina H. Bloom is Vice President of Administration of Ultimus Fund Solutions, LLC
and Ultimus Fund Distributors, LLC.
Additional information about members of the Board of Trustees and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-800-281-3217.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from ordinary income and net realized
gains made by the Funds during the year ended March 31, 2007. For the fiscal
year ended March 31, 2007, certain dividends paid by the Funds may be subject to
a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The FBP Value Fund and the FBP Balanced Fund intend
to designate up to a maximum amount of $4,866,767 and $4,087,871, respectively,
as taxed at a maximum rate of 15%. Additionally, for the fiscal year ended March
31, 2007, 100% and 80% of the dividends paid from ordinary income by the FBP
Value Fund and the FBP Balanced Fund, respectively, qualified for the dividends
received deduction for corporations. As required by federal regulations,
complete information will be computed and reported in conjunction with your 2007
Form 1099-DIV.
25
THE FLIPPIN BRUCE & PORTER FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Funds, you incur ongoing costs, including management fees and other fund
expenses. Operating expenses, which are deducted from each Fund's gross income,
directly reduce the investment return of the Funds.
A fund's ongoing costs are expressed as a percentage of its average net assets.
This figure is known as the expense ratio. The following examples are intended
to help you understand the ongoing costs (in dollars) of investing in the Funds
and to compare these costs with the ongoing costs of investing in other mutual
funds. The examples below are based on an investment of $1,000 made at the
beginning of the period shown and held for the entire period.
The table below illustrates each Fund's costs in two ways:
Actual fund return - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Funds. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Funds under the heading "Expenses Paid During Period."
Hypothetical 5% return - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the return used is not the Funds' actual
returns, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge transaction fees, such as
purchase or redemption fees, nor do they carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
More information about the Funds' expenses, including annual expense ratios for
the prior five fiscal years, can be found in this report. For additional
information on operating expenses and other shareholder costs, please refer to
the Funds' prospectus.
FBP VALUE FUND
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2006 March 31, 2007 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,049.70 $5.11
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.95 $5.04
- --------------------------------------------------------------------------------
* Expenses are equal to the FBP Value Fund's annualized expense ratio of
1.00% for the period, multiplied by the average account value over the
period, multiplied by 182/365 (to reflect the one-half year period).
26
THE FLIPPIN BRUCE & PORTER FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
(CONTINUED)
================================================================================
FBP BALANCED FUND
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2006 March 31, 2007 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,043.00 $4.94
- --------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.09 $4.89
- --------------------------------------------------------------------------------
* Expenses are equal to the FBP Balanced Fund's annualized expense ratio of
0.97% for the period, multiplied by the average account value over the
period, multiplied by 182/365 (to reflect the one-half year period).
THE FLIPPIN, BRUCE & PORTER FUNDS
OTHER INFORMATION (UNAUDITED)
================================================================================
The Trust files a complete listing of portfolio holdings for the Funds with the
Securities and Exchange Commission (the SEC) as of the first and third quarters
of each fiscal year on Form N-Q. The filings are available upon request, by
calling 1-800-327-9375. Furthermore, you may obtain a copy of these filings on
the SEC's website at http://www.sec.gov. The Trust's Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC, and
information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available without charge
upon request by calling toll-free 1-800-327-9375, or on the SEC's website at
http://www.sec.gov. Information regarding how the Funds voted proxies relating
to portfolio securities during the most recent 12-month period ended June 30 is
also available without charge upon request by calling toll-free 1-800-327-9375,
or on the SEC's website at http://www.sec.gov.
27
THE FLIPPIN, BRUCE & PORTER FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENTS (UNAUDITED)
================================================================================
At an in-person meeting held on February 5, 2007, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance for a
one-year period of the Investment Advisory Agreements with the Adviser on behalf
of the FBP Value Fund and the FBP Balanced Fund. Below is a discussion of the
factors considered by the Board of Trustees along with their conclusions with
respect thereto that formed the basis for the Board's approvals.
In selecting the Adviser and approving the most recent annual continuance of the
Investment Advisory Agreements, the Trustees considered all information they
deemed reasonably necessary to evaluate the terms of the Agreements. The
principal areas of review by the Trustees were the nature, extent and quality of
the services provided by the Adviser and the reasonableness of the fees charged
for those services. These matters were considered by the Independent Trustees
consulting with experienced counsel for the Independent Trustees, who is
independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Funds was considered.
Each Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives and to the Adviser's
comparably managed private accounts. The Trustees also considered the scope and
quality of the in-house capabilities of the Adviser and other resources
dedicated to performing services for the Funds. The quality of administrative
and other services, including the Adviser's role in coordinating the activities
of the Funds' other service providers, were considered in light of the Funds'
compliance with investment policies and applicable laws and regulations and of
related reports by management and the Funds' independent public accountants in
periodic meetings with the Trust's Audit Committee. The Trustees also considered
the business reputation of the Adviser, the qualifications of its key investment
and compliance personnel, and its financial resources.
In reviewing the fees payable under the Investment Advisory Agreements, the
Trustees compared the advisory fees and overall expense levels of each Fund with
those of competitive funds with similar investment objectives as well as the
private accounts managed by the Adviser. The Trustees considered information
provided by the Adviser concerning the Adviser's profitability with respect to
each Fund, including the assumptions and methodology used in preparing the
profitability information, in light of applicable case law relating to advisory
fees. For these purposes, the Trustees took into account not only the fees paid
by the Funds, but also so-called "fallout" benefits to the Adviser, such as the
benefits of research made available to the Adviser by reason of brokerage
commissions generated by the Funds' securities transactions. The Trustees also
reviewed the revenue sharing arrangements relating to the Funds, whereby fees
are paid by the Adviser to various intermediaries that direct assets to the
Funds. In evaluating the Funds' advisory fees, the Trustees took into account
the complexity and quality of the investment management of the Funds.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the performance of each Fund managed by the Adviser and the
other services provided under the Investment Advisory Agreements, they believe
that the Adviser has provided quality services to the Funds as compared to
similarly managed funds and comparable private accounts managed by the Adviser;
(ii) although the advisory fees payable to the Adviser by each Fund are in the
higher range of fees for other comparably managed funds, they believe the fees
to be reasonable given the quality of services provided by the Adviser; and
(iii) the total operating expense ratio of each Fund is lower than the average
of comparably managed funds, as calculated and published by Morningstar. Given
the size of the Funds and their expected growth, the Independent Trustees did
not believe that at the present time it would be relevant to consider the extent
to which economies of scale would be realized as the Funds grow, and whether fee
levels reflect these economies of scale. The Independent Trustees also
considered the "fallout" benefits to, and the profitability of, the Adviser but
given the amounts involved viewed these as secondary factors in connection with
the evaluation of the reasonableness of the advisory fees paid by the Funds.
28
THE FLIPPIN, BRUCE & PORTER FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENTS (UNAUDITED)
(CONTINUED)
================================================================================
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreements. Rather the Trustees concluded, in light of a weighing and balancing
of all factors considered, that it was in the best interests of each Fund and
its shareholders to continue its Investment Advisory Agreement without
modification to its terms, including the fees charged for services thereunder.
29
================================================================================
THE
FLIPPIN, BRUCE & PORTER
FUNDS
----------
INVESTMENT ADVISER LEGAL COUNSEL
Flippin, Bruce & Porter, Inc. Sullivan & Worcester LLP
800 Main Street, Second Floor One Post Office Square
P.O. Box 6138 Boston, Massachusetts 02109
Lynchburg, Virginia 24505
TOLL-FREE 1-800-327-9375 OFFICERS
WWW.FBPINC.COM John T. Bruce, President
and Portfolio Manager
ADMINISTRATOR John M. Flippin, Vice President
Ultimus Fund Solutions, LLC R. Gregory Porter, III,
P.O. Box 46707 Vice President
Cincinnati, Ohio 45246-0707 John H. Hanna, IV, Vice President
TOLL-FREE 1-866-738-1127 David J. Marshall, Vice President
CUSTODIAN TRUSTEES
US Bank Austin Brockenbrough, III
425 Walnut Street John T. Bruce
Cincinnati, Ohio 45202 Charles M. Caravati, Jr.
Robert S. Harris
INDEPENDENT REGISTERED J. Finley Lee, Jr.
PUBLIC ACCOUNTING FIRM Richard L. Morrill
Ernst & Young LLP Harris V. Morrissette
1900 Scripps Center Erwin H. Will, Jr.
312 Walnut Street Samuel B. Witt, III
Cincinnati, Ohio 45202
================================================================================
=====================================================
THE
GOVERNMENT STREET
FUNDS
NO-LOAD MUTUAL FUNDS
ANNUAL REPORT
MARCH 31, 2007
=====================================================
T. LEAVELL & ASSOCIATES, INC.
-----------------------------------------
I N V E S T M E N T A D V I S E R
-----------------------------------------
Founded 1979
=====================================================
THE GOVERNMENT STREET EQUITY FUND
THE GOVERNMENT STREET MID-CAP FUND
THE GOVERNMENT STREET BOND FUND
THE ALABAMA TAX FREE BOND FUND
=====================================================
LETTER FROM THE PRESIDENT MAY 9, 2007
================================================================================
Dear Fellow Shareholders:
We are enclosing for your review the audited Annual Report of The Government
Street Funds for the year ended March 31, 2007.
THE GOVERNMENT STREET EQUITY FUND
- ---------------------------------
The Government Street Equity Fund had a positive return of 7.04% for the
fiscal year ended March 31, 2007. While a positive return is always welcomed, on
a relative basis it trailed the S&P 500 Index, which achieved an 11.83% result.
The relative result is explained entirely by sluggish performance in the first
half of the fiscal year. The second half of the year has shown significant
progress in recovering the relative shortfall and your Fund's fourth quarter
results of 1.72% easily outdistanced the S&P 500 Index return of 0.64%.
During the first half of the fiscal year (April 1, 2006 - September 30,
2006) there were some significant underperformers in the portfolio. Home Depot
(a 2.06% holding as of the semi-annual date of September 30, 2006) was down
- -14.90% as it experienced negative results tied to a high profile management
change and the forecasted decline in the housing industry. Cardinal Health (a
2.02% holding at mid-year) was down -11.55% as a result of negative comments
attributable to Government sponsored drug distribution programs such as provided
by Cardinal. United Health Group (a 3.19% holding at mid-year) was down -11.92%
as the negative health care environment and the continuing disruption of its now
retired CEO's highly unfavorable stock option grants continued to make financial
headlines. Florida Rock (a 1.32% holding at mid-year) was down -30.67% primarily
as a result of the forecasted housing industry slowdown. Each of these stocks
has made recoveries in the second half of the year, (Home Depot +2.55%, Cardinal
Health +11.37%, United Health Group +7.14% and Florida Rock +74.78%) but not
enough to overcome the damage done in the first six months. However, these are
high quality companies that are expected to recover and thrive in the future.
During the year a number of exchange traded funds (ETFs) have been added to
your portfolio. These investment companies, traded like stocks, provide broad
holdings of securities within well defined economic and investment sectors. ETF
investments were discussed in last year's Annual Report. The decision to invest
in ETFs has been implemented to take advantage of the tax and diversification
attributes of ETFs. By investing in ETFs, we are supplementing economic sectors
in the portfolio and exposing the Fund to broad based International investments
in the process. The end result should be greater risk control through broader
diversification and improved returns through broader exposure outside domestic
markets. This approach represents a widely accepted philosophy within the
category of investments which includes our Fund. We believe that the final
quarterly results, cited earlier, are a direct result of this effort. We
anticipate a future overall commitment to
1
this type of investment of approximately 20% of the Fund's assets. We will
report the performance of this area of investments in future news letters.
The 10 largest holdings in the Fund at March 31, 2007 are:
iShares MSCI EAFE Index Fund 4.4%
Bank of America Corporation 3.7%
Altria Group, Inc. 3.3%
UnitedHealth Group, Inc. 3.0%
US Bancorp 2.8%
Wellpoint, Inc. 2.6%
American Express Company 2.4%
Florida Rock Industries, Inc. 2.3%
Chevron Corporation 2.2%
Procter & Gamble Company (The) 2.2%
In summary, your Fund is positioned for the future with a widely
diversified portfolio of what we believe to be high quality investments. The
economy remains strong and continues to provide a positive environment for
investment. There is a tremendous level of liquidity in capital markets that
should continue to provide demand for equity investments. We look forward to
informing you of progress in your investment.
As of March 31, 2007, the Fund's net assets were $87,756,501; net asset
value per share was $48.37; the ratio of expenses to average net assets was
0.84%. Portfolio turnover rate was 15%. Income dividends of $0.475 were
distributed during the year.
THE GOVERNMENT STREET MID-CAP FUND
- ----------------------------------
The Government Street Mid-Cap Fund completed its third full fiscal year on
March 31, 2007. The Fund produced a one year total return of 3.83% versus the
benchmark S&P 400 return of 8.44%. This relative underperformance was the result
of several sector weight deviations from the benchmark. The largest
discrepancies between the Fund and the benchmark were in the consumer sector.
The largest negative contributors to performance came from the Fund being
overweight in the health care and energy sectors which both underperformed the
index. Through the course of the last fiscal year, some of these gaps have been
closed, and we continue to reduce some of the differences within the individual
sectors. While the Fund does not want to exactly match the sector weights of the
index, we do not think it is appropriate for this Fund to make large "sector
bets" and will continue to monitor the allocations closely.
The longer term total return performance was more satisfactory as the Fund
produced an annualized total return of 11.36% for the 3 year period while the
S&P 400 returned 13.36% and the S&P 500 returned 10.06%. Some of the top
performers in the Fund over that time period included Valero Energy, Martin
Marietta and Albemarle which were up 482%, 212% and 196%, respectively.
2
Mid-cap stocks have outperformed large-cap stocks in 6 out of the last 7
calendar years and so far in 2007 that trend is continuing. In fact, over the
past 15 years mid-cap stocks have outperformed large-cap stocks by an average of
more than 3% per year. While it will be difficult to continue this period of
near-term outperformance, mid-cap stocks should continue to perform favorably on
a relative basis with both small and large capitalization companies. Mid-cap
stocks are large enough to have established themselves as being worthy of
investment while at the same time being small enough to generate impressive
earnings growth rates.
Currently the Government Street Mid-Cap Fund is underweight the consumer
discretionary and financial sectors compared to the S&P 400. The Fund is
currently overweight the health care sector compared to the S&P 400. For the
first quarter of 2007 the best performing sectors in the mid-cap space were
materials and consumer staples while the worst performing sectors were
financials and telecommunications. For the year ended March 31, 2007, value
stocks outperformed growth stocks in the S&P 400 by over 5%.
The market continues to show strength, although with greater volatility,
even as the economy faces pressure from the sagging housing sector, increasing
energy prices and inflated budget deficits. So far relatively low interest
rates, low unemployment and global liquidity have been able to limit the impact
of these concerns on the domestic financial markets.
Regardless of the upcoming market environment we believe your Fund is
positioned well with its broad diversification and high quality constituents.
The Fund is expected to move in the direction of the overall market and should
give good relative returns over time.
As of March 31, 2007 the net assets of the Fund were $33,960,853 and the
net asset value per share was $13.13. The turnover rate for the previous 12
months was 11% and the total number of common stock holdings is 144. The net
expense ratio for the Fund is 1.10% of assets.
THE GOVERNMENT STREET BOND FUND
- -------------------------------
Federal Reserve policy remained steady during the year as the Federal Funds
rate was maintained at the 5.25% level. Federal Reserve chairman Ben Bernanke
noted that policy is still aimed at combating inflation even in the face of
heightened uncertainty about economic growth. Recent Fed comments have not
hinted at the possibility of any rate cuts. Bond prices were volatile during the
year, bouncing back and forth depending upon the latest economic data and Fed
pronouncements. The yield on the U. S. Treasury 2-year note declined during the
year from 4.86% to 4.57% on March 31st. The yield on the 10-year note declined,
from 5.03% to 4.64%. The result of these changes was a slightly more normal
shaped yield curve with longer term rates slightly higher than shorter term
rates. However, it should be noted that shorter term T-Bill rates remain higher
than those on both the two and ten year notes. The future direction of rates
remains dependent upon the outlook for inflation and the resulting actions taken
by the Federal Reserve Board. Inflationary pressures will continue to be the
3
Fed's main concern. It is also our main concern which is reflective in our
defensive structure of The Government Street Bond Fund.
The Government Street Bond Fund had a total return of 5.56% for the fiscal
year ended March 31, 2007. The performance was achieved with 59% of the
securities rated AAA and the average maturity of the Fund being 2.96 years. Most
fixed income sectors have seen increased volatility due to the sub prime
mortgage environment, and money continues to flow into both U.S. and
International markets. During the year we reduced the portfolio's corporate
exposure from 46% to 39%. We increased the percentage of the agency sector to
32%. Currently, the portfolio is overweighted in the agency sector relative to
the Lehman Intermediate Government/Credit Bond Index. Agency credit worthiness
has been enhanced as the Congress continues to pursue more regulation. A
slowdown in housing sector has been occurring which has contained the supply of
agency paper reducing volatility. The Lehman Intermediate Government/Credit Bond
Index, which has an average maturity of 4.47 years, had a total return of 6.14%
for the year ended March 31, 2007.
Looking back over a 20 year period, the longest time the Fed went from
tightening interest rates to easing interest rates was 18 months. The Fed has
not changed the lending rate for the past 11 months. It will take consecutive
months of economic data in one direction or another for the Fed to start
changing rates in either direction. The Government Street Bond Fund will remain
relatively short and should be positioned to provide solid performance if and
when the Fed does begin to cut rates.
As of March 31, 2007, the net assets of the Fund were $29,741,124. Net
asset value per share was $19.82. Portfolio turnover rate was 26%.
THE ALABAMA TAX FREE BOND FUND
- ------------------------------
The Alabama Tax Free Bond Fund maintained its defensive portfolio strategy
during the past year with an average duration at the short end of the targeted
range. With a yield curve that has been flat to inverted for much of the past
year, there has been little incentive to extend maturities in the Fund. Although
such an environment has led to relative underperformance of the Fund when
compared to intermediate-term indices, the portfolio is well positioned to take
advantage of a more normally shaped yield curve.
For the fiscal year ended March 31, 2007, the Fund had a return of 3.38%
compared to a return of 4.29% for the Lehman 5-year Municipal Bond Index and
4.55% for the Lipper Intermediate Term Municipal Fund Index. The Alabama Tax
Free Bond Fund has a shorter average maturity and holds higher rated securities
on average than those funds which comprise the Lipper Intermediate Term
Municipal Fund Index. As of March 31, 2007, the average maturity of the Fund was
4.7 years compared to 4.6 years a year ago. All of the bonds held in the Fund
are rated in the two highest categories of AAA and AA.
The Fund's manager remains committed to the primary objectives of the Fund
of preserving value and generating income that is exempt from
4
both Federal and Alabama state income taxes. The duration and average maturity
of the Fund will be adjusted in a manner consistent with these stated
objectives. Investors can expect the quality of the bonds in the Fund to be
maintained at consistently above average levels.
The net assets of the Fund as of March 31, 2007 were $25,968,433 and the
net asset value per share was $10.39. The ratio of net investment income to
average net assets during the fiscal year was 3.44%. Portfolio turnover rate was
15%.
Thank you for your continued confidence in The Government Street Funds.
Please call us if we can be of further service to you.
Very truly yours,
/s/ Thomas W. Leavell
Thomas W. Leavell
President
T. Leavell & Associates, Inc.
The Government Street Funds
* The returns noted for individual stocks represent the internal rate of
return earned by the Fund on the holding using the discounted cash flow
method.
This report is submitted for the general information of the shareholders of the
Funds. The report is not authorized for distribution to prospective investors in
the Funds unless it is accompanied by a current prospectus.
This report reflects our views, opinions and portfolio holdings as of March 31,
2007, the end of the reporting period. These views are subject to change at any
time based upon market or other conditions. For more current information
throughout the year please visit www.tleavell.com.
5
THE GOVERNMENT STREET EQUITY FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE GOVERNMENT STREET EQUITY FUND
Comparison of the Change in Value of a $10,000 Investment in
The Goverment Street Equity Fund and the Standard & Poor's 500 Index
[GRAPHIC OMITTED]
STANDARD & POOR'S 500 INDEX GOVERNMENT STREET EQUITY FUND
--------------------------- -----------------------------
DATE VALUE DATE VALUE
---- ----- ---- -----
03/31/97 $10,000 03/31/97 $10,000
06/30/97 11,746 06/30/97 11,658
09/30/97 12,626 09/30/97 12,375
12/31/97 12,988 12/31/97 12,584
03/31/98 14,800 03/31/98 13,931
06/30/98 15,289 06/30/98 14,158
09/30/98 13,768 09/30/98 12,877
12/31/98 16,700 12/31/98 15,571
03/31/99 17,532 03/31/99 15,994
06/30/99 18,768 06/30/99 17,225
09/30/99 17,596 09/30/99 16,094
12/31/99 20,214 12/31/99 18,328
03/31/00 20,678 03/31/00 19,182
06/30/00 20,128 06/30/00 18,810
09/30/00 19,933 09/30/00 18,739
12/31/00 18,374 12/31/00 17,626
03/31/01 16,195 03/31/01 15,229
06/30/01 17,143 06/30/01 15,865
09/30/01 14,627 09/30/01 13,786
12/31/01 16,190 12/31/01 15,333
03/31/02 16,234 03/31/02 15,439
06/30/02 14,059 06/30/02 13,406
09/30/02 11,630 09/30/02 11,274
12/31/02 12,612 12/31/02 12,066
03/31/03 12,215 03/31/03 11,661
06/30/03 14,095 06/30/03 13,401
09/30/03 14,468 09/30/03 13,813
12/31/03 16,229 12/31/03 15,458
03/31/04 16,504 03/31/04 15,870
06/30/04 16,788 06/30/04 16,000
09/30/04 16,475 09/30/04 15,443
12/31/04 17,996 12/31/04 16,893
03/31/05 17,609 03/31/05 16,390
06/30/05 17,850 06/30/05 16,614
09/30/05 18,493 09/30/05 17,362
12/31/05 18,879 12/31/05 17,738
03/31/06 19,674 03/31/06 18,420
06/30/06 19,390 06/30/06 18,049
09/30/06 20,489 09/30/06 18,233
12/31/06 21,861 12/31/06 19,383
03/31/07 22,001 03/31/07 19,717
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Government Street Equity Fund 7.04% 5.01% 7.02%
Standard & Poor's 500 Index 11.83% 6.27% 8.20%
- --------------------------------------------------------------------------------
(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.
6
THE GOVERNMENT STREET MID-CAP FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE GOVERNMENT STREET MID-CAP FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Mid-Cap Fund and the Standard & Poor's MidCap 400 Index
[GRAPHIC OMITTED]
STANDARD & POOR'S MIDCAP 400 INDEX THE GOVERNMENT STREET MID-CAP FUND
---------------------------------- ----------------------------------
DATE VALUE DATE VALUE
---- ----- ---- -----
11/17/03 $ 10,000 11/17/03 $ 10,000
12/31/03 10,435 12/31/03 10,218
03/31/04 10,963 03/31/04 10,683
06/30/04 11,069 06/30/04 10,808
09/30/04 10,837 09/30/04 10,652
12/31/04 12,155 12/31/04 11,602
03/31/05 12,106 03/31/05 11,696
06/30/05 12,623 06/30/05 12,223
09/30/05 13,239 09/30/05 12,855
12/31/05 13,682 12/31/05 13,226
03/31/06 14,725 03/31/06 14,211
06/30/06 14,262 06/30/06 13,628
09/30/06 14,108 09/30/06 13,352
12/31/06 15,094 12/31/06 13,967
03/31/07 15,969 03/31/07 14,755
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR SINCE INCEPTION*
The Government Street Mid-Cap Fund 3.83% 12.24%
Standard & Poor's MidCap 400 Index 8.44% 14.90%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. The return does not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
* Initial public offering of shares was November 17, 2003.
7
THE GOVERNMENT STREET BOND FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE GOVERNMENT STREET BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Government
Street Bond Fund, the Lehman Intermediate Government/Credit Bond Index and the
90-Day Treasury Bill Index
[GRAPHIC OMITTED]
LEHMAN INTERMEDIATE GOVERNMENT
/CREDIT BOND INDEX THE GOVERNMENT STREET BOND FUND 90-DAY TREASURY BILL INDEX
- ------------------------------ ------------------------------- --------------------------
DATE VALUE DATE VALUE DATE VALUE
---- ----- ---- ----- ---- -----
03/31/97 $ 10,000 03/31/97 $ 10,000 03/31/97 $ 10,000
06/30/97 10,295 06/30/97 10,290 06/30/97 10,136
09/30/97 10,573 09/30/97 10,574 09/30/97 10,272
12/31/97 10,799 12/31/97 10,794 12/31/97 10,401
03/31/98 10,968 03/31/98 10,961 03/31/98 10,536
06/30/98 11,174 06/30/98 11,167 06/30/98 10,672
09/30/98 11,676 09/30/98 11,588 09/30/98 10,823
12/31/98 11,709 12/31/98 11,596 12/31/98 10,945
03/31/99 11,687 03/31/99 11,551 03/31/99 11,061
06/30/99 11,640 06/30/99 11,407 06/30/99 11,193
09/30/99 11,748 09/30/99 11,484 09/30/99 11,335
12/31/99 11,753 12/31/99 11,478 12/31/99 11,476
03/31/00 11,930 03/31/00 11,628 03/31/00 11,636
06/30/00 12,131 06/30/00 11,819 06/30/00 11,812
09/30/00 12,481 09/30/00 12,184 09/30/00 11,990
12/31/00 12,943 12/31/00 12,655 12/31/00 12,185
03/31/01 13,383 03/31/01 13,053 03/31/01 12,368
06/30/01 13,472 06/30/01 13,124 06/30/01 12,507
09/30/01 14,093 09/30/01 13,687 09/30/01 12,643
12/31/01 14,106 12/31/01 13,679 12/31/01 12,723
03/31/02 14,074 03/31/02 13,689 03/31/02 12,778
06/30/02 14,573 06/30/02 14,103 06/30/02 12,833
09/30/02 15,233 09/30/02 14,613 09/30/02 12,888
12/31/02 15,490 12/31/02 14,818 12/31/02 12,938
03/31/03 15,723 03/31/03 14,971 03/31/03 12,977
06/30/03 16,150 06/30/03 15,236 06/30/03 13,009
09/30/03 16,147 09/30/03 15,214 09/30/03 13,041
12/31/03 16,157 12/31/03 15,258 12/31/03 13,072
03/31/04 16,556 03/31/04 15,471 03/31/04 13,102
06/30/04 16,138 06/30/04 15,218 06/30/04 13,139
09/30/04 16,574 09/30/04 15,468 09/30/04 13,190
12/31/04 16,645 12/31/04 15,531 12/31/04 13,257
03/31/05 16,499 03/31/05 15,477 03/31/05 13,342
06/30/05 16,909 06/30/05 15,689 06/30/05 13,438
09/30/05 16,820 09/30/05 15,670 09/30/05 13,550
12/31/05 16,907 12/31/05 15,692 12/31/05 13,681
03/31/06 16,842 03/31/06 15,756 03/31/06 13,832
06/30/06 16,877 06/30/06 15,852 06/30/06 13,993
09/30/06 17,417 09/30/06 16,218 09/30/06 14,161
12/31/06 17,597 12/31/06 16,416 12/31/06 14,331
03/31/07 17,876 03/31/07 16,632 03/31/07 14,506
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Government Street Bond Fund 5.56% 3.97% 5.22%
Lehman Intermediate Government/
Credit Bond Index 6.14% 4.90% 5.98%
90-Day Treasury Bill Index 4.88% 2.57% 3.79%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital
gains distributions are reinvested in shares of the Fund. Returns do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
8
THE ALABAMA TAX FREE BOND FUND
PERFORMANCE INFORMATION (UNAUDITED)
================================================================================
THE ALABAMA TAX FREE BOND FUND
Comparison of the Change in Value of a $10,000 Investment in The Alabama Tax
Free Bond Fund, the Lehman 7-Year Municipal Bond Index, the Lehman 3-Year
Municipal Bond Index and the Lipper Intermidiate Municipal Fund Index
[GRAPHIC OMITTED]
LEHMAN 3-YEAR MUNICIPAL THE ALABAMA TAX FREE LEHMAN 7-YEAR MUNICIPAL LIPPER INTERMEDIATE
BOND INDEX BOND FUND BOND INDEX MUNICIPAL FUND INDEX
- ----------------------- ----------------------- ----------------------- -----------------------
DATE VALUE DATE VALUE DATE VALUE DATE VALUE
---- ----- ---- ----- ---- ----- ---- -----
03/31/97 $ 10,000 03/31/97 $ 10,000 03/31/97 $ 10,000 03/31/97 $ 10,000
06/30/97 10,185 06/30/97 10,245 06/30/97 10,278 06/30/97 10,264
09/30/97 10,359 09/30/97 10,454 09/30/97 10,552 09/30/97 10,516
12/31/97 10,506 12/31/97 10,665 12/31/97 10,784 12/31/97 10,743
03/31/98 10,614 03/31/98 10,744 03/31/98 10,908 03/31/98 10,846
06/30/98 10,734 06/30/98 10,868 06/30/98 11,030 06/30/98 10,978
09/30/98 10,947 09/30/98 11,149 09/30/98 11,398 09/30/98 11,282
12/31/98 11,053 12/31/98 11,212 12/31/98 11,470 12/31/98 11,346
03/31/99 11,176 03/31/99 11,253 03/31/99 11,561 03/31/99 11,410
06/30/99 11,127 06/30/99 11,069 06/30/99 11,371 06/30/99 11,219
09/30/99 11,238 09/30/99 11,102 09/30/99 11,462 09/30/99 11,226
12/31/99 11,271 12/31/99 11,102 12/31/99 11,452 12/31/99 11,191
03/31/00 11,384 03/31/00 11,292 03/31/00 11,624 03/31/00 11,388
06/30/00 11,543 06/30/00 11,428 06/30/00 11,817 06/30/00 11,526
09/30/00 11,728 09/30/00 11,644 09/30/00 12,083 09/30/00 11,767
12/31/00 11,974 12/31/00 12,011 12/31/00 12,491 12/31/00 12,161
03/31/01 12,287 03/31/01 12,275 03/31/01 12,812 03/31/01 12,436
06/30/01 12,436 06/30/01 12,332 06/30/01 12,905 06/30/01 12,528
09/30/01 12,731 09/30/01 12,613 09/30/01 13,260 09/30/01 12,852
12/31/01 12,761 12/31/01 12,535 12/31/01 13,137 12/31/01 12,744
03/31/02 12,826 03/31/02 12,595 03/31/02 13,261 03/31/02 12,836
06/30/02 13,203 06/30/02 13,022 06/30/02 13,826 06/30/02 13,291
09/30/02 13,497 09/30/02 13,527 09/30/02 14,429 09/30/02 13,805
12/31/02 13,620 12/31/02 13,591 12/31/02 14,448 12/31/02 13,808
03/31/03 13,734 03/31/03 13,686 03/31/03 14,644 03/31/03 13,944
06/30/03 13,855 06/30/03 13,954 06/30/03 15,034 06/30/03 14,251
09/30/03 14,008 09/30/03 13,980 09/30/03 15,124 09/30/03 14,280
12/31/03 13,984 12/31/03 14,030 12/31/03 15,256 12/31/03 14,410
03/31/04 14,114 03/31/04 14,152 03/31/04 15,486 03/31/04 14,577
06/30/04 13,980 06/30/04 13,900 06/30/04 15,122 06/30/04 14,289
09/30/04 14,245 09/30/04 14,209 09/30/04 15,632 09/30/04 14,716
12/31/04 14,273 12/31/04 14,258 12/31/04 15,762 12/31/04 14,820
03/31/05 14,165 03/31/05 14,143 03/31/05 15,602 03/31/05 14,711
06/30/05 14,336 06/30/05 14,350 06/30/05 16,015 06/30/05 15,063
09/30/05 14,356 09/30/05 14,341 09/30/05 15,949 09/30/05 15,034
12/31/05 14,397 12/31/05 14,391 12/31/05 16,032 12/31/05 15,119
03/31/06 14,414 03/31/06 14,398 03/31/06 16,012 03/31/06 15,134
06/30/06 14,463 06/30/06 14,438 06/30/06 16,039 06/30/06 15,140
09/30/06 14,742 09/30/06 14,689 09/30/06 16,556 09/30/06 15,588
12/31/06 14,835 12/31/06 14,773 12/31/06 16,671 12/31/06 15,703
03/31/07 14,980 03/31/07 14,884 03/31/07 16,822 03/31/07 15,822
Past performance is not predictive of future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns(a)
(for periods ended March 31, 2007)
1 YEAR 5 YEARS 10 YEARS
The Alabama Tax Free Bond Fund 3.38% 3.40% 4.06%
Lehman 7-Year Municipal Bond Index 5.06% 4.87% 5.34%
Lehman 3-Year Municipal Bond Index 3.92% 3.15% 4.12%
Lipper Intermediate Municipal Fund Index 4.55% 4.27% 4.69%
- --------------------------------------------------------------------------------
(a) Total return is a measure of the change in value of an investment in the
Fund over the periods covered, which assumes any dividends or capital gains
distributions are reinvested in shares of the Fund. Returns do not reflect
the deduction of taxes a shareholder would pay on Fund distributions or the
redemption of Fund shares.
9
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
INDUSTRY CONCENTRATION VS. THE S&P 500 INDEX (% OF NET ASSETS)
[GRAPHIC OMITTED]
The Government Street S&P 500
Equity Fund Index
-------------------------------------
Consumer Discretionary 8.7% 10.5%
Consumer Staples 7.8% 9.6%
Energy 12.7% 10.1%
Financials 18.6% 21.6%
Health Care 13.0% 11.9%
Industrials 13.3% 10.9%
Information Technology 10.9% 14.9%
Materials 4.6% 3.1%
Telecommunications Services 0.3% 3.7%
Utilities 1.8% 3.7%
Exchange-Traded Funds 8.0% 0.0%
Cash Equivalents 0.3% 0.0%
TOP TEN HOLDINGS
SECURITY DESCRIPTION % OF NET ASSETS
-----------------------------------------------------------
iShares MSCI EAFE Index Fund 4.4%
Bank of America Corporation 3.7%
Altria Group, Inc. 3.3%
UnitedHealth Group, Inc. 3.0%
U.S. Bancorp 2.8%
Wellpoint, Inc. 2.6%
American Express Company 2.4%
Florida Rock Industries, Inc. 2.3%
Chevron Corporation 2.2%
Procter & Gamble Company (The) 2.2%
10
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
INDUSTRY CONCENTRATION VS. THE S&P MIDCAP 400 INDEX (% OF NET ASSETS)
[GRAPHIC OMITTED]
The Government Street S&P MidCap
Mid-Cap Fund 400 Index
------------------------------------------
Consumer Discretionary 10.3% 14.9%
Consumer Staples 2.2% 2.5%
Energy 5.9% 8.1%
Financials 16.0% 16.9%
Health Care 11.9% 11.1%
Industrials 14.7% 15.6%
Information Technology 15.3% 15.8%
Materials 6.2% 6.2%
Telecommunications Services 0.2% 0.8%
Utilities 7.5% 8.1%
Cash Equivalents 9.8% 0.0%
TOP TEN HOLDINGS
SECURITY DESCRIPTION % OF NET ASSETS
-----------------------------------------------------------
Gilead Sciences, Inc. 1.7%
Covance, Inc. 1.4%
Coventry Health Care, Inc. 1.4%
Martin Marietta Materials, Inc. 1.2%
Harrah's Entertainment, Inc. 1.1%
Compass Bancshares, Inc. 1.1%
Trinity Industries, Inc. 1.1%
Valero Energy Corporation 1.1%
Albemarle Corporation 1.1%
Alliant Energy Corporation 1.1%
11
THE GOVERNMENT STREET BOND FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
ASSET ALLOCATION VS. THE LEHMAN INTERNEDIATE
GOVERNMENT/CREDIT BOND INDEX (% OF PORTFOLIO)
[GRAPHIC OMITTED]
Lehman Government/
The Government Street Corporate Intermediate
Bond Fund Bond Index
-----------------------------------------------
U.S. Treasury Obligations 2.4% 40.5%
U.S. Agency Obligations 23.4% 21.7%
Corporate Bonds 45.8% 37.8%
Mortgage-Backed Securities 23.6% 0.0%
Cash Equivalents 4.8% 0.0%
DISTRIBUTION BY MATURITY
-----------------------------------------------
Maturity % Holdings
-------- ----------
Under 1 year 32.6%
1-3 Years 8.7%
3-5 Years 25.6%
5-7 Years 10.0%
7-10 Years 0.6%
Over 10 Years 22.5%
DISTRIBUTION BY RATING
-----------------------------------------------
Rating % Holdings
------ ----------
AAA 59.2%
A+ 8.8%
A 28.4%
BBB- 3.6%
12
THE ALABAMA TAX FREE BOND FUND
PORTFOLIO INFORMATION
MARCH 31, 2007 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF HOLDINGS)
[GRAPHIC OMITTED]
Revenue Bonds - 28.8%
Pre-Refunded & Escrowed Bonds - 16.1%
General Obligation Bonds - 52.0%
Cash Equivalents - 3.1%
DISTRIBUTION BY RATING
-------------------------------------------------
Rating % Holdings
------ ----------
AAA 61.6%
AA 38.4%
13
THE GOVERNMENT STREET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2007
=====================================================================================================
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 ...................... $45,315,831 $25,525,920 $30,190,393 $25,375,247
=========== =========== =========== ===========
At value (Note 1) ........................ $88,345,336 $33,994,718 $29,876,140 $25,709,817
Dividends and interest receivable .......... 91,012 19,819 287,571 297,563
Receivable for capital shares sold ......... 6,155 54,781 -- --
Other assets ............................... 6,821 5,289 5,217 4,718
----------- ----------- ----------- -----------
TOTAL ASSETS ............................. 88,449,324 34,074,607 30,168,928 26,012,098
----------- ----------- ----------- -----------
LIABILITIES
Distributions payable ...................... 83,164 5,244 5,986 24,044
Payable for capital shares redeemed ........ 547,202 84,106 404,824 4,801
Accrued investment advisory fees (Note 3) .. 44,592 15,979 10,019 7,220
Accrued administration fees (Note 3) ....... 9,000 4,100 1,900 3,300
Accrued compliance fees (Note 3) ........... 750 550 550 500
Other accrued expenses ..................... 8,115 3,775 4,525 3,800
----------- ----------- ----------- -----------
TOTAL LIABILITIES ........................ 692,823 113,754 427,804 43,665
----------- ----------- ----------- -----------
NET ASSETS ................................. $87,756,501 $33,960,853 $29,741,124 $25,968,433
=========== =========== =========== ===========
Net assets consist of:
Paid-in capital ............................ $44,719,448 $25,435,005 $32,995,442 $25,689,876
Accumulated undistributed (overdistributed)
net investment income .................... 7,415 56,792 (71,879) 12,778
Accumulated net realized gains (losses)
from security transactions ............... 133 258 (2,868,186) (68,791)
Net unrealized appreciation (depreciation)
on investments ........................... 43,029,505 8,468,798 (314,253) 334,570
----------- ----------- ----------- -----------
Net assets ................................. $87,756,501 $33,960,853 $29,741,124 $25,968,433
=========== =========== =========== ===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ............................ 1,814,429 2,585,769 1,500,346 2,500,143
=========== =========== =========== ===========
Net asset value, offering price and
redemption price per share (Note 1) ...... $ 48.37 $ 13.13 $ 19.82 $ 10.39
=========== =========== =========== ===========
See accompanying notes to financial statements.
14
THE GOVERNMENT STREET FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 2007
==============================================================================================
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest ............................. $ 64,799 $ 73,648 $1,612,067 $ 990,889
Dividends ............................ 1,578,534 380,927 59 54,544
----------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME ............ 1,643,333 454,575 1,612,126 1,045,433
----------- ---------- ---------- ----------
EXPENSES
Investment advisory fees (Note 3) .... 549,698 249,844 154,744 89,544
Administration fees (Note 3) ......... 110,366 48,785 23,147 38,276
Professional fees .................... 18,464 16,164 17,264 15,064
Trustees' fees and expenses .......... 12,513 12,513 12,513 12,513
Custodian fees ....................... 18,256 8,478 11,869 5,147
Compliance fees (Note 3) ............ 9,243 5,522 5,824 5,013
Postage and supplies ................. 7,798 5,042 5,721 4,895
Pricing costs ........................ 2,352 4,530 5,894 9,950
Registration fees .................... 5,858 3,923 3,356 2,898
Account maintenance fees ............. 6,603 5,840 2,220 1,093
Insurance expense .................... 7,148 2,953 2,879 2,207
Printing of shareholder reports ...... 5,312 2,391 2,400 2,053
Other expenses ....................... 14,057 5,773 6,161 5,311
----------- ---------- ---------- ----------
TOTAL EXPENSES ..................... 767,668 371,758 253,992 193,964
Fees waived by the Adviser (Note 3) .. -- (5,320) (34,257) (27,666)
----------- ---------- ---------- ----------
NET EXPENSES ....................... 767,668 366,438 219,735 166,298
----------- ---------- ---------- ----------
NET INVESTMENT INCOME .................. 875,665 88,137 1,392,391 879,135
----------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses) from
security transactions .............. 8,725,441 1,827,568 (398,481) 20,874
Net change in unrealized appreciation/
depreciation on investments ........ (3,740,630) (804,624) 672,643 (44,862)
----------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS ........ 4,984,811 1,022,944 274,162 (23,988)
----------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS ...................... $ 5,860,476 $1,111,081 $1,666,553 $ 855,147
=========== ========== ========== ==========
See accompanying notes to financial statements.
15
THE GOVERNMENT STREET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
========================================================================================================
GOVERNMENT STREET GOVERNMENT STREET
EQUITY FUND MID-CAP FUND
---------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006
- --------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .................... $ 875,665 $ 1,280,429 $ 88,137 $ 145,958
Net realized gains from
security transactions .................. 8,725,441 7,070,087 1,827,568 1,116,759
Net change in unrealized appreciation/
depreciation on investments ............ (3,740,630) 7,628,352 (804,624) 6,448,351
------------ ------------ ----------- ------------
Net increase in net assets from operations.. 5,860,476 15,978,868 1,111,081 7,711,068
------------ ------------ ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............... (871,818) (1,289,147) (123,370) (64,987)
From realized capital gains
on security transactions ............... (13,025,536) -- (2,640,776) --
------------ ------------ ----------- ------------
Net decrease in net assets from
distributions to shareholders ............ (13,897,354) (1,289,147) (2,764,146) (64,987)
------------ ------------ ----------- ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ................ 4,965,258 7,008,051 2,730,131 10,696,669
Net asset value of shares issued in
reinvestment of distributions
to shareholders ........................ 13,483,748 1,259,283 2,748,844 62,706
Payments for shares redeemed ............. (29,898,475) (48,635,746) (7,483,807) (12,812,121)
------------ ------------ ----------- ------------
Net decrease in net assets from
capital share transactions ............... (11,449,469) (40,368,412) (2,004,832) (2,052,746)
------------ ------------ ----------- ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ............................ (19,486,347) (25,678,691) (3,657,897) 5,593,335
NET ASSETS
Beginning of year ........................ 107,242,848 132,921,539 37,618,750 32,025,415
------------ ------------ ----------- ------------
End of year .............................. $ 87,756,501 $107,242,848 $33,960,853 $ 37,618,750
============ ============ =========== ============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME .................... $ 7,415 $ 3,568 $ 56,792 $ 92,025
============ ============ =========== ============
Capital share activity
Sold ..................................... 101,372 142,558 209,562 869,617
Reinvested ............................... 275,696 25,262 209,747 4,914
Redeemed ................................. (608,524) (943,681) (577,999) (963,680)
------------ ------------ ----------- ------------
Net decrease in shares outstanding ....... (231,456) (775,861) (158,690) (89,149)
Shares outstanding, beginning of year .... 2,045,885 2,821,746 2,744,459 2,833,608
------------ ------------ ----------- ------------
Shares outstanding, end of year .......... 1,814,429 2,045,885 2,585,769 2,744,459
============ ============ =========== ============
See accompanying notes to financial statements.
16
THE GOVERNMENT STREET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
=======================================================================================================
GOVERNMENT STREET ALABAMA TAX FREE
BOND FUND BOND FUND
---------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2007 2006 2007 2006
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ................... $ 1,392,391 $ 2,189,049 $ 879,135 $ 1,041,473
Net realized gains (losses) from
security transactions ................. (398,481) 88,201 20,874 (1,406)
Net change in unrealized appreciation/
depreciation on investments ........... 672,643 (1,219,754) (44,862) (443,003)
------------ ------------ ----------- ------------
Net increase in net assets
from operations ......................... 1,666,553 1,057,496 855,147 597,064
------------ ------------ ----------- ------------
DISTRIBUTIONS TO SHAREHOLDER
From and/or in excess of net
investment income ..................... (1,429,567) (2,795,083) (876,155) (1,031,750)
------------ ------------ ----------- ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 2,278,502 6,594,193 2,206,930 2,730,197
Net asset value of shares issued in
reinvestment of distributions
to shareholders ....................... 1,339,337 2,668,658 569,451 748,246
Payments for shares redeemed ............ (10,348,383) (31,209,270) (2,968,731) (11,386,673)
------------ ------------ ----------- ------------
Net decrease in net assets from
capital share transactions .............. (6,730,544) (21,946,419) (192,350) (7,908,230)
------------ ------------ ----------- ------------
TOTAL DECREASE IN NET ASSETS .............. (6,493,558) (23,684,006) (213,358) (8,342,916)
NET ASSETS
Beginning of year ....................... 36,234,682 59,918,688 26,181,791 34,524,707
------------ ------------ ----------- ------------
End of year ............................. $ 29,741,124 $ 36,234,682 $25,968,433 $ 26,181,791
============ ============ =========== ============
ACCUMULATED UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME ....................... $ (71,879) $ (703,627) $ 12,778 $ 10,659
============ ============ =========== ============
Capital share activity
Sold .................................... 115,201 326,991 212,370 259,561
Reinvested .............................. 67,923 133,172 54,790 71,117
Redeemed ................................ (525,317) (1,570,726) (285,665) (1,085,020)
------------ ------------ ----------- ------------
Net decrease in shares outstanding ...... (342,193) (1,110,563) (18,505) (754,342)
Shares outstanding, beginning of year ... 1,842,539 2,953,102 2,518,648 3,272,990
------------ ------------ ----------- ------------
Shares outstanding, end of year ......... 1,500,346 1,842,539 2,500,143 2,518,648
============ ============ =========== ============
See accompanying notes to financial statements.
17
THE GOVERNMENT STREET EQUITY FUND
FINANCIAL HIGHLIGHTS
=================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
=================================================================================================
YEARS ENDED MARCH 31,
---------------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------------
Net asset value at beginning of year ...... $ 52.42 $ 47.11 $ 46.10 $ 34.13 $ 45.55
------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment income ................... 0.48 0.50 0.50 0.32 0.28
Net realized and unrealized
gains (losses) on investments ......... 2.90 5.31 1.01 11.97 (11.42)
------- -------- -------- -------- -------
Total from investment operations .......... 3.38 5.81 1.51 12.29 (11.14)
------- -------- -------- -------- -------
Less distributions:
Dividends from net investment income .... (0.48) (0.50) (0.50) (0.32) (0.28)
Distributions from net realized gains ... (6.95) -- -- -- --
------- -------- -------- -------- -------
Total distributions ....................... (7.43) (0.50) (0.50) (0.32) (0.28)
------- -------- -------- -------- -------
Net asset value at end of year ............ $ 48.37 $ 52.42 $ 47.11 $ 46.10 $ 34.13
======= ======== ======== ======== =======
Total return (a) .......................... 7.04% 12.39% 3.27% 36.09% (24.47%)
======= ======== ======== ======== =======
Net assets at end of year (000's) ......... $87,757 $107,243 $132,922 $129,719 $87,837
======= ======== ======== ======== =======
Ratio of expenses to average net assets ... 0.84% 0.78% 0.76% 0.79% 0.81%
Ratio of net investment income
to average net assets ................... 0.96% 0.95% 1.08% 0.77% 0.76%
Portfolio turnover rate ................... 15% 17% 13% 15% 12%
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See accompanying notes to financial statements.
18
THE GOVERNMENT STREET MID-CAP FUND
FINANCIAL HIGHLIGHTS
=========================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
=========================================================================================
PERIOD
YEARS ENDED MARCH 31, ENDED
-------------------- MARCH 31,
2007 2006 2005 2004 (a)
- -----------------------------------------------------------------------------------------
Net asset value at beginning of period ... $ 13.71 $ 11.30 $ 10.33 $ 10.00
------- ------- ------- -------
Income from investment operations:
Net investment income .................. 0.04 0.05 0.01 0.01
Net realized and unrealized
gains on investments ................. 0.45 2.38 0.97 0.68
------- ------- ------- -------
Total from investment operations ......... 0.49 2.43 0.98 0.69
------- ------- ------- -------
Less distributions:
Dividends from net investment income ... (0.05) (0.02) (0.01) (0.01)
Distributions from net realized gains... (1.02) -- (0.00)(b) (0.35)
------- ------- ------- -------
Total distributions ...................... (1.07) (0.02) (0.01) (0.36)
------- ------- ------- -------
Net asset value at end of period ......... $ 13.13 $ 13.71 $ 11.30 $ 10.33
======= ======= ======= =======
Total return (c) ......................... 3.83% 21.51% 9.47% 6.83%(d)
======= ======= ======= =======
Net assets at end of period (000's) ...... $33,961 $37,619 $32,025 $19,227
======= ======= ======= =======
Ratio of net expenses to
average net assets (e) ................. 1.10% 1.10% 1.10% 1.09%(f)
Ratio of net investment income
to average net assets .................. 0.26% 0.37% 0.14% 0.11%(f)
Portfolio turnover rate .................. 11% 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 shown 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 1.12%, 1.11%, 1.23%
and 1.71%(f) for the periods ended March 31, 2007, 2006, 2005 and 2004,
respectively (Note 3).
(f) Annualized.
See accompanying notes to financial statements.
19
THE GOVERNMENT STREET BOND FUND
FINANCIAL HIGHLIGHTS
=============================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
=============================================================================================
YEARS ENDED MARCH 31,
-------------------------------------------------
2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 19.67 $ 20.29 $ 21.24 $ 21.55 $ 20.75
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ................. 0.81 0.77(a) 0.71 0.81 0.99
Net realized and unrealized
gains (losses) on investments ....... 0.26 (0.41) (0.71) (0.11) 0.92
------- ------- ------- ------- -------
Total from investment operations ........ 1.07 0.36 0.00 0.70 1.91
------- ------- ------- ------- -------
Dividends from and/or in excess of
net investment income ................. (0.92) (0.98) (0.95) (1.01) (1.11)
------- ------- ------- ------- -------
Net asset value at end of year .......... $ 19.82 $ 19.67 $ 20.29 $ 21.24 $ 21.55
======= ======= ======= ======= =======
Total return (b) ........................ 5.56% 1.80% 0.04% 3.34% 9.36%
======= ======= ======= ======= =======
Net assets at end of year (000's) ....... $29,741 $36,235 $59,919 $64,005 $58,665
======= ======= ======= ======= =======
Ratio of net expenses
to average net assets (c) ............. 0.71% 0.71% 0.71% 0.70% 0.71%
Ratio of net investment income
to average net assets ................. 4.50% 3.75% 3.44% 3.65% 4.62%
Portfolio turnover rate ................. 26% 32% 28% 33% 39%
(a) Calculated using weighted average shares outstanding during the year.
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(c) Absent investment advisory fees voluntarily waived by the Adviser, the
ratio of expenses to average net assets would have been 0.82% and 0.74% for
the years ended March 31, 2007 and 2006, respectively (Note 3).
See accompanying notes to financial statements.
20
THE ALABAMA TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
===========================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
===========================================================================================
YEARS ENDED MARCH 31,
-----------------------------------------------
2007 2006 2005 2004 2003
- -------------------------------------------------------------------------------------------
Net asset value at beginning of year .... $ 10.40 $ 10.55 $ 10.90 $ 10.89 $ 10.40
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ................. 0.36 0.34 0.35 0.35 0.40
Net realized and unrealized
gains (losses) on investments ....... (0.01) (0.15) (0.36) 0.01 0.49
------- ------- ------- ------- -------
Total from investment operations ........ 0.35 0.19 (0.01) 0.36 0.89
------- ------- ------- ------- -------
Dividends from net investment income .... (0.36) (0.34) (0.34) (0.35) (0.40)
------- ------- ------- ------- -------
Net asset value at end of year .......... $ 10.39 $ 10.40 $ 10.55 $ 10.90 $ 10.89
======= ======= ======= ======= =======
Total return (a) ........................ 3.38% 1.80% (0.06%) 3.40% 8.67%
======= ======= ======= ======= =======
Net assets at end of year (000's) ....... $25,968 $26,182 $34,525 $38,702 $34,729
======= ======= ======= ======= =======
Ratio of net expenses to
average net assets (b) ................ 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of net investment income
to average net assets ................. 3.44% 3.25% 3.21% 3.26% 3.74%
Portfolio turnover rate ................. 15% 5% 4% 10% 9%
(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 shown do not
reflect the deduction of taxes a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(b) Absent investment advisory fees voluntarily waived by the Adviser, the
ratios of expenses to average net assets would have been 0.76%, 0.73%,
0.69%, 0.68% and 0.69% for the years ended March 31, 2007, 2006, 2005, 2004
and 2003, respectively (Note 3).
See accompanying notes to financial statements.
21
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 91.7% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 8.7%
4,000 CBS Corporation - Class B ........................ $ 122,360
10,000 Harrah's Entertainment, Inc. ..................... 844,500
50,000 Home Depot, Inc. ................................. 1,837,000
4,000 J.C. Penney Company, Inc. ........................ 328,640
10,000 Johnson Controls, Inc. ........................... 946,200
5,500 NIKE, Inc. - Class B ............................. 584,430
5,000 Nordstrom, Inc. .................................. 264,700
10,000 Saks, Inc. (a) ................................... 208,400
26,000 Starbucks Corporation (a) ........................ 815,360
50,000 Walt Disney Company (The) ........................ 1,721,500
-----------
7,673,090
-----------
CONSUMER STAPLES -- 7.8%
33,000 Altria Group, Inc. ............................... 2,897,730
9,000 ConAgra Foods, Inc. .............................. 224,190
10,000 PepsiCo, Inc. .................................... 635,600
30,000 Procter & Gamble Company (The) ................... 1,894,800
25,000 Walgreen Company ................................. 1,147,250
-----------
6,799,570
-----------
ENERGY -- 12.7%
23,314 Apache Corporation ............................... 1,648,300
10,000 Baker Hughes, Inc. ............................... 661,300
10,000 BP plc - ADR ..................................... 647,500
26,000 Chevron Corporation .............................. 1,922,960
27,000 ConocoPhillips ................................... 1,845,450
21,300 Exxon Mobil Corporation .......................... 1,607,085
476 Hugoton Royalty Trust ............................ 11,986
32,990 Spectra Energy Corporation ....................... 866,647
10,000 Transocean, Inc. (a) ............................. 817,000
10,000 Valero Energy Corporation ........................ 644,900
8,000 XTO Energy, Inc. ................................. 438,480
----------
11,111,608
----------
FINANCIALS -- 18.6%
27,080 Aegon N.V. - ARS ................................. 539,975
30,000 AFLAC, Inc. ...................................... 1,411,800
37,000 American Express Company ......................... 2,086,800
62,870 Bank of America Corporation ...................... 3,207,627
15,000 Charles Schwab Corporation ....................... 274,350
35,000 Citigroup, Inc. .................................. 1,796,900
27,200 Colonial Properties Trust ........................ 1,242,224
7,000 Goldman Sachs Group, Inc. (The) .................. 1,446,410
6,000 JPMorgan Chase & Company ......................... 290,280
5,000 MetLife, Inc. .................................... 315,750
30,000 Progressive Corporation .......................... 654,600
15,000 Rayonier, Inc. ................................... 645,000
70,000 U.S. Bancorp ..................................... 2,447,900
-----------
16,359,616
-----------
22
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 91.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
HEALTH CARE -- 13.0%
16,000 Amgen, Inc. (a)................................... $ 894,080
17,000 Becton, Dickinson & Company....................... 1,307,130
25,000 Cardinal Health, Inc.............................. 1,823,750
20,000 Elan Corporation (a).............................. 265,800
5,000 Fresenius Medical Care AG & Company - ADR......... 243,350
21,000 Johnson & Johnson................................. 1,265,460
11,250 Techne Corporation (a)............................ 642,375
50,000 UnitedHealth Group, Inc. ......................... 2,648,500
28,000 WellPoint, Inc. (a)............................... 2,270,800
-----------
11,361,245
-----------
INDUSTRIALS -- 13.3%
26,000 Caterpillar, Inc.................................. 1,742,780
2,500 C.H. Robinson Worldwide, Inc. .................... 119,375
30,000 Emerson Electric Company.......................... 1,292,700
15,000 Fedex Corporation................................. 1,611,450
23,000 General Dynamics Corporation...................... 1,757,200
25,000 General Electric Company.......................... 884,000
16,000 Ingersoll-Rand Company Ltd. - Class A............. 693,920
2,500 Joy Global, Inc................................... 107,250
10,000 Norfolk Southern Corporation...................... 506,000
32,000 Quanta Services, Inc. (a)......................... 807,040
2,500 Stericycle, Inc. (a).............................. 203,750
16,000 United Technologies Corporation................... 1,040,000
16,000 Waters Corporation (a)............................ 928,000
-----------
11,693,465
-----------
INFORMATION TECHNOLOGY -- 10.9%
44,000 Adobe Systems, Inc. (a)........................... 1,834,800
5,000 Applied Materials, Inc............................ 91,600
20,000 Automatic Data Processing, Inc. .................. 968,000
4,000 Cerner Corporation (a)............................ 217,800
67,000 Cisco Systems, Inc. (a)........................... 1,710,510
30,000 Corning, Inc. (a)................................. 682,200
37,000 Hewlett-Packard Company........................... 1,485,180
15,100 Intel Corporation................................. 288,863
7,000 International Business Machines Corporation....... 659,820
5,000 Microsoft Corporation............................. 139,350
18,000 Network Appliance, Inc. (a)....................... 657,360
27,000 Texas Instruments, Inc. .......................... 812,700
-----------
9,548,183
-----------
MATERIALS -- 4.6%
7,000 Alcoa, Inc........................................ 237,300
30,000 Florida Rock Industries, Inc...................... 2,018,700
10,000 Newmont Mining Corporation........................ 419,900
10,000 Nucor Corporation................................. 651,300
7,000 POSCO - ADR....................................... 727,650
-----------
4,054,850
-----------
23
THE GOVERNMENT STREET EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 91.7% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 0.3%
6,000 AT&T, Inc......................................... $ 236,580
-----------
UTILITIES -- 1.8%
65,980 Duke Energy Corporation........................... 1,338,734
5,000 Wisconsin Energy Corporation...................... 242,600
-----------
1,581,334
-----------
TOTAL COMMON STOCKS (Cost $38,096,408)............ $80,419,541
-----------
================================================================================
SHARES EXCHANGE-TRADED FUNDS -- 8.0% VALUE
- --------------------------------------------------------------------------------
50,500 iShares MSCI EAFE Index Fund...................... $ 3,855,675
23,665 Rydex S&P Equal Weight ETF........................ 1,148,226
4,000 Vanguard Consumer Discretionary ETF............... 245,200
5,000 Vanguard Consumer Staples ETF..................... 328,300
9,000 Vanguard Financials ETF........................... 571,590
7,000 Vanguard Information Technology Index ETF......... 366,450
7,000 Vanguard Telecommunication Services ETF........... 537,110
-----------
TOTAL EXCHANGE-TRADED FUNDS (Cost $6,346,179)..... $ 7,052,551
-----------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 1.0% VALUE
- --------------------------------------------------------------------------------
$ 872,000 Prudential Funding, LLC, discount, due 04/02/2007
(Cost $871,875)................................. $ 871,875
-----------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
1,369 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $1,369)............................. $ 1,369
-----------
TOTAL INVESTMENTS AT VALUE -- 100.7%
(Cost $45,315,831).............................. $88,345,336
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%) (588,835)
-----------
NET ASSETS -- 100.0%.............................. $87,756,501
===========
(a) Non-income producing security.
ADR - American Depositary Receipt
ARS - American Registered Shares
See accompanying notes to financial statements.
24
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
SHARES COMMON STOCKS -- 90.2% VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 10.3%
2,500 AnnTaylor Stores Corporation (a).................. $ 96,950
1,000 ArvinMeritor, Inc................................. 18,250
6,500 Barnes & Noble, Inc. ............................. 256,425
5,700 BJ's Wholesale Club, Inc. (a)..................... 192,831
2,000 Bob Evans Farms, Inc. ............................ 73,900
1,000 BorgWarner, Inc................................... 75,420
1,700 CBRL Group, Inc................................... 78,710
1,500 Coach, Inc. (a)................................... 75,075
2,000 DreamWorks Animation SKG, Inc. (a)................ 61,160
8,000 GameStop Corporation - Class A (a)................ 260,560
4,500 Harrah's Entertainment, Inc....................... 380,025
3,000 Hasbro, Inc....................................... 85,860
5,500 Herman Miller, Inc. .............................. 184,195
3,800 Hilton Hotels Corporation......................... 136,648
2,500 IAC/InterActiveCorp (a)........................... 94,275
500 International Speedway Corporation - Class A...... 25,850
2,500 ITT Educational Services, Inc. (a)................ 203,725
3,000 Limited Brands, Inc............................... 78,180
3,000 Mattel, Inc. ..................................... 82,710
5,000 MSC Industrial Direct Company, Inc................ 233,400
2,200 OfficeMax, Inc. .................................. 116,028
5,800 O'Reilly Automotive, Inc. (a)..................... 191,980
2,100 Phillips-Van Heusen Corporation................... 123,480
2,000 Ross Stores, Inc.................................. 68,800
3,500 Saks, Inc. (a).................................... 72,940
2,000 Scholastic Corporation (a)........................ 62,200
5,000 Service Corporation International................. 59,300
2,000 Snap-on, Inc...................................... 96,200
-----------
3,485,077
-----------
CONSUMER STAPLES -- 2.2%
5,400 Church & Dwight Company, Inc...................... 271,890
6,000 Hormel Foods Corporation.......................... 223,140
4,700 J.M. Smucker Company.............................. 250,604
-----------
745,634
-----------
ENERGY -- 5.9%
3,760 Cameron International Corporation (a)............. 236,090
4,000 FMC Technologies, Inc. (a)........................ 279,040
4,350 Murphy Oil Corporation............................ 232,290
2,800 Newfield Exploration Company (a).................. 116,788
2,680 Noble Corporation................................. 210,862
4,800 Peabody Energy Corporation........................ 193,152
5,000 Pride International, Inc. (a)..................... 150,500
4,500 Smith International, Inc.......................... 216,225
5,800 Valero Energy Corporation......................... 374,042
-----------
2,008,989
-----------
25
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 90.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCIALS -- 16.1%
8,400 American Financial Group, Inc..................... $ 285,936
7,300 Associated Banc-Corp.............................. 245,280
6,000 Bank of Hawaii Corporation........................ 318,180
10,050 Berkley (W.R.) Corporation........................ 332,856
9,000 Brown & Brown, Inc. .............................. 243,180
5,500 Compass Bancshares, Inc........................... 378,400
5,600 Cullen/Frost Bankers, Inc......................... 293,048
10,250 Eaton Vance Corporation........................... 365,310
2,600 Everest Re Group Ltd.............................. 250,042
9,300 HCC Insurance Holdings, Inc....................... 286,440
6,200 Investors Financial Services Corporation.......... 360,530
10,400 Jefferies Group, Inc.............................. 301,080
2,900 Legg Mason, Inc................................... 273,209
4,600 Liberty Property Trust............................ 224,112
1,129 PNC Financial Services Group, Inc................. 81,254
6,941 Potlatch Corporation.............................. 317,759
4,000 Radian Group, Inc................................. 219,520
7,000 Rayonier, Inc. ................................... 301,000
3,300 Westamerica Bancorporation........................ 158,961
5,200 Wilmington Trust Corporation...................... 219,284
-----------
5,455,381
-----------
HEALTH CARE -- 11.9%
1,400 Alcon, Inc........................................ 184,548
2,000 Applera Corporation - Applied Biosystems Group.... 59,140
3,450 Barr Pharmaceuticals, Inc. (a).................... 159,908
2,500 Bio-Rad Laboratories, Inc. - Class A (a).......... 174,600
1,500 Cephalon, Inc. (a)................................ 106,815
8,000 Community Health Systems, Inc. (a)................ 282,000
8,000 Covance, Inc. (a)................................. 474,720
8,250 Coventry Health Care, Inc. (a).................... 462,412
5,600 DENTSPLY International, Inc....................... 183,400
1,000 Elan Corporation plc - ADR (a).................... 13,290
4,000 Fresenius Medical Care AG & Company - ADR......... 194,680
7,500 Gilead Sciences, Inc. (a)......................... 573,750
2,800 Henry Schein, Inc. (a)............................ 154,504
500 Millipore Corporation (a)......................... 36,235
8,700 Mylan Laboratories, Inc........................... 183,918
2,000 ResMed, Inc. (a).................................. 100,740
4,500 Techne Corporation (a)............................ 256,950
3,900 UnitedHealth Group, Inc. ......................... 206,583
4,600 Varian Medical Systems, Inc. (a).................. 219,374
-----------
4,027,567
-----------
INDUSTRIALS -- 14.6%
3,000 Alexander & Baldwin, Inc.......................... 151,320
7,500 AMETEK, Inc....................................... 259,050
5,000 ChoicePoint, Inc. (a)............................. 187,150
6,000 C.H. Robinson Worldwide, Inc. .................... 286,500
3,000 Corporate Executive Board Company................. 227,880
6,000 Donaldson Company, Inc............................ 216,600
26
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 90.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIALS -- 14.6% (CONTINUED)
6,000 Expeditors International of Washington, Inc....... $ 247,920
7,000 Fastenal Company.................................. 245,350
3,500 Goodrich Corporation.............................. 180,180
6,000 Graco, Inc. ...................................... 234,960
6,000 Jacobs Engineering Group, Inc. (a)................ 279,900
2,000 Joy Global, Inc................................... 85,800
3,000 L-3 Communications Holdings, Inc. ................ 262,410
4,000 Manpower, Inc. ................................... 295,080
3,000 Overseas Shipholding Group, Inc................... 187,800
5,000 SPX Corporation................................... 351,000
4,500 Stericycle, Inc. (a).............................. 366,750
8,000 Swift Transportation Company, Inc. (a)............ 249,280
2,750 Teleflex, Inc. ................................... 187,193
2,000 Thomas & Betts Corporation (a).................... 97,640
9,000 Trinity Industries, Inc........................... 377,280
-----------
4,977,043
-----------
INFORMATION TECHNOLOGY -- 15.3%
8,000 Activision, Inc. (a).............................. 151,520
8,000 Acxiom Corporation................................ 171,120
8,500 ADC Telecommunications, Inc. (a).................. 142,290
5,000 ADTRAN, Inc....................................... 121,750
4,000 Advent Software, Inc. (a)......................... 139,480
5,000 Alliance Data Systems Corporation (a)............. 308,100
8,000 Arrow Electronics, Inc. (a)....................... 302,000
3,500 CDW Corporation................................... 215,005
6,000 Cerner Corporation (a)............................ 326,700
4,500 CheckFree Corporation (a)......................... 166,905
4,000 Cognizant Technology Solutions Corporation (a).... 353,080
6,500 Cree, Inc. (a).................................... 106,990
4,000 DST Systems, Inc. (a)............................. 300,800
5,500 Harris Corporation................................ 280,225
10,000 Integrated Device Technology, Inc. (a)............ 154,200
9,000 Jack Henry & Associates, Inc...................... 216,450
7,000 Lam Research Corporation (a)...................... 331,380
5,000 Linear Technology Corporation..................... 157,950
6,000 Macrovision Corporation (a)....................... 150,300
5,000 Microchip Technology, Inc......................... 177,650
8,000 National Instruments Corporation.................. 209,840
4,000 Plantronics, Inc. ................................ 94,480
8,000 SanDisk Corporation (a)........................... 350,400
7,000 Xilinx, Inc....................................... 180,110
2,500 Zebra Technologies Corporation (a)................ 96,525
-----------
5,205,250
-----------
MATERIALS -- 6.2%
4,000 Airgas, Inc. ..................................... 168,600
9,000 Albemarle Corporation............................. 372,060
4,000 Cabot Corporation................................. 190,920
3,200 Eagle Materials, Inc.............................. 142,816
3,000 Martin Marietta Materials, Inc.................... 405,600
27
THE GOVERNMENT STREET MID-CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS -- 90.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
MATERIALS -- 6.2% (CONTINUED)
4,000 Scotts Miracle-Gro Company (The) - Class A ...... $ 176,120
5,000 Sonoco Products Company........................... 187,900
6,500 Steel Dynamics, Inc............................... 280,800
7,000 Valspar Corporation (The)......................... 194,810
-----------
2,119,626
-----------
TELECOMMUNICATIONS SERVICES -- 0.2%
1,000 Telephone and Data Systems, Inc. ................. 59,620
-----------
UTILITIES -- 7.5%
7,000 AGL Resources, Inc................................ 299,040
8,300 Alliant Energy Corporation........................ 372,006
7,000 Equitable Resources, Inc.......................... 338,240
8,850 MDU Resources Group, Inc. ........................ 254,349
5,750 ONEOK, Inc........................................ 258,750
7,900 Pepco Holdings, Inc............................... 229,258
10,800 Puget Energy, Inc................................. 277,344
6,300 SCANA Corporation................................. 271,971
5,000 Wisconsin Energy Corporation...................... 242,600
-----------
2,543,558
-----------
TOTAL COMMON STOCKS (Cost $22,158,947)............ $30,627,745
-----------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 9.9% VALUE
- --------------------------------------------------------------------------------
$1,666,000 American Express Credit Corporation, discount,
due 04/02/2007.................................. $ 1,665,761
1,700,000 Prudential Funding, LLC discount, due 04/02/2007.. 1,699,756
-----------
TOTAL COMMERCIAL PAPER (Cost $3,365,517).......... $ 3,365,517
-----------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
1,456 AIM STIT - STIC Prime Portfolio -
Institutional Class (Cost $1,456)............... $ 1,456
-----------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $25,525,920).............................. $33,994,718
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%).. (33,865)
-----------
NET ASSETS -- 100.0%.............................. $33,960,853
===========
(a) Non-income producing security.
ADR - American Depositary Receipt
See accompanying notes to financial statements.
28
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
PAR VALUE U.S. TREASURY AND AGENCY OBLIGATIONS -- 32.8% VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 0.3%
$ 100,000 5.625%, due 05/15/2008 ........................... $ 100,816
-----------
FEDERAL HOME LOAN BANK -- 24.1%
500,000 4.005%, due 06/15/2007 ........................... 498,648
450,000 4.00%, due 06/29/2007 ............................ 448,667
1,000,000 5.25%, due 09/04/2007 ............................ 1,000,016
735,000 5.10%, due 03/06/2008 ............................ 735,033
500,000 5.375%, due 09/14/2009 ........................... 499,278
1,000,000 5.75%, due 04/20/2010 ............................ 1,000,187
2,000,000 5.00%, due 08/16/2011 ............................ 1,981,926
1,000,000 5.00%, due 06/13/2012 ............................ 988,402
-----------
7,152,157
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 5.0%
1,500,000 5.35%, due 10/20/2008 ............................ 1,499,163
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 3.4%
1,000,000 5.00%, due 09/14/2007 ............................ 998,731
-----------
TOTAL U.S. TREASURY AND AGENCY OBLIGATIONS
(Cost $9,796,256) .............................. $ 9,750,867
-----------
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 23.5% VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.2%
$ 56,513 Pool #438434, 6.50%, due 01/15/2013............... $ 57,892
5,919 Pool #470177, 7.00%, due 03/15/2014............... 6,107
24,818 Pool #518403, 7.00%, due 09/15/2014............... 25,607
1,013 Pool #181540, 8.00%, due 02/15/2017............... 1,075
160,789 Pool #581879, 6.50%, due 03/15/2017............... 164,713
15,601 Pool #493659, 6.50%, due 12/15/2018............... 16,007
77,273 Pool #476695, 6.50%, due 10/15/2023............... 79,283
32,872 Pool #366710, 6.50%, due 02/15/2024............... 33,727
28,756 Pool #453826, 7.25%, due 09/15/2027............... 29,825
51,505 Pool #412360, 7.00%, due 11/15/2027............... 53,530
172,205 Pool #447408, 7.00%, due 01/15/2028............... 178,978
12,516 Pool #454162, 7.00%, due 05/15/2028............... 13,008
109,260 Pool #780825, 6.50%, due 07/15/2028............... 112,103
22,281 Pool #2617, 7.50%, due 07/20/2028................. 23,112
21,747 Pool #158794, 7.00%, due 09/15/2028............... 22,602
19,829 Pool #486760, 6.50%, due 12/15/2028............... 20,344
70,489 Pool #781096, 6.50%, due 12/15/2028............... 72,323
70,648 Pool #781136, 7.00%, due 12/15/2028............... 73,427
47,600 Pool #506618, 7.00%, due 03/15/2029............... 49,472
12,525 Pool #511562, 7.50%, due 07/15/2030............... 13,042
80,609 Pool #448316, 6.50% due 04/15/2031............... 82,706
52,687 Pool #530606, 6.50% due 04/15/2031............... 54,058
27,574 Pool #545820, 7.00% due 06/15/2031............... 28,659
198,381 Pool #781330, 6.00%, due 09/15/2031............... 200,961
29
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE MORTGAGE-BACKED SECURITIES -- 23.5% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.2%
(CONTINUED)
$ 69,530 Pool #3228, 6.50%, due 04/20/2032 ................ $ 71,230
104,185 Pool #569903, 6.50%, due 06/15/2032 .............. 106,895
549,085 Pool #595934, 6.00%, due 09/15/2032 .............. 556,227
-----------
2,146,913
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 8.4%
945,609 Pool #01173, 5.50%, due 06/01/2017 ............... 947,545
1,571,099 Pool #G18056, 5.00%, due 06/01/2020 .............. 1,550,080
-----------
2,497,625
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 7.9%
721,888 Pool #635149, 5.50%, due 07/01/2017 .............. 723,592
1,654,149 Pool #255808, 5.00%, due 07/01/2025 .............. 1,612,619
-----------
2,336,211
-----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $7,109,618) $ 6,980,749
-----------
================================================================================
PAR VALUE CORPORATE BONDS -- 38.6% VALUE
- --------------------------------------------------------------------------------
FINANCE -- 18.3%
American General Finance Corporation,
$1,500,000 4.50%, due 11/15/2007........................... $ 1,493,799
-----------
CIT Group, Inc.,
2,000,000 4.75%, due 12/15/2010........................... 1,969,192
-----------
JPMorgan Chase & Company,
1,000,000 4.50%, due 01/15/2012........................... 972,365
-----------
Student Loan Marketing Association,
1,000,000 5.125%, due 08/27/2012.......................... 991,384
-----------
TOTAL FINANCE CORPORATE BONDS .................... 5,426,740
-----------
INDUSTRIAL -- 20.3%
First Data Corporation,
1,000,000 4.70%, due 08/01/2013........................... 940,329
-----------
Ford Motor Company,
1,000,000 7.25%, due 10/01/2008........................... 996,250
-----------
General Dynamics Corporation,
1,750,000 4.50%, due 08/15/2010........................... 1,725,890
-----------
30
THE GOVERNMENT STREET BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE CORPORATE BONDS -- 38.6% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIAL -- 20.3% (CONTINUED)
Hewlett-Packard Company,
$1,500,000 5.50%, due 07/01/2007........................... $ 1,499,868
-----------
Praxair, Inc.,
885,000 4.75%, due 07/15/2007........................... 883,853
-----------
TOTAL INDUSTRIAL CORPORATE BONDS ................. 6,046,190
-----------
TOTAL CORPORATE BONDS (Cost $11,612,925).......... $11,472,930
-----------
================================================================================
PAR VALUE COMMERCIAL PAPER -- 5.6% VALUE
- --------------------------------------------------------------------------------
$ 171,000 American Express Credit Corporation, discount,
due 04/02/2007 ................................. $ 170,975
1,500,000 Prudential Funding, LLC, discount, due
04/02/2007 ..................................... 1,499,785
-----------
TOTAL COMMERCIAL PAPER (Cost $1,670,760).......... $ 1,670,760
-----------
================================================================================
SHARES MONEY MARKET FUNDS -- 0.0% VALUE
- --------------------------------------------------------------------------------
834 AIM STIT - STIC Prime Portfolio - Institutional
Class (Cost $834) .............................. $ 834
-----------
TOTAL INVESTMENTS AT VALUE -- 100.5%
(Cost $30,190,393).............................. $29,876,140
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.5%)... (135,016)
-----------
NET ASSETS -- 100.0%.............................. $29,741,124
===========
See accompanying notes to financial statements.
31
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 2007
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 96.9% VALUE
- --------------------------------------------------------------------------------
Alabama Drinking Water Financing Auth., Rev.,
$250,000 4.00%, due 08/15/2014........................... $ 252,295
-----------
Alabama Special Care Facilities Financing Auth.,
Birmingham, Rev.,
500,000 4.50%, due 11/01/2009, ETM...................... 509,025
400,000 5.375%, due 11/01/2012, ETM..................... 402,524
-----------
911,549
-----------
Alabama Special Care Facilities Financing Auth.,
Mobile Hospital, Rev.,
250,000 4.50%, due 11/01/2010, ETM...................... 255,775
-----------
Alabama State Federal Highway Financing Auth., Rev.,
210,000 5.00%, due 03/01/2009........................... 215,359
300,000 5.00%, due 03/01/2016........................... 316,281
-----------
531,640
-----------
Alabama State, GO,
500,000 3.00%, due 09/01/2007.......................... 498,270
250,000 5.00%, due 06/01/2012.......................... 259,850
300,000 5.00%, due 09/01/2016.......................... 314,760
300,000 5.00%, due 09/01/2017.......................... 322,674
-----------
1,395,554
-----------
Alabama State Parks System Improvement
Corporation, GO,
200,000 5.50%, due 06/01/2010........................... 211,276
-----------
Alabama State Public School & College Auth.,
Capital Improvements, Rev.,
300,000 5.00%, due 02/01/2010........................... 310,722
475,000 5.00%, due 11/01/2012........................... 491,283
600,000 5.125%, due 11/01/2013.......................... 621,714
525,000 5.125%, due 11/01/2015.......................... 544,000
-----------
1,967,719
-----------
Alabama State Public School & College Auth., Rev.,
355,000 5.00%, due 05/01/2010........................... 369,069
-----------
Alabama Water Pollution Control Auth., Rev.,
500,000 5.00%, due 08/15/2010........................... 521,555
-----------
Anniston, AL, Waterworks & Sewer Board, Rev.,
400,000 4.00%, due 06/01/2015........................... 402,540
-----------
Athens, AL, Electric Rev. Warrants,
500,000 3.00%, due 06/01/2011........................... 480,455
-----------
Athens, AL, School Warrants,
335,000 5.05%, due 08/01/2015.......................... 344,015
-----------
Auburn, AL, Capital Improvements, School
Warrants, GO,
225,000 5.00%, due 08/01/2012........................... 238,588
-----------
32
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 96.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Auburn, AL, GO,
$ 300,000 4.00%, due 08/01/2007........................... $ 300,336
285,000 4.25%, due 08/01/2009........................... 288,913
-----------
589,249
-----------
Auburn, AL, Water Works Board, Rev.,
335,000 5.00%, due 07/01/2015........................... 354,025
-----------
Auburn University, AL, General Fee Rev.,
400,000 4.45%, due 06/01/2011........................... 406,348
-----------
Baldwin Co., AL, Board of Education, Rev.
Warrants,
200,000 5.20%, due 06/01/2009........................... 203,554
300,000 5.00%, due 06/01/2010........................... 312,003
-----------
515,557
-----------
Baldwin Co., AL, GO,
500,000 4.50%, due 11/01/2008........................... 506,630
200,000 5.00%, due 02/01/2015........................... 213,414
-----------
720,044
-----------
Baldwin Co., AL, Warrants - Series A,
320,000 5.00%, due 02/01/2017........................... 347,094
-----------
Birmingham, AL, Industrial Water Board, Rev.,
60,000 6.00%, due 07/01/2007.......................... 60,337
-----------
Birmingham, AL, Special Care Facilities Financing
Authority, Rev.,
300,000 3.70%, due 06/01/2009........................... 300,069
-----------
Decatur, AL, GO, Warrants,
300,000 5.00%, due 06/01/2009........................... 304,476
-----------
Decatur, AL, Water Rev.,
100,000 5.00%, due 05/01/2014........................... 103,510
-----------
Dothan, AL, GO,
500,000 5.50%, due 09/01/2014........................... 525,560
-----------
Fairhope, AL, Warrants,
295,000 5.10%, due 06/01/2014........................... 308,968
-----------
Florence, AL, School Warrants,
200,000 4.65%, due 12/01/2012........................... 206,592
-----------
Foley, AL, Utilities Board, Rev.,
500,000 4.00%, due 11/01/2007........................... 501,020
-----------
Homewood, AL, GO,
500,000 5.00%, due 09/01/2014 .......................... 529,255
-----------
33
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 96.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Houston Co., AL, GO,
$ 300,000 5.60%, due 10/15/2014........................... $ 319,431
-----------
Huntsville, AL, Capital Improvements, GO,
100,000 3.25%, due 11/01/2010........................... 98,302
-----------
Huntsville, AL, Electric Systems, Rev.,
250,000 4.80%, due 12/01/2012........................... 256,023
-----------
Huntsville, AL, GO,
200,000 4.50%, due 08/01/2007........................... 200,546
400,000 5.50%, due 08/01/2009........................... 416,680
500,000 5.00%, due 08/01/2011........................... 526,000
250,000 5.25%, due 11/01/2012........................... 258,267
-----------
1,401,493
-----------
Huntsville, AL, Water Systems, Rev.,
200,000 4.70%, due 11/01/2013........................... 204,686
-----------
Jefferson Co., AL, Sewer Rev.,
225,000 5.00%, due 02/01/2041, Prerefunded
02/01/2011 @ 101............................... 237,481
-----------
Madison, AL, Warrants,
200,000 4.40%, due 02/01/2011........................... 203,782
400,000 4.85%, due 02/01/2013........................... 411,224
-----------
615,006
-----------
Madison Co., AL, Board of Education, Capital
Outlay Tax Antic. Warrants,
400,000 5.20%, due 03/01/2011........................... 420,076
250,000 5.20%, due 03/01/2014........................... 262,355
-----------
682,431
-----------
Mobile, AL, GO,
100,000 4.50%, due 08/01/2013........................... 104,019
400,000 4.75%, due 02/15/2014........................... 419,396
-----------
523,415
-----------
Montgomery, AL, GO,
500,000 5.10%, due 10/01/2008........................... 510,015
300,000 5.00%, due 11/01/2015........................... 315,297
-----------
825,312
-----------
Montgomery, AL, Waterworks & Sanitation, Rev.,
500,000 5.00%, due 09/01/2008........................... 509,520
350,000 5.25%, due 09/01/2011........................... 371,921
-----------
881,441
-----------
Mountain Brook, AL, City Board of Education,
Capital Outlay Warrants,
405,000 4.80%, due 02/15/2011........................... 405,328
-----------
Opelika, AL, GO,
210,000 4.00%, due 03/01/2010........................... 211,955
-----------
34
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
ALABAMA FIXED RATE REVENUE AND GENERAL
PAR VALUE OBLIGATION (GO) BONDS -- 96.9% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
Scottsboro, AL, Waterworks Sewer & Gas Board, Rev.,
$200,000 4.35%, due 08/01/2011........................... $ 202,876
-----------
Shelby Co., AL, Board of Education, Rev. Warrants,
500,000 4.80%, due 02/01/2011........................... 514,145
-----------
St. Clair Co., AL, GO,
145,000 4.00%, due 08/01/2013........................... 147,268
205,000 4.00%, due 08/01/2014........................... 208,384
-----------
355,652
-----------
Trussville, AL, Warrants,
400,000 4.30%, due 10/01/2010........................... 408,344
-----------
Tuscaloosa, AL, Board of Education, GO,
300,000 4.625%, due 08/01/2008.......................... 300,903
-----------
Tuscaloosa, AL, Board of Education, Special Tax
Warrants,
300,000 4.85%, due 02/15/2013........................... 300,249
-----------
Tuscaloosa, AL, Warrants, GO,
145,000 4.25%, due 02/15/2011........................... 147,875
500,000 5.45%, due 01/01/2014........................... 527,865
-----------
675,740
-----------
Tuscaloosa Co., AL, Warrants, GO,
425,000 4.30%, due 10/01/2009........................... 432,161
400,000 5.55%, due 01/01/2015,
Prerefunded 01/01/2010 @ 101.................. 423,328
-----------
855,489
-----------
University of Alabama, AL, General Fee Rev.,
240,000 4.10%, due 12/01/2013........................... 244,906
-----------
University of Alabama, AL, Series A, Rev.,
375,000 4.00%, due 10/01/2010........................... 379,650
-----------
Vestavia Hills, AL, Warrants,
565,000 5.00%, due 02/01/2012........................... 596,199
-----------
TOTAL ALABAMA FIXED RATE REVENUE AND GENERAL
OBLIGATION (GO) BONDS (Cost $24,816,021)........ $25,150,591
-----------
35
THE ALABAMA TAX-FREE BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
SHARES MONEY MARKET FUNDS -- 2.1% VALUE
- --------------------------------------------------------------------------------
559,226 Alpine Muncipal Money Market Fund - Class I
(Cost $559,226)................................. $ 559,226
-----------
TOTAL INVESTMENTS AT VALUE -- 99.0%
(Cost $25,375,247).............................. $25,709,817
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0%..... 258,616
-----------
NET ASSETS -- 100.0%.............................. $25,968,433
===========
ETM - Escrow to Maturity
See accompanying notes to financial statements.
36
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007
================================================================================
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, 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 or are considered to be
unreliable due to significant market or other events 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.
37
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Repurchase agreements -- The Funds may enter into joint repurchase agreements
with other funds within the Trust. The joint repurchase agreement, which is
collateralized by U.S. Government obligations, is valued at cost which, together
with accrued interest, approximates market value. At the time the Funds enter
into the joint repurchase agreement, the Funds take possession of the underlying
securities and the seller agrees that the value of the underlying securities,
including accrued interest, will at all times be equal to or exceed the face
amount of the repurchase agreement. In addition, each Fund actively monitors and
seeks additional collateral, as needed.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding. The offering price and redemption price per
share of each Fund is equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on fixed-income
securities purchased are amortized using the interest method.
Distributions to shareholders -- Dividends arising from net investment income
are declared and paid quarterly to shareholders of The Government Street Equity
Fund; declared and paid annually to shareholders of The Government Street
Mid-Cap Fund; declared and paid monthly to shareholders of The Government Street
Bond Fund; and declared daily and paid monthly to shareholders of The Alabama
Tax Free Bond Fund. Net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. The amount of distributions from
net investment income and net realized gains are determined in accordance with
federal income tax regulations which may differ from accounting principles
generally accepted in the United States. These "book/tax" differences are either
temporary or permanent in nature. Certain Funds may utilize earnings and profits
distributed to shareholders on redemptions of shares as part of the dividends
paid deduction for income tax purposes. The tax character of distributions paid
during the years ended March 31, 2007 and March 31, 2006 are as follows:
- ---------------------------------------------------------------------------------------------------------
YEARS ORDINARY EXEMPT-INTEREST LONG-TERM TOTAL
ENDED INCOME DIVIDENDS GAINS DISTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------
Government Street Equity Fund ... 03/31/07 $1,084,650 $ -- $12,812,704 $13,897,354
03/31/06 $1,289,147 $ -- $ -- $ 1,289,147
- ---------------------------------------------------------------------------------------------------------
Government Street Mid-Cap Fund .. 03/31/07 $ 154,752 $ -- $ 2,609,394 $ 2,764,146
03/31/06 $ 64,987 $ -- $ -- $ 64,987
- ---------------------------------------------------------------------------------------------------------
Government Street Bond Fund ..... 03/31/07 $1,429,567 $ -- $ -- $ 1,429,567
03/31/06 $2,795,083 $ -- $ -- $ 2,795,083
- ---------------------------------------------------------------------------------------------------------
Alabama Tax Free Bond Fund ...... 03/31/07 $ -- $ 876,155 $ -- $ 876,155
03/31/06 $ -- $1,031,750 $ -- $ 1,031,750
- ---------------------------------------------------------------------------------------------------------
38
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Security transactions -- Security transactions are accounted for on trade date.
Gains and losses on securities sold are determined on a specific identification
basis.
Common expenses -- Common expenses of the Trust are allocated among the funds of
the Trust based on relative net assets of each fund or the nature of the
services performed and the relative applicability to each fund.
Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results could
differ from those estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of Subchapter M of the Internal Revenue Code applicable to regulated
investment companies. As provided therein, in any fiscal year in which a Fund so
qualifies, and distributes at least 90% of its taxable net income, the Fund (but
not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is computed on a tax basis for each item as of March
31, 2007:
- --------------------------------------------------------------------------------------------------------
GOVERNMENT GOVERNMENT GOVERNMENT ALABAMA
STREET STREET STREET TAX FREE
EQUITY MID-CAP BOND BOND
FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------
Cost of portfolio investments ............... $45,315,831 $25,525,920 $30,267,721 $25,430,741
=========== =========== =========== ===========
Gross unrealized appreciation ............... $43,460,750 $ 8,909,653 $ 33,461 $ 366,621
Gross unrealized depreciation ............... (431,245) (440,855) (425,042) (87,545)
----------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation) ............................ 43,029,505 8,468,798 (391,581) 279,076
Undistributed ordinary income ............... 12,466 56,868 11,435 24,044
Capital loss carryforwards .................. -- -- (2,751,670) (519)
Post-October losses ......................... -- -- (116,516) --
Undistributed long-term gains ............... 78,246 5,426 -- --
Other temporary differences ................. (83,164) (5,244) (5,986) (24,044)
----------- ----------- ----------- -----------
Total distributable earnings
(accumulated deficit) ..................... $43,037,053 $ 8,525,848 $(3,254,318) $ 278,557
=========== =========== =========== ===========
- --------------------------------------------------------------------------------------------------------
39
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 Bond Fund and The Alabama
Tax Free Bond Fund is due to certain timing differences in the recognition of
capital gains or losses under income tax regulations and accounting principles
generally accepted in the United States. These "book/tax" differences are
temporary in nature and are primarily due to the tax deferral of losses on wash
sales and/or differing methods in the amortization of discounts and premiums on
fixed income securities.
As of March 31, 2007, 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 $ 220,187 2008
195,097 2009
86,819 2010
70,419 2011
218,396 2012
261,545 2013
528,696 2014
1,170,511 2015
----------
$2,751,670
==========
- --------------------------------------------------------------------------------
Alabama Tax Free Bond Fund $ 519 2009
- --------------------------------------------------------------------------------
These capital loss carryforwards may be utilized in future years to offset net
realized capital gains, if any, prior to distribution to shareholders.
In addition, The Government Street Bond Fund had net realized capital losses of
$116,516 during the period November 1, 2006 through March 31, 2007, which are
treated for federal income tax purposes as arising during the Fund's tax year
ending March 31, 2008. These "post-October" losses may be utilized in future
years to offset net realized capital gains prior to distributing such gains to
shareholders.
During the year ended March 31, 2007, The Alabama Tax Free Bond Fund utilized
capital loss carryforwards of $20,194 to offset current year realized gains.
For the year ended March 31, 2007, The Government Street Equity Fund and The
Government Street Mid-Cap Fund reclassified $1,113,428 and $89,304 of
accumulated net realized gains from security transactions, respectively, against
paid-in capital on the Statement of Assets and Liabilities due to permanent
differences in the recognition of capital gains and losses under income tax
regulations and accounting principles generally accepted in the United States.
These differences are primarily due to the utilization of earnings and profits
distributed to shareholders on redemptions of shares as
40
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
part of the dividends paid deduction for income tax purposes. Such
reclassifications had no effect on the Funds' net assets or net asset value per
share.
For the year ended March 31, 2007, The Government Street Bond Fund reclassified
$668,924 of overdistributed net investment income against accumulated net
realized losses and The Alabama Tax Free Bond Fund reclassified $861 of
undistributed net investment income against accumulated net realized losses on
the Statements of Assets and Liabilities due to permanent differences in the
recognition of capital gains or losses under income tax regulations and
accounting principles generally accepted in the United States. These differences
are primarily due to the tax treatment of certain debt obligations and paydown
adjustments. Such reclassifications had no effect on the Funds' net assets or
net asset value per share.
For the year ended March 31, 2007, The Government Street Bond Fund reclassified
accumulated net realized losses of $106,011 against paid-in capital on the
Statement of Assets and Liabilities due to the expiration of capital loss
carryforwards. Such reclassification had no effect on the Fund's net assets or
net asset value per share.
2. INVESTMENT TRANSACTIONS
During the year ended March 31, 2007, cost of purchases and proceeds from sales
and maturities of investment securities, other than short-term investments and
U.S. government securities, amounted to $14,021,021 and $38,299,868,
respectively, for The Government Street Equity Fund; $3,680,250 and $11,282,872,
respectively, for The Government Street Mid-Cap Fund; $2,428,710 and
$10,137,015, respectively, for The Government Street Bond Fund; and $5,151,775
and $3,660,000, 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.
41
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
For the year ended March 31, 2007, the Adviser voluntarily undertook to limit
the total operating expenses of The Government Street Mid-Cap Fund, The
Government Street Bond Fund and The Alabama Tax Free Bond Fund to 1.10%, .71%
and .65%, respectively, of each Fund's average daily net assets. Accordingly,
the Adviser voluntarily waived $5,320, $34,257 and $27,666, respectively, of its
investment advisory fees from The Government Street Mid-Cap Fund, The Government
Street Bond Fund and The Alabama Tax Free Bond Fund during the year ended March
31, 2007.
Until August 2006, the Adviser was reimbursed for the estimated costs of
providing a Chief Compliance Officer (CCO) for the Funds. The Adviser received
fees of $3,040, $960, $1,320 and $680 from The Government Street Equity Fund,
The Government Street Mid-Cap Fund, The Government Street Bond Fund and The
Alabama Tax-Free Bond Fund, respectively, for providing CCO services during the
year ended March 31, 2007. In addition, the Funds paid out-of-pocket expenses
incurred by the Adviser in connection with these services.
Certain Trustees and officers of the Trust are also officers of the Adviser.
MUTUAL FUND SERVICES AGREEMENT
Under the terms of a Mutual Fund Services Agreement between the Trust and
Ultimus Fund Solutions, LLC (Ultimus), Ultimus provides administrative, pricing,
accounting, dividend disbursing, shareholder servicing and transfer agent
services for the Funds. For these services, Ultimus receives a monthly fee from
The Government Street Equity Fund, The Government Street Mid-Cap Fund and The
Alabama Tax Free Bond Fund at an annual rate of .15% of each Fund's average
daily net assets up to $25 million; .125% of the next $25 million of such
assets; and .10% of such net assets in excess of $50 million. Additionally, The
Government Street Mid-Cap Fund is subject to a minimum monthly fee of $4,000.
From The Government Street Bond Fund, Ultimus receives a monthly fee at an
annual rate of .075% of the Fund's average daily net assets up to $200 million
and .05% of such assets in excess of $200 million. In addition, each Fund pays
out-of-pocket expenses including, but not limited to, postage, supplies and
costs of pricing the Funds' portfolio securities.
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 year ended March 31, 2007,
Ultimus received fees of $5,997, $4,356, $4,298 and $4,127 from The Government
Street Equity Fund, The Government Street Mid-Cap Fund, The Government Street
Bond Fund and The Alabama Tax-Free Bond Fund, respectively, for compliance
consulting services.
42
THE GOVERNMENT STREET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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.
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 Fund's tax
returns to determine whether the tax positions are "more-likely-than-not" of
being sustained by the applicable tax authority. Tax positions not deemed to
meet the more-likely-than-not threshold would be recorded as a tax benefit or
expense in the current year. Adoption of FIN 48 is required for fiscal years
beginning after December 15, 2006 and is to be applied to all open tax years as
of the effective date. Recent SEC guidance allows implementing FIN 48 in fund
NAV calculations as late as the Fund's last such calculation in the first
required financial statement period. As a result, the Funds will incorporate FIN
48 in their Semi-Annual Report on September 30, 2007. Management is in the
process of determining the impact of the adoption of FIN 48.
In September 2006, the Financial Accounting Standards Board 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 SFAS No. 157 relate to
the definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. As of March 31, 2007, the
Funds do 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.
43
THE GOVERNMENT STREET FUNDS
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
The Government Street Equity Fund, The Government Street Mid-Cap Fund,
The Government Street Bond Fund, and The Alabama Tax-Free Bond Fund
of the Williamsburg Investment Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of The Government Street Equity Fund, The
Government Street Mid-Cap Fund, The Government Street Bond Fund, and The Alabama
Tax-Free Bond Fund (the "Funds") (each a series of Williamsburg Investment
Trust) as of March 31, 2007, and the related statements of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
four years or periods in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights presented for
the year ended March 31, 2003 were audited by other auditors whose report dated
April 25, 2003, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes,
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2007 by correspondence with the custodian.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of The
Government Street Equity Fund, The Government Street Mid-Cap Fund, The
Government Street Bond Fund, and The Alabama Tax-Free Bond Fund as of March 31,
2007, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the four years or periods in the period then
ended in conformity with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
May 16, 2007
44
THE GOVERNMENT STREET FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Funds, you incur ongoing costs, including management fees and other fund
expenses. Operating expenses, which are deducted from each Fund's gross income,
directly reduce the investment returns of the Funds.
A fund's ongoing costs are expressed as a percentage of its average net assets.
This figure is known as the expense ratio. The following examples are intended
to help you understand the ongoing costs (in dollars) of investing in the Funds
and to compare these costs with the ongoing costs of investing in other mutual
funds. The examples below are based on an investment of $1,000 made at the
beginning of the period shown and held for the entire period.
The table below illustrates each Fund's costs in two ways:
ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Fund's actual return, and the third column shows the dollar amount of operating
expenses that would have been paid by an investor who started with $1,000 in the
Funds. You may use the information here, together with the amount you invested,
to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Funds under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Funds'
costs with those of other mutual funds. It assumes that each Fund had an annual
return of 5% before expenses during the period shown, but that the expense ratio
is unchanged. In this case, because the returns used are not the Funds' actual
returns, the results do not apply to your investment. The example is useful in
making comparisons because the Securities and Exchange Commission requires all
mutual funds to calculate expenses based on a 5% return. You can assess each
Fund's costs by comparing this hypothetical example with the hypothetical
examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Funds do not charge transaction fees, such as
purchase or redemption fees, nor do they carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
45
THE GOVERNMENT STREET FUNDS
ABOUT YOUR FUNDS' EXPENSES (UNAUDITED)
(CONTINUED)
================================================================================
More information about the Funds' expenses, including annual expense ratios for
the prior five fiscal years, can be found in this report. For additional
information on operating expenses and other shareholder costs, please refer to
the Funds' prospectus.
- --------------------------------------------------------------------------------
Expenses
Beginning Ending Paid
Account Value Account Value During
Oct. 1, 2006 March 31, 2007 Period*
- --------------------------------------------------------------------------------
THE GOVERNMENT STREET EQUITY FUND
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,081.40 $4.41
- -------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.69 $4.28
- -------------------------------------------------------------------------------
THE GOVERNMENT STREET MID-CAP FUND
- -------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,105.10 $5.77
- -------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.45 $5.54
- -------------------------------------------------------------------------------
THE GOVERNMENT STREET BOND FUND
- -------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,025.50 $3.59
- -------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.39 $3.58
- -------------------------------------------------------------------------------
THE ALABAMA TAX FREE BOND FUND
- -------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,013.30 $3.26
- -------------------------------------------------------------------------------
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,021.69 $3.28
- -------------------------------------------------------------------------------
* Expenses are equal to the Funds' annualized expense ratios for the period
as stated below, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
The Government Street Equity Fund 0.85%
The Government Street Mid-Cap Fund 1.10%
The Government Street Bond Fund 0.71%
The Alabama Tax Free Bond Fund 0.65%
46
THE GOVERNMENT STREET FUNDS
BOARD OF TRUSTEES AND EXECUTIVE
OFFICERS (UNAUDITED)
================================================================================
Overall responsibility for management of the Funds rests with the Board of
Trustees. The Trustees serve during the lifetime of the Trust and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of the Funds. The officers have been elected for an
annual term. The following are the Trustees and executive officers of the Funds:
POSITION HELD LENGTH OF
TRUSTEE ADDRESS AGE WITH THE TRUST TIME SERVED
- -------------------------------------------------------------------------------------------------------
* Charles M. Caravati, Jr. 931 Broad Street Road, 70 Chairman and Since
Manakin-Sabot, VA Trustee June 1991
- -------------------------------------------------------------------------------------------------------
* Austin Brockenbrough III 1802 Bayberry Court, 70 Trustee Since
Suite 400 September 1988
Richmond, VA
- -------------------------------------------------------------------------------------------------------
* John T. Bruce 800 Main Street 53 Trustee Since
Lynchburg, VA September 1988
- -------------------------------------------------------------------------------------------------------
Robert S. Harris 100 Darden Boulevard 57 Trustee Since
Charlottesville, VA January 2007
- -------------------------------------------------------------------------------------------------------
J. Finley Lee, Jr. 4488 Pond Apple 67 Trustee Since
Drive North September 1988
Naples, FL
- -------------------------------------------------------------------------------------------------------
Richard L. Morrill University of Richmond 67 Trustee Since
Richmond, VA March 1993
- -------------------------------------------------------------------------------------------------------
Harris V. Morrissette 100 Jacintoport Boulevard 47 Trustee Since
Saraland, AL March 1993
- -------------------------------------------------------------------------------------------------------
Erwin H. Will, Jr. 47 Willway Avenue 74 Trustee Since
Richmond, VA July 1997
- -------------------------------------------------------------------------------------------------------
Samuel B. Witt III 302 Clovelly Road 71 Trustee Since
Richmond, VA November 1988
- -------------------------------------------------------------------------------------------------------
Thomas W. Leavell 150 Government Street 63 President Since
Mobile, AL February 2004
- -------------------------------------------------------------------------------------------------------
Mary Shannon Hope 150 Government Street 43 Vice President of The Since
Mobile, AL Government Street February 2004
Bond Fund
- -------------------------------------------------------------------------------------------------------
Timothy S. Healey 600 Luckie Drive 54 Vice President of The Since
Suite 305 Alabama Tax Free Bond January 1995
Birmingham, AL Fund and The Government
Street Mid-Cap Fund
- -------------------------------------------------------------------------------------------------------
Robert G. Dorsey 225 Pictoria Drive 50 Vice President Since
Suite 450 November 2000
Cincinnati, OH
- -------------------------------------------------------------------------------------------------------
Mark J. Seger 225 Pictoria Drive 45 Treasurer Since
Suite 450 November 2000
Cincinnati, OH
- -------------------------------------------------------------------------------------------------------
John F. Splain 225 Pictoria Drive 50 Secretary Since
Suite 450 November 2000
Cincinnati, OH
- -------------------------------------------------------------------------------------------------------
Tina H. Bloom 225 Pictoria Drive 38 Chief Compliance Officer Since
Suite 450 August 2006
Cincinnati, OH
- -------------------------------------------------------------------------------------------------------
* Messrs. Bruce, Brockenbrough and Caravati are "interested persons" of the
Trust within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940. Charles M. Caravati, Jr. is the father of Charles M. Caravati III,
an officer of The Jamestown Funds, which are other portfolios of the Trust.
47
THE GOVERNMENT STREET FUNDS
BOARD OF TRUSTEES AND EXECUTIVE
OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
Each Trustee oversees twelve portfolios of the Trust, including the Funds. The
principal occupations of the Trustees and executive officers of the Funds during
the past five years and public directorships held by the Trustees are set forth
below:
Charles M. Caravati, Jr. is a retired physician. He is also the retired
President of Dermatology Associates of Virginia, P.C.
Austin Brockenbrough III is President and Managing Director of Lowe,
Brockenbrough & Company, Inc. (an investment advisory firm). He is a member of
the Board of Directors of Tredegar Corporation (a plastics manufacturer) and
Wilkinson O'Grady & Co., Inc. (a global asset manager).
John T. Bruce is a Principal of Flippin, Bruce & Porter, Inc. (an investment
advisory firm).
Robert S. Harris is the C. Stewart Sheppard Professor of Business Administration
at The Darden Graduate School of Business Administration at the University of
Virginia. He was previously the dean at Darden. Professor Harris has published
widely on corporate finance, financial markets and mergers and acquisitions and
has served as a consultant to corporations and government agencies.
J. Finley Lee, Jr. is a financial consultant and the Julian Price Professor
Emeritus at the University of North Carolina.
Richard L. Morrill is the Chancellor of the University of Richmond. He is also a
member of the Board of Directors of Tredegar Corporation and Albemarle
Corporation (polymers and chemical manufacturer).
Harris V. Morrissette is Chief Executive Officer of Marshall Biscuit Co., Inc.
He is a member of the Board of Directors of BancTrust Financial Group, Inc. (a
bank holding company) and EnergySouth, Inc. In addition, he is Chairman of
Azalea Aviation, Inc. (an airplane fueling company).
Erwin H. Will, Jr. is the retired Chief Investment Officer of Virginia
Retirement System (VRS). Subsequent to his retirement, he temporarily served as
Acting Managing Director of Equities for VRS.
Samuel B. Witt III is the retired Senior Vice President and General Counsel of
Stateside Associates, Inc. He is also a member of the Board of Directors of The
Swiss Helvetia Fund, Inc. (a closed-end investment company).
Thomas W. Leavell is a Principal of the Adviser.
Mary Shannon Hope is a Principal of the Adviser.
Timothy S. Healey is a Principal of the Adviser.
48
THE GOVERNMENT STREET FUNDS
BOARD OF TRUSTEES AND EXECUTIVE
OFFICERS (UNAUDITED) (CONTINUED)
================================================================================
Robert G. Dorsey is a Managing Director of Ultimus Fund Solutions, LLC and
Ultimus Fund Distributors, LLC.
Mark J. Seger is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
John F. Splain is a Managing Director of Ultimus Fund Solutions, LLC and Ultimus
Fund Distributors, LLC.
Tina H. Bloom is Vice President of Administration of Ultimus Fund Solutions, LLC
and Ultimus Fund Distributors, LLC.
Additional information about members of the Board of Trustees and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-800-281-3217.
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
For the fiscal year ended March 31, 2007 certain dividends paid by The
Government Street Equity Fund and The Government Street Mid-Cap Fund may be
subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax
Relief Reconciliation Act of 2003. The Funds intend to designate up to a maximum
amount of $1,084,650 and $154,752, respectively, as taxed at a maximum rate of
15%, as well as $13,926,132 and $2,698,698, respectively, as long-term gain
distributions. Additionally, for the fiscal year ended March 31, 2007, 100% of
the dividends paid from ordinary income by The Governent Street Equity Fund and
The Government Street Mid-Cap Fund qualified for the dividends received
deduction for corporations. Complete information will be computed and reported
in conjunction with your 2007 Form 1099-DIV.
49
THE GOVERNMENT STREET FUNDS
OTHER INFORMATION (UNAUDITED)
================================================================================
A description of the policies and procedures that the Funds use to vote proxies
relating to portfolio securities is available without charge upon request by
calling toll-free 1-866-738-1125, or on the Securities and Exchange Commission's
(SEC) website at http://www.sec.gov. Information regarding how the Funds voted
proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is available without charge upon request by calling toll-free
1-866-738-1125 or on the SEC's website at http://www.sec.gov.
The Trust files a complete listing of portfolio holdings for the Funds with the
SEC as of the first and third quarters of each fiscal year on Form N-Q. The
filings are available upon request, by calling 1-866-738-1125. Furthermore, you
may obtain a copy of these filings on the SEC's website at http://www.sec.gov.
The Trust's Forms N-Q may also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC, and information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
50
THE GOVERNMENT STREET FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED)
================================================================================
At an in-person meeting held on February 5, 2007, the Board of Trustees,
including a majority of the Independent Trustees, approved the continuance for a
one-year period of the Investment Advisory Agreements with the Adviser on behalf
of The Government Street Equity Fund, The Government Street Mid-Cap Fund, The
Government Street Bond Fund and The Alabama Tax Free Bond Fund. Below is a
discussion of the factors considered by the Board of Trustees along with the
conclusions with respect thereto that formed the basis for the Board's
approvals.
In selecting the Adviser and approving the most recent annual continuance of the
Investment Advisory Agreements, the Trustees considered all information they
deemed reasonably necessary to evaluate the terms of the Agreements. The
principal areas of review by the Trustees were the nature, extent and quality of
the services provided by the Adviser and the reasonableness of the fees charged
for those services. These matters were considered by the Independent Trustees
consulting with experienced counsel for the Independent Trustees, who is
independent of the Adviser.
The Trustees' evaluation of the quality of the Adviser's services took into
account their knowledge and experience gained through meetings with and reports
of the Adviser's senior management over the course of the preceding year. Both
short-term and long-term investment performance of the Funds was considered.
Each Fund's performance was compared to its performance benchmark and to that of
competitive funds with similar investment objectives. The Trustees also
considered the scope and quality of the in-house capabilities of the Adviser and
other resources dedicated to performing services for the Funds. The quality of
administrative and other services, including the Adviser's role in coordinating
the activities of the Funds' other service providers, were considered in light
of the Funds' compliance with investment policies and applicable laws and
regulations and of related reports by management and the Funds' independent
public accountants in periodic meetings with the Trust's Audit Committee. The
Trustees also considered the business reputation of the Adviser, the
qualifications of its key investment and compliance personnel, and its financial
resources.
In reviewing the fees payable under the Investment Advisory Agreements, the
Trustees compared the advisory fees and overall expense levels of each Fund with
those of competitive funds with similar investment objectives. The Trustees
considered information provided by the Adviser concerning the Adviser's
profitability with respect to each Fund, including the assumptions and
methodology used in preparing the profitability information, in light of
applicable case law relating to advisory fees. For these purposes, the Trustees
took into account not only the fees paid by the Funds, but also so-called
"fallout" benefits to the Adviser. The Trustees also considered the
51
THE GOVERNMENT STREET FUNDS
DISCLOSURE REGARDING APPROVAL OF
INVESTMENT ADVISORY AGREEMENTS
(UNAUDITED) (CONTINUED)
================================================================================
Adviser's representations that all of the Funds' portfolio trades were executed
based on the best price and execution available, and that the Adviser does not
participate in any soft dollar or directed brokerage arrangements. The Trustees
further considered that neither the Funds nor the Adviser participate in any
revenue sharing arrangements on behalf of the Funds. In evaluating the Funds'
advisory fees, the Trustees took into account the complexity and quality of the
investment management of the Funds.
Based upon their review of this information, the Independent Trustees concluded
that: (i) based on the long-term performance of each Fund manaaged by the
Adviser as compared to similarly managed funds and the other services provided
under the Investment Advisory Agreements, they believe that the Adviser has
provided quality services to the Funds; (ii) the investment advisory fees
payable to the Adviser by each Fund are competitive with similarly managed
funds, and they believe the fees to be reasonable given the quality of services
provided by the Adviser; (iii) the total operating expense ratio of each Fund is
in line with the average of comparably managed funds, as calculated and
published by Morningstar; and (iv) the Adviser's voluntary commitment to cap
overall operating expenses of The Government Street Mid-Cap Fund, The Government
Street Bond Fund and The Alabama Tax Free Bond Fund through advisory fee waivers
has enabled those Funds to increase returns for shareholders and maintain an
overall expense ratio lower than the average for similarly managed funds, as
calculated and published by Morningstar. Given the current size of the Funds and
their expected growth, the Independent Trustees did not believe that at the
present time it would be relevant to consider the extent to which economies of
scale would be realized as the Funds grow, and whether fee levels reflect these
economies of scale. The Independent Trustees also considered the "fallout"
benefits to, and the profitability of, the Adviser with respect to the Funds,
but given the amounts involved viewed these as secondary factors in connection
with the evaluation of the reasonableness of the advisory fees paid by the
Funds.
No single factor was considered in isolation or to be determinative to the
decision of the Trustees to approve continuance of the Investment Advisory
Agreements. Rather the Trustees concluded, in light of a weighing and balancing
of all factors considered, that it was in the best interests of each Fund and
its shareholders to continue its Investment Advisory Agreement without
modification to its terms, including the fees charged for services thereunder.
52
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.
Robert S. Harris
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
----------------------------------------------------------------------------
================================================================================
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the registrant or a third party. Pursuant to Item 12(a)(1), a
copy of registrant's code of ethics is filed as an exhibit to this Form N-CSR.
During the period covered by this report, the code of ethics has not been
amended, and the registrant has not granted any waivers, including implicit
waivers, from the provisions of the code of ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. The
name of the audit committee financial expert is Erwin H. Will, Jr. Mr. Will is
"independent" for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) AUDIT FEES. The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the
registrant's annual financial statements or for services that are
normally provided by the accountant in connection with statutory and
regulatory filings or engagements were $146,951 and $125,001 with
respect to the registrant's fiscal years ended March 31, 2007 and
2006, respectively.
(b) AUDIT-RELATED FEES. No fees were billed in either of the last two
fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the
audit of the registrant's financial statements and are not reported
under paragraph (a) of this Item.
(c) TAX FEES. No fees were billed in either of the last two fiscal years
for professional services rendered by the principal accountant for
tax compliance, tax advice, and tax planning.
(d) ALL OTHER FEES. No fees were billed in either of the last two fiscal
years for products and services provided by the principal
accountant, other than the services reported in paragraphs (a)
through (c) of this Item.
(e)(1) The audit committee has adopted pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X. Pursuant to the pre-approval policies and procedures, the audit
committee has pre-approved certain audit, audit-related and tax
services and has established, with respect to each fiscal year of
the registrant, the following maximum fee levels for services
covered under the pre-approval policies and procedures:
o Services, relating to a new series or class of a series,
associated with SEC registration statements, periodic
reports and other documents filed by the registrant with
the SEC or other documents issued by the registrant in
connection with securities offerings and assistance in
responding to SEC comment letters--$5,000
o Consultations with management of the registrant, not in
connection with an audit, as to the accounting or
disclosure treatment of transactions or events and/or
the actual or potential impact of final or proposed
rules, standards or interpretations by the SEC, FASB or
other regulatory or standard setting bodies--$5,000
o All tax services provided to the registrant in the
aggregate--$5,000
(e)(2) None of the services described in paragraph (b) through (d) of this
Item were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50% of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the
most recent fiscal year were attributed to work performed by persons
other than the principal accountant's full-time, permanent
employees.
(g) No non-audit fees were billed in either of the last two fiscal years
by the registrant's accountant for services rendered to the
registrant, and rendered to the registrant's investment adviser (not
including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or
under common control with the adviser that provides ongoing services
to the registrant.
(h) The principal accountant has not provided any non-audit services to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable [schedule filed with Item 1]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant's Nominating Committee shall review shareholder recommendations
to fill vacancies on the registrant's board of trustees if such recommendations
are submitted in writing, addressed to the Committee at the registrant's offices
and meet any minimum qualifications adopted by the Committee. The Committee may
adopt, by resolution, a policy regarding its procedures for considering
candidates for the board of trustees, including any recommended by shareholders.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) as of a date within 90 days of the filing date of this report, the
registrant's principal executive officers and principal financial officer have
concluded that such disclosure controls and procedures are reasonably designed
and are operating effectively to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to them
by others within those entities, particularly during the period in which this
report is being prepared, and that the information required in filings on Form
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Attached hereto
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)): Attached hereto
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act (17 CFR 270.23c-1) sent or given during the period covered by the report
by or on behalf of the registrant to 10 or more persons: Not applicable
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)): Attached hereto
Exhibit 99.CODE ETH Code of Ethics
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Williamsburg Investment Trust
----------------------------------------
By (Signature and Title)* /s/ John F. Splain
----------------------------------------
John F. Splain, Secretary
Date June 4, 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/ John T. Bruce
----------------------------------------
John T. Bruce,
President (FBP Value Fund and FBP
Balanced Fund)
Date June 4, 2007
------------
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 June 4, 2007
------------
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 June 4, 2007
------------
By (Signature and Title)* /s/ Joseph A. Jennings III
----------------------------------------
Joseph A. Jennings III,
President (The Jamestown Tax Exempt
Virginia Fund)
Date June 4, 2007
------------
By (Signature and Title)* /s/ Lawrence B. Whitlock, Jr.
----------------------------------------
Lawrence B. Whitlock, Jr.,
President (The Jamestown Select Fund)
Date June 4, 2007
------------
By (Signature and Title)* /s/ Joseph L. Antrim III
----------------------------------------
Joseph L. Antrim III,
President (The Davenport Equity Fund)
Date June 4, 2007
------------
By (Signature and Title)* /s/ Mark J. Seger
----------------------------------------
Mark J. Seger, Treasurer
Date June 4, 2007
------------
* Print the name and title of each signing officer under his or her signature.