UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-10085
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Hillman Capital Management Investment Trust
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(Exact name of registrant as specified in charter)
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
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(Address of principal executive offices) (Zip code)
Julian G. Winters
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
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(Name and address of agent for service)
Registrant's telephone number, including area code: 252-972-9922
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Date of fiscal year end: September 30
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Date of reporting period: September 30, 2006
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Item 1. REPORTS TO STOCKHOLDERS.
Annual Report 2006
The Hillman Advantage Equity Fund
(formerly known as The Hillman Total Return Fund)
The Hillman Focused Advantage Fund
September 30, 2006
No Load Shares
Class A Shares
Class B Shares
Class C Shares
HILLMAN
CAPITAL MANAGEMENT
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Hillman Capital Management Funds
("Funds"). This report is not authorized for distribution to prospective
investors in the Funds unless preceded or accompanied by an effective
prospectus. Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC, Federal
Reserve Board or any other agency, and are subject to investment risks,
including possible loss of principal amount invested. Neither the Funds nor the
Funds' distributor is a bank.
Distributor: Capital Investment Group, Inc., 116 S. Franklin St., Rocky Mount,
NC 27804, Phone 1-800-773-3863.
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Statements in this Annual Report that reflect projections or expectations of
future financial or economic performance of the Hillman Capital Management Funds
("Funds") and of the market in general and statements of the Funds' plans and
objectives for future operations are forward-looking statements. No assurance
can be given that actual results or events will not differ materially from those
projected, estimated, assumed or anticipated in any such forward-looking
statements. Important factors that could result in such differences, in addition
to the other factors noted with such forward-looking statements, include,
without limitation, general economic conditions such as inflation, recession and
interest rates. Past performance is not a guarantee of future results.
Investments in the Funds are subject to investment risks, including the possible
loss of some or the entire principal amount invested. There can be no assurance
that the Funds will be successful in meeting their investment objective.
Investment in the Funds is also subject to the following risks: market risk,
investment advisor risk, credit risk, interest rate risk, maturity risk,
investment-grade securities risk, short sales risk, for the Focused Fund only:
management style risk, non-diversified fund risk, and sector focus risk. More
information about these risks and other risks can be found in the Funds'
prospectus.
The performance information quoted in this annual report represents past
performance, which is not a 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. An investor
may obtain performance data current to the most recent month-end by visiting
www.nottinghamco.com.
An investor should consider the investment objectives, risks, and charges and
expenses of the Funds carefully before investing. The prospectus contains this
and other information about the Funds. A copy of the prospectus is available at
www.nottinghamco.com or by calling Shareholder Services at 1-800-773-3863. The
prospectus should be read carefully before investing.
- --------------------------------------------------------------------------------
Stated performance in the Funds was achieved at some or all points during the
year by waiving or reimbursing part of the Funds' total expenses to ensure
shareholders did not absorb expenses significantly greater than the industry
norm.
This Annual Report was first distributed to shareholders on or about November
29, 2006.
For More Information on Your Hillman Capital Management Mutual Funds:
See Our Web site @ www.hillmancapital.com
or
Call Our Shareholder Services Group Toll-Free at 1-800-773-3863
November 4, 2006
Dear Shareholder of The Hillman Funds:
Our investment philosophy at Hillman Capital Management (HCM) is to purchase
companies with a sustainable competitive advantage that are currently selling
below their intrinsic value. We believe that this philosophy of buying
attractively priced industry leaders will lead to strong performance over
extended periods of time. We have benefited immensely in the past from this
disciplined investment approach and our long-term view. An ephemeral view of the
marketplace has seldom served investors well, as this often leads to "chasing"
returns. As a bi-product of our methodology and long-term stance, we tend to
stay fully invested - a benefit for equity investors these past few years.
Hillman Advantage Equity Fund
Enclosed please find the annual report for The Hillman Advantage Equity Fund
(the "Equity Fund") for the fiscal year ended September 30, 2006. The Equity
Fund returned 10.41% for the No Load Shares, 9.35% for the Class A Shares (3),
9.19% for the Class B Shares (3) and 9.19% for the Class C Shares (3), and the
S&P 500 Total Return Index (the "S&P 500")(1) returned 10.79%(2), for the fiscal
year ended September 30, 2006.
Since inception of the Equity Fund on December 29, 2000 to September 30, 2006,
the Equity Fund's No Load Shares have achieved a cumulative total return of
50.80%, versus 11.51%(2) for the S&P 500 for the same period. For the period
from the date of initial public offering of the Equity Fund's Class A Shares,
Class B Shares and Class C Shares on July 18, 2006 to September 30, 2006, the
Class A Shares, Class B Shares and Class C Shares each achieved a cumulative
total return of 9.35%, 9.19%, and 9.19%, respectively, versus 8.44% (2) for the
S&P 500 for the same period.
Hillman Focused Advantage Fund
Enclosed please find the annual report for The Hillman Focused Advantage Fund
(the "Focused Fund") for the fiscal year ended September 30, 2006. The Focused
Fund returned 7.15% for the No Load Shares, 9.74% for the Class A Shares (3),
9.52% for the Class B Shares (3) and 9.52% for the Class C Shares (3), and the
S&P 500(1) returned 10.79%(2), for the fiscal year ended September 30, 2006.
Since inception of the Focused Fund on December 29, 2000 to September 30, 2006,
the Focused Fund's No Load Shares have achieved a cumulative total return of
58.66%, versus 11.51%(2) for the S&P 500 for the same period. For the period
from the date of initial public offering of the Focused Fund's Class A Shares,
Class B Shares and Class C Shares on July 18, 2006 to September 30, 2006, the
Class A Shares, Class B Shares and Class C Shares each achieved a cumulative
total return of 9.74%, 9.52%, and 9.52%, respectively, versus 8.44%(2) for the
S&P 500 for the same period.
The equity markets in general reported a strong fiscal year in 2006,
particularly in the fiscal fourth quarter (calendar third quarter) with near
record highs for the anachronistic Dow Jones Industrial Average (Dow). At HCM,
our discipline demands that we look beyond short-term fluctuations and think
past market pundits to company specific competitiveness. The talking heads, and
their interminable need to polarize markets, are touting the Dow's rise as
either the beginning or demise of recent equity market strength. However, given
the composition of the Dow, one conclusion that can be drawn from the record
setting run of the Dow is a movement, albeit slow, into large cap stocks from
___________________________
^1 The S&P 500 Total Return Index is the Standard & Poor's Composite Index of
500 stocks and is a widely recognized, unmanaged index of common stock prices.
It is not possible to invest in this index.
^2 FT Interactive Data
^3 For the period from July 18, 2006 (Date of Initial Public Offering of the
Class A Shares, Class B Shares and Class C Shares) to September 30, 2006.
smaller and more speculative market segments. This "flight to quality" thesis is
also buttressed by our corporate and economic outlooks.
A pervasive theme in equity markets has been the strength of earnings and
corporate balance sheets. A recent U.S. Department of Commerce report concludes
that corporate profits as a share of U.S. GDP are at levels not seen since the
sixties, approximately 10.3%. Corporate profit is a widely followed economic and
financial indicator as corporate profits fuel further investment in both
physical and human capital. Strong corporate balance sheets and high cash hordes
are continually being put to use in the form of buybacks and dividends. In fact,
Standard & Poor's reported that the second quarter of 2006 saw buybacks for the
S&P 500 index reach $116 billion - a new quarterly record surpassing the $104
billion spent repurchasing shares in the fourth quarter of last year. We
continue to see opportunity in the marketplace for future investments.
We plan to continue to adhere to our strategy of investing in companies we
believe to have competitive advantage in their industries at times when their
securities are undervalued in our effort to help clients participate in market
advances without unreasonable risk. By using this strategy, we hope the Hillman
Funds will outperform the market over time.
We urge our investors to act prudently. We believe the long-term value of an
investment is not defined by temporary investor sentiment but by sound
principals of finance, such as the present value of cash flows, dividends, or
earnings an underlying asset can produce. We believe that our disciplined focus
on quality companies with competitive advantage will continue to be a favorable
investment strategy into the future.
We appreciate the opportunity to serve as your Fund's Investment Adviser.
Sincerely,
/s/ Mark Hillman
Investments in the Funds are subject to investment risks, including the possible
loss of some or the entire principal amount invested. There can be no assurance
that the Funds will be successful in meeting their investment objective.
Investment in the Funds is also subject to the following risks: market risk,
investment advisor risk, credit risk, interest rate risk, maturity risk,
investment-grade securities risk, short sales risk, for the Focused Fund only:
management style risk, non-diversified fund risk, and sector focus risk. More
information about these risks and other risks can be found in the Funds'
prospectus.
An investor should consider the investment objectives, risks, and charges and
expenses of the Funds carefully before investing. The prospectus contains this
and other information about the Funds. A copy of the prospectus is available at
www.nottinghamco.com or by calling Shareholder Services at 1-800-773-3863. The
prospectus should be read carefully before investing.
Statements in this Annual Report reflect projections or expectations of future
financial or economic performance of the Fund and of the market in general and
statements of the Fund's plans and objectives for future operations are
forward-looking statements. No assurance can be given that actual results or
events will not differ materially from those projected, estimated, assumed or
anticipated in any such forward-looking statements. Important factors that could
result in such differences, in addition to the other factors noted with such
forward-looking statements, include general economic conditions such as
inflation, recession and interest rates.
Underwriter and Distributor: Capital Investment Group, Inc.
116 South Franklin Street, Rocky Mount, NC 27804
Phone (800) 773-3863
The Hillman Advantage Equity Fund No Load Shares
Performance Update - $10,000 Investment (Unaudited)
For the fiscal year ended September 30, 2006.
- ------------------------------------------------------------- --------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
--------------------------------------------------------------
Advantage Equity Fund S&P 500 Total Average Annual One Five Since
- No Load Shares Return Index Total Returns Year Year Inception*
---------------- ------------ --------------------------------------------------------------
12/29/2000 $10,000 $10,000 The Hillman Advantage
9/30/2001 8,750 7,961 Equity Fund No Load Shares 10.41% 11.50% 7.40%
9/30/2002 8,614 6,330 --------------------------------------------------------------
9/30/2003 10,635 7,874 Final Value
9/30/2004 12,084 8,967 Cumulative Total Since of $10,000
9/30/2005 13,658 10,065 Investment Returns Inception* Investment
9/30/2006 15,080 11,151 --------------------------------------------------------------
The Hillman Advantage 50.80% $15,080
Equity Fund No Load Shares
--------------------------------------------------------------
S&P 500 Total Return Index 11.51% $11,151
--------------------------------------------------------------
* The No Load Shares' inception date - December 29, 2000 (Date
of Initial Public Investment).
- ----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at December 29, 2000 (Date of
Initial Public Investment). All dividends and distributions are reinvested. This
graph depicts the performance of The Hillman Advantage Equity Fund - No Load
Shares (the "Fund") versus the S&P 500 Total Return Index. It is important to
note that the Fund is a professionally managed mutual fund while the index is
not available for investment and is unmanaged. The comparison is shown for
illustrative purposes only.
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur ongoing costs, including management
fees; distribution (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds. The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The second line of the table
below provides information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio and an assumed annual rate of
return of 5% before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Expense Example Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2006 September 30, 2006 During Period*
- --------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,022.30 $7.55
- --------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before $1,000.00 $1,017.60 $7.54
expenses)
- --------------------------------------------------------------------------------------------------------------------------------
* Actual expenses are based on expenses incurred in the most recent six-month
period. The Fund's annualized six-month expense ratio is 1.49%. The values under
"Expenses Paid During Period" are equal to the annualized ratio multiplied by
the average account value over the period, multiplied by 183/365 (to reflect the
number of days in the six month period ending September 30, 2006).
The Hillman Advantage Equity Fund Class A Shares
Performance Update - $10,000 Investment (Unaudited)
For the period from July 18, 2006 (Date of Initial Public Offering) to September
30, 2006
- -----------------------------------------------------------------------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
----------------------------------------------------------------
The Hillman Advantage Equity S&P 500 Total Total Returns Since Inception*
Fund - Class A Shares Return Index ----------------------------------------------------------------
--------------------- ------------ The Hillman Advantage Equity Fund
7/18/2006 $ 9,425 $10,000 - Class A Shares - No Sales Load 9.35%
7/31/2006 9,604 10,326 ----------------------------------------------------------------
8/31/2006 9,955 10,571 The Hillman Advantage Equity Fund
9/30/2006 10,306 10,844 - Class A Shares - 5.75% Maximum
Sales Load 3.06%
----------------------------------------------------------------
Final Value of
Cumulative Total Since $10,000
Investment Returns Inception* Investment
----------------------------------------------------------------
The Hillman Advantage Equity Fund 9.35% $10,935
- Class A Shares - No Sales Load
----------------------------------------------------------------
The Hillman Advantage Equity Fund 3.06% $10,306
- Class A Shares - 5.75% Maximum
Sales Load
----------------------------------------------------------------
S&P 500 Total Return Index 8.44% $10,844
----------------------------------------------------------------
*The Fund's inception date - July 18, 2006 (Date of Initial
Public Offering).
- -----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment ($9,425 after maximum sales load
of 5.75%) at July 18, 2006 (Date of Initial Public Offering). All dividends and
distributions are reinvested. This graph depicts the performance of The Hillman
Advantage Equity Fund - Class A Shares (the "Fund") versus the S&P 500 Total
Return Index. It is important to note that the Fund is a professionally managed
mutual fund while the index is not available for investment and is unmanaged.
The comparison is shown for illustrative purposes only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The last line of the table below
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments. Therefore, the last line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example July 18, 2006 September 30, 2006 Period*
- ----------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,094.30 $2.63
- ----------------------------------------------------------------------------------------------------------------------------
Beginning Account Value Ending Account Value Expenses Paid During
April 1, 2006 September 30, 2006 Period**
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before $1,000.00 $1,018.85 $6.28
expenses)
- ----------------------------------------------------------------------------------------------------------------------------
* Actual Expenses are equal to the Fund's annualized expense ratio 1.24%
multiplied by the average account value over the period, multiplied by 74 days
and divided by 365 (to reflect the number of days in the initial fiscal period).
** Hypothetical Expenses paid during the period are equal to the Fund's
annualized expense ratio of 1.24% multiplied by the average account value over
the period, multiplied by 183 days and divided by 365 (to reflect the number of
days in the six month period ending September 30, 2006).
The Hillman Advantage Equity Fund Class B Shares
Performance Update - $10,000 Investment (Unaudited)
For the period from July 18, 2006 (Date of Initial Public Offering) to September
30, 2006
- -----------------------------------------------------------------------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
---------------------------------------------------------------
The Hillman Advantage Equity S&P 500 Total Total Returns Since Inception*
Fund - Class B Shares Return Index ---------------------------------------------------------------
--------------------- ------------ The Hillman Advantage Equity Fund
7/18/2006 $10,000 $10,000 - Class B Shares - No Sales Charge 9.19%
7/31/2006 10,190 10,326 ---------------------------------------------------------------
8/31/2006 10,555 10,571 The Hillman Advantage Equity Fund
9/30/2006 10,419 10,844 - Class B Shares - Maximum Sales
Charge 4.19%
---------------------------------------------------------------
Final Value of
Cumulative Total Since $10,000
Investment Returns Inception* Investment
---------------------------------------------------------------
The Hillman Advantage Equity Fund
- Class B Shares - No Sales Charge 9.19% $10,919
---------------------------------------------------------------
The Hillman Advantage Equity Fund
- Class B Shares - Maximum Sales
Charge 4.19% $10,419
---------------------------------------------------------------
S&P 500 Total Return Index 8.44% $10,844
---------------------------------------------------------------
*The Fund's inception date - July 18, 2006 (Date of Initial
Public Offering).
- -----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at July 18, 2006 (Date of
Initial Public Offering). The table and graph above includes the maximum
contingent deferred sales charge ("CDSC") corresponding to the length of time
that the investment as held as noted. The CDSC for the Class B Shares declines
from 5% to 0% over seven years; and the Class B Shares are converted to Class A
Shares of the Fund after eight years, without the imposition of any sales
charges. All dividends and distributions are reinvested. This graph depicts the
performance of The Hillman Advantage Equity Fund - Class B Shares (the "Fund")
versus the S&P 500 Total Return Index. It is important to note that the Fund is
a professionally managed mutual fund while the index is not available for
investment and is unmanaged. The comparison is shown for illustrative purposes
only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The last line of the table below
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments. Therefore, the last line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example July 18, 2006 September 30, 2006 Period*
- ----------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,094.30 $2.63
- ----------------------------------------------------------------------------------------------------------------------------
Beginning Account Value Ending Account Value Expenses Paid During
April 1, 2006 September 30, 2006 Period**
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before
expenses) $1,000.00 $1,018.85 $6.28
- ----------------------------------------------------------------------------------------------------------------------------
* Actual Expenses are equal to the Fund's annualized expense ratio 1.24%
multiplied by the average account value over the period, multiplied by 74 days
and divided by 365 (to reflect the number of days in the initial fiscal period).
** Hypothetical Expenses paid during the period are equal to the Fund's
annualized expense ratio of 1.24% multiplied by the average account value over
the period, multiplied by 183 days and divided by 365 (to reflect the number of
days in the six month period ending September 30, 2006).
The Hillman Advantage Equity Fund Class C Shares
Performance Update - $10,000 Investment (Unaudited)
For the period from July 18, 2006 (Date of Initial Public Offering) to September
30, 2006
- -----------------------------------------------------------------------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
---------------------------------------------------------------
The Hillman Advantage Equity S&P 500 Total Since
Fund - Class C Shares Return Index Total Returns Inception*
--------------------- ------------ ---------------------------------------------------------------
7/18/2006 $10,000 $10,000 The Hillman Advantage Equity Fund
7/31/2006 10,190 10,326 Class C Shares - No Sales Charge - 9.19%
8/31/2006 10,555 10,571 ---------------------------------------------------------------
9/30/2006 10,819 10,844 The Hillman Advantage Equity Fund -
Class C Shares - Maximum Sales Charge 8.19%
---------------------------------------------------------------
Final Value
Cumulative Total Since of $10,000
Investment Returns Inception* Investment
---------------------------------------------------------------
The Hillman Advantage Equity Fund -
Class C Shares - No Sales Charge 9.19% $10,919
---------------------------------------------------------------
The Hillman Advantage Equity Fund -
Class C Shares - Maximum Sales Charge 8.19% $10,810
---------------------------------------------------------------
S&P 500 Total Return Index 8.44% $10,844
---------------------------------------------------------------
*The Fund's inception date - July 18, 2006 (Date of Initial
Public Offering).
- -----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at July 18, 2006 (Date of
Initial Public Offering). The deduction of the maximum contingent deferred sales
charge ("CDSC") is reflected in the graph because the 1% CDSC for the Class C
Shares is imposed on proceeds redeemed within 1 year of the purchase date. The
CDSC may be waived or reduced under certain circumstances. All dividends and
distributions are reinvested. This graph depicts the performance of The Hillman
Advantage Equity Fund - Class C Shares (the "Fund") versus the S&P 500 Total
Return Index. It is important to note that the Fund is a professionally managed
mutual fund while the index is not available for investment and is unmanaged.
The comparison is shown for illustrative purposes only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The last line of the table below
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments. Therefore, the last line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example July 18, 2006 September 30, 2006 Period*
- ----------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,094.30 $2.63
- ----------------------------------------------------------------------------------------------------------------------------
Beginning Account Value Ending Account Value Expenses Paid During
April 1, 2006 September 30, 2006 Period**
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before $1,000.00 $1,018.85 $6.28
expenses)
- ----------------------------------------------------------------------------------------------------------------------------
* Actual Expenses are equal to the Fund's annualized expense ratio 1.24%
multiplied by the average account value over the period, multiplied by 74 days
and divided by 365 (to reflect the number of days in the initial fiscal period).
** Hypothetical Expenses paid during the period are equal to the Fund's
annualized expense ratio of 1.24% multiplied by the average account value over
the period, multiplied by 183 days and divided by 365 (to reflect the number of
days in the six month period ending September 30, 2006).
The Hillman Advantage Equity Fund
Schedule of Investments
As of September 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- ---------------------------------------------------------------- ----------------------------------------------------------------
COMMON STOCKS - 98.72% Hand/Machine Tools - 2.02%
Black & Decker Corporation 6,000 $ 476,100
--------------
Aerospace/Defense - 4.58%
Goodrich Corporation 13,000 $ 526,760 Healthcare - Products - 2.20%
The Boeing Company 7,000 551,950 Johnson & Johnson 8,000 519,520
-------------- --------------
1,078,710
--------------
Apparel - 2.23% Healthcare - Services - 4.41%
Nike, Inc. 6,000 525,720 Aetna Inc. 13,000 514,150
-------------- * Laboratory Corporation of
America Holdings 8,000 524,560
Biotechnology - 2.12% --------------
* Amgen Inc. 7,000 500,710 1,038,710
-------------- --------------
Home Builders - 2.23%
Chemicals - 2.36% D.R. Horton, Inc. 22,000 526,900
E.I. du Pont de Nemours --------------
and Company 13,000 556,920 Household Products/Wares - 2.14%
-------------- The Clorox Company 8,000 504,000
--------------
Computers - 6.50% Internet - 1.93%
* EMC Corporation 44,000 527,120 * Yahoo! Inc. 18,000 455,040
Hewlett-Packard Company 14,000 513,660 --------------
International Business Machines Media - 4.42%
Corporation 6,000 491,640 Time Warner Inc. 30,000 546,900
-------------- The Walt Disney Company 16,000 494,560
1,532,420 --------------
-------------- 1,041,460
Cosmetics/Personal Care - 2.10% --------------
The Procter & Gamble Miscellaneous Manufacturing - 4.46%
Company 8,000 495,840 3M Co. 7,000 520,940
-------------- General Electric Company 15,000 529,500
--------------
Diversified Financial Services - 2.1 1,050,440
Citigroup Inc. 10,000 496,700 --------------
-------------- Oil & Gas - 2.28%
Exxon Mobil Corporation 8,000 536,800
Electric - 4.35% --------------
American Electric Power
Company Inc. 14,000 509,180 Pharmaceuticals - 4.12%
The Southern Company 15,000 516,900 Merck & Co., Inc. 11,000 460,900
-------------- Pfizer Inc. 18,000 510,480
1,026,080 --------------
-------------- 971,380
Financial Services - 2.56% --------------
Allied Capital Corporation 20,000 604,200 Real Estate Investment Trust - 2.24%
-------------- Host Hotels & Resorts 23,000 527,390
--------------
Food - 10.97%
Campbell Soup Company 14,000 511,000
H.J. Heinz Company 12,000 503,160
Kellogg Company 11,000 544,720
McCormick & Company,
Incorporated 13,000 493,740
Whole Foods Market, Inc. 9,000 534,870
--------------
2,587,490
--------------
(Continued)
The Hillman Advantage Equity Fund
Schedule of Investments
As of September 30, 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Market Value
Shares (Note 1)
- ---------------------------------------------------------------- -----------------------------------------------------------------
COMMON STOCKS - (Continued) Summary of Investments by Industry
% of Net Market
Retail - 12.57% Industry Assets Value
----------------------------------------------------------------
Brinker International, Inc. 12,000 $ 481,080 Aerospace/Defense 4.58% $ 1,078,710
McDonald's Corporation 13,000 508,560 Apparel 2.23% 525,720
OSI Restaurant Partners, Inc. 15,000 475,650 Biotechnology 2.12% 500,710
Target Corporation 9,000 497,250 Chemicals 2.36% 556,920
The Home Depot, Inc. 14,000 507,780 Computers 6.50% 1,532,420
Wal-Mart Stores, Inc. 10,000 493,200 Cosmetics/Personal Care 2.10% 495,840
-------------- Diversified Financial Services 2.11% 496,700
2,963,520 Electric 4.35% 1,026,080
-------------- Financial Services 2.56% 604,200
Semiconductors - 2.18% Food 10.97% 2,587,490
Intel Corporation 25,000 514,250 Hand/Machine Tools 2.02% 476,100
-------------- Healthcare - Products 2.20% 519,520
Healthcare - Services 4.41% 1,038,710
Software - 2.26% Home Builders 2.23% 526,900
* Oracle Corporation 30,000 532,200 Household Products/Wares 2.14% 504,000
-------------- Internet 1.93% 455,040
Investment Company 0.96% 227,359
Telecommunications - 7.08% Media 4.42% 1,041,460
AT&T Inc. 18,000 586,080 Miscellaneous Manufacturing 4.46% 1,050,440
Motorola, Inc. 21,000 525,000 Oil & Gas 2.28% 536,800
Verizon Communications Inc. 15,000 556,950 Pharmaceuticals 4.12% 971,380
-------------- Real Estate Investment Trust 2.24% 527,390
1,668,030 Retail 12.57% 2,963,520
-------------- Semiconductors 2.18% 514,250
Transportation - 2.30% Software 2.26% 532,200
FedEx Corp. 5,000 543,400 Telecommunications 7.08% 1,668,030
-------------- Transportation 2.30% 543,400
---------------------------------------------------------------
Total Common Stocks (Cost $19,567,907) 23,273,930 Total 99.68% $ 23,501,289
--------------
INVESTMENT COMPANY - 0.96%
Evergreen Institutional Money Market Fund
(Cost $227,359) 227,359 227,359
--------------
Total Investments (Cost $19,795,266) - 99.68% $ 23,501,289
Other Assets less Liabilities - 0.32% 75,271
--------------
Net Assets - 100.00% $ 23,576,560
==============
* Non-income producing investment.
See Notes to Financial Statements
The Hillman Focused Advantage Fund No Load Shares
Performance Update - $10,000 Investment (Unaudited)
For the fiscal year ended September 30, 2006.
- ------------------------------------------------------------- --------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006.
--------------------------------------------------------------
The Hillman Focused Advantage S&Ps 500 Total Average Annual One Five Since
Fund - No Load Shares Return Index Total Returns Year Year Inception*
--------------------- ------------ --------------------------------------------------------------
12/29/2000 $10,000 $10,000 The Hillman Focused
9/30/2001 7,500 7,961 Advantage Fund No Load
9/30/2002 6,550 6,330 Shares 7.15% 16.17% 8.35%
9/30/2003 9,668 7,874 --------------------------------------------------------------
9/30/2004 11,874 8,967 Since Final Value
9/30/2005 14,806 10,065 Cumulative Total of $10,000
9/30/2006 15,866 11,151 Investment Returns Inception* Investment
--------------------------------------------------------------
The Hillman Focused
Advantage Fund No Load
Shares 58.66% $15,866
--------------------------------------------------------------
S&P 500 Total Return Index 11.51% $11,151
--------------------------------------------------------------
* The No Load Shares' inception date - December 29, 2000 (Date
of Initial Public Investment).
- ----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at December 29, 2000 (Date of
Initial Public Investment). All dividends and distributions are reinvested. This
graph depicts the performance of The Hillman Focused Advantage Fund - No Load
Shares (the "Fund") versus the S&P 500 Total Return Index. It is important to
note that the Fund is a professionally managed mutual fund while the index is
not available for investment and is unmanaged. The comparison is shown for
illustrative purposes only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur ongoing costs, including management
fees; distribution (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds. The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The second line of the table
below provides information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio and an assumed annual rate of
return of 5% before expenses, which is not the Fund's actual return. The
hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Expense Example Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2006 September 30, 2006 During Period*
- --------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $984.70 $7.41
- --------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% return before
expenses) $1,000.00 $1,017.60 $7.54
- --------------------------------------------------------------------------------------------------------------------------------
* Actual expenses are based on expenses incurred in the most recent six-month
period. The Fund's annualized six-month expense ratio is 1.49%. The values under
"Expenses Paid During Period" are equal to the annualized ratio multiplied by
the average account value over the period, multiplied by 183/365 (to reflect the
number of days in the six month period ending September 30, 2006).
The Hillman Focused Advantage Fund Class A Shares
Performance Update - $10,000 Investment (Unaudited)
For the period from July 18, 2006 (Date of Initial Public Offering) to September
30, 2006
- -----------------------------------------------------------------------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
---------------------------------------------------------------
The Hillman Focused Advantage S&P 500 Total Total Returns Since Inception*
Fund - Class A Shares Return Index ---------------------------------------------------------------
--------------------- ------------ The Hillman Focused Advantage Fund
7/18/2006 $9,425 $10,000 - Class A Shares No Sales Load 9.74%
7/31/2006 9,580 10,326 ---------------------------------------------------------------
8/31/2006 9,938 10,571 The Hillman Focused Advantage Fund
9/30/2006 10,343 10,844 - Class A Shares 5.75% Maximum
Sales Load 3.43%
---------------------------------------------------------------
Final Value of
Cumulative Total Since $10,000
Investment Returns Inception* Investment
---------------------------------------------------------------
The Hillman Focused Advantage Fund
- Class A Shares No Sales Load 9.74% $10,974
---------------------------------------------------------------
The Hillman Focused Advantage Fund
- Class A Shares 5.75% Maximum
Sales Load 3.43% $10,343
---------------------------------------------------------------
S&P 500 Total Return Index 8.44% $10,844
---------------------------------------------------------------
*The Fund's inception date - July 18, 2006 (Date of Initial
Public Offering).
- -----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment ($9,425 after maximum sales load
of 5.75%) at July 18, 2006 (Date of Initial Public Offering). All dividends and
distributions are reinvested. This graph depicts the performance of The Hillman
Focused Advantage Fund - Class A Shares (the "Fund") versus the S&P 500 Total
Return Index. It is important to note that the Fund is a professionally managed
mutual fund while the index is not available for investment and is unmanaged.
The comparison is shown for illustrative purposes only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The last line of the table below
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments. Therefore, the last line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example July 18, 2006 September 30, 2006 Period*
- ----------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,097.40 $2.64
- ----------------------------------------------------------------------------------------------------------------------------
Beginning Account Value Ending Account Value Expenses Paid During
April 1, 2006 September 30, 2006 Period**
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before $1,000.00 $1,018.85 $6.28
expenses)
- ----------------------------------------------------------------------------------------------------------------------------
* Actual Expenses are equal to the Fund's annualized expense ratio 1.24%
multiplied by the average account value over the period, multiplied by 74 days
and divided by 365 (to reflect the number of days in the initial fiscal period).
** Hypothetical Expenses paid during the period are equal to the Fund's
annualized expense ratio of 1.24% multiplied by the average account value over
the period, multiplied by 183 days and divided by 365 (to reflect the number of
days in the six month period ending September 30, 2006).
The Hillman Focused Advantage Fund Class B Shares
Performance Update - $10,000 Investment (Unaudited)
For the period from July 18, 2006 (Date of Initial Public Offering)
to September 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
---------------------------------------------------------------
The Hillman Focused Advantage S&P 500 Total Since
Fund - Class B Shares Return Index Total Returns Inception*
--------------------- ------------ ---------------------------------------------------------------
7/18/2006 $10,000 $10,000 The Hillman Focused Advantage Fund -
7/31/2006 10,165 10,326 Class B Shares - No Sales Charge 9.52%
8/31/2006 10,537 10,571 ---------------------------------------------------------------
9/30/2006 10,452 10,844 The Hillman Focused Advantage Fund -
Class B Shares - Maximum Sales Charge 4.52%
---------------------------------------------------------------
Final Value
Cumulative Total Since of $10,000
Investment Returns Inception* Investment
---------------------------------------------------------------
The Hillman Focused Advantage Fund -
Class B Shares - No Sales Charge 9.52% $10,952
---------------------------------------------------------------
The Hillman Focused Advantage Fund -
Class B Shares - Maximum Sales Charge 4.52% $10,452
---------------------------------------------------------------
S&P 500 Total Return Index 8.44% $10,844
---------------------------------------------------------------
*The Fund's inception date - July 18, 2006(Date of Initial
Public Offering).
- -----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at July 18, 2006 (Date of
Initial Public Offering). The table and graph above includes the maximum
contingent deferred sales charge ("CDSC") corresponding to the length of time
that the investment as held as noted. The CDSC for the Class B Shares declines
from 5% to 0% over seven years; and the Class B Shares are converted to Class A
Shares of the Fund after eight years, without the imposition of any sales
charges. All dividends and distributions are reinvested. This graph depicts the
performance of The Hillman Focused Advantage Fund - Class B Shares (the "Fund")
versus the S&P 500 Total Return Index. It is important to note that the Fund is
a professionally managed mutual fund while the index is not available for
investment and is unmanaged. The comparison is shown for illustrative purposes
only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The last line of the table below
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments. Therefore, the last line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example July 18, 2006 September 30, 2006 Period*
- ----------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,097.40 $2.64
- ----------------------------------------------------------------------------------------------------------------------------
Beginning Account Value Ending Account Value Expenses Paid During
April 1, 2006 September 30, 2006 Period**
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before
expenses) $1,000.00 $1,018.85 $6.28
- --------------------------------------------- -------------------------- ------------------------- -------------------------
* Actual Expenses are equal to the Fund's annualized expense ratio 1.24%
multiplied by the average account value over the period, multiplied by 74 days
and divided by 365 (to reflect the number of days in the initial fiscal period).
** Hypothetical Expenses paid during the period are equal to the Fund's
annualized expense ratio of 1.24% multiplied by the average account value over
the period, multiplied by 183 days and divided by 365 (to reflect the number of
days in the six month period ending September 30, 2006).
The Hillman Focused Advantage Fund Class C Shares
Performance Update - $10,000 Investment (Unaudited)
For the period from July 18, 2006 (Date of Initial Public Offering)
to September 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------
[Line Graph Here] Performance Returns for the periods ended September 30, 2006
---------------------------------------------------------------
The Hillman Focused Advantage S&P 500 Total Since
Fund - Class C Shares Return Index Total Returns Inception*
--------------------- ------------ ---------------------------------------------------------------
7/18/2006 $10,000 $10,000 The Hillman Focused Advantage Fund -
7/31/2006 10,165 10,326 Class C Shares - No Sales Charge 9.52%
8/31/2006 10,537 10,571 ---------------------------------------------------------------
9/30/2006 10,852 10,844 The Hillman Focused Advantage Fund -
Class C Shares - Maximum Sales Charge 8.52%
---------------------------------------------------------------
Final Value
Cumulative Total Since of $10,000
Investment Returns Inception* Investment
---------------------------------------------------------------
The Hillman Focused Advantage Fund -
Class C Shares - No Sales Charge 9.52% $10,952
---------------------------------------------------------------
The Hillman Focused Advantage -
Class C Shares Fund - Maximum Sales
Charge 8.52% $10,852
---------------------------------------------------------------
S&P 500 Total Return Index 8.44% $10,844
---------------------------------------------------------------
*The Fund's inception date - July 18, 2006 (Date of Initial
Public Offering).
- -----------------------------------------------------------------------------------------------------------------------------
The graph assumes an initial $10,000 investment at July 18, 2006 (Date of
Initial Public Offering). The deduction of the maximum contingent deferred sales
charge ("CDSC") is not reflected in the graph because the 1% CDSC for the Class
C Shares is imposed on proceeds redeemed within 1 year of the purchase date. The
CDSC may be waived or reduced under certain circumstances. All dividends and
distributions are reinvested. This graph depicts the performance of The Hillman
Focused Advantage Fund - Class C Shares (the "Fund") versus the S&P 500 Total
Return Index. It is important to note that the Fund is a professionally managed
mutual fund while the index is not available for investment and is unmanaged.
The comparison is shown for illustrative purposes only.
- --------------------------------------------------------------------------------
Performance quoted above represents past performance, which is no guarantee of
future results. Investment return and principal value will fluctuate so that
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. An
investor may obtain performance data, current to the most recent month-end, by
visiting www.nottinghamco.com.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Average annual
total returns are historical in nature and measure net investment income and
capital gain or loss from portfolio investments assuming reinvestments of
dividends.
Fund Expenses (Unaudited)
- --------------------------------------------------------------------------------
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, which may include sales charges (loads) on purchase payments and (2)
ongoing costs, including management fees; distribution (12b-1) fees; and other
Fund expenses. This example is intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period as indicated below.
Actual Expenses - The first line of the table below provides information about
the actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. 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 in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
Hypothetical Example for Comparison Purposes - The last line of the table below
provides information about hypothetical account values and hypothetical expenses
based on the Fund's actual expense ratio and an assumed annual rate of return of
5% before expenses, which is not the Fund's actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds by comparing this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) on purchase payments. Therefore, the last line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Account Value Ending Account Value Expenses Paid During
Expense Example July 18, 2006 September 30, 2006 Period*
- ----------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,097.40 $2.64
- ----------------------------------------------------------------------------------------------------------------------------
Beginning Account Value Ending Account Value Expenses Paid During
April 1, 2006 September 30, 2006 Period**
- ----------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before
expenses) $1,000.00 $1,018.85 $6.28
- ----------------------------------------------------------------------------------------------------------------------------
* Actual Expenses are equal to the Fund's annualized expense ratio 1.24%
multiplied by the average account value over the period, multiplied by 74 days
and divided by 365 (to reflect the number of days in the initial fiscal period).
** Hypothetical Expenses paid during the period are equal to the Fund's
annualized expense ratio of 1.24% multiplied by the average account value over
the period, multiplied by 183 days and divided by 365 (to reflect the number of
days in the six month period ending September 30, 2006).
The Hillman Focused Advantage Fund
Schedule of Investments
As of September 30, 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- ----------------------------------------------------------------- ---------------------------------------------------------------
COMMON STOCKS - 98.99% Telecommunications - 14.50%
AT&T Inc. 115,000 $ 3,744,400
Aerospace/Defense - 9.97% Motorola, Inc. 155,000 3,875,000
Goodrich Corporation 95,000 $ 3,849,400 Verizon Communications, Inc. 100,000 3,713,000
The Boeing Corporation 50,000 3,942,500 --------------
-------------- 11,332,400
7,791,900 --------------
-------------- Transportation - 5.56%
Chemicals - 4.93% FedEx Corp. 40,000 4,347,200
E.I. du Pont de Nemours --------------
Company 90,000 3,855,600 Total Common Stocks (Cost $74,961,166) 77,383,650
-------------- --------------
Computers - 10.37% INVESTMENT COMPANY - 0.78%
* EMC Corporation 340,000 4,073,200 Evergreen Institutional Money Market Fund
Hewlett-Packard Company 110,000 4,035,900 (Cost $610,018) 610,018 610,018
-------------- --------------
8,109,100
--------------
Diversified Financial Services - 4.77% Total Investments
Citigroup Inc. 75,000 3,725,250 (Cost $75,571,184) - 99.77% $ 77,993,668
--------------
Other Assets Less Liabilities - 0.23% 183,524
--------------
Electric - 4.65%
American Electric Power Net Assets - 100.00% $ 78,177,192
Company, Inc. 100,000 3,637,000 ==============
--------------
*Non-income producing investment.
Financial Services - 4.83%
Allied Capital Corporation 125,000 3,776,250
--------------
Food - 4.94%
Whole Foods Market, Inc. 65,000 3,862,950 Summary of Investments by Industry
-------------- % of Net Market
Industry Assets Value
Healthcare - Services - 9.84% ---------------------------------------------------------------
Aetna Inc. 95,000 3,757,250 Aerospace/Defense 9.97% $ 7,791,900
* Laboratory Corporation of Chemicals 4.93% 3,855,600
America Holdings 60,000 3,934,200 Computers 10.37% 8,109,100
-------------- Diversified Financial Services 4.77% 3,725,250
7,691,450 Electric 4.65% 3,637,000
-------------- Financial Services 4.83% 3,776,250
Home Builders - 5.05% Food 4.94% 3,862,950
D.R. Horton, Inc. 165,000 3,951,750 Healthcare - Services 9.84% 7,691,450
-------------- Home Builders 5.05% 3,951,750
Miscellaneous Manufacturing - 4.97% Investment Company 0.78% 610,018
General Electric Company 110,000 3,883,000 Miscellaneous Manufacturing 4.97% 3,883,000
-------------- Real Estate Investment Trust 4.84% 3,783,450
Real Estate Investment Trust - 4.84% Retail 9.77% 7,636,350
Host Hotels & Resorts 165,000 3,783,450 Telecommunications 14.50% 11,332,400
-------------- Transportation 5.56% 4,347,200
Retail - 9.77% --------------------------------------------------------------
OSI Restaurant Partners, Inc. 115,000 3,646,650 Total 99.77% $ 77,993,668
The Home Depot, Inc. 110,000 3,989,700
--------------
7,636,350
--------------
See Notes to Financial Statements
Hillman Capital Management Funds
Statements of Assets and Liabilities
Advantage Equity Focused Advantage
As of September 30, 2006 Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments, at cost ..................................................................... $19,795,266 $75,571,184
Investments, at value (note 1) ........................................................... $23,501,289 $77,993,668
Cash ..................................................................................... 4,491 --
Receivables:
Fund shares sold ..................................................................... 55,102 170,264
Dividends and Interest ............................................................... 25,450 102,136
Prepaid expenses:
Fund accounting fees ................................................................. 4,500 4,500
Compliance service fees .............................................................. 646 646
Other expenses ....................................................................... 38,890 53,849
----------- ------------
Total Assets ............................................................................. 23,630,368 78,325,063
----------- ------------
Liabilities:
Payables:
Fund shares repurchased .............................................................. 24,858 63,870
Distributions ........................................................................ 2,014 38,837
Accrued expenses ......................................................................... 26,877 36,323
Due to affiliates:
Advisor (note 2) ..................................................................... 59 8,841
----------- ------------
Total Liabilities ........................................................................ 53,808 147,871
----------- ------------
Net Assets ................................................................................... $23,576,560 $78,177,192
=========== ============
Net Assets Consist of:
Capital .................................................................................. $18,103,030 $70,155,473
Undistributed net investment income ...................................................... -- 6,219
Undistributed net realized gain on investments ........................................... 1,767,507 5,593,016
Net unrealized appreciation in investments ............................................... 3,706,023 2,422,484
----------- ------------
Total Net Assets ......................................................................... $23,576,560 $78,177,192
=========== ===========
No Load Shares Outstanding, no par value
(unlimited shares authorized) ........................................................ 1,712,852 5,122,096
Net Assets - No Load Shares .............................................................. $23,543,734 $78,144,264
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ................... $ 13.75 $ 15.26
Class A Shares Outstanding, no par value (unlimited shares authorized) ....................... 794 717
Net Assets - Class A Shares .............................................................. $ 10,942 $ 10,976
Net Asset Value and Redemption Price Per Share ........................................... $ 13.79 (a) $ 15.31
Maximum Offering Price Per Share (Net Asset Value / 0.9425) .............................. $ 14.63 $ 16.24
Class B Shares Outstanding, no par value (unlimited shares authorized) ....................... 792 716
Net Assets - Class B Shares (b) .......................................................... $ 10,942 $ 10,976
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ................... $ 13.81 (a) $ 15.33
Class C Shares Outstanding, no par value (unlimited shares authorized) ....................... 792 716
Net Assets - Class C Shares (b) .......................................................... $ 10,942 $ 10,976
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ................... $ 13.81 (a) $ 15.33
(a) Due to rounding of shares outstanding, the Net Assets divided by shares does
not equal the Net Asset Value per share.
(b) Class B and C shares have a contingent deferred sales charge (note 1).
See Notes to Financial Statements
Hillman Capital Management Funds
Statements of Operations
Advantage Equity Focused Advantage
For the fiscal year ended September 30, 2006 Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends ......................................................................... $ 446,893 $ 1,849,177
Interest .......................................................................... 31,219 --
----------- -----------
Total Income ...................................................................... 478,112 1,849,177
----------- -----------
Expenses:
Advisory fees (note 2) ............................................................ 210,005 881,094
Administration fees (note 2) ...................................................... 26,251 100,609
Transfer agent fees (note 2) ...................................................... 21,000 31,498
Registration and filing administration fees (note 2) .............................. 11,961 11,986
Fund accounting fees (note 2) ..................................................... 34,544 41,291
Compliance services fees (note 2) ................................................. 7,750 7,750
Custody fees (note 2) ............................................................. 5,560 29,064
Distribution and services fees - No Load Shares (note 3) .......................... 51,138 215,474
Other accounting fees (note 2) .................................................... 46 --
Legal fees ........................................................................ 15,604 16,794
Audit and tax preparation fees .................................................... 15,145 14,145
Registration and filing expenses .................................................. 20,836 34,314
Shareholder servicing expenses .................................................... 2,983 15,158
Printing expenses ................................................................. 1,246 5,913
Trustees' fees and meeting expenses ............................................... 4,192 4,215
Securities pricing fees ........................................................... 4,382 1,761
Other operating expenses .......................................................... 9,767 17,945
----------- -----------
Total Expenses .................................................................... 442,410 1,429,011
----------- -----------
Advisory fees waived (note 2) ..................................................... (103,473) (85,017)
Administration fees waived (note 2) ............................................... (959) --
----------- -----------
Net Expenses ...................................................................... 337,978 1,343,994
----------- -----------
Net Investment Income .................................................................. 140,134 505,183
----------- -----------
Net Realized and Unrealized Gain (Loss) from Investments:
Net realized gain from:
Investments ................................................................... 1,767,879 5,812,827
Capital gain distributions from other investment companies .................... 27,760 30,500
Change in unrealized appreciation on investments .................................. 144,350 (2,164,093)
----------- -----------
Net Realized and Unrealized Gain on Investments ........................................ 1,939,989 3,679,234
----------- -----------
Net Increase in Net Assets Resulting from Operations ................................... $ 2,080,123 $ 4,184,417
=========== ===========
See Notes to Financial Statements
Hillman Capital Management Funds
Statements of Changes in Net Assets
Advantage Equity Fund Focused Advantage Fund
For the fiscal years ended September 30, 2006 2005 2006 2005
- --------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income .................................. $ 140,134 $ 150,575 $ 505,183 $ 7,988
Net realized gain from investment transactions ......... 1,767,879 304,323 5,812,827 2,090,551
Capital gain distributions from other
investment companies ................................. 27,760 37,489 30,500 --
Change in unrealized appreciation on investments........ 144,350 1,704,000 (2,164,093) 2,892,020
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting from Operations........ 2,080,123 2,196,387 4,184,417 4,990,559
------------ ------------ ------------ ------------
Distributions to Shareholders: (note 5)
Net investment income - No Load Shares ................. (251,827) (150,140) (506,930) (10,478)
Net investment income - Class A Shares ................. (16) -- (14) --
Net realized gain from investment transactions -
No Load Shares ....................................... (261,624) (283,131) (2,294,247) --
------------ ------------ ------------ ------------
Decrease in Net Assets Resulting from Distributions ......... (513,467) (433,271) (2,801,191) (10,478)
------------ ------------ ------------ ------------
Capital Share Transactions: (note 6)
No Load Shares
Shares sold .......................................... 3,860,040 3,932,673 76,442,383 63,962,401
Reinvested dividends and distributions ............... 509,863 432,872 2,603,468 10,240
Shares repurchased ................................... (2,453,740) (1,418,516) (67,461,663) (15,623,836)
Class A Shares
Shares sold .......................................... 10,000 -- 10,000 --
Reinvested dividends and distributions ............... 16 -- 14 --
Shares repurchased ................................... -- -- -- --
Class B Shares
Shares sold .......................................... 10,000 -- 10,000 --
Reinvested dividends and distributions ............... -- -- -- --
Shares repurchased ................................... -- -- -- --
Class C Shares
Shares sold .......................................... 10,000 -- 10,000 --
Reinvested dividends and distributions ............... -- -- -- --
Shares repurchased ................................... -- -- -- --
------------ ------------ ------------ ------------
Increase from Capital Share Transactions .................... 1,946,179 2,947,029 11,614,202 48,348,805
------------ ------------ ------------ ------------
Net Increase in Net Assets .................................. 3,512,835 4,710,145 12,997,428 53,328,886
Net Assets:
Beginning of year ...................................... 20,063,725 15,353,580 65,179,764 11,850,878
------------ ------------ ------------ ------------
End of year ............................................ $ 23,576,560 $ 20,063,725 $ 78,177,192 $ 65,179,764
============ ============ ============ ============
Undistributed Net Investment Income .......................... $ -- $ 83,578 $ 6,219 $ 7,980
Hillman Capital Management Funds
Financial Highlights
For a share outstanding during the Advantage Equity Fund No Load
fiscal years ended September 30, 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year ........................ $ 12.76 $ 11.56 $ 10.25 $ 8.51 $ 8.77
--------- ---------- ---------- ---------- ---------
Income from Investment Operations:
Net investment income ............................... 0.08 0.09 0.13 0.14 0.10
Net realized and unrealized gain (loss) on securities 1.23 1.40 1.27 1.83 (0.25)
--------- ---------- ---------- ---------- ---------
Total from Investment Operations .......................... 1.31 1.49 1.40 1.97 (0.15)
--------- ---------- ---------- ---------- ---------
Less Distributions:
Dividends (from net investment income) .............. (0.15) (0.10) (0.09) (0.15) (0.11)
Distributions (from capital gains) .................. (0.17) (0.19) -- (0.08) --
--------- ---------- ---------- ---------- ---------
Total Distributions ....................................... (0.32) (0.29) (0.09) (0.23) (0.11)
--------- ---------- ---------- ---------- ---------
Net Asset Value, End of Year .............................. $ 13.75 $ 12.76 $ 11.56 $ 10.25 $ 8.51
========= ========== ========== ========== =========
Total Return .............................................. 10.41% 13.02% 13.63% 23.46% (1.56)%
Net Assets, End of Year (in thousands) .................... $ 23,544 $ 20,064 $ 15,354 $ 11,754 $ 6,288
Average Net Assets for the Year (in thousands) ............ $ 20,994 $ 18,682 $ 14,244 $ 8,448 $ 6,715
Ratio of Gross Expenses to Average Net Assets (a) ......... 2.11% 2.18% 2.24% 2.61% 2.83%
Ratio of Net Expenses to Average Net Assets (a) ........... 1.61% 1.75% 1.75% 1.83% 1.80%
Ratio of Net Investment
Income to Average Net Assets ........................ 0.67% 0.81% 1.15% 1.62% 1.11%
Portfolio Turnover Rate ................................... 38.18% 12.11% 17.14% 19.71% 40.37%
Advantage Equity Fund
For a share outstanding during the Class A Class B Class C
period ended September 30, 2006 (b) 2006 (b) 2006 (b)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period .................................................... $ 12.62 $ 12.62 $ 12.62
--------- --------- ---------
Income from Investment Operations:
Net investment income ............................................................. 0.02 0.02 0.02
Net realized and unrealized gain on securities .................................... 1.17 1.17 1.17
--------- --------- ---------
Total from Investment Operations ........................................................ 1.19 1.19 1.19
--------- --------- ---------
Less Distributions:
Dividends (from net investment income) ............................................ (0.02) -- --
--------- --------- ---------
Total Distributions ..................................................................... (0.02) -- --
--------- --------- ---------
Net Asset Value, End of Period .......................................................... $ 13.79 $ 13.81 $ 13.81
========= ========= =========
Total Return (d) ........................................................................ 9.43% 9.43% 9.43%
Net Assets, End of Period (in thousands) ................................................ $ 11 $ 11 $ 11
Average Net Assets for the Period (in thousands) ........................................ $ 10 $ 10 $ 10
Ratio of Gross Expenses to Average Net Assets (a)(c) .................................... 2.23% 2.23% 2.23%
Ratio of Net Expenses to Average Net Assets (a)(c) ...................................... 1.24% 1.24% 1.24%
Ratio of Net Investment
Income to Average Net Assets (c) .................................................. 0.91% 0.91% 0.91%
Portfolio Turnover Rate ................................................................. 38.18% 38.18% 38.18%
(a) The expense ratios listed reflect total expenses prior to any waivers (gross
expense ratio) and after any waivers (net expense ratio).
(b) For the period from July 18, 2006 (Date of Initial Public Offering) to
September 30, 2006.
(c) Annualized.
(d) Total return does not reflect payment of sales charge.
See Notes to Financial Statements (Continued)
Hillman Capital Management Funds
Financial Highlights
For a share outstanding during the Focused Advantage Fund No Load
fiscal years ended September 30, 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Year ........................ $ 14.73 $ 11.82 $ 9.63 $ 6.55 $ 7.51
---------- ---------- ---------- --------- ---------
Income from Investment Operations:
Net investment income (loss) ........................ 0.09 -- 0.03 0.04 (0.04)
Net realized and unrealized gain (loss) on securities 0.95 2.92 2.17 3.08 (0.92)
---------- ---------- ---------- --------- ---------
Total from Investment Operations .......................... 1.04 2.92 2.20 3.12 (0.96)
---------- ---------- ---------- --------- ---------
Less Distributions:
Dividends (from net investment income) .............. (0.09) (0.01) (0.01) (0.04) --
Distributions (from capital gains) .................. (0.42) -- -- -- --
---------- ---------- ---------- --------- ---------
Total Distributions ....................................... (0.51) (0.01) (0.01) (0.04) --
---------- ---------- ---------- --------- ---------
Net Asset Value, End of Year .............................. $ 15.26 $ 14.73 $ 11.82 $ 9.63 $ 6.55
========== ========== ========== ========= =========
Total Return .............................................. 7.15% 24.69% 22.82% 47.60% (12.67)%
Net Assets, End of Year (in thousands) .................... $ 78,144 $ 65,180 $ 11,851 $ 5,157 $ 2,977
Average Net Assets for the Year (in thousands) ............ $ 88,103 $ 32,265 $ 8,329 $ 3,879 $ 3,628
Ratio of Gross Expenses to Average Net Assets (a) ......... 1.62% 1.89% 2.58% 3.93% 4.06%
Ratio of Net Expenses to Average Net Assets (a) ........... 1.53% 1.75% 1.75% 2.10% 2.12%
Ratio of Net Investment
Income (Loss) to Average Net Assets ................. 0.57% 0.02% 0.39% 0.53% (0.46%)
Portfolio Turnover Rate ................................... 43.27% 39.94% 37.80% 41.37% 67.29%
Focused Advantage Fund
For a share outstanding during the Class A Class B Class C
period ended September 30, 2006 (b) 2006 (b) 2006 (b)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period ..................................... $ 13.97 $ 13.97 $ 13.97
--------- --------- ---------
Income from Investment Operations:
Net investment income .............................................. 0.03 0.03 0.03
Net realized and unrealized gain on securities ..................... 1.33 1.33 1.33
--------- --------- ---------
Total from Investment Operations ......................................... 1.36 1.36 1.36
--------- --------- ---------
Less Distributions:
Dividends (from net investment income) ............................. (0.02) -- --
--------- --------- ---------
Total Distributions ...................................................... (0.02) -- --
--------- --------- ---------
Net Asset Value, End of Period ........................................... $ 15.31 $ 15.33 $ 15.33
========= ========= =========
Total Return (d) ......................................................... 9.74% 9.74% 9.74%
Net Assets, End of Period (in thousands) ................................. $ 11 $ 11 $ 11
Average Net Assets for the Period (in thousands) ......................... $ 10 $ 10 $ 10
Ratio of Gross Expenses to Average Net Assets (a)(c) ..................... 1.58% 1.58% 1.58%
Ratio of Net Expenses to Average Net Assets (a)(c) ....................... 1.24% 1.24% 1.24%
Ratio of Net Investment
Income to Average Net Assets (c) ................................... 0.93% 0.93% 0.93%
Portfolio Turnover Rate .................................................. 43.27% 43.27% 43.27%
(a) The expense ratios listed reflect total expenses prior to any waivers (gross
expense ratio) and after any waivers (net expense ratio).
(b) For the period from July 18, 2006 (Date of Initial Public Offering) to
September 30, 2006.
(c) Annualized.
(d) Total return does not reflect payment of sales charge.
See Notes to Financial Statements
Hillman Capital Management Funds
Notes to Financial Statements
________________________________________________________________________________
1. Organization and Significant are subject to distribution plan fees
Accounting Policies as described in Note 3. Class B shares
automatically convert into Class A
The Hillman Advantage Equity Fund, shares after eight years, and Class C
formerly known as The Hillman Total shares are automatically converted
Return Fund, and The Hillman Focused into the No Load shares after ten
Advantage Fund, formerly known as The years.
Hillman Aggressive Equity Fund,
(collectively the "Funds" and The following accounting policies have
individually a "Fund") are series been consistently followed by the
funds. The Funds are part of the Funds and are in conformity with
Hillman Capital Management Investment accounting principles generally
Trust (the "Trust"), which was accepted in the United States of
organized as a Delaware Business America in the investment company
Statutory Trust and is registered industry.
under the Investment Company Act of
1940, (the "1940 Act"), as amended, as Investment Valuation
an open-ended management investment The Funds' investments in securities
company. are carried at value. Securities
listed on an exchange or quoted on a
The Hillman Advantage Equity Fund national market system are valued at
("Advantage Equity Fund") commenced the last sales price as of 4:00 p.m.
operations on December 29, 2000. The Eastern Time. Securities traded in the
investment objective of the Fund is to NASDAQ over-the-counter market are
seek maximum total return through a generally valued at the NASDAQ
combination of long-term capital Official Closing Price. Other
appreciation and current income. securities traded in the
over-the-counter market and listed
The Hillman Focused Advantage Fund securities for which no sale was
("Focused Advantage Fund") commenced reported on that date are valued at
operations on December 29, 2000. The the most recent bid price. Securities
investment objective of the Fund is to and assets for which representative
seek long-term capital appreciation. market quotations are not readily
available or which cannot be
The Board of Trustees of the Trust accurately valued using the Funds'
(the "Trustees") approved, on February normal pricing procedures are valued
14, 2006, a plan to authorize three at fair value as determined in good
new classes of shares for both Funds faith under policies approved by the
designated as Class A Shares, Class B Trustees. Fair value pricing may be
Shares, and Class C Shares. On July used, for example, in situations where
18, 2006, the Class A Shares, Class B (i) a portfolio security is so thinly
Shares, and Class C Shares became traded that there have been no
effective. The Funds currently have an transactions for that security over an
unlimited number of authorized shares, extended period of time; (ii) the
which are divided into four classes - exchange on which the portfolio
No Load Shares, Class A Shares, Class security is principally traded closes
B Shares, and Class C Shares. early; or (iii) trading of the
portfolio security is halted during
Each class of shares has equal rights the day and does not resume prior to
as to assets of the Fund, and the the Funds' net asset value
classes are identical except for calculation. A portfolio security's
differences in their sales charge "fair value" price may differ from the
structures and ongoing distribution price next available for that
and service fees. Income, expenses portfolio security using the Funds'
(other than distribution and service normal pricing procedures. Instruments
fees), and realized and unrealized with maturities of 60 days or less are
gains or losses on investments are valued at amortized cost, which
allocated to each class of shares approximates market value.
based upon its relative net assets.
All classes have equal voting Investment Transactions and Investment
privileges, except where otherwise Income
required by law or when the Trustees Investment transactions are accounted
determine that the matter to be voted for as of the date purchased or sold
on affects only the interests of the (trade date). Dividend income is
shareholders of a particular class. recorded on the ex-dividend date.
The Funds' Class B and Class C shares Certain dividends from foreign
are sold without an initial sales securities will be recorded as soon as
charge; however, they are subject to a the Trust is informed of the dividend
contingent deferred sales charge. if such information is obtained
Class B shares are charged at the rate subsequent to the ex-dividend date.
of 5% in the first year and declining Interest income is recorded on the
to 0% over a six-year period, and accrual basis and includes
Class C shares at a rate of 1% if amortization of discounts and
redeemed in the first year, which is premiums. Gains and losses are
payable to the Distributor of the determined on the identified cost
Trust. Class A shares are sold with an basis, which is the same basis used
initial sales charge of up to 5.75% of for federal income tax purposes.
the amount invested. The No Load,
Class A, Class B, and Class C shares Expenses
The Funds bear expenses incurred
specifically on their behalf as well
as a portion of general trust
expenses, which are allocated
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements
________________________________________________________________________________
according to methods reviewed annually procure and pay the custodian for each
by the Trustees. Fund, additional compensation for fund
accounting and recordkeeping services,
Dividend Distributions and additional compensation for
The Funds may declare and distribute certain costs involved with the daily
dividends from net investment income valuation of securities and as
(if any) at the end of each calendar reimbursement for out-of-pocket
quarter. Distributions from capital expenses. A breakdown of these fees is
gains (if any) are generally declared provided in the following schedule.
and distributed annually. The Administrator has voluntarily
waived a portion of its fees for the
Estimates fiscal year ended September 30, 2006.
The preparation of financial There can be no assurance that the
statements in conformity with foregoing voluntary waiver will
accounting principles generally continue in the future.
accepted in the United States of
America requires management to make Compliance Services
estimates and assumptions that affect Nottingham Compliance Services, LLC, a
the amount of assets, liabilities, fully owned affiliate of The
expenses and revenues reported in the Nottingham Company, provides services
financial statements. Actual results which assist the Trust's Chief
could differ from those estimates. Compliance Officer in monitoring and
testing the policies and procedures of
Federal Income Taxes the Trust in conjunction with
No provision for income taxes is requirements under Rule 38a-1 of the
included in the accompanying financial Securities and Exchange Commission. It
statements, as the Funds intend to receives compensation for this service
distribute to shareholders all taxable at an annual rate of $7,750 per Fund.
investment income and realized gains
and otherwise comply with Subchapter M Transfer Agent
of the Internal Revenue Code North Carolina Shareholder Services,
applicable to regulated investment LLC ("Transfer Agent") serves as
companies. transfer, dividend paying, and
shareholder servicing agent for the
2. Transactions with Affiliates Funds. It receives compensation for
its services based upon $15 per
Advisor shareholder per year, subject to a
The Funds pay a monthly advisory fee minimum fee of $1,750 per month per
to Hillman Capital Management, Inc. Fund, plus $500 per month for each
(the "Advisor") based upon the average additional class of shares.
daily net assets of each Fund and
calculated at the annual rate of Distributor
1.00%. For the year ended September Capital Investment Group, Inc. (the
30, 2006, the Advisor has voluntarily "Distributor") serves as the Fund's
waived a portion of these fees in the principal underwriter and distributor.
amounts of $103,473 and $85,017 for The Distributor receives any sales
the Advantage Equity Fund and the charges imposed on purchases of shares
Focused Advantage Fund, respectively. and re-allocates a portion of such
charges to dealers through whom the
Administrator sale was made, if any. For the fiscal
Each Fund pays a monthly year ended September 30, 2006, the
administration fee to The Nottingham Distributor retained no sales charges.
Company (the "Administrator") based
upon the average daily net assets of Certain Trustees and officers of the
each Fund and calculated at the annual Trust are also officers of the
rates as shown in the following Advisor, the Distributor or the
schedule which is subject to a minimum Administrator.
of $2,000 per month per Fund. The
Administrator also receives a fee to
- ------------------------------------------------------------------------------------------------------------------------------------
Fund Accounting
Administration Fees (1)(2) Custody Fees (3) Fund Asset Based
- ------------------------------------ --------------------------- Accounting Blue Sky
Average Annual Average Annual Fees Average Net Annual Administration
Net Assets Rate Net Assets Rate (monthly) Assets Rate Fees (annual)
- ------------------------------------------------------------------------------------------------------------------------------------
First $50 million 0.125% First $100 million 0.020% $2,250 All Assets 0.01% $150 per state
Next $50 million 0.100% Over $100 million 0.009% $750 (4)
Over $100 million 0.075%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The Administrator waived administration fees for the Advantage Equity Fund in the amount of $959 for the fiscal
year ended September 30, 2006.
(2) Subject to a minimum fee of $2,000 per month
(3) Subject to a minimum fee of $400 per month
(4) For each additional class.
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements
________________________________________________________________________________
Distribution and Service Fees
The Trustees, including a majority of of long-term U.S. Government
the Trustees who are not "interested Obligations in the amount of $529,531
persons" (as defined in the 1940 Act), in The Hillman Advantage Equity Fund
of the Trust adopted distribution and only for the fiscal year ended
service plans pursuant to Rule 12b-1 September 30, 2006.
of the 1940 Act (the "Plans")
applicable to the No Load Shares, 5. Federal Income Tax
Class A Shares, Class B Shares, and
Class C Shares. The 1940 Act regulates The tax components of capital shown in
the manner in which a regulated Table 1 represent: (1) distribution
investment company may assume costs of requirements the Funds must satisfy
distributing and promoting the sales under the income tax regulations, and
of its shares and servicing of its (2) unrealized appreciation or
shareholder accounts. The Plans depreciation of investments for
provide that the Fund may incur federal income tax purposes as of
certain costs, which may not exceed September 30, 2006.
0.25% per annum of the average daily
net assets of the No Load Shares and Other book tax differences in the
Class A Shares or 1.00% per annum of current year primarily consist of
the average daily net assets of the adjustments due to reclassifications
Class B Shares or Class C Shares for of income received from investments in
each year elapsed subsequent to real estate investment trusts and
adoption of the Plans, for payment to different book and tax treatment of
the Distributor and others for items short-term capital gains.
such as advertising expenses, selling
expenses, commissions, travel, or ----------------------------------------------------------
other expenses reasonably intended to Table 1 Undistributed
result in sales of No Load Shares, ----------------
Class A Shares, Class B Shares, and ----------------------------------------------------------
Class C Shares in the Funds or support Fund Ordinary Long-Term Net Tax
servicing of those classes' Income Capital Gains Appreciation
shareholder accounts. See the table ----------------------------------------------------------
below for a breakout of the 12b-1 fees Advantage Equity $139,192 $1,628,315 $3,706,023
incurred for the Advantage Equity Fund ----------------------------------------------------------
and the Focused Advantage Fund for the Focused $1,008,783 $4,778,775 $2,234,161
fiscal year ended September 30, 2006. Advantage
----------------------------------------------------------
- ----------------------------------------------------------
12b-1 fees incurred As a result of permanent differences
- ---------------------------------------------------------- between the financial statement and
Fund No Load Class A Class B Class C income tax reporting requirements, the
Shares Shares Shares Shares following reclassifications, shown
- ---------------------------------------------------------- below in Table 2, were made for the
Advantage Equity $51,138 $ - $ - $ - year ended September 30, 2006. These
- ---------------------------------------------------------- reclassifications had no effect on the
Focused $215,474 $ - $ - $ - net assets or the net asset value of
Advantage the Funds.
- ----------------------------------------------------------
------------------------------------------------------
4. Purchases and Sales of Investment Table 2 Increase (Decrease) in
Securities -----------------
Undistributed
For the fiscal year ended September Fund Net Net Realized
30, 2006 the aggregate cost of Paid-in Investment Gain on
purchases and proceeds from sales of Capital Income Investments
investment securities (excluding ------------------------------------------------------
short-term securities) were as Advantage Equity $ - $28,131 ($28,131)
follows: ------------------------------------------------------
Focused $ - $ - $ -
Advantage
------------------------------------------------------
- -----------------------------------------------
Proceeds from The aggregate cost of investments and
Purchases of Sales of the composition of unrealized
Fund Securities Securities appreciation and depreciation of
- ----------------------------------------------- investment securities for federal
Advantage Equity $11,175,785 $7,024,247 income tax purposes as of September
- ----------------------------------------------- 30, 2006 are noted on the following
Focused Advantage $47,349,404 $37,027,979 page, in Table 3. The primary
- ----------------------------------------------- difference between book and tax
appreciation or depreciation of
There were no purchases of long-term investments is wash sale loss
U.S. Government Obligations for either deferrals.
Fund during the fiscal year ended
September 30, 2006. There were sales
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements
________________________________________________________________________________
- ------------------------------------------------------------ -------------------------------------------------------
Table 3 Federal Tax Aggregate Gross For the year ended
Cost Unrealized September 30, 2006 Distributions from
- ------------------------------------------------------------ -------------------------------------------------------
Fund Appreciation Depreciation Fund Ordinary Income Long-Term Capital
- ------------------------------------------------------------ Gains
Advantage Equity $19,795,266 $4,275,200 ($569,177) -------------------------------------------------------
- ------------------------------------------------------------ Advantage Equity $389,131 $124,336
Focused $75,759,507 $6,792,561 ($4,558,400) -------------------------------------------------------
Advantage Focused Advantage $1,355,046 $1,446,145
- ------------------------------------------------------------ -------------------------------------------------------
The amount of dividends and -------------------------------------------------------
distributions from net investment For the year ended Distributions from
income and net realized capital gains September 30, 2005
are determined in accordance with -------------------------------------------------------
federal income tax regulations which Fund Ordinary Income Long-Term Capital
may differ from accounting principles Gains
generally accepted in the United -------------------------------------------------------
States of America. These differences Advantage Equity $150,140 $283,131
are due to differing treatments for -------------------------------------------------------
items such as net short-term gains, Focused Advantage $10,478 $ -
deferral of wash sale losses, net -------------------------------------------------------
investment losses and capital loss
carry-forwards. Permanent differences
such as tax returns of capital and net
investment losses, if any, would be
reclassified against capital.
6. Capital Share Transactions
- ----------------------------------------------------------------------------------------------------------------------------------
For the fiscal years or period ended Advantage Equity Fund
September 30,
Class A Class B Class C
No Load Shares Shares Shares Shares
---------------------------------- ------------ -------------- -------------
2006 2005 2006 (1) 2006 (1) 2006 (1)
- ---------------------------------------------------------------------- ----------------- ------------ -------------- -------------
Transactions in Fund Shares
Shares sold 288,671 323,550 793 792 792
Reinvested distributions 38,825 35,269 1 - -
Shares repurchased (187,293) (114,562) - - -
Net Increase in Capital Shares Transactions 140,203 244,257 794 792 792
Shares Outstanding, Beginning of Period 1,572,649 1,328,392 - - -
Shares Outstanding, End of Period 1,712,852 1,572,649 794 792 792
- ---------------------------------------------------------------------- ----------------- ------------ -------------- -------------
(1) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
- -----------------------------------------------------------------------------------------------------------------------------------
For the fiscal years or period ended Focused Advantage Fund
September 30,
Class A Class B Class C
No Load Shares Shares Shares Shares
---------------------------------- ------------ -------------- -------------
2006 2005 2006 (1) 2006 (1) 2006 (1)
- ---------------------------------------------------------------------- ----------------- ------------ -------------- -------------
Transactions in Fund Shares
Shares sold 5,099,562 4,506,830 716 716 716
Reinvested distributions 174,545 769 1 - -
Shares repurchased (4,577,945) (1,804,636) - - -
Net Increase in Capital Shares Transactions 696,162 3,422,963 717 716 716
Shares Outstanding, Beginning of Period 4,425,934 1,002,971 - - -
Shares Outstanding, End of Period 5,122,096 4,425,934 717 716 716
- ---------------------------------------------------------------------- ----------------- ------------ -------------- -------------
(1) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
(Continued)
Hillman Capital Management Funds
Additional Information (Unaudited)
________________________________________________________________________________
7. Change in Independent Registered 2006, the Funds do not believe the
Public Accounting Firm adoption of SFAS No. 157 will impact
the amounts reported in the financial
On December 14, 2004, the Board of statements, however, additional
Trustees engaged Briggs, Bunting & disclosures may be required about the
Dougherty, LLP ("BBD") as its new inputs used to develop the
independent registered public measurements and the effect of certain
accounting firm. At no time preceding of the measurements reported on the
the engagement of BBD did the Funds statement of changes in net assets for
consult the firm regarding either (i) a fiscal period.
the application of accounting
principles to a specified transaction, On July 13, 2006, the Financial
either completed or proposed, or the Accounting Standards Board (FASB)
type of audit opinion that might be released FASB Interpretation No. 48
rendered on the Funds' financial "Accounting for Uncertainty in Income
statements, or (ii) any matter that Taxes" (FIN 48). FIN 48 provides
was either subject of a disagreement guidance for how uncertain tax
or a reportable event, as such terms positions should be recognized,
are defined in Item 304 of Regulation measured, presented and disclosed in
S-K. the financial statements. FIN 48
requires the evaluation of tax
Prior to this date, Deloitte & Touche positions taken or expected to be
LLP ("Deloitte") served as the taken in the course of preparing the
independent registered public Fund's tax returns to determine
accounting firm for the Trust and whether the tax positions are
issued reports on the Funds' financial "more-likely-than-not" of being
statements as of September 30, 2004 sustained by the applicable tax
and 2003. Such reports did not contain authority. Tax positions not deemed to
an adverse opinion or a disclaimer of meet the more-likely-than-not
opinion, nor were they qualified or threshold would be recorded as a tax
modified as to uncertainty, audit benefit or expense in the current
scope, or accounting principles. year. Adoption of FIN 48 is required
for fiscal years beginning after
At no time preceding the removal of December 15, 2006 and is to be applied
Deloitte were there any disagreements to all open tax years as of the
with Deloitte on any matter of effective date. At this time,
accounting principles or practices, management is evaluating the
financial statement disclosure, or implications of FIN 48. Although not
auditing scope or procedure, which yet determined, management does not
disagreements, if not resolved to the expect FIN 48 to have a material
satisfaction of Deloitte, would have impact on the financial statements.
caused it to make reference to the
subject matter of the disagreements in 9. Commitments and Contingencies
connection with its report. At no time
preceding the removal of Deloitte did Under the Trust's organizational
any of the events enumerated in documents, its officers and Trustees
paragraphs (1)(v)(A) through (D) of are indemnified against certain
Item 304(a) of Regulation S-K occur. liabilities arising out of the
performance of their duties to the
8. New Accounting Pronouncements Funds. In addition, in the normal
course of business, the Funds entered
In September 2006, the Financial into contracts with their vendors and
Accounting Standards Board (FASB) others that provide for general
issued Statement on Financial indemnifications. The Funds' maximum
Accounting Standards (SFAS) No. 157, exposure under these arrangements is
"Fair Value Measurements". This unknown, as this would involve future
standard establishes a single claims that may be made against the
authoritative definition of fair Funds. The Funds expect that risk of
value, sets out a framework for loss to be remote.
measuring fair value and requires
additional disclosure 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 September 30,
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of
Hillman Capital Management Investment Trust
and Shareholders of The Hillman Advantage Equity Fund
and The Hillman Focused Advantage Fund
We have audited the accompanying statements of assets and liabilities of The
Hillman Advantage Equity Fund and The Hillman Focused Advantage Fund, each a
series of shares of Hillman Capital Management Investment Trust, including the
schedules of investments, as of September 30, 2006, and the related statements
of operations for the year then ended, and the statements of changes in net
assets and the financial highlights for each of the two 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 for each of the three years ended September 30,
2004 were audited by other auditors whose report dated November 2, 2004
expressed an unqualified opinion on such 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 audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2006 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Hillman Advantage Equity Fund and The Hillman Focused Advantage Fund as of
September 30, 2006, the results of their operations for the year then ended, and
the changes in their net assets and their financial highlights for each of the
two years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/ BRIGGS, BUNTING & DOUGHERTY, LLP
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
November 3, 2006
Hillman Capital Management Funds
Additional Information (Unaudited)
________________________________________________________________________________
1. Proxy Voting Policies and Voting earned during the fiscal year
Record represent qualifying dividends.
A copy of the Trust's Proxy Voting and Dividends and distributions received
Disclosure Policy and the Advisor's by retirement plans such as IRAs,
Proxy Voting and Disclosure Policy are Keogh-type plans and 403(b) plans need
included as Appendix B to the Funds' not be reported as taxable income.
Statement of Additional Information However, many retirement plans may
and is available, without charge, upon need this information for their annual
request, by calling 1-800-773-3863. information reporting.
Information regarding how the Funds
voted proxies relating to portfolio 4. Information about Trustees and
securities during the most recent Officers
12-month period ended June 30, is
available (1) without charge, upon The business and affairs of the Funds
request, by calling the Funds at the and the Trust are managed under the
number above and (2) on the SEC's direction of the Trustees. Information
website at http://www.sec.gov. concerning the Trustees and officers
of the Trust and Funds is set forth
2. Quarterly Portfolio Holdings below. Generally, each Trustee and
officer serves an indefinite term or
The Funds file their complete schedule until certain circumstances such as
of portfolio holdings with the SEC for their resignation, death, or otherwise
the first and third quarters of each as specified in the Trust's
fiscal year on From N-Q. The Funds' organizational documents. Any Trustee
Form N-Q are available on the SEC's may be removed at a meeting of
website at http://www.sec.gov. You may shareholders by a vote meeting the
review and make copies at the SEC's requirements of the Trust's
Public Reference Room in Washington, organizational documents. The
D.C. You may also obtain copies after Statement of Additional Information of
paying a duplicating fee by writing the Funds includes additional
the SEC's Public Reference Section, information about the Trustees and
Washington, D.C. 20549-0102 or by officers and is available, without
electronic request to charge, upon request by calling the
publicinfo@sec.gov, or is available Funds toll-free at 1-800-773-3863. The
without charge, upon request, by address of each Trustee and officer,
calling the Funds at 1-800-773-3863. unless otherwise indicated below, is
Information on the operation of the 116 South Franklin Street, Rocky
Public Reference Room may be obtained Mount, North Carolina 27804. The
by calling the SEC at 202-942-8090. Independent Trustees received
aggregate compensation of $5,700
3. Tax Information during the fiscal year ended September
30, 2006 from each Fund for their
We are required to advise you within services to the Funds and Trust. The
60 days of the Funds' fiscal year-end Interested Trustee and officers did
regarding the federal tax status of not receive compensation from the
certain distributions received by Funds for their services to the Funds
shareholders during each fiscal year. and Trust.
The following information is provided
for the Funds' fiscal year ending,
September 30, 2006.
During the fiscal year, the Advantage
Equity Fund and Focused Advantage Fund
paid a long-term capital gain
distribution of $124,336, and
$1,446,145, respectively.
Individual shareholders are eligible
for reduced tax rates on qualified
dividend income. For the purposes of
computing the dividends eligible for
reduced tax rates, all of the
dividends paid by the funds from
ordinary income earned during the
fiscal year are considered qualified
dividend income.
Corporate shareholders may exclude up
to 70% of qualifying dividends. For
the purposes of computing this
exclusion, all of the dividends paid
by the fund from ordinary income
(Continued)
Hillman Capital Management Funds
Additional Information (Unaudited)
________________________________________________________________________________
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Number of
Portfolios in
Position(s) Fund Complex
Name, Age, held with Length of Principal Occupation(s) Overseen by Other Directorships
and Address Fund/Trust Time Served During Past 5 Years Trustee Held by Trustee
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
INDEPENDENT TRUSTEES
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Jack E. Brinson, 74 Trustee Since 12/2000 Retired since January 2000; 2 Independent Trustee of
Previously, President, Brinson the following - Gardner
Investment Co. (personal Lewis Investment Trust
investments) and President, Brinson for the three series of
Chevrolet, Inc. (auto dealership). that trust; The
Nottingham Investment
Trust II for the six
series of that trust;
New Providence
Investment Trust for
the one series of that
trust; and Tilson
Investment Trust for
the two series of that
trust (all registered
investment companies)
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Theo H. Pitt, Jr., 70 Trustee Since 12/2000 Senior Partner, Community Financial 2 Independent Trustee of
and Institutions Consulting (bank the following - Gardner
Chairman consulting) since 1997 and Account Lewis Investment Trust
Administrator, Holden Wealth for the three series of
Management Group of Wachovia that trust; and Tilson
Securities (money management firm) Investment Trust for
since September 2003. the two series of that
trust (all registered
investment companies)
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
INTERESTED TRUSTEE*
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Mark A. Hillman, 44 Trustee Trustee and President, Hillman Capital 2 None
7600 Wisconsin Avenue and President Management, Inc. (investment
Suite 650 President since 12/2000 advisor to the Funds); previously,
Bethesda, MD 20814 (Principal Chief Investment Officer, Menocal
Executive Capital Management, Inc.
Officer) (investment advisor).
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
* Basis of Interestedness. Mr. Hillman is an Interested Trustee because he is an officer of Hillman Capital Management, Inc., the
investment advisor to the Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Tracey L. Hendricks, 39** Assistant Since 12/2004 Chief Financial Officer of The n/a n/a
Secretary Nottingham Company (administrator
to the Funds) since August 2006;
and Vice President of Financial
Reporting, Tax, Internal Audit, and
Compliance of The Nottingham
Company since 2004; previously,
Vice President of Special Projects
of The Nottingham Company from 2001
to 2004.
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Fletcher D. Perkins, 28 Treasurer Since 12/2002 Analyst, Hillman Capital n/a n/a
7600 Wisconsin Avenue (Principal Management, Inc., since 2002;
Suite 650 Financial Account Manager, Netivity Solutions
Bethesda, MD 20814 Officer) (computer network service) from
January 2001 to October 2001.
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
C. Frank Watson III, 36 Chief Since 5/2006 Manager, Fairview Investment n/a n/a
107 Glenwood Avenue Compliance Services, LLC (investment services)
Raleigh, NC 27603 Officer since June 2005; previously,
President and Chief Operating
Officer, The Nottingham Company.
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
(Continued)
Hillman Capital Management Funds
Additional Information (Unaudited)
________________________________________________________________________________
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
Julian G. Winters, 37** Secretary Secretary Vice President - Compliance n/a n/a
and since Administration, The Nottingham
Assistant 12/2004; Company.
Treasurer Assistant
Treasurer
since
12/2002
- -------------------------- ------------ -------------- ------------------------------------- --------------- -----------------------
** Ms. Hendricks and Mr. Winters are sister-in-law and brother-in-law.
- ------------------------------------------------------------------------------------------------------------------------------------
(This page was intentionally left blank.)
The Hillman Capital Management
Mutual Funds are series of the
Hillman Capital Management Investment Trust
For Shareholder Service Inquiries: For Investment Advisor Inquiries:
Documented: Documented:
NC Shareholder Services Hillman Capital Management, Inc.
116 South Franklin Street 7600 Wisconsin Ave
Post Office Drawer 4365 Suite 650
Rocky Mount, North Carolina 27803 Bethesda, Maryland 20814
Toll-Free Telephone: Toll-Free Telephone:
1-800-773-3863 1-800-773-3863
World Wide Web @: World Wide Web @:
nottinghamco.com hillmancapital.com
HILLMAN
CAPITAL MANAGEMENT
Item 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to its Principal Executive
Officer, Principal Financial Officer, and Principal Accounting
Officer(s), or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third
party.
(c) There have been no amendments during the period covered by this report.
(d) The registrant has not granted, during the period covered by this
report, any waivers, including an implicit waiver.
(f)(1) A copy of the code of ethics that applies to the registrant's Principal
Executive Officer and Principal Financial Officer is filed pursuant to
Item 12.(a)(1) below.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of directors has determined that the registrant
does not have an audit committee financial expert serving on its audit
committee.
(a)(2) Not applicable.
(a)(3) The registrant believes that the registrant's current audit committee
has sufficient knowledge and experience to meet its obligations as an
audit committee of the registrant, but the registrant's Board of
Trustees has determined that it would consider naming or finding a
qualified candidate who meets the requirements of an audit committee
financial expert should there be a need or desire to appoint such a
person in the future.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees - Audit fees billed for the registrant for the last two
fiscal years are reflected in the table below. These amounts represent
aggregate fees billed by the registrant's independent accountant,
Briggs, Bunting & Dougherty, LLP ("Accountant"), in connection with the
annual audits of the registrant's financial statements and for services
normally provided by the Accountant in connection with the registrant's
statutory and regulatory filings.
------------------------------------------------- --------------- -------------
Fund 2005 2006
------------------------------------------------- --------------- -------------
The Hillman Focused Advantage Fund (formerly The $11,500 $11,500
Hillman Aggressive Equity Fund)
------------------------------------------------- --------------- -------------
The Hillman Advantage Equity Fund (formerly The $12,500 $12,500
Hillman Total Return Fund)
------------------------------------------------- --------------- -------------
(b) Audit-Related Fees - There were no additional fees billed in the fiscal
years ended September 30, 2005 and September 30, 2006 for assurance and
related services by the Accountant that were reasonably related to the
performance of the audit of the registrant's financial statements that
were not reported under paragraph (a) of this Item.
(c) Tax Fees - The tax fees billed in each of the last two fiscal years for
professional services rendered by the Accountant for tax compliance,
tax advice, and tax planning are reflected in the table below. These
services were for the completion of each fund's federal, state, and
excise tax returns and assistance with distribution calculations.
------------------------------------------------- --------------- -------------
Fund 2005 2006
------------------------------------------------- --------------- -------------
The Hillman Focused Advantage Fund $1,500 $2,000
------------------------------------------------- --------------- -------------
The Hillman Advantage Equity Fund $1,500 $2,000
------------------------------------------------- --------------- -------------
(d) All Other Fees -There were no other fees billed by the Accountant which
were not disclosed in Items (a) through (c) above during the last two
fiscal years.
(e)(1) The registrant's Board of Trustees pre-approved the engagement of the
Accountant for the last two fiscal years at an audit committee meeting
of the Board of Trustees called for such purpose and will pre-approve
the Accountant for each fiscal year thereafter at an audit committee
meeting called for such purpose. The charter of the audit committee
states that the audit committee should pre-approve any audit services
and, when appropriate, evaluate and pre-approve any non-audit services
provided by the Accountant to the registrant and to pre-approve, when
appropriate, any non-audit services provided by the Accountant to the
registrant's investment adviser, or any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant if the engagement relates directly
to the operations and financial reporting of the registrant.
(2) There were no services as described in each of paragraph (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable.
(g) Aggregate non-audit fees billed by the Accountant to the registrant for
services rendered during the fiscal years ended September 30, 2005 and
2006 were $3,000 and $4,000, respectively. There were no non-audit fees
billed by the Accountant for services rendered to the registrant's
investment adviser, or any other entity controlling, controlled by, or
under common control with the registrant's investment adviser.
(h) Not applicable.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
Item 6. SCHEDULE OF INVESTMENTS.
A copy of the schedule of investments of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this Form.
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.
None.
Item 11. CONTROLS AND PROCEDURES.
(a) The Principal Executive Officer and the Principal Financial Officer
have concluded that the registrant's disclosure controls and procedures
are effective based on their evaluation of the disclosure controls and
procedures as of a date within 90 days of the filing of this report.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's 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.
(a)(1) Code of Ethics required by Item 2 of Form N-CSR is filed herewith as
Exhibit 12.(a)(1).
(a)(2) Certifications required by Item 12.(a)(2) of Form N-CSR are filed
herewith as Exhibit 12.(a)(2).
(a)(3) Not applicable.
(b) Certifications required by Item 12.(b) of Form N-CSR are filed herewith
as Exhibit 12.(b).
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.
Hillman Capital Management Investment Trust
By: (Signature and Title) /s/ Mark A. Hillman
____________________________________
Mark A. Hillman, Trustee, President
and Principal Executive Officer
Date: November 23, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: (Signature and Title) /s/ Mark A. Hillman
____________________________________
Mark A. Hillman, Trustee, President and
Principal Executive Officer
Date: November 23, 2006
By: (Signature and Title) /s/ Fletcher D. Perkins
____________________________________
Fletcher D. Perkins, Treasurer and
Principal Financial Officer
Date: November 22, 2006