UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-10085
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Hillman Capital Management Investment Trust
-------------------------------------------
(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)
A. Vason Hamrick
116 South Franklin Street, Post Office Box 69, Rocky Mount, North Carolina 27802
- --------------------------------------------------------------------------------
(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: March 31, 2007
--------------
Item 1. REPORTS TO STOCKHOLDERS.
Semi-Annual Report 2007
The Hillman Advantage Equity Fund
(formerly known as The Hillman Total Return Fund)
The Hillman Focused Advantage Fund
March 31, 2007
(Unaudited)
No Load Shares
Class A Shares
Class B Shares
Class C Shares
[Logo Here]
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.
________________________________________________________________________________
Investments in the Hillman Capital Management Funds ("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 its investment objective. Investment in the Funds is also subject to the
following risks: market risk, investment advisor risk, management style risk. In
addition, the Focus Advantage Fund is subject to the following risks:
non-diversified status 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 semi-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 those Funds' total expenses to ensure
shareholders did not absorb expenses significantly greater than the industry
norm.
This Semi-Annual Report was first distributed to shareholders on or about May
30, 2007.
For More Information on Your Hillman Capital Management (Hillman) Mutual Funds:
See Our Website @ www.hillmancapital.com
or
Call Our Shareholder Services Group Toll-Free at 1-800-773-3863
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 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.
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.
(Continued)
Fund Expenses (Unaudited) (Continued)
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Beginning Ending
The Hillman Advantage Equity Fund Account Value Account Value Expenses Paid
No Load Class Shares October 1, 2006 March 31, 2007 During Period*
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Actual $1,000.00 $1,058.80 $7.65
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Hypothetical (5% annual return before expenses) $1,000.00 $1,017.50 $7.49
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Beginning Ending
The Hillman Advantage Equity Fund Account Value Account Value Expenses Paid
Class A Shares October 1, 2006 March 31, 2007 During Period*
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Actual $1,000.00 $1,059.40 $6.37
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Hypothetical (5% annual return before expenses) $1,000.00 $1,018.75 $6.24
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Beginning Ending
The Hillman Advantage Equity Fund Account Value Account Value Expenses Paid
Class B Shares October 1, 2006 March 31, 2007 During Period*
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Actual $1,000.00 $1,057.10 $6.36
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Hypothetical (5% annual return before expenses) $1,000.00 $1,018.75 $6.24
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Beginning Ending
The Hillman Advantage Equity Fund Account Value Account Value Expenses Paid
Class C Shares October 1, 2006 March 31, 2007 During Period*
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Actual $1,000.00 $1,057.10 $6.36
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Hypothetical (5% annual return before expenses) $1,000.00 $1,018.75 $6.24
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*Expenses are equal to the Fund's six month expense ratio (1.49% for the No Load Class, 1.24% for Class A, Class B and Class C)
multiplied by the average account value over the period, multiplied by 182 (the number of days in the most recent six months)
divided by 365 (to reflect the semi-annual period).
Beginning Ending
The Hillman Focused Advantage Fund Account Value Account Value Expenses Paid
No Load Class Shares October 1, 2006 March 31, 2007 During Period**
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Actual $1,000.00 $1,068.60 $7.68
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Hypothetical (5% annual return before expenses) $1,000.00 $1,017.50 $7.49
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning Ending
The Hillman Focused Advantage Fund Account Value Account Value Expenses Paid
Class A Shares October 1, 2006 March 31, 2007 During Period**
- -----------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,070.40 $7.69
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Hypothetical (5% annual return before expenses) $1,000.00 $1,017.50 $7.49
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning Ending
The Hillman Focused Advantage Fund Account Value Account Value Expenses Paid
Class B Shares October 1, 2006 March 31, 2007 During Period**
- -----------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,066.60 $11.54
- -----------------------------------------------------------------------------------------------------------------------------------
Hypothetical (5% annual return before expenses) $1,000.00 $1,013.76 $11.25
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning Ending
The Hillman Focused Advantage Fund Account Value Account Value Expenses Paid
Class C Shares October 1, 2006 March 31, 2007 During Period**
- -----------------------------------------------------------------------------------------------------------------------------------
Actual $1,000.00 $1,064.50 $11.53
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Hypothetical (5% annual return before expenses) $1,000.00 $1,013.76 $11.25
- -----------------------------------------------------------------------------------------------------------------------------------
** Expenses are equal to the Fund's six month expense ratio (1.49% for the No Load Class and Class A, 2.24% for Class B and Class C)
multiplied by the average account value over the period, multiplied by 182 (the number of days in the most recent six months)
divided by 365 (to reflect the semi-annual period).
Dear Shareholder:
Enclosed please find the semi-annual report for The Hillman Capital Management
Funds ("the Funds") for the six months ending March 31, 2007.
The investment team here at Hillman Capital Management (HCM) focuses on a
company's products and processes and their ability to do business in a manner
against which it is difficult to compete. We believe that this philosophy of
buying attractively priced industry leaders will lead to strong performance over
extended periods of time. We feel we have benefited immensely in the past from
this disciplined approach and our long-term view. Therefore, we give little
credence to economic forecasting but do pay attention to the fundamentals of the
economy, key sectors and the relationship between these themes and the operating
environments of the companies in which we invest. We prefer to diligently
examine the data at hand and consequently, on a case by case basis, examine the
current, intrinsic value of the equities in our qualified universe.
The past two quarters in the equity markets were dissimilar in that the fiscal
first quarter (the calendar fourth quarter) saw strong equity market performance
with little volatility. On the other hand, the funds' second quarter (the first
calendar quarter) saw significant volatility, including one of the largest
single-day losses in the history of the Dow Jones Industrial Average. Our
opinion of the market environment as well as our larger view of the economy and
notable sectors is discussed below.
Equity markets made headlines in October as the Dow Jones Industrial Average
(the Dow) surpassed the 12,000 mark for the first time in history and continued
on a torrid pace for the remainder of the calendar year. Likewise, the S&P500, a
widely followed market proxy, turned in a solid calendar fourth quarter. The
most recent quarter, however, served as a poignant reminder of the short-term
risks inherent in equity investing as markets were quite volatile. On Tuesday,
February 27th of this year, the Dow Jones Industrial Average (the Dow)
experienced the seventh-largest point decline ever^1, 416.02 points, while the
S&P 500 lost 50.33 points to 1399.04. Similarly, the NASDAQ Composite Index and
the Russell 2000 Index lost 3.9% and 3.8% respectively.
A hotly debated topic is the state of, and the continued, surprising resilience
of the U.S. consumer. Economists and market prognosticators have long foretold
the fall of the U.S. consumer and subsequently a recession. While we acknowledge
that this is entirely possible, especially as home price values decline and the
full effects of Federal Reserve tightening run their course, we also note that
the key factors that have historically driven consumer spending remain positive.
These factors include growth of real disposable incomes, low real interest
rates, and the fact that real household net worth, net of all debt, is at an all
time high^2. In fact, personal income has increased 5.9% year-over-year as of
the end of 2006^3. The Commerce Department recently released that personal
incomes rose 0.6% in February following a 1% increase in January - we believe
these data points suggest that the consumer will remain defiant of forecasts, at
least for the near-term. For example, a recent Commerce Department report also
noted that consumer spending rose 0.6% for the month of February - double the
- ------------------------------------
^1 The Wall Street Journal
^2 CapitalEyes: Bank of America
^3 Ibid
consensus forecast by economists^4. All this being said and given our
reluctance to bet against the consumer, it is also worth noting that we believe
a perfect storm of higher energy prices and decreasing home values may pose a
significant challenge for consumers going forward. Again, the extent and timing
of these events and their effect on consumers cannot be fully known but rather
are worth mentioning as potential reasons for a slowdown in consumer spending.
Closely linked to, and often mentioned as a driver of, consumer spending is the
housing market. In the broader economic picture, housing is one of the wild
cards. The monthly data has yet to tell a consistent story about the health of
the housing sector. Despite the near-term fluctuations, we believe that rising
monthly mortgage payments and declines in housing demand may causes prices to
continue to fall in many regions. A major driver of the home price increases we
saw in recent years was tied to not only low interest rates but also the
extension of credit to "sub-prime" borrowers. We agree with Federal Reserve
Chairman Ben Bernanke when he commented that "the impact on the broader economy
and financial markets of the problems in the sub-prime markets seems to be
contained." This does not imply zero impact on the markets or that the erosion
of wealth in this category is to be ignored, but rather that its affects are
limited in scope and the economy can absorb a slowdown in this industry.
The flexibility of the U.S. economy has continued to impress economists and
market participants alike. Over the last 12 months, the U.S. economy has
absorbed numerous shocks, all of which seemed like an end to the current
expansion. These events include: high oil prices, the popping of the housing
bubble, numerous interest rate increases, the sub-prime fallout, declines in
refinancing activity, continued geopolitical woes, slower growth of corporate
profits - albeit from all-time highs - a sustained and growing budget deficit,
waning consumer confidence, slightly higher inflation and a change of leadership
at the Federal Reserve Bank. All that being said, in the fourth quarter of 2006
the U.S. economy grew at a 2.5% annualized rate. The 2.5% growth rate brings the
2006 annual rate to 3.3%, compared to 3.2% in 2005 and 3.9% in 2004^5. On a
year-over-year basis, it is clear that the economy is slowing and we believe
that the cumulative affects of the above mentioned headwinds are taking their
toll on top-line GDP growth. Economic performance in 2006 was a solid year with
growth above the 15-year average, historically low unemployment, export growth
that outpaced import growth for the first time in a decade, and rising wages^6.
Looking ahead to the remainder of 2007, we believe the economy is less solid
than in years past and expect to see continued slowing of GDP growth. Like the
housing market, the economic indicators continue to be mixed and the precise
direction of the economy cannot be determined with certainty. However, former
Federal Reserve Chairman Alan Greenspan commented in February that a recession
is increasingly likely in the near future. Among the reasons he cited for a
domestic slowdown include the looming budget deficit and the stabilization of
corporate profit margins - a historically accurate indicator of a late-cycle
decline. Similarly, the growth rate of corporate profits, a widely followed
measure of broad business and economic health, has slowed after having reached
an all time high in the third quarter of 2006.
- ------------------------------------
^4 The Wall Street Journal: "Consumer Spending Strength." Accessed on 3/31/2007
^5 The Wall Street Journal: "Fourth-Quarter GDP Revised Up." Accessed on
3/29/2007
^6 Department of Commerce
Irrespective of where we believe we are in the larger economic cycle, the state
of the consumer, or the health of the housing sector, our philosophy here at HCM
remains unchanged: we believe that relentlessly focusing on the individual,
competitive merits of the companies which we invest in is the most prudent
attempt to achieve market out-performance over time. 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 the approach, we hope the 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 Funds' Investment Adviser.
Sincerely,
/s/ Mark Hillman
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.
Hillman Capital Management, Inc. is a registered investment advisor. More
information about the about the advisor can be obtained by visiting
www.hillmancapital.com.
Statements contained herein that reflect projections or expectations of future
financial or economic performance of the 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 general economic conditions such as
inflation, recession and interest rates. The information presented here should
not be considered a recommendation to purchase or sell any particular security.
It should not be assumed that any of the securities transactions, holdings or
sectors discussed were or will prove to be profitable, or that the investment
recommendations or decisions we make in the future will be profitable or will
equal the investment performance of the securities discussed herein. All
recommendations within the preceding 12 months or applicable period are
available upon request.
Underwriter and Distributor: Capital Investment Group, Inc.
116 South Franklin Street
Rocky Mount, NC 27804
Phone (800) 773-3863
The Hillman Advantage Equity Fund
Schedule of Investments
(Unaudited)
As of March 31, 2007
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Market Value Market Value
Shares (Note 1) Shares (Note 1)
- ---------------------------------------------------------- ------------------------------------------------------------------
COMMON STOCKS - 99.01% Hand/Machine Tools - 1.94%
Black & Decker Corporation 6,000 $ 489,720
Aerospace/Defense - 5.11% ------------
Goodrich Corporation 13,000 $ 669,240
The Boeing Company 7,000 622,370 Healthcare - Products - 1.91%
------------ Johnson & Johnson 8,000 482,080
1,291,610 ------------
------------
Apparel - 2.52% Healthcare - Services - 4.55%
Nike, Inc. 6,000 637,560 Aetna Inc. 13,000 569,270
------------ * Laboratory Corporation of
America Holdings 8,000 581,040
Biotechnology - 1.75% ------------
* Amgen Inc. 7,900 441,452 1,150,310
------------ ------------
Chemicals - 2.54% Home Builders - 1.91%
E.I. du Pont de Nemours D.R. Horton, Inc. 22,000 484,000
and Company 13,000 642,590 ------------
------------
Household Products/Wares - 2.02%
Computers - 6.87% The Clorox Company 8,000 509,520
* EMC Corporation 44,000 609,400 ------------
Hewlett-Packard Company 14,000 561,960
International Business Machines Internet - 2.23%
Corporation 6,000 565,560 * Yahoo! Inc. 18,000 563,220
------------ ------------
1,736,920
------------ Media - 4.52%
Time Warner Inc. 30,000 591,600
Cosmetics/Personal Care - 2.00% The Walt Disney Company 16,000 550,880
The Procter & Gamble ------------
Company 8,000 505,280 1,142,480
------------ ------------
Diversified Financial Services - 7.46% Miscellaneous Manufacturing - 4.21%
Citigroup Inc. 10,000 513,400 3M Co. 7,000 535,010
JPMorgan Chase & Co. 11,300 546,694 General Electric Company 15,000 530,400
The Goldman Sachs Group, Inc. 4,000 826,520 ------------
------------ 1,065,410
1,886,614 ------------
------------
Oil & Gas - 2.39%
Electric - 2.17% Exxon Mobil Corporation 8,000 603,600
Southern Company 15,000 549,750 ------------
------------
Pharmaceuticals - 3.96%
Financial Services - 2.28% Merck & Co., Inc. 11,000 485,870
Allied Capital Corporation 20,000 576,200 Pfizer Inc. 20,400 515,304
------------ ------------
1,001,174
Food - 10.49% -------------
Campbell Soup Company 14,000 545,300
H.J. Heinz Company 12,000 565,440 Real Estate Investment Trust - 2.39%
Kellogg Company 11,000 565,730 Host Hotels & Resorts 23,000 605,130
McCormick & Company, ------------
Incorporated 13,000 500,760
Whole Foods Market, Inc. 10,600 475,410 Retail - 10.65%
------------ Brinker International, Inc. 18,000 588,600
2,652,640 McDonald's Corporation 13,000 585,650
------------ Target Corporation 9,000 533,340
The Home Depot, Inc. 14,000 514,360
Wal-Mart Stores, Inc. 10,000 469,500
------------
2,691,450
------------
(Continued)
The Hillman Advantage Equity Fund
Schedule of Investments
(Unaudited)
As of March 31, 2007
- -----------------------------------------------------------------------------------------------------------------------------------
Market Value
Shares (Note 1)
- ------------------------------------------------------------- ----------------------------------------------------------------
COMMON STOCKS - (Continued) Summary of Investments by Industry
% of Net Market
Semiconductors - 1.89% Industry Assets Value
Intel Corporation 25,000 $ 478,250 ---------------------------------------------------------------
------------ Aerospace/Defense 5.11% $ 1,291,610
Apparel 2.52% 637,560
Software - 2.15% Biotechnology 1.75% 441,452
* Oracle Corporation 30,000 543,900 Chemicals 2.54% 642,590
------------ Computers 6.87% 1,736,920
Cosmetics/Personal Care 2.00% 505,280
Telecommunications - 6.98% Diversified Financial Services 7.46% 1,886,614
AT&T Inc. 18,000 709,740 Electric 2.17% 549,750
Motorola, Inc. 27,500 485,925 Financial Services 2.28% 576,200
Verizon Communications Inc. 15,000 568,800 Food 10.49% 2,652,640
------------ Hand/Machine Tools 1.94% 489,720
1,764,465 Healthcare - Products 1.91% 482,080
------------ Healthcare - Services 4.55% 1,150,310
Home Builders 1.91% 484,000
Transportation - 2.12% Household Products/Wares 2.02% 509,520
FedEx Corp. 5,000 537,150 Internet 2.23% 563,220
------------ Investment Company 0.78% 198,197
Media 4.52% 1,142,480
Total Common Stocks (Cost $20,252,262) 25,032,475 Miscellaneous Manufacturing 4.21% 1,065,410
------------ Oil & Gas 2.39% 603,600
Pharmaceuticals 3.96% 1,001,174
INVESTMENT COMPANY - 0.78% Real Estate Investment Trust 2.39% 605,130
Evergreen Institutional Money Market Fund Retail 10.65% 2,691,450
(Cost $198,197) 198,197 198,197 Semiconductors 1.89% 478,250
------------ Software 2.15% 543,900
Telecommunications 6.98% 1,764,465
Total Investments (Cost $20,450,459) - 99.79% $ 25,230,672 Transportation 2.12% 537,150
Other Assets Less Liabilities - 0.21% 50,178 ---------------------------------------------------------------
------------ Total 99.79% $ 25,230,672
Net Assets - 100.00% $ 25,280,850
============
* Non-income producing investment.
See Notes to Financial Statements
The Hillman Focused Advantage Fund
Schedule of Investments
(Unaudited)
As of March 31, 2007
- -----------------------------------------------------------------------------------------------------------------------------------
Market Value Market Value
Shares (Note 1) Shares (Note 1)
- ---------------------------------------------------------- ------------------------------------------------------------------
COMMON STOCKS - 94.89% Telecommunications - 14.58%
AT&T Inc. 125,000 $ 4,928,750
Aerospace/Defense - 9.39% Motorola, Inc. 285,000 5,035,950
Goodrich Corporation 100,000 $ 5,148,000 Verizon Communications, Inc. 130,000 4,929,600
The Boeing Corporation 50,000 4,445,500 --------------
-------------- 14,894,300
9,593,500 --------------
--------------
Transportation - 4.73%
Chemicals - 4.84% FedEx Corp. 45,000 4,834,350
E.I. du Pont de Nemours --------------
Company 100,000 4,943,000
-------------- Total Common Stocks (Cost $91,178,353) 96,937,906
--------------
Computers - 9.79%
* EMC Corporation 360,000 4,986,000 INVESTMENT COMPANIES - 8.52%
Hewlett-Packard Company 125,000 5,017,500
-------------- Evergreen Institutional Money
10,003,500 Market Fund 4,964,177 4,964,177
-------------- Merrimac Cash Series Fund 3,736,576 3,736,576
Diversified Financial Services - 9.35% Total Investment Companies
Citigroup Inc. 89,510 4,595,444 (Cost $8,700,753) 8,700,753
The Goldman Sachs Group, --------------
Inc. 24,000 4,959,120 Total Investments
-------------- (Cost $99,879,106) - 103.41% $ 105,638,659
9,554,564 Liabilities in Excess of Other Assets - (3.41%) (3,484,442)
-------------- --------------
Financial Services - 4.65% Net Assets - 100.00% $ 102,154,217
Allied Capital Corporation 165,010 4,753,938 ==============
-------------- * Non-income producing investment.
Food - 4.61% Summary of Investments by Industry
Whole Foods Market, Inc. 105,000 4,709,250
--------------
Healthcare - Services - 9.69%
Aetna Inc. 110,000 4,816,900 % of Net Market
* Laboratory Corporation of Industry Assets Value
America Holdings 70,000 5,084,100 -------------------------------------------------------------
-------------- Aerospace/Defense 9.39% $ 9,593,500
9,901,000 Chemicals 4.84% 4,943,000
-------------- Computers 9.79% 10,003,500
Diversified Financial Services 9.35% 9,554,564
Home Builders - 4.69% Financial Services 4.65% 4,753,938
D.R. Horton, Inc. 217,780 4,791,160 Food 4.61% 4,709,250
-------------- Healthcare - Services 9.69% 9,901,000
Home Builders 4.69% 4,791,160
Miscellaneous Manufacturing - 4.82% Investment Companies 8.52% 8,700,753
General Electric Company 139,150 4,920,344 Miscellaneous Manufacturing 4.82% 4,920,344
-------------- Oil & Gas 4.43% 4,527,000
Real Estate Investment Trust 4.64% 4,735,800
Oil & Gas - 4.43% Retail 4.68% 4,776,200
Exxon Mobil Corporation 60,000 4,527,000 Telecommunications 14.58% 14,894,300
-------------- Transportation 4.73% 4,834,350
-------------------------------------------------------------
Real Estate Investment Trust - 4.64% Total 103.41% $ 105,638,659
Host Hotels & Resorts 180,000 4,735,800
--------------
Retail - 4.68%
The Home Depot, Inc. 130,000 4,776,200
--------------
See Notes to Financial Statements
Hillman Capital Management Funds
Statements of Assets and Liabilities
(Unaudited)
Advantage Equity Focused Advantage
As of March 31, 2007 Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments, at cost ............................................................... $ 20,450,459 $ 99,879,106
Investments, at value (note 1) ..................................................... $ 25,230,672 $ 105,638,659
Cash ............................................................................... 1,500 637
Receivables:
Fund shares sold ................................................................... 479 219,329
Dividends and Interest, at value (note 1) .......................................... 28,340 128,521
Prepaid expenses:
Fund accounting fees ............................................................... 4,500 4,500
Compliance fees .................................................................... 646 646
Other expenses ..................................................................... 41,470 34,492
-------------- ---------------
Total Assets ....................................................................... 25,307,607 106,026,784
-------------- ---------------
Liabilities:
Payables:
Investments purchased .............................................................. 3,008 3,037,323
Fund shares repurchased ............................................................ - 796,395
Accrued expenses ................................................................... 23,749 38,849
-------------- ---------------
Total Liabilities .................................................................. 26,757 3,872,567
-------------- ---------------
Net Assets ......................................................................... $ 25,280,850 $ 102,154,217
Net Assets Consist of:
Capital ............................................................................ 20,184,211 94,447,106
Accumulated net investment income .................................................. 93,527 401,700
Accumulated net realized gain on investments ....................................... 222,899 1,545,858
Net unrealized appreciation in investments ......................................... 4,780,213 5,759,553
-------------- ---------------
Total Net Assets ................................................................... $ 25,280,850 $ 102,154,217
============== ===============
No Load Shares Outstanding, no par value (unlimited shares authorized) ............. 1,863,517 6,640,205
Net Assets- No Load Shares ......................................................... $ 25,246,048 $ 101,450,289
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ............. $ 13.55 $ 15.28
Class A Shares Outstanding, no par value (unlimited shares authorized) ............. 852 12,424
Net Assets- Class A Shares ......................................................... $ 11,602 $ 190,586
Net Asset Value and Redemption Price Per Share ..................................... $ 13.61 (b) $ 15.34
Offering Price Per Share (Net Asset Value / 0.9425) ................................ $ 14.44 $ 16.28
Class B Shares Outstanding, no par value (unlimited shares authorized) ............. 851 1,123
Net Assets- Class B Shares (a) ..................................................... $ 11,600 $ 17,148
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ............. $ 13.63 $ 15.27
Class C Shares Outstanding, no par value (unlimited shares authorized) ............. 851 32,562
Net Assets- Class C Shares (a) ..................................................... $ 11,600 $ 496,194
Net Asset Value, Maximum Offering Price and Redemption Price Per Share ............. $ 13.63 $ 15.24
(a) Class B and C shares have a contengent deferred sales charge (note 1).
(b) Due to rounding of shares outstanding, the Net Assets divided by shares does
not equal the Net Asset Value per share.
See Notes to Financial Statements
Hillman Capital Management Funds
Statements of Operations
(Unaudited)
Advantage Equity Focused Advantage
For the six month period ended March 31, 2007 Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends ............................................................................ $ 280,148 $ 1,077,853
----------- -------------
Total Investment Income .............................................................. 280,148 1,077,853
----------- -------------
Expenses:
Advisory fees (note 2) ............................................................... 125,326 445,702
Administration fees (note 2) ......................................................... 15,666 50,803
Transfer agent fees (note 2) ......................................................... 19,500 19,596
Registration and filing administration fees (note 2) ................................. 15,558 15,632
Fund accounting fees (note 2) ........................................................ 28,253 31,457
Compliance services fees (note 2) .................................................... 3,875 3,875
Custody fees (note 2) ................................................................ 3,268 12,405
Distribution and service fees - No Load Class Shares (note 3) ........................ 31,289 111,024
Distribution and service fees - Class A Shares (note 3) .............................. - 97
Distribution and service fees - Class B Shares (note 3) .............................. - 82
Distribution and service fees - Class C Shares (note 3) .............................. - 1,137
Legal fees ........................................................................... 11,405 11,293
Audit and tax preparation fees ....................................................... 8,291 7,730
Registration and filing expenses ..................................................... 15,155 33,507
Shareholder servicing expenses ....................................................... 1,496 6,483
Printing expenses .................................................................... 622 1,745
Trustees' fees and meeting expenses .................................................. 2,493 2,493
Securities pricing fees .............................................................. 2,244 349
Other operating expenses ............................................................. 4,738 17,951
Total Expenses ....................................................................... 289,179 773,361
----------- -------------
Advisory fees waived (note 2) ........................................................ (93,558) (107,548)
Transfer agent fees waived (note 2) .................................................. (9,000) (1,699)
Net Expenses ......................................................................... 186,621 664,114
----------- -------------
Net Investment Income ................................................................ 93,527 413,739
----------- -------------
Net Realized and Unrealized Gain from Investments:
Net realized gain from Investments ................................................... 222,600 1,734,208
Change in unrealized appreciation on investments ..................................... 1,074,190 3,337,069
Net Realized and Unrealized Gain on Investments ...................................... 1,296,790 5,071,277
----------- -------------
Net Increase in Net Assets Resulting from Operations ................................. $ 1,390,317 $ 5,485,016
=========== =============
See Notes to Financial Statements
Hillman Capital Management Funds
Statements of Changes in Net Assets
Advantage Equity Fund Focused Advantage Fund
March 31, September 30, March 31, September 30,
For the six month period or fiscal year ended 2007 (a) 2006 2007 (a) 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income $ 93,527 $ 140,134 $ 413,739 $ 505,183
Net realized gain from investment transactions 222,600 1,767,879 1,734,208 5,812,827
Capital gain distributions from other
investment companies - 27,760 - 30,500
Change in unrealized appreciation on investments 1,074,190 144,350 3,337,069 (2,164,093)
Net Increase in Net Assets Resulting from Operations 1,390,317 2,080,123 5,485,016 4,184,417
----------- ------------ ------------ ------------
Distributions to Shareholders: (note 5)
Net investment income - No Load Class Shares - (251,827) (17,799) (506,930)
Net investment income - Class A Shares - (16) (116) (14)
Net investment income - Class B Shares - - (30) -
Net investment income - Class C Shares - - (313) -
Net realized gain from investment transactions -
No Load Class Shares (1,765,102) (261,624) (5,767,892) (2,294,247)
----------- ------------ ------------ ------------
Net realized gain from investment transactions -
Class A Shares (806) - (1,823) -
Net realized gain from investment transactions -
Class B Shares (805) - (1,090) -
Net realized gain from investment transactions -
Class C Shares (805) - (10,561) -
Decrease in Net Assets Resulting from Distributions (1,767,518) (513,467) (5,799,624) (2,801,191)
Capital Share Transactions: (note 6)
No Load Shares
Shares sold 1,012,909 3,860,040 37,322,369 76,442,383
Reinvested dividends and distributions 1,739,975 509,863 4,708,454 2,603,468
Shares repurchased (673,809) (2,453,740) (18,425,219) (67,461,663)
Class A Shares
Shares sold - 10,000 187,867 10,000
Reinvested dividends and distributions 806 16 1,939 14
Shares repurchased - - (7,000) -
Class B Shares
Shares sold - 10,000 5,300 10,000
Reinvested dividends and distributions 805 - 1,120 -
Shares repurchased - - - -
Class C Shares
Shares sold - 10,000 500,825 10,000
Reinvested dividends and distributions 805 - 10,874 -
Shares repurchased - - (14,896) -
Increase from Capital Share Transactions 2,081,491 1,946,179 24,291,633 11,614,202
----------- ------------ ------------ ------------
Net Increase in Net Assets 1,704,290 3,512,835 23,977,025 12,997,428
----------- ------------ ------------ ------------
Net Assets:
Beginning of Period 23,576,560 20,063,725 78,177,192 65,179,764
----------- ------------ ------------ ------------
End of Period $25,280,850 $ 23,576,560 $102,154,217 $ 78,177,192
=========== ============ ============ ============
Accumulated Net Investment Income $ 93,526 $ - $ 401,700 $ 6,219
(a) Unaudited.
See Notes to Financial Statements
Hillman Capital Management Funds
Advantage Equity Fund
Financial Highlights
No Load
September 30,
For a share outstanding during the March 31, --------------------------------------------------------------
six month period or fiscal years ended 2007 (a) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 13.75 $ 12.76 $ 11.56 $ 10.25 $ 8.51 $ 8.77
--------- --------- --------- --------- -------- --------
Income from Investment Operations:
Net investment income 0.05 0.08 0.09 0.13 0.14 0.10
Net realized and unrealized gain (loss) on securities 0.77 1.23 1.40 1.27 1.83 (0.25)
Total from Investment Operations 0.82 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) (1.02) (0.17) (0.19) - (0.08) -
Total Distributions (1.02) (0.32) (0.29) (0.09) (0.23) (0.11)
--------- --------- --------- --------- -------- --------
Net Asset Value, End of Period $ 13.55 $ 13.75 $ 12.76 $ 11.56 $ 10.25 $ 8.51
========= ========= ========= ========= ======== ========
Total Return 5.88% 10.41% 13.02% 13.63% 23.46% (1.56)%
Net Assets, End of Period (in thousands) $ 25,246 $ 23,544 $ 20,064 $ 15,354 $ 11,754 $ 6,288
Average Net Assets for the Period (in thousands) $ 25,100 $ 20,994 $ 18,682 $ 14,244 $ 8,448 $ 6,715
Ratio of Gross Expenses to Average Net Assets (e) 2.24% (d) 2.11% 2.18% 2.24% 2.61% 2.83%
Ratio of Net Expenses to Average Net Assets (e) 1.49% (d) 1.61% 1.75% 1.75% 1.83% 1.80%
Ratio of Net Investment
Income to Average Net Assets 0.75% (d) 0.67% 0.81% 1.15% 1.62% 1.11%
Portfolio Turnover Rate 5.07% 38.18% 12.11% 17.14% 19.71% 40.37%
Focused Advantage Fund
No Load
September 30,
For a share outstanding during the March 31, --------------------------------------------------------------
six month period or fiscal years ended 2007 (a) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 15.26 $ 14.73 $ 11.82 $ 9.63 $ 6.55 $ 7.51
--------- --------- --------- --------- -------- --------
Income from Investment Operations:
Net investment income (loss) 0.06 0.09 - 0.03 0.04 (0.04)
Net realized and unrealized gain (loss) on securities 1.00 0.95 2.92 2.17 3.08 (0.92)
Total from Investment Operations 1.06 1.04 2.92 2.20 3.12 (0.96)
--------- --------- --------- --------- -------- --------
Less Distributions:
Dividends (from net investment income) 0.00 (c) (0.09) (0.01) (0.01) (0.04) -
Distributions (from capital gains) (1.04) (0.42) - - - -
Total Distributions (1.04) (0.51) (0.01) (0.01) (0.04) -
--------- --------- --------- --------- -------- --------
Net Asset Value, End of Period $ 15.28 $ 15.26 $ 14.73 $ 11.82 $ 9.63 $ 6.55
========= ========= ========= ========= ======== ========
Total Return 6.86% 7.15% 24.69% 22.82% 47.60% (12.67)%
Net Assets, End of Period (in thousands) $ 101,450 $ 78,144 $ 65,180 $ 11,851 $ 5,157 $ 2,977
Average Net Assets for the Period (in thousands) $ 89,063 $ 88,103 $ 32,265 $ 8,329 $ 3,879 $ 3,628
Ratio of Gross Expenses to Average Net Assets (e) 1.73% (d) 1.62% 1.89% 2.58% 3.93% 4.06%
Ratio of Net Expenses to Average Net Assets (e) 1.49% (d) 1.53% 1.75% 1.75% 2.10% 2.12%
Ratio of Net Investment
Income (loss) to Average Net Assets 0.93% (d) 0.57% 0.02% 0.39% 0.53% (0.46)%
Portfolio Turnover Rate 20.09% 43.27% 39.94% 37.80% 41.37% 67.29%
(a) Unaudited.
(b) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
(c) Actual amount is less than $0.01 per share.
(d) Annualized.
(e) The expense ratios listed reflect the total expenses prior to any waivers (gross expense ratio) and after any waviers
(net expense ratio).
(f) Total return does not reflect payment of sales charge.
See Notes to Financial Statements (Continued)
Hillman Capital Management Funds
Financial Highlights
Advantage Equity Fund
Class A Class B Class C
March 31, September 30, March 31, September 30, March 31, September 30,
2007 (a) 2006 (b) 2007 (a) 2006 (b) 2007 (a) 2006 (b)
----------------------------------- ----------------------------------- -----------------------------------
$ 13.79 $ 12.62 $ 13.81 $ 12.62 $ 13.81 $ 12.62
---------- ---------- ---------- ---------- ---------- ----------
0.06 0.02 0.06 0.02 0.06 0.02
0.78 1.17 0.78 1.17 0.78 1.17
0.84 1.19 0.84 1.19 0.84 1.19
---------- ---------- ---------- ---------- ---------- ----------
- (0.02) - - - -
(1.02) - (1.02) - (1.02) -
(1.02) (0.02) (1.02) - (1.02) -
---------- ---------- ---------- ---------- ---------- ----------
$ 13.61 $ 13.79 $ 13.63 $ 13.81 $ 13.63 $ 13.81
========== ========== ========== ========== ========== ===========
5.94% (f) 9.43% (f) 5.71% 9.43% 5.71% 9.43%
$ 12 $ 11 $ 12 $ 11 $ 12 $ 11
$ 12 $ 10 $ 12 $ 10 $ 12 $ 10
1.98% (d) 2.23% (d) 1.98% (d) 2.23% (d) 1.98% (d) 2.23%
1.24% (d) 1.24% (d) 1.24% (d) 1.24% (d) 1.24% (d) 1.24%
1.00% (d) 0.91% (d) 1.00% (d) 0.91% (d) 1.00% (d) 0.91%
5.07% 38.18% 5.07% 38.18% 5.07% 38.18%
Focused Advantage Fund
Class A Class B Class C
March 31, September 30, March 31, September 30, March 31, September 30,
2007 (a) 2006 (b) 2007 (a) 2006 (b) 2007 (a) 2006 (b)
----------------------------------- ----------------------------------- -----------------------------------
$ 15.31 $ 13.97 $ 15.33 $ 13.97 $ 15.33 $ 13.97
---------- ---------- ---------- ---------- ---------- ----------
0.03 0.03 0.01 0.03 - 0.03
1.06 1.33 0.99 1.33 0.97 1.33
1.09 1.36 1.00 1.36 0.97 1.36
---------- ---------- ---------- ---------- ---------- ----------
(0.02) (0.02) (0.02) - (0.02) -
(1.04) - (1.04) - (1.04) -
(1.06) (0.02) (1.06) - (1.06) -
---------- ---------- ---------- ---------- ---------- ----------
$ 15.34 $ 15.31 $ 15.27 $ 15.33 $ 15.24 $ 15.33
========== ========== ========== ========== ========== ===========
7.04% (f) 9.74% (f) 6.66% 9.74% 6.45% 9.74%
$ 191 $ 11 $ 17 $ 11 $ 496 $ 11
$ 78 $ 10 $ 16 $ 10 $ 228 $ 10
2.03% (d) 1.58% (d) 2.46% (d) 1.58% (d) 2.72% (d) 1.58% (d)
1.49% (d) 1.24% (d) 2.24% (d) 1.24% (d) 2.24% (d) 1.24% (d)
0.86% (d) 0.93% (d) 0.18% (d) 0.93% (d) 0.20% (d) 0.93% (d)
20.09% 43.27% 20.09% 43.27% 20.09% 43.27%
See Notes to Financial Statements
Hillman Capital Management Funds
Notes to Financial Statements (Unaudited)
- -------------------------------------------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
The Hillman Advantage Equity Fund, formerly known as Load, Class A, Class B, and Class C shares are subject
The Hillman Total Return Fund, and The Hillman Focused to distribution plan fees as described in Note 3. Class
Advantage Fund, formerly known as The Hillman B shares automatically convert into Class A shares
Aggressive Equity Fund, (collectively the "Funds" and after eight years, and Class C shares are automatically
individually a "Fund") are series funds. The Funds are converted into the No Load shares after ten years.
part of the Hillman Capital Management Investment Trust
(the "Trust"), which was organized as a Delaware The following accounting policies have been
Business Statutory Trust and is registered under the consistently followed by the Funds and are in
Investment Company Act of 1940, (the "1940 Act"), as conformity with accounting principles generally
amended, as an open-ended management investment accepted in the United States of America in the
company. investment company industry.
The Hillman Advantage Equity Fund ("Advantage Equity Investment Valuation
Fund") commenced operations on December 29, 2000. The The Funds' investments in securities are carried at
investment objective of the Fund is to seek maximum value. Securities listed on an exchange or quoted on a
total return through a combination of long-term capital national market system are valued at the last sales
appreciation and current income. price as of 4:00 p.m. Eastern Time. Securities traded
in the NASDAQ over-the-counter market are generally
The Hillman Focused Advantage Fund ("Focused Advantage valued at the NASDAQ Official Closing Price. Other
Fund") commenced operations on December 29, 2000. The securities traded in the over-the-counter market and
investment objective of the Fund is to seek long-term listed securities for which no sale was reported on
capital appreciation. that date are valued at the most recent bid price.
Securities and assets for which representative market
The Board of Trustees of the Trust (the "Trustees") quotations are not readily available or which cannot be
approved, on February 14, 2006, a plan to authorize accurately valued using the Funds' normal pricing
three new classes of shares for both Funds designated procedures are valued at fair value as determined in
as Class A Shares, Class B Shares, and Class C Shares. good faith under policies approved by the Trustees.
On July 18, 2006, the Class A Shares, Class B Shares, Fair value pricing may be used, for example, in
and Class C Shares became effective. The Funds situations where (i) a portfolio security is so thinly
currently have an unlimited number of authorized traded that there have been no transactions for that
shares, which are divided into four classes - No Load security over an extended period of time; (ii) the
Shares, Class A Shares, Class B Shares, and Class C exchange on which the portfolio security is principally
Shares. traded closes early; or (iii) trading of the portfolio
security is halted during the day and does not resume
Each class of shares has equal rights as to assets of prior to the Funds' net asset value calculation. A
the Fund, and the classes are identical except for portfolio security's "fair value" price may differ from
differences in their sales charge structures and the price next available for that portfolio security
ongoing distribution and service fees. Income, expenses using the Funds' normal pricing procedures. Instruments
(other than distribution and service fees), and with maturities of 60 days or less are valued at
realized and unrealized gains or losses on investments amortized cost, which approximates market value.
are allocated to each class of shares based upon its
relative net assets. All classes have equal voting Investment Transactions and Investment Income
privileges, except where otherwise required by law or Investment transactions are accounted for as of the
when the Trustees determine that the matter to be voted date purchased or sold (trade date). Dividend income is
on affects only the interests of the shareholders of a recorded on the ex-dividend date. Certain dividends
particular class. The Funds' Class B and Class C shares from foreign securities will be recorded as soon as the
are sold without an initial sales charge; however, they Trust is informed of the dividend if such information
are subject to a contingent deferred sales charge. is obtained subsequent to the ex-dividend date.
Class B shares are charged at the rate of 5% in the Interest income is recorded on the accrual basis and
first year and declining to 0% over a six-year period, includes amortization of discounts and premiums. Gains
and Class C shares at a rate of 1% if redeemed in the and losses are determined on the identified cost basis,
first year, which is payable to the Distributor of the which is the same basis used for federal income tax
Trust. Class A shares are sold with an initial sales purposes.
charge of up to 5.75% of the amount invested. The No
Expenses
The Funds bear expenses incurred specifically on their
behalf as well as a portion of general trust expenses,
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements (Unaudited)
- -------------------------------------------------------------------------------------------------------------------
which are allocated according to methods reviewed which is subject to a minimum of $2,000 per month per
annually by the Trustees. Fund. The Administrator also receives a fee to procure
and pay the custodian for each Fund, additional
Dividend Distributions compensation for fund accounting and recordkeeping
The Funds may declare and distribute dividends from net services, and additional compensation for certain costs
investment income (if any) at the end of each calendar involved with the daily valuation of securities and as
quarter. Distributions from capital gains (if any) are reimbursement for out-of-pocket expenses. A breakdown
generally declared and distributed annually. of these fees is provided in the following schedule.
Estimates Compliance Services
The preparation of financial statements in conformity Nottingham Compliance Services, LLC, a fully owned
with accounting principles generally accepted in the affiliate of The Nottingham Company, provides services
United States of America requires management to make which assist the Trust's Chief Compliance Officer in
estimates and assumptions that affect the amount of monitoring and testing the policies and procedures of
assets, liabilities, expenses and revenues reported in the Trust in conjunction with requirements under Rule
the financial statements. Actual results could differ 38a-1 of the Securities and Exchange Commission. It
from those estimates. receives compensation for this service at an annual
rate of $7,750 per Fund.
Federal Income Taxes
No provision for income taxes is included in the Transfer Agent
accompanying financial statements, as the Funds intend North Carolina Shareholder Services, LLC ("Transfer
to distribute to shareholders all taxable investment Agent") serves as transfer, dividend paying, and
income and realized gains and otherwise comply with shareholder servicing agent for the Funds. It receives
Subchapter M of the Internal Revenue Code applicable to compensation for its services based upon $15 per
regulated investment companies. shareholder per year, subject to a minimum fee of
$1,750 per month per Fund, plus $500 per month for each
2. Transactions with Affiliates additional class of shares. The Transfer Agent has
voluntarily waived a portion of its fees for the six
Advisor month ended March 31, 2007 in the amounts of $9,000 and
The Funds pay a monthly advisory fee to Hillman Capital $1,699 for the Advantage Equity Fund and the Focused
Management, Inc. (the "Advisor") based upon the average Advantage Fund, respectively.
daily net assets of each Fund and calculated at the
annual rate of 1.00%. For the six month period ended Distributor
March 31, 2007, the Advisor has voluntarily waived a Capital Investment Group, Inc. (the "Distributor")
portion of these fees in the amounts of $93,558 and serves as the Fund's principal underwriter and
$107,548 for the Advantage Equity Fund and the Focused distributor. The Distributor receives any sales charges
Advantage Fund, respectively. imposed on purchases of shares and re-allocates a
portion of such charges to dealers through whom the
Administrator sale was made, if any. For the six month period ended
Each Fund pays a monthly administration fee to The March 31, 2007, the Distributor retained no sales
Nottingham Company (the "Administrator") based upon the charges.
average daily net assets of each Fund and calculated at
the annual rates as shown in the following schedule Certain Trustees and officers of the Trust are also
officers of the Advisor, the Distributor or the
Administrator.
- -----------------------------------------------------------------------------------------------------------------------------------
Fund Accounting
Administration Fees (1) Custody Fees (2) Fund Asset Based
- ---------------------------- ----------------------------- Accounting Blue Sky
Average Annual Average Annual Fees Average Annual Administration
Net Assets Rate Net Assets Rate (monthly) Net 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 (3)
Over $100 million 0.075%
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Subject to a minimum fee of $2,000 per month
(2) Subject to a minimum fee of $400 per month
(3) For each additional class.
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
3. Distribution and Service Fees
The Trustees, including a majority of the Trustees who 5. Federal Income Tax
are not "interested persons" (as defined in the 1940
Act), of the Trust adopted distribution and service The tax components of capital shown in Table 1
plans pursuant to Rule 12b-1 of the 1940 Act (the represent the distribution requirements the Funds must
"Plans") applicable to the No Load Shares, Class A satisfy under the income tax regulations as of
Shares, Class B Shares, and Class C Shares. The 1940 September 30, 2006.
Act regulates the manner in which a regulated
investment company may assume costs of distributing and Other book tax differences in the current year
promoting the sales of its shares and servicing of its primarily consist of adjustments due to
shareholder accounts. The Plans provide that the Fund reclassifications of income received from investments
may incur certain costs, which may not exceed 0.25% per in real estate investment trusts and different book and
annum of the average daily net assets of the No Load tax treatment of short-term capital gains.
Shares and Class A Shares or 1.00% per annum of the
average daily net assets of the Class B Shares or Class -----------------------------------------------------------------------
C Shares for each year elapsed subsequent to adoption Table 1 Undistributed
of the Plans, for payment to the Distributor and others ----------------------------------
for items such as advertising expenses, selling -----------------------------------------------------------------------
expenses, commissions, travel, or other expenses Long-Term
reasonably intended to result in sales of No Load Ordinary Capital Net Tax
Shares, Class A Shares, Class B Shares, and Class C Fund Income Gains Appreciation
Shares in the Funds or support servicing of those -----------------------------------------------------------------------
classes' shareholder accounts. See the table below for Advantage Equity $139,192 $1,628,315 $3,706,023
a breakout of the 12b-1 fees incurred for the Advantage
Equity Fund and the Focused Advantage Fund for the six Focused Advantage $1,008,783 $4,778,775 $2,234,161
month period ended March 31, 2007. -----------------------------------------------------------------------
- -------------------------------------------------------- The aggregate cost of investments and the composition
12b-1 fees incurred of unrealized appreciation and depreciation of
----------------------------------------- investment securities for federal income tax purposes
Class Class Class as of March 31, 2007 are noted below in Table 2. The
No Load A B C primary difference between book and tax appreciation or
Fund Shares Shares Shares Shares depreciation of investments is wash sale loss
- -------------------------------------------------------- deferrals.
Advantage
Equity $31,289 $ - $ - $ - -----------------------------------------------------------------------
- -------------------------------------------------------- Aggregate Gross
Focused Unrealized
Advantage $111,024 $97 $82 $1,137 Table 2 ------------------------
- -------------------------------------------------------- Federal Tax
Fund Cost Appreciation Depreciation
4. Purchases and Sales of Investment Securities -----------------------------------------------------------------------
Advantage Equity $20,450,459 $5,387,829 ($607,616)
For the six month period ended March 31, 2007 the -----------------------------------------------------------------------
aggregate cost of purchases and proceeds from sales of Focused Advantage $100,093,916 $10,469,559 ($4,924,816)
investment securities (excluding short-term securities) -----------------------------------------------------------------------
were as follows:
The amount of dividends and distributions from net
investment income and net realized capital gains are
- -------------------------------------------------------- determined in accordance with federal income tax
Proceeds from regulations which may differ from accounting principles
Purchases of Sales of generally accepted in the United States of America.
Fund Securities Securities These differences are due to differing treatments for
- -------------------------------------------------------- items such as net short-term gains, deferral of wash
Advantage Equity $1,717,529 $1,255,775 sale losses, net investment losses and capital loss
- -------------------------------------------------------- carry-forwards. Permanent differences such as tax
Focused Advantage $32,019,497 $17,536,519 returns of capital and net investment losses, if any,
- -------------------------------------------------------- would be reclassified against capital.
There were no purchases or sales of long-term U.S.
Government Obligations for either Fund during the six
month period ended March 31, 2007.
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------- -----------------------------------------------------------------------
For the year ended For the year ended
September 30, 2006 Distributions from September 30, 2005 Distributions from
- -------------------------------------------------------- -----------------------------------------------------------------------
Ordinary Long-Term Ordinary Long-Term
Fund Income Capital Gains Fund Income Capital Gains
Advantage Equity $389,131 $124,336 Advantage Equity $150,140 $283,131
Focused Advantage $1,355,046 $1,446,145 Focused Advantage $10,478 $ -
- -------------------------------------------------------- -----------------------------------------------------------------------
6. Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Advantage Equity Fund
No Load Shares Class A Shares
----------------------------------------------------------------------
March 31, September 30, March 31, September 30,
For the six month period or fiscal years ended 2007 2006 (2) 2007 2006 (1,2)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in Capital Shares
Shares sold 71,303 288,671 - 793
Reinvested distributions 127,471 38,825 58 1
Shares repurchased (48,109) (187,293) - -
Net Increase in Capital Shares Transactions 150,665 140,203 58 794
Shares Outstanding, Beginning of Period 1,712,852 1,572,649 794 -
Shares Outstanding, End of Period 1,863,517 1,712,852 852 794
- -----------------------------------------------------------------------------------------------------------------------------------
(1) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
(2) Audited.
- -----------------------------------------------------------------------------------------------------------------------------------
Advantage Equity Fund
Class B Shares Class C Shares
----------------------------------------------------------------------
March 31, September 30, March 31, September 30,
For the six month period or fiscal years ended 2007 2006 (2) 2007 2006 (1,2)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in Capital Shares
Shares sold - 792 - 792
Reinvested distributions 59 - 59 -
Shares repurchased - - - -
Net Increase in Capital Shares Transactions 59 792 59 792
Shares Outstanding, Beginning of Period 792 - 792 -
Shares Outstanding, End of Period 851 792 851 792
- -----------------------------------------------------------------------------------------------------------------------------------
(1) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
(2) Audited.
- -----------------------------------------------------------------------------------------------------------------------------------
Focused Advantage Fund
No Load Shares Class A Shares
----------------------------------------------------------------------
March 31, September 30, March 31, September 30,
For the six month period or fiscal years ended 2007 2006 (2) 2007 2006 (1,2)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in Capital Shares
Shares sold 2,401,309 5,099,562 12,010 716
Reinvested distributions 304,163 174,545 124 1
Shares repurchased (1,187,363) (4,577,945) (427) -
Net Increase in Capital Shares Transactions 1,518,109 696,162 11,707 717
Shares Outstanding, Beginning of Period 5,122,096 4,425,934 717 -
Shares Outstanding, End of Period 6,640,205 5,122,096 12,424 717
- -----------------------------------------------------------------------------------------------------------------------------------
(1) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
(2) Audited.
(Continued)
Hillman Capital Management Funds
Notes to Financial Statements (Unaudited)
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Focused Advantage Fund
Class B Shares Class C Shares
----------------------------------------------------------------------
March 31, September, March 31, September 30,
For the six month period or fiscal years ended 2007 2006 (1,2) 2007 2006 (1,2)
- -----------------------------------------------------------------------------------------------------------------------------------
Transactions in Capital Shares
Shares sold 335 716 32,108 716
Reinvested distributions 72 - 701 -
Shares repurchased - - (963) -
Net Increase in Capital Shares Transactions 407 716 31,846 716
Shares Outstanding, Beginning of Period 716 - 716 -
Shares Outstanding, End of Period 1,123 716 35,562 716
- -----------------------------------------------------------------------------------------------------------------------------------
(1) For the period from July 18, 2006 (Date of Initial Public Offering) to September 30, 2006.
(2) Audited.
7. New Accounting Pronouncements
In September 2006, the Financial Accounting Standards 31, 2007 and is to be applied to all open tax years. At
Board (FASB) issued Statement on Financial Accounting this time, management is evaluating the implications of
Standards (SFAS) No. 157, "Fair Value Measurements". FIN 48. Although not yet determined, management does
This standard establishes a single authoritative not expect FIN 48 to have a material impact on the
definition of fair value, sets out a framework for financial statements.
measuring fair value and requires additional disclosure
about fair value measurements. SFAS No. 157 applies to 8. Commitments and Contingencies
fair value measurements already required or permitted
by existing standards. SFAS No. 157 is effective for Under the Trust's organizational documents, its
financial statements issued for fiscal years beginning officers and Trustees are indemnified against certain
after November 15, 2007 and interim periods within liabilities arising out of the performance of their
those fiscal years. The changes to current generally duties to the Funds. In addition, in the normal course
accepted accounting principles from the application of of business, the Funds entered into contracts with
this Statement relate to the definition of fair value, their vendors and others that provide for general
the methods used to measure fair value, and the indemnifications. The Funds' maximum exposure under
expanded disclosures about fair value measurements. As these arrangements is unknown, as this would involve
of March 31, 2007, the Funds do not believe the future claims that may be made against the Funds. The
adoption of SFAS No. 157 will impact the amounts Funds expect that risk of loss to be remote.
reported in the financial statements, however,
additional disclosures may be required about the inputs
used to develop the measurements and the effect of
certain of the measurements reported on the statement
of changes in net assets for a fiscal period.
On July 13, 2006, the Financial Accounting Standards
Board (FASB) released FASB Interpretation No. 48
"Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and
disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be
taken in the course of preparing the Fund's tax returns
to determine whether the tax positions are
"more-likely-than-not" of being sustained by the
applicable tax authority. Tax positions not deemed to
meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current
year. FIN 48 is to be implemented no later than August
Hillman Capital Management funds
Additional information (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
1. Proxy Voting Policies and Voting Record
A copy of the Trust's Proxy Voting and Disclosure (vi) the Advisor's practices regarding possible
Policy and the Advisor's Proxy Voting and Disclosure conflicts of interest.
Policy are included as Appendix B to the Funds'
Statement of Additional Information and is available, At the meeting, the Trustees reviewed various
without charge, upon request, by calling informational materials including, without limitation,
1-800-773-3863. Information regarding how the Funds a copy of the Investment Advisory Agreement for the
voted proxies relating to portfolio securities during Funds; a memorandum from the Advisor to the Trustees
the most recent 12-month period ended June 30, is containing information about the Advisor, its business,
available (1) without charge, upon request, by calling its finances, its personnel, its services to the Funds,
the Funds at the number above and (2) on the SEC's and comparative expense ratio information for other
website at http://www.sec.gov. mutual funds with strategies similar to the Funds; and
a memorandum from Parker Poe Adams & Bernstein LLP
2. Quarterly Portfolio Holdings (counsel to the Funds) that summarized the fiduciary
duties and responsibilities of the Board of Trustees in
The Funds file their complete schedule of portfolio reviewing and approving the Investment Advisory
holdings with the SEC for the first and third quarters Agreement, including the types of information and
of each fiscal year on From N-Q. The Funds' Form N-Q is factors that should be considered in order to make an
available on the SEC's website at http://www.sec.gov. informed decision.
You may review and make copies at the SEC's Public
Reference Room in Washington, D.C. You may also obtain In considering the nature, extent, and quality of the
copies after paying a duplicating fee by writing the services provided by the Advisor to the Funds, the
SEC's Public Reference Section, Washington, D.C. Trustees reviewed the services being provided by the
20549-0102 or by electronic request to Advisor to the Funds including, without limitation, the
publicinfo@sec.gov, or is available without charge, quality of its investment advisory services since each
upon request, by calling the Funds at 1-800-773-3863. Fund's inception (including research and
Information on the operation of the Public Reference recommendations with respect to portfolio securities);
Room may be obtained by calling the SEC at its procedures for formulating investment
202-942-8090. recommendations and assuring compliance with each
Fund's investment objectives and limitations; its
3. Approval of Advisory Agreements During the Period coordination of services for the Funds among the Funds'
service providers; and its efforts to promote the
The Advisor supervises the investments of the Funds Funds, grow the Funds' assets, and assist in the
pursuant to an Investment Advisory Agreement. At the distribution of Fund shares. The Trustees noted that
annual meeting of the Funds' Board of Trustees on the Funds' principal executive officer, principal
November 28, 2006, the Trustees unanimously approved financial officer, and chief compliance officer were
the renewal of the Investment Advisory Agreement for employees of the Advisor and serve the Funds without
another year. In considering whether to approve the additional compensation from the Funds. After reviewing
renewal of the Investment Advisory Agreement, the the foregoing information and further information in
Trustees reviewed and considered such information as the memorandum from the Advisor (e.g., descriptions of
they deemed reasonably necessary, including the the Advisor's business, the Advisor's compliance
following material factors: (i) the nature, extent, and programs, and the Advisor's Form ADV), the Board of
quality of the services provided by the Advisor; (ii) Trustees concluded that the nature, extent, and quality
the investment performance of the Funds and the of the services provided by the Advisor were
Advisor; (iii) the costs of the services to be provided satisfactory and adequate for the Funds.
and profits to be realized by the Advisor and its
affiliates from the relationship with the Funds; (iv) In considering the investment performance of the Funds
the extent to which economies of scale would be and the Advisor, the Trustees compared the short and
realized as the Funds grow and whether advisory fee long-term performance of each Fund with the performance
levels reflect those economies of scale for the benefit of its benchmark index, comparable funds with similar
of the Funds' investors; (v) the Advisor's practices objectives and sizes managed by other investment
regarding brokerage and portfolio transactions; and advisors, and comparable peer group indices (e.g.,
Morningstar category averages). The Trustees also
considered the consistency of the Advisor's management
of each Fund with its investment objective and
policies. After reviewing the short and long-term
(Continued)
Hillman Capital Management Funds
Additional Information (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
investment performance of the Funds, the Advisor's Advisor involved only the management fee. The Trustees
experience managing the Funds and other advisory noted that, while the management fees remained the same
accounts, the Advisor's historical investment at all asset levels, the Funds' shareholders had
performance, and other factors, the Board of Trustees experienced benefits from the Advisor's voluntary
concluded that the investment performance of the Funds waiver of advisory fees for the Funds and would benefit
and the Advisor was satisfactory. from economies of scale under the Funds' agreements
with service providers other than the Advisor.
In considering the costs of the services to be provided Following further discussion of the Funds' asset
and profits to be realized by the Advisor and its levels, expectations for growth, and fee levels, the
affiliates from the relationship with the Funds, Board of Trustees determined that the Funds' fee
including any benefits derived or to be derived by the arrangements were fair and reasonable in relation to
Advisor from the relationship with the Funds, the the nature and quality of the services provided by the
Trustees considered the Advisor's staffing, personnel, Advisor, and that the Advisor's voluntary waiver of
and methods of operating; the education and experience advisory fees for the Funds provided potential savings
of the Advisor's personnel; the Advisor's compliance or protection for the benefit of the Funds' investors.
policies and procedures; the financial condition of the
Advisor and the level of commitment to the Funds and In considering the Advisor's practices regarding
the Advisor by the principals of the Advisor; the asset brokerage and portfolio transactions, the Trustees
level of each Fund; and the overall expenses of each reviewed the Advisor's standards, and performance in
Fund, including certain prior fee waivers and utilizing those standards, for seeking best execution
reimbursements by the Advisor on behalf of the Funds for Fund portfolio transactions, including the use of
and the nature and frequency of advisory fee payments. alternative markets (e.g., direct purchases from
The Trustees reviewed the financial statements for the issuers or underwriters or, as to equity securities,
Advisor and discussed the financial stability and "third market" for listed securities and principal
profitability of the firm. The Trustees discussed the market makers for over-the-counter securities). The
Advisor's prior fee waivers in detail, including the Trustees noted that the Funds' fixed income portfolio
nature and scope of cost allocation for such fees. The transactions are normally principal transactions
Trustees also considered potential benefits for the executed in over-the-counter markets on a "net" basis.
Advisor in managing the Funds, including promotion of The Trustees also considered the anticipated portfolio
the Advisor's name, the ability for the Advisor to turnover rate for the Funds; the extent to which the
place small accounts into the Funds, and the potential Funds allocate portfolio business to broker-dealers who
for the Advisor to generate soft dollars from certain provide research, statistical, or other services (soft
of the Funds' trades that may benefit the Advisor's dollars) to the Funds compared with broker-dealers who
other clients as well. The Trustees then compared the provide only execution services; the difference between
fees and expenses of each Fund (including the "full service" and "bare bones" commission rates,
management fee) to other funds comparable in terms of including consideration, each quarter, of whether the
the type of fund, the nature of its investment higher rates are reasonable in relation to the value of
strategy, its style of investment management, and its the services provided; the process by which evaluations
size, among other factors. With respect to each Fund, are made of the overall reasonableness of commissions
the Trustees determined that the management fee was paid; the method and basis for selecting and evaluating
higher than the comparable funds and the net expense the broker-dealers used; any anticipated allocation of
ratio, while higher than some of the comparable funds portfolio business to persons affiliated with the
and lower than others, was higher than the industry Advisor; the general nature and quality of the
average. Following this comparison and upon further research, statistical, and other services received (or
consideration and discussion of the foregoing, the expected to be received) by the Advisor or the Funds in
Board of Trustees concluded that the fees to be paid to return for commissions paid by the Funds or by any
the Advisor by the Funds were fair and reasonable in other account advised by the Advisor. The Trustees then
relation to the nature and quality of the services considered whether such services and soft dollars
provided by the Advisor. provide lawful and appropriate assistance to the
Advisor in the performance of its investment
In considering the extent to which economies of scale decision-making responsibilities and whether any
would be realized as the Funds grow and whether the payments are made for such services through the use of
advisory fee levels reflect these economies of scale concessions or mark-ups charged by underwriters or
for the benefit of the Funds' investors, the Trustees dealers in a principal (including riskless principal)
considered that each Fund's fee arrangements with the capacity; the extent to which any soft dollar payment
is allocated for products or services that provide both
a research and a non-research function; the extent to
which such services benefit other accounts, if any,
advised by the Advisor; the extent to which such
(Continued)
Hillman Capital Management Funds
Additional Information (Unaudited)
- --------------------------------------------------------------------------------
services enable the Advisor to avoid expenses that it
otherwise would be required to bear under the
Investment Advisory Agreement with the Funds; the
alternatives to "paying up for research" (e.g., paying
for research with cash, enlarging the investment staff,
etc.); and the opportunities for the Advisor to
recapture brokerage or related fees (e.g., as to equity
funds, tender offer fees, underwriting fees, etc.) and
credit it against the fees of the Funds. After further
review and discussion, the Board of Trustees determined
that the Advisor's practices regarding brokerage and
portfolio transactions were satisfactory.
In considering possible conflicts of interest, the
Trustees evaluated the potential for conflicts of
interest and considered such matters as the experience
and ability of the advisory personnel assigned to the
Funds; the basis for soft dollar payments with
broker-dealers, including any broker-dealers affiliated
with the Advisor; the basis of decisions to buy or sell
securities for the Funds and/or the Advisor's other
accounts; the method for bunching of portfolio
securities transactions; and the substance and
administration of the Advisor's code of ethics.
Following further consideration and discussion, the
Board of Trustees indicated that the Advisor's
standards and practices relating to the identification
and mitigation of possible conflicts of interests were
satisfactory.
Based upon all of the foregoing considerations, the
Board, including a majority of the Trust's independent
trustees, approved the renewal of the Investment
Advisory Agreement.
The Hillman Capital Management
Mutual Funds are a series of the
Hillman Capital Management Investment Trust
For Shareholder Service Inquiries: For Investment Advisor Inquiries:
Documented: Documented:
NC Shareholder Services, LLC Hillman Capital Management, Inc.
116 South Franklin Street 7600 Wisconsin Avenue
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
[Logo Here]
HILLMAN CAPITAL MANAGEMENT
Item 2. CODE OF ETHICS.
Not applicable.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
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 SECURITYHOLDERS.
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) Not applicable.
(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: May 29, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: (Signature and Title)
/s/ Mark A. Hillman
________________________________________________
Mark A. Hillman, Trustee, President and Principal
Date: May 29, 2007 Executive Officer
By: (Signature and Title)
/s/ Fletcher D. Parkins
_________________________________________________
Fletcher D. Perkins, Treasurer and Principal
Financial Officer
Date: May 29, 2007