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 811-8411
---------------------------------------------
The James Advantage Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
1349 Fairground Road, Beavercreek, Ohio 45385
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(Address of principal executive offices) (Zip code)
Barry R. James, P.O. Box 8, Alpha, Ohio, 45301
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (937) 426-7640
----------------------------
Date of fiscal year end: 6/30
----------------
Date of reporting period: 12/31/03
----------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The James Advantage Funds Semi-Annual Report
LETTER TO SHAREHOLDERS
OF THE JAMES ADVANTAGE FUNDS
================================================================================
As we begin 2004, the year of yet another presidential election, optimism seems
to abound in every corner of the U.S. equity markets. While election years have
typically been good for investors, this year is heavy with additional risk:
economic risk at home and international risk abroad. Investors will do well to
employ time proven and market tested managers who understand risk.
THE MARKET OVER THE PAST SIX MONTHS
By the end of the Funds' 2003 fiscal year, June 30th, stock markets around the
globe had already rallied sharply following the quick end to the formal war in
Iraq. The second half of 2003 continued the powerful rally. The S&P 500 advanced
more than 15% and the higher risk small cap index, the Russell 2000, moved up
24.92%. The NASDAQ, also higher risk, about matched the Russell 2000 with a
23.77% gain in the second half of 2003.
The strength in the markets followed the surprisingly strong GDP growth in the
third quarter and signs of some improvement in the unemployment plight of the
U.S. economy. The stock markets had begun to believe unemployment would continue
to rise and the economy sputter, two unfounded concerns given the magnitude of
the Bush tax cuts and rebates. The weakening dollar and liquidation of U.S.
stocks by foreign investors was more than offset by renewed domestic interest in
the stock market. The weak dollar, after all, was leading to sharply higher
profits for many U.S. companies.
INVESTMENT GOALS AND OBJECTIVES
The James Advantage Funds family is designed to perform well throughout the
business cycle. The Funds in the family have different goals and carry different
levels of risk. We believe these Funds can also meet the changing needs and
objectives of investors and allow them to change their risk tolerances when
combined into a portfolio of funds. To this extent, portfolio management is a
dynamic process which should reflect the investor's needs and goals. The
flexibility to employ different funds at different times has been very helpful
to investors over time.
The Small Cap Fund and the Large Cap Plus Fund carry higher levels of risk
because they are always close to fully invested in stocks. The Large Cap Plus
Fund is a non-diversified mutual fund, so it may hold overweight positions in
some industries or sectors. The Small Cap Fund is diversified, but smaller
capitalization companies generally are considered to be riskier investments than
large companies. The Market Neutral Fund seeks to eliminate market risk
altogether and seeks to profit on the market's miss-pricing of stocks. The
Golden Rainbow Fund, with its heavy reliance on high quality bonds, seeks to
provide income and, in declining markets, preservation of capital. These Fund
goals do not change because the business environment changes, but each should
perform well in its turn. We encourage investors to develop a portfolio of funds
that meets their own risk tolerances and objectives.
INVESTMENT PHILOSOPHY
Our conservative philosophy dictates that we thoroughly research stocks to
identify those that have strong earnings growth and the prospect for additional
earnings growth, but whose stock prices have not fully reflected the good news.
This is the basis for Value Investing; companies must have solid earnings to
justify their share prices. When the economy emerges from a long period of
recession or slow growth, earnings and the expectations for higher earnings will
increase significantly. This change is not evenly distributed throughout the
market, but is generally concentrated in some industries initially, then spreads
out to other sectors.
A disciplined approach to bond and stock selection helps to identify where
companies are in their cycle. Those companies that have been on the brink of
bankruptcy will have sharp moves up in price early in a recovery, but will
falter later if earnings do not become positive and continue to grow. Some
smaller companies will just be hitting their stride, achieving economies of
scale and attracting more attention, even after significant rallies in their
stocks.
1
James' conservative investment philosophy, based on research, has been the key
to differentiate between those with long term prospects and those in the midst
of a brief relief rally.
STRATEGY FOR MEETING FUND OBJECTIVES
James is known as a manager in search of value. That means the Adviser seeks out
stocks that have relatively low valuations as measured by various statistical
ratios such as Price to Book and Price Earnings. James' valuation models
consider close to 200 factors. Their weightings are revalidated every other year
to make sure they continue to have strong forecasting traits.
James adds new indicators to its models after a thorough testing process
validates their usefulness. Conversely, if an older indicator no longer is
helpful in predicting stock price movements, it is removed from the model. In
this manner, James keeps its process dynamic and contemporary.
Using this process, along with strong fundamental research, James will continue
to identify stocks with strong and verifiable value characteristics. Combined
with economic research in a top-down approach, we have a process designed to
select the strongest candidates in a universe of over 8000 stocks.
FUND PERFORMANCE
The James Advantage Funds had a very good year in 2003. Over that twelve month
period the Funds' flagship balanced fund, the Golden Rainbow, advanced by
18.21%. It also distributed regular quarterly dividends, meeting its income
objective. Its benchmark is a blend comprised of 25% Russell 2000, 25% S&P 500
and 50% Lehman Brothers Intermediate Government/Credit bond Index, which rose
20.56% over the period.
The James Large Cap Plus and the James Small Cap also had very strong
performances. The Large Cap Plus returned 26.66% for the year while the Small
Cap posted a total return of 53.64%. The S&P 500, the benchmark index for the
Large Cap Plus advanced 28.69% for the calendar year while the Russell 2000, the
Small Cap benchmark, rose 47.25%. The James Market Neutral rose 3.23% in 2004,
outperforming the risk-free rate of the 90 day Treasury Bill, which rose by
1.15%
EXPECTATIONS FOR THE FUTURE
Every Autumn the Adviser to the Funds, James Investment Research, Inc., prepares
an in-depth analysis of the U.S. economy and forecasts trends and opportunities
for the coming year. The annual economic outlook is made available to
shareholders of the James Advantage Funds in January. This year the Adviser is
forecasting continued strength in the stock markets in the first half of the
year, but rising concerns for stocks as valuations become steamy as the U.S.
presidential election draws nearer.
Bond prices, which were under pressure in the second half of 2003, will remain
volatile as economic growth is balanced against stubbornly high levels of
unemployment. This volatility will provide opportunities to enhance returns in
the bond markets.
Our strategy, then, is to use the expected market volatility for both stocks and
bonds, looking for shorter term advances and declines. Active management, not a
buy and hold mentality, is likely to be the best strategy in 2004.
/s/ Thomas L. Mangan
Thomas L. Mangan
Chief Financial Officer
2
THE JAMES ADVANTAGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2003 (UNAUDITED)
=============================================================================================================
THE GOLDEN THE JAMES THE JAMES THE JAMES
RAINBOW SMALL CAP MARKET NEUTRAL LARGE CAP
FUND FUND FUND PLUS FUND
- -------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At cost .................................... $ 60,858,926 $ 7,631,403 $ 7,147,197 $ 5,170,408
============ ============ ============ ============
At value ................................... $ 76,980,552 $ 11,533,664 $ 9,856,706 $ 6,259,611
Segregated cash with brokers ................. -- -- 6,860,933 --
Cash ......................................... 68 -- -- --
Receivable for capital shares sold ........... 265,498 98,797 -- --
Receivable for securities sold ............... 418,543 -- -- --
Dividends and interest receivable ............ 575,881 29,185 3,955 11,677
Other assets ................................. 8,304 -- -- --
------------ ------------ ------------ ------------
TOTAL ASSETS ............................. 78,248,846 11,661,646 16,721,594 6,271,288
------------ ------------ ------------ ------------
LIABILITIES
Securities sold short (proceeds $5,032,354) .. -- -- 6,023,217 --
Payable for capital shares redeemed .......... 11,518 -- 65,839 --
Payable for securities purchased ............. 379,900 -- -- --
Dividends payable on securities sold short ... -- -- 5,096 --
Accrued expenses:
Management fees ............................ 47,987 10,520 13,115 4,916
12b-1 distribution and service fees ........ 36,835 4,989 4,228 2,319
Trustees' fees ............................. 2,894 -- -- --
Other ...................................... 22,872 -- -- --
------------ ------------ ------------ ------------
TOTAL LIABILITIES ........................ 502,006 15,509 6,111,495 7,235
------------ ------------ ------------ ------------
NET ASSETS ................................... $ 77,746,840 $ 11,646,137 $ 10,610,099 $ 6,264,053
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital .............................. $ 63,840,559 $ 7,902,844 $ 10,266,162 $ 9,064,032
Accumulated net investment income (loss) ..... (189) 14 (76,698) 2
Accumulated net realized losses from
security transactions ..................... (2,215,156) (158,982) (1,298,011) (3,889,184)
Net unrealized appreciation on investments ... 16,121,626 3,902,261 1,718,646 1,089,203
------------ ------------ ------------ ------------
NET ASSETS ................................... $ 77,746,840 $ 11,646,137 $ 10,610,099 $ 6,264,053
------------ ------------ ------------ ------------
Shares of beneficial interest
outstanding (unlimited number
of shares authorized, no par value) ........ 5,203,674 702,229 1,005,740 895,448
============ ============ ============ ============
Net asset value and redemption price per share $ 14.94 $ 16.58 $ 10.55 $ 7.00
============ ============ ============ ============
See accompanying notes to financial statements.
3
THE JAMES ADVANTAGE FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003 (UNAUDITED)
=================================================================================================================
THE GOLDEN THE JAMES THE JAMES THE JAMES
RAINBOW SMALL CAP MARKET LARGE CAP
FUND FUND NEUTRAL FUND PLUS FUND
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (Net of witholding
taxes of $495, $221, $0, 119) ................. $ 291,342 $ 118,484 $ 15,823 $ 56,722
Interest ......................................... 840,091 805 37,667 303
----------- ----------- ----------- -----------
TOTAL INVESTMENT INCOME ........................ 1,131,433 119,289 53,490 57,025
----------- ----------- ----------- -----------
EXPENSES
Management fees .................................. 270,347 60,451 77,778 31,831
12b-1 distribution and service fees - Class A .... 88,255 12,920 12,048 6,894
Administration fees .............................. 27,718 -- -- --
Accounting services fees ......................... 15,000 -- -- --
Professional fees ................................ 18,424 -- -- --
Dividend expense on securities sold short ........ -- -- 36,216 --
Shareholder report printing and mailing .......... 7,693 -- -- --
Trustees' fees ................................... 3,648 4,147 4,146 4,138
Transfer agent fees .............................. 11,184 -- -- --
Custodian fees and expenses ...................... 10,191 -- -- --
Postage and supplies ............................. 9,648 -- -- --
Other expenses ................................... 7,211 -- -- --
----------- ----------- ----------- -----------
Total expenses ..................................... 469,319 77,518 130,188 42,863
----------- ----------- ----------- -----------
NET INVESTMENT INCOME (LOSS) ....................... 662,114 41,771 (76,698) 14,162
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gains (losses)
from security transactions .................... 808,861 360,981 147,822 (142,317)
Net realized losses on closed short positions .... -- -- (613,275) --
Net change in unrealized appreciation/depreciation
on investments ................................ 5,422,765 1,827,190 1,087,509 868,601
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS ................................... 6,231,626 2,188,171 622,056 726,284
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS .................................. $ 6,893,740 $ 2,229,942 $ 545,358 $ 740,446
=========== =========== =========== ===========
See accompanying notes to financial statements.
4
THE GOLDEN RAINBOW FUND
STATEMENTS OF CHANGES IN NET ASSETS
==================================================================================================
SIX MONTHS YEAR
ENDED ENDED
DEC. 31, 2003 JUNE 30,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ........................................... $ 662,114 $ 1,316,891
Net realized gains (losses) on investments ...................... 808,861 (2,920,426)
Net change in unrealized appreciation/depreciation on investments 5,422,765 4,537,781
------------ ------------
Net increase in net assets from operations ...................... 6,893,740 2,934,246
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ............................ (662,306) (1,318,738)
Distributions from net realized gains ........................... -- (1,688,540)
------------ ------------
Decrease in net assets from distributions to shareholders ......... (662,306) (3,007,278)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ....................................... 5,010,586 8,479,683
Net asset value of shares issued in reinvestment
of distributions to shareholders .............................. 640,412 2,905,464
Payments for shares redeemed ...................................... (3,304,899) (7,598,504)
------------ ------------
Net increase in net assets from capital share transactions ........ 2,346,099 3,786,643
------------ ------------
TOTAL INCREASE IN NET ASSETS ...................................... 8,577,533 3,713,611
NET ASSETS
Beginning of period ............................................. 69,169,307 65,455,696
------------ ------------
End of period ................................................... $ 77,746,840 $ 69,169,307
============ ============
ACCUMULATED NET INVESTMENT INCOME (LOSS) .......................... $ (189) $ 3
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold ..................................................... 350,014 653,294
Shares issued in reinvestment of distributions to shareholders .. 43,898 224,183
Shares redeemed ................................................. (232,428) (579,564)
------------ ------------
Net increase in shares outstanding .............................. 161,484 297,913
Shares outstanding, beginning of period ......................... 5,042,190 4,744,277
------------ ------------
Shares outstanding, end of period ............................... 5,203,674 5,042,190
============ ============
See accompanying notes to financial statements.
5
THE JAMES SMALL CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
SIX MONTHS YEAR
ENDED ENDED
DEC. 31, 2003 JUNE 30,
(UNAUDITED) 2003
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ........................................... $ 41,771 $ 68,706
Net realized gains (losses) on investments ...................... 360,981 (25,738)
Net change in unrealized appreciation/depreciation on investments 1,827,190 931,501
------------ ------------
Net increase in net assets from operations ...................... 2,229,942 974,469
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ............................ (41,757) (68,743)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ....................................... 840,912 2,006,620
Net asset value of shares issued in reinvestment
of distributions to shareholders .............................. 39,152 63,922
Payments for shares redeemed .................................... (620,791) (1,659,716)
------------ ------------
Net increase in net assets from capital share transactions ........ 259,273 410,826
------------ ------------
TOTAL INCREASE IN NET ASSETS ...................................... 2,447,458 1,316,552
NET ASSETS
Beginning of period ............................................. 9,198,679 7,882,127
------------ ------------
End of period ................................................... $ 11,646,137 $ 9,198,679
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME ............................... $ 14 $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold ..................................................... 55,998 182,251
Shares issued in reinvestment of distributions to shareholders .. 2,470 5,700
Shares redeemed ................................................. (41,379) (155,571)
------------ ------------
Net increase in shares outstanding .............................. 17,089 32,380
Shares outstanding, beginning of period ......................... 685,140 652,760
------------ ------------
Shares outstanding, end of period ............................... 702,229 685,140
============ ============
See accompanying notes to financial statements.
6
THE JAMES MARKET NEUTRAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
=====================================================================================================
SIX MONTHS YEAR
ENDED ENDED
DEC. 31, 2003 JUNE 30,
(UNAUDITED) 2003
- -----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss ............................................. $ (76,698) $ (88,589)
Net realized gains (losses) from:
Security transactions ......................................... 147,822 (717,104)
Closed short positions ........................................ (613,275) 201,693
Net change in unrealized appreciation/depreciation on investments 1,087,509 (206,204)
------------ ------------
Net increase (decrease) in net assets from operations ............. 545,358 (810,204)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ....................................... 1,568,863 4,546,230
Payments for shares redeemed .................................... (722,917) (3,193,658)
------------ ------------
Net increase in net assets from capital share transactions ........ 845,946 1,352,572
------------ ------------
TOTAL INCREASE IN NET ASSETS ...................................... 1,391,304 542,368
NET ASSETS
Beginning of period ............................................. 9,218,795 8,676,427
------------ ------------
End of period ................................................... $ 10,610,099 $ 9,218,795
============ ============
ACCUMULATED NET INVESTMENT LOSS ................................... $ (76,698) $ --
============ ============
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold ................................................... 151,955 428,221
Shares redeemed ............................................... (70,885) (307,370)
------------ ------------
Net increase in shares outstanding ............................ 81,070 120,851
Shares outstanding, beginning of period ....................... 924,670 803,819
------------ ------------
Shares outstanding, end of period ............................. 1,005,740 924,670
============ ============
See accompanying notes to financial statements.
7
THE JAMES LARGE CAP PLUS FUND
STATEMENTS OF CHANGES IN NET ASSETS
==================================================================================================
SIX MONTHS YEAR
ENDED ENDED
DEC. 31, 2003 JUNE 30,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ........................................... $ 14,162 $ 27,725
Net realized losses on investments .............................. (142,317) (342,249)
Net change in unrealized appreciation/depreciation on investments 868,601 95,974
----------- -----------
Net increase (decrease) in net assets from operations ........... 740,446 (218,550)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ............................ (14,163) (27,940)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ....................................... 447,954 3,279,263
Net asset value of shares issued in reinvestment
of distributions to shareholders .............................. 13,379 26,209
Payments for shares redeemed .................................... (303,008) (1,467,853)
----------- -----------
Net increase in net assets from capital share transactions ........ 158,325 1,837,619
----------- -----------
TOTAL INCREASE IN NET ASSETS ...................................... 884,608 1,591,129
NET ASSETS
Beginning of period ............................................. 5,379,445 3,788,316
----------- -----------
End of period ................................................... $ 6,264,053 $ 5,379,445
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME ............................... $ 2 $ 3
=========== ===========
SUMMARY OF CAPITAL SHARE ACTIVITY
Shares sold ..................................................... 68,612 557,216
Shares issued in reinvestment of distributions to shareholders .. 2,003 4,490
Shares redeemed ................................................. (46,192) (262,786)
----------- -----------
Net increase in shares outstanding .............................. 24,423 298,920
Shares outstanding, beginning of period ......................... 871,025 572,105
----------- -----------
Shares outstanding, end of period ............................... 895,448 871,025
=========== ===========
See accompanying notes to financial statements.
8
THE GOLDEN RAINBOW FUND
FINANCIAL HIGHLIGHTS
=================================================================================================================================
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DEC. 31, 2003 ----------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period ..... $ 13.72 $ 13.80 $ 14.34 $ 16.54 $ 17.28 $ 18.96
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income .................... 0.13 0.27 0.40 0.40 0.50 0.49
Net realized and unrealized
gains (losses) on investments .......... 1.22 0.28 0.33 (0.08) 0.31 0.91
-------- -------- -------- -------- -------- --------
Total from investment operations ........... 1.35 0.55 0.73 0.32 0.81 1.40
-------- -------- -------- -------- -------- --------
Less distributions:
From net investment income ............... (0.13) (0.27) (0.40) (0.40) (0.50) (0.49)
From net realized gains on investments ... -- (0.36) (0.87) (2.12) (1.05) (2.59)
-------- -------- -------- -------- -------- --------
Total distributions ........................ (0.13) (0.63) (1.27) (2.52) (1.55) (3.08)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ........... $ 14.94 $ 13.72 $ 13.80 $ 14.34 $ 16.54 $ 17.28
======== ======== ======== ======== ======== ========
Total return ............................... 9.86%(A) 4.34% 5.37% 2.33% 4.98% 7.97%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ........ $ 77,747 $ 69,169 $ 65,456 $ 65,902 $ 82,754 $107,802
======== ======== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Ratio of net expenses to average net assets:
Before expense reimbursements
and waived fees ........................ 1.28%(B) 1.32% 1.24% 1.25% 1.22% 1.19%
After expense reimbursements
and waived fees ........................ 1.28%(B) 1.32% 1.24% 1.25% 1.07% 1.00%
Ratio of net investment income to
average net assets ....................... 1.81%(B) 2.08% 2.84% 2.61% 2.86% 2.71%
Portfolio turnover rate .................... 26%(B) 61% 54% 57% 82% 38%
(A) Not annualized.
(B) Annualized.
See accompanying notes to financial statements.
9
THE JAMES SMALL CAP FUND
FINANCIAL HIGHLIGHTS
============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR PERIOD
ENDED DEC. 31, ENDED ENDED ENDED ENDED ENDED
2003 JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
(UNAUDITED) 2003 2002 2001 2000 1999(A)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 13.43 $ 12.08 $ 11.03 $ 10.61 $ 11.87 $ 10.00
------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) ............ 0.06 0.10 0.00(B) (0.04) (0.05) (0.00)(B)
Net realized and unrealized gains
(losses) on investments ................ 3.15 1.35 1.06 0.46 (1.21) 1.87
------- ------- ------- ------- ------- -------
Total from investment operations .......... 3.21 1.45 1.06 0.42 (1.26) 1.87
------- ------- ------- ------- ------- -------
Less distributions:
From net investment income .............. (0.06) (0.10) (0.01) -- -- --
------- ------- ------- ------- ------- -------
Net asset value at end of period .......... $ 16.58 $ 13.43 $ 12.08 $ 11.03 $ 10.61 $ 11.87
======= ======= ======= ======= ======= =======
Total return .............................. 23.92%(C) 12.20% 9.65% 3.96% (10.61%) 18.74%(C)
======= ======= ======= ======= ======= =======
Net assets at end of period (000's) ....... $11,646 $ 9,199 $ 7,882 $ 7,066 $ 5,251 $ 6,564
======= ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Ratio of net expenses to average net assets 1.50%(D) 1.50% 1.48% 1.50% 1.50% 1.49%(D)
Ratio of net investment income (loss) to
average net assets ...................... 0.81%(D) 0.90% 0.02% (0.45%) (0.48%) (0.11%)(D)
Portfolio turnover rate ................... 41%(D) 52% 78% 75% 101% 42%(D)
(A) Represents the period from the initial public offering of shares (October
2, 1998) through June 30, 1999.
(B) Amount rounds to less than $0.005.
(C) Not annualized.
(D) Annualized.
See accompanying notes to financial statements.
10
THE JAMES MARKET NEUTRAL FUND
FINANCIAL HIGHLIGHTS
==========================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR YEAR PERIOD
ENDED DEC. 31, ENDED ENDED ENDED ENDED ENDED
2003 JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
(UNAUDITED) 2003 2002 2001 2000 1999(A)
- --------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .... $ 9.97 $ 10.79 $ 10.12 $ 9.71 $ 9.30 $ 10.00
------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) ............ (0.08) (0.10) 0.02 0.24 0.23 0.13
Net realized and unrealized gains
(losses) on investments ................ 0.66 (0.72) 0.69 0.41 0.41 (0.70)
------- ------- ------- ------- ------- -------
Total from investment operations .......... 0.58 (0.82) 0.71 0.65 0.64 (0.57)
------- ------- ------- ------- ------- -------
Less distributions:
From net investment income .............. -- -- (0.04) (0.24) (0.23) (0.13)
Net asset value at end of period .......... $ 10.55 $ 9.97 $ 10.79 $ 10.12 $ 9.71 $ 9.30
======= ======= ======= ======= ======= =======
Total return .............................. 5.82%(B) (7.60%) 7.06% 6.76% 7.02% (5.74%)(B)
======= ======= ======= ======= ======= =======
Net assets at end of period (000's) ....... $10,610 $ 9,219 $ 8,676 $ 9,651 $ 6,684 $ 8,284
======= ======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Ratio of net expenses to average net
assets, excluding dividends
on securities sold short .............. 1.95%(C) 1.95% 1.95% 1.95% 1.95% 1.94%(C)
Ratio of dividend expense on
securities sold short ................... 0.75%(C) 0.53% 0.28% 0.25% 0.53% 0.36%(C)
------- ------- ------- ------- ------- -------
Ratio of net expenses to average net assets 2.70%(C) 2.48% 2.23% 2.20% 2.48% 2.30%(C)
------- ------- ------- ------- ------- -------
Ratio of net investment income (loss) to
average net assets ...................... (1.59%)(C) (0.98%) 0.25% 2.47% 2.47% 2.31%(C)
Portfolio turnover rate(D) ................ 0%(C) 86% 154% 104% 90% 54%(C)
(A) Represents the period from the initial public offering of shares (October
2, 1998) through June 30, 1999.
(B) Not annualized.
(C) Annualized.
(D) The portfolio turnover rate does not include short transactions that were
held for less than one year which, if included, would have significantly
increased the Fund's portfolio turnover rate.
See accompanying notes to financial statements.
11
THE JAMES LARGE CAP PLUS FUND
FINANCIAL HIGHLIGHTS
==============================================================================================================================
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR PERIOD
ENDED DEC. 31, ENDED ENDED ENDED ENDED
2003 JUNE 30, JUNE 30, JUNE 30 JUNE 30,
(UNAUDITED) 2003 2002 2001 2000(A)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period .................... $ 6.18 $ 6.62 $ 7.65 $ 13.65 $ 10.00
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) ............................ 0.02 0.03 0.01 (0.07) (0.06)
Net realized and unrealized
gains (losses) on investments ......................... 0.82 (0.44) (1.03) (5.93) 3.71
------- ------- ------- ------- -------
Total from investment operations .......................... 0.84 (0.41) (1.02) (6.00) 3.65
------- ------- ------- ------- -------
Less distributions:
From net investment income .............................. (0.02) (0.03) (0.01) -- --
------- ------- ------- ------- -------
Net asset value at end of period .......................... $ 7.00 $ 6.18 $ 6.62 $ 7.65 $ 13.65
======= ======= ======= ======= =======
Total return .............................................. 13.54%(B) (6.14%) (13.29%) (43.96%) 36.50% (B)
======= ======= ======= ======= =======
Net assets at end of period (000's) ....................... $ 6,264 $ 5,379 $ 3,788 $ 4,504 $ 6,279
======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Ratio of net expenses to average net assets ............... 1.49%(C) 1.50% 1.50% 1.50% 1.49%(C)
Ratio of net investment income (loss) to average net assets 0.49%(C) 0.56% 0.20% (0.67%) (0.99%)(C)
Portfolio turnover rate ................................... 61%(C) 65% 87% 131% 95%(C)
(A) Represents the period from the initial public offering of shares (November
1, 1999) through June 30, 2000.
(B) Not annualized.
(C) Annualized.
See accompanying notes to financial statements.
12
THE GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS - 49.0% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS - 5.3%
30,000 Barrick Gold Corporation ............................ $ 681,300
21,500 Cytec Industries, Inc.* ............................. 825,385
35,650 Methanex Corporation ................................ 400,350
42,000 Newmont Mining Corporation .......................... 2,041,620
10,000 RPM International, Inc. ............................. 164,600
-----------
4,113,255
-----------
CONSUMER, CYCLICAL - 7.6%
16,000 AutoNation, Inc.* ................................... 293,920
20,000 CBRL Group, Inc. .................................... 765,200
36,000 Central Garden & Pet Company* ....................... 1,009,080
16,800 Columbia Sportswear Company* ........................ 915,600
9,000 General Motors Corporation .......................... 480,600
20,000 Hartmarx Corporation* ............................... 83,400
34,500 Jarden Corporation* ................................. 943,230
8,000 The Pantry, Inc.* ................................... 181,600
16,000 The Toro Company .................................... 742,400
13,000 Weis Markets, Inc. .................................. 471,900
-----------
5,886,930
-----------
CONSUMER, NON-CYCLICAL - 11.2%
40,000 Coventry Health Care, Inc.* ......................... 2,579,600
18,000 DaVita, Inc.* ....................................... 702,000
10,000 Dynamex, Inc.* ...................................... 120,000
25,000 Flanders Corporation* ............................... 164,500
5,000 John B. Sanfilippo & Son, Inc.* ..................... 255,200
12,000 Mine Safety Appliances Company ...................... 954,120
18,750 Mylan Laboratories, Inc. ............................ 473,625
15,000 Pharmaceutical Resources, Inc.* ..................... 977,250
37,234 PolyMedica Corporation .............................. 979,627
12,000 Res-Care, Inc.* ..................................... 97,200
12,000 Sanderson Farms, Inc. ............................... 483,600
35,300 Supervalu, Inc. ..................................... 1,009,227
-----------
8,795,949
-----------
ENERGY - 4.1%
11,000 Amerada Hess Corporation ............................ 584,870
8,400 Apache Corporation .................................. 681,240
4,470 ChevronTexaco Corporation ........................... 386,163
15,000 Devon Energy Corporation ............................ 858,900
15,000 EOG Resources, Inc. ................................. 692,550
-----------
3,203,723
-----------
13
THE GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS - 49.0% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCIAL - 5.8%
4,000 Bank of America Corporation ......................... $ 321,720
4,500 Bear Stearns Companies, Inc. ........................ 359,775
10,000 Health Care REIT, Inc. .............................. 360,000
28,500 RenaissanceRe Holdings, Ltd. ........................ 1,397,925
37,500 Rent-A-Center, Inc.* ................................ 1,120,500
19,000 Stewart Information Services Corporation ............ 770,450
4,500 Washington Mutual, Inc. ............................. 180,540
-----------
4,510,910
-----------
INDUSTRIAL - 5.3%
8,000 Ball Corporation .................................... 476,560
10,000 BorgWarner, Inc. .................................... 850,700
15,000 Briggs & Stratton Corporation ....................... 1,011,000
5,000 Deere & Company ..................................... 325,250
14,000 Lennox International, Inc. .......................... 233,800
27,000 Precision Castparts Corporation ..................... 1,226,070
-----------
4,123,380
-----------
TECHNOLOGY - 3.5%
6,000 Amgen, Inc.* ........................................ 370,800
40,000 Aviall, Inc.* ....................................... 620,400
4,000 Electronic Arts, Inc.* .............................. 191,120
5,000 Hutchinson Technology, Inc.* ........................ 153,700
10,000 Moog, Inc. - Class A* ............................... 494,000
30,000 Take-Two Interactive Software, Inc.* ................ 864,300
-----------
2,694,320
-----------
UTILITIES - 4.9%
18,500 Alliance Resource Partners, L.P. .................... 636,030
5,000 ALLTEL Corporation .................................. 232,900
48,000 Edison International* ............................... 1,052,640
35,400 Energen Corporation ................................. 1,452,462
21,000 NiSource, Inc. ...................................... 460,740
-----------
3,834,772
-----------
INTERNATIONAL EQUITY FUNDS - 1.3%
10,000 Greater China Fund, Inc. ............................ 191,200
20,000 iShares MSCI Australia Index Fund ................... 267,200
18,000 iShares MSCI Japan Index Fund* ...................... 173,520
20,000 iShares MSCI Malaysia Index Fund .................... 129,000
8,000 iShares MSCI Spain Index Fund ....................... 220,800
-----------
981,720
-----------
TOTAL COMMON STOCKS ................................. $38,144,959
-----------
14
THE GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE U.S. GOVERNMENT & AGENCY BONDS - 44.4% VALUE
- --------------------------------------------------------------------------------
$1,000,000 U.S. Treasury Notes, 2.125%, 10/31/04 ............... $ 1,007,773
6,500,000 U.S. Treasury Notes, 3.500%, 11/15/06 ............... 6,718,614
6,000,000 U.S. Treasury Notes, 6.250%, 2/15/07 ................ 6,688,128
3,000,000 U.S. Treasury Notes, 6.625%, 5/15/07 ................ 3,395,274
500,000 U.S. Treasury Notes, 3.250%, 8/15/07 ................ 510,020
4,000,000 U.S. Treasury Notes, 6.000%, 8/15/09 ................ 4,530,780
1,000,000 U.S. Treasury Bonds, 10.000%, 5/15/10 ............... 1,113,203
2,500,000 U.S. Treasury Bonds, 5.000%, 2/15/11 ................ 2,684,863
2,000,000 U.S. Treasury Bonds, 4.875%, 2/15/12 ................ 2,118,124
1,000,000 U.S. Treasury Bonds, 3.875%, 2/15/13 ................ 978,906
1,300,000 U.S. Treasury Bonds, 5.250%, 2/15/29 ................ 1,311,476
1,200,000 U.S. Treasury Bonds, 5.375%, 2/15/31 ................ 1,251,422
2,000,000 Federal Farm Credit Bank, 5.950%, 3/16/09 ........... 2,215,528
-----------
TOTAL U.S. GOVERNMENT & AGENCY BONDS ................ $34,524,111
-----------
================================================================================
PAR VALUE CORPORATE BONDS - 3.9% .............................. VALUE
- --------------------------------------------------------------------------------
$ 500,000 Anheuser-Busch Companies, Inc., 6.000%, 4/15/11 ..... $ 556,210
500,000 Barrick Gold Finance, Inc., 7.500%, 5/1/07 .......... 568,995
500,000 General Electric Capital
Corporation, 7.875%, 12/1/06 ........................ 572,471
250,000 National Fuel Gas Company, 6.820%, 8/1/04 ........... 257,201
500,000 Public Service Electric & Gas, 7.375%, 3/1/14 ....... 514,520
500,000 Tennessee Valley Authority, 5.625%, 1/18/11 ......... 539,677
-----------
TOTAL CORPORATE BONDS ............................... $ 3,009,074
-----------
================================================================================
SHARES SHORT TERM INVESTMENTS - 1.7% ....................... VALUE
- --------------------------------------------------------------------------------
1,302,408 FAM Treasury Obligations ............................ $ 1,302,408
-----------
TOTAL INVESTMENT SECURITIES - 99.0%
(Cost $60,858,926) .................................. $76,980,552
OTHER ASSETS IN EXCESS OF LIABILITIES - 1.0% ........ 766,288
-----------
NET ASSETS - 100.0% ................................. $77,746,840
===========
* Non-income producing security.
See accompanying notes to financial statements.
15
THE JAMES SMALL CAP FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS - 97.4% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS - 5.8%
3,800 Bandag, Inc. ........................................ $ 156,560
910 Octel Corporation* .................................. 17,918
8,200 Schnitzer Steel Industries, Inc. .................... 496,100
-----------
670,578
-----------
CONSUMER, CYCLICAL - 30.3%
9,300 Aaron Rents, Inc. ................................... 187,209
6,475 Banta Corporation ................................... 262,238
7,600 Brown Shoe Company, Inc. ............................ 288,268
11,230 Central Garden & Pet Company* ....................... 314,777
6,675 Columbia Sportswear Company* ........................ 363,787
6,900 Corrections Corporation of America* ................. 198,927
21,000 Decoma International, Inc. .......................... 216,300
1,180 Department 56, Inc.* ................................ 15,458
12,500 Handelman Company ................................... 256,625
1,500 Johnson Outdoors, Inc.* ............................. 22,505
10,130 Landry's Restaurants, Inc. .......................... 260,544
1,680 Nutraceutical International Corporation* ............ 18,514
1,390 Orleans Homebuilders, Inc.* ......................... 39,379
1,890 Perini Corporation* ................................. 17,294
6,700 Sharper Image Corporation* .......................... 218,755
3,680 The Ryland Group, Inc. .............................. 326,194
11,130 The Toro Company .................................... 516,431
-----------
3,523,205
-----------
CONSUMER, NON-CYCLICAL - 14.0%
780 American Medical Security Group, Inc.* .............. 17,488
1,480 Candela Corporation* ................................ 26,906
2,500 CCA Industries, Inc. ................................ 20,875
599 Del Laboratories, Inc.* ............................. 14,963
2,150 Dynamex, Inc.* ...................................... 25,800
3,580 Flanders Corporation* ............................... 23,556
16,920 Helen of Troy Ltd.* ................................. 391,698
1,070 John B. Sanfilippo & Son, Inc.* ..................... 54,613
7,600 New England Business Service, Inc. .................. 224,200
2,475 Res-Care, Inc.* ..................................... 20,048
12,825 Sanderson Farms, Inc. ............................... 516,847
15,915 Sola International, Inc.* ........................... 299,202
-----------
1,636,196
-----------
ENERGY - 7.0%
3,150 Brigham Exploration Company* ........................ 25,291
1,800 Giant Industries, Inc.* ............................. 21,564
15,618 Patina Oil & Gas Corporation ........................ 765,126
-----------
811,981
-----------
FINANCIAL - 20.1%
1,170 ACE Cash Express, Inc.* ............................. 24,872
3,780 Capital Title Group, Inc.* .......................... 16,292
8,930 Capstead Mortage Corporation ........................ 149,845
980 Donegal Group, Inc. ................................. 21,580
16,730 FirstFed America Bancorp, Inc. ...................... 435,482
24,710 Flagstar Bancorp, Inc. .............................. 529,288
16
THE JAMES SMALL CAP FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
SHARES COMMON STOCKS - 97.4% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
FINANCIAL - 20.1% (Continued)
1,070 FPIC Insurance Group, Inc.* ......................... $ 26,846
11,420 Irwin Financial Corporation ......................... 358,588
12,800 Novastar Financial, Inc. ............................ 549,888
7,600 NYMAGIC, Inc. ....................................... 208,392
1,280 World Acceptance Corporation* ....................... 25,485
-----------
2,346,558
-----------
INDUSTRIAL - 8.5%
5,100 Briggs & Stratton Corporation ....................... 343,740
790 Cascade Corporation ................................. 17,617
920 Gundle/SLT Environmental, Inc.* ..................... 19,099
16,825 Lennox International, Inc. .......................... 280,978
1,000 Middleby Corporation ................................ 40,470
29,000 OMI Corporation* .................................... 258,970
820 Rofin-Sinar Technologies, Inc.* ..................... 28,339
-----------
989,213
-----------
TECHNOLOGY - 7.8%
1,230 Diodes, Inc.* ....................................... 23,370
1,210 ePlus, Inc.* ........................................ 14,921
6,900 Hutchinson Technology, Inc.* ........................ 212,106
3,100 Imergent, Inc.* ..................................... 26,505
10,130 John H. Harland Company ............................. 276,548
9,900 MTS Systems Corporation ............................. 190,377
2,800 Schick Technologies, Inc.* .......................... 20,720
8,195 United Industrial Corporation ....................... 147,920
-----------
912,467
-----------
UTILITIES - 3.9%
9,800 Golden Telecom, Inc.* ............................... 271,950
770 Green Mountain Power Corporation .................... 18,172
14,700 TALK America Holdings, Inc.* ........................ 169,344
-----------
459,466
-----------
TOTAL COMMON STOCKS ................................. $11,349,664
-----------
================================================================================
SHARES SHORT TERM INVESTMENTS - 1.6% VALUE
- --------------------------------------------------------------------------------
184,000 FAM Treasury Obligations ............................ $ 184,000
-----------
TOTAL INVESTMENT SECURITIES - 99.0%
(Cost $7,631,403).................................... $11,533,664
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0% ....... 112,473
-----------
NET ASSETS - 100.0% ................................. $11,646,137
===========
* Non-income producing security.
See accompanying notes to financial statements.
17
THE JAMES MARKET NEUTRAL FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS - 66.7% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS - 9.1%
10,500 Methanex Corporation ................................ $ 117,915
4,000 Quanex Corporation .................................. 184,400
11,000 Schnitzer Steel Industries, Inc. .................... 665,500
-----------
967,815
-----------
CONSUMER, CYCLICAL - 12.7%
3,000 AutoZone, Inc.* ..................................... 255,630
6,300 Banta Corporation ................................... 255,150
4,900 CBRL Group, Inc. .................................... 187,474
10,000 Central Garden & Pet Company* ....................... 280,300
13,500 Jarden Corporation* ................................. 369,090
-----------
1,347,644
-----------
CONSUMER, NON-CYCLICAL - 9.8%
7,000 Fresh Del Monte Produce, Inc. ....................... 166,810
14,000 Helen of Troy Ltd.* ................................. 324,100
13,000 Humana, Inc.* ....................................... 297,050
3,800 Pharmaceutical Resources, Inc.* ..................... 247,570
-----------
1,035,530
-----------
ENERGY - 5.7%
3,948 Apache Corporation .................................. 320,183
5,000 Devon Energy Corporation ............................ 286,300
-----------
606,483
-----------
FINANCIAL - 14.2%
100 Berkshire Hathaway, Inc. - Class B* ................. 281,500
6,530 RenaissanceRe Holdings, Ltd. ........................ 320,297
14,250 Rent-A-Center, Inc.* ................................ 425,790
17,400 Sierra Health Services, Inc.* ....................... 477,630
-----------
1,505,217
-----------
INDUSTRIAL - 1.7%
3,000 Ball Corporation .................................... 178,710
-----------
TECHNOLOGY - 11.4%
7,500 AO VimpelCom - ADR* ................................. 551,250
7,500 Benchmark Electronics, Inc.* ........................ 261,075
3,800 Electronic Arts, Inc.* .............................. 181,564
4,468 Moog, Inc. - Class A* ............................... 220,718
-----------
1,214,607
-----------
UTILITIES - 2.1%
10,000 Edison International* ............................... 219,300
-----------
TOTAL COMMON STOCKS ................................. $ 7,075,306
-----------
18
THE JAMES MARKET NEUTRAL FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
================================================================================
PAR VALUE U.S. GOVERNMENT & AGENCY BONDS - 24.0% VALUE
- --------------------------------------------------------------------------------
$ 650,000 U.S. Treasury Bills, 1/8/04 $ 649,877
350,000 U.S. Treasury Bills, 1/15/04 349,870
1,000,000 U.S. Treasury Bills, 1/29/04 999,323
250,000 U.S. Treasury Bills, 6/17/04 248,887
300,000 U.S. Treasury Bills, 6/24/04 298,563
-----------
TOTAL U.S. GOVERNMENT & AGENCY BONDS $ 2,546,520
-----------
================================================================================
SHARES SHORT TERM INVESTMENTS - 2.2% VALUE
- --------------------------------------------------------------------------------
234,880 FAM Treasury Obligations $ 234,880
-----------
TOTAL INVESTMENT SECURITIES - 92.9%
(Cost $7,147,197) $ 9,856,706
SEGREGATED CASH WITH BROKERS - 64.7% 6,860,933
SECURITIES SOLD SHORT -
(56.8%) (Proceeds $5,032,354) (6,023,217)
LIABILITIES IN EXCESS OF OTHER ASSETS - (0.8%) (84,323)
-----------
NET ASSETS - 100.0% $10,610,099
===========
* Non-income producing security.
See accompanying notes to financial statements.
19
THE JAMES MARKET NEUTRAL FUND
SCHEDULE OF SECURITIES SOLD SHORT
DECEMBER 31, 2003 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS SOLD SHORT - 56.8% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS - 3.1%
5,000 Agnico-Eagle Mines Limited .......................... $ 60,350
5,000 Great Lakes Chemical Corporation .................... 135,950
1,600 Potash Corporation of Saskatchewan .................. 138,368
-----------
334,668
-----------
CONSUMER, CYCLICAL - 13.1%
4,700 Four Seasons Hotels, Inc. ........................... 240,405
5,050 Navistar International Corporation .................. 241,844
9,000 Robert Half International, Inc. ..................... 210,060
9,000 Sotheby's Holdings, Inc. - Class A .................. 122,940
13,300 Steelcase, Inc. ..................................... 190,988
5,000 Triarc Companies, Inc. .............................. 59,100
10,000 Triarc Companies, Inc. - Class B .................... 107,800
10,800 ValueVision Media, Inc. - Class A ................... 180,360
11,200 Wilsons The Leather Experts, Inc. ................... 39,088
-----------
1,392,585
-----------
CONSUMER, NON-CYCLICAL - 15.6%
6,000 Andrx Group ......................................... 144,240
5,000 Cabot Microelectronics Corporation .................. 245,000
16,500 Cerus Corporation ................................... 74,910
11,600 CV Therapeutics ..................................... 170,056
5,000 Eastman Chemical Company ............................ 197,650
5,000 Forest Laboratories, Inc. ........................... 309,000
7,100 NPS Pharmaceuticals, Inc. ........................... 218,254
7,000 Olin Corporation .................................... 140,420
9,308 Vector Group Ltd. ................................... 151,911
-----------
1,651,441
-----------
ENERGY - 5.5%
5,000 Diamond Offshore Drilling ........................... 102,550
8,000 IDACORP, Inc. ....................................... 239,360
11,400 Input/Output, Inc. .................................. 51,414
10,000 Pride International, Inc. ........................... 186,400
-----------
579,724
-----------
FINANCIAL - 7.8%
4,750 Bank of New York Company, Inc. ...................... 157,320
5,000 Delaware First Financial Corporation ................ 180,300
12,100 Instinet Group, Inc. ................................ 62,315
3,000 Northern Trust Corporation .......................... 139,260
10,000 Ohio Casualty Corporation ........................... 173,600
3,000 Paychex, Inc. ....................................... 111,600
-----------
824,395
-----------
20
THE JAMES MARKET NEUTRAL FUND
SCHEDULE OF SECURITIES SOLD SHORT (CONTINUED)
================================================================================
SHARES COMMON STOCKS SOLD SHORT - 56.8% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
INDUSTRIAL - 3.4%
15,000 Abitibi-Consolidated, Inc. .......................... $ 121,650
2,400 Bowater, Inc. ....................................... 111,144
11,000 Vicor Corporation ................................... 125,510
-----------
358,304
-----------
TECHNOLOGY - 8.3%
8,100 Brooks Automation, Inc. ............................. 195,777
16,800 Credence Systems Corporation ........................ 221,088
14,500 KEMET Corporation ................................... 198,505
10,500 MatrixOne, Inc. ..................................... 64,680
15,000 Micron Technology, Inc. ............................. 202,050
-----------
882,100
-----------
TOTAL COMMON STOCKS (Proceeds $5,032,354) ........... $ 6,023,217
-----------
See accompanying notes to financial statements.
21
THE JAMES LARGE CAP PLUS FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003 (UNAUDITED)
================================================================================
SHARES COMMON STOCKS - 97.2% VALUE
- --------------------------------------------------------------------------------
BASIC MATERIALS - 5.3%
5,900 Monsanto Company .................................... $ 169,802
3,400 Newmont Mining Corporation .......................... 165,274
-----------
335,076
-----------
CONSUMER, CYCLICAL - 21.8%
7,450 Coca-Cola Enterprises, Inc. ......................... 162,932
4,400 CVS Corporation ..................................... 158,928
4,600 Fox Entertainment Group - Class A* .................. 134,090
2,755 Johnson Controls, Inc. .............................. 319,910
10,215 Mattel, Inc. ........................................ 196,843
4,665 Sears, Roebuck & Company ............................ 212,211
7,900 The Gap, Inc. ....................................... 183,359
-----------
1,368,273
-----------
CONSUMER, NON-CYCLICAL - 4.6%
5,100 Bristol-Myers Squibb Company ........................ 145,860
6,400 Cendant Corporation* ................................ 142,528
-----------
288,388
-----------
ENERGY - 9.2%
3,820 Anadarko Petroleum Corporation ...................... 194,858
4,000 Exxon Mobil Corporation ............................. 164,000
6,515 Marathon Oil Corporation ............................ 215,582
-----------
574,440
-----------
FINANCIAL - 21.5%
1,900 Aetna, Inc. ......................................... 128,402
1,900 Bear Stearns Companies, Inc. ........................ 151,905
3,945 First Tennessee National Corporation ................ 173,975
3,900 JP Morgan Chase & Company ........................... 143,247
3,100 National City Corporation ........................... 105,214
5,895 Progressive Corporation ............................. 492,763
3,750 Washington Mutual, Inc. ............................. 150,450
-----------
1,345,956
-----------
INDUSTRIAL - 5.3%
2,325 Magna International, Inc. - Class A ................. 186,116
1,700 PACCAR, Inc. ........................................ 144,704
-----------
330,820
-----------
TECHNOLOGY - 15.4%
3,600 National Semiconductor Corporation* ................. 141,876
8,200 Nextel Communications - Class A* .................... 230,092
1,850 SanDisk Corporation* ................................ 113,109
7,900 Seagate Technology .................................. 149,310
3,455 United Technologies Corporation ..................... 327,430
-----------
961,817
-----------
22
THE JAMES LARGE CAP PLUS FUND
SCHEDULE OF INVESTMENTS (Continued)
================================================================================
SHARES COMMON STOCKS - 97.2% (CONTINUED) VALUE
- --------------------------------------------------------------------------------
UTILITIES - 14.1%
3,100 ALLTEL Corporation .................................. $ 144,398
7,200 NiSource, Inc. ...................................... 157,968
4,075 PPL Corporation ..................................... 178,281
8,775 Southern Company .................................... 265,444
3,985 Verizon Communications, Inc. ........................ 139,794
-----------
885,885
-----------
TOTAL COMMON STOCKS ................................. $ 6,090,655
-----------
================================================================================
SHARES SHORT TERM INVESTMENTS - 2.7% VALUE
- --------------------------------------------------------------------------------
168,956 FAM Treasury Obligations $ 168,956
-----------
TOTAL INVESTMENT SECURITIES - 99.9%
(Cost $5,170,408) $ 6,259,611
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.1% 4,442
-----------
NET ASSETS - 100.0% $ 6,264,053
===========
* Non-income producing security.
See accompanying notes to financial statements.
23
THE JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 (UNAUDITED)
================================================================================
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The Golden Rainbow Fund, The James Small Cap Fund, and The James Market Neutral
Fund (individually the "Fund," collectively the "Funds") are each a diversified
series of The James Advantage Funds (the "Trust"), and The James Large Cap Plus
Fund is a non-diversified series of the Trust. The Trust is an open-end
management investment company that was organized as an Ohio business trust on
August 29, 1997. The Trust is registered under the Investment Company Act of
1940 (the "1940 Act"). The Golden Rainbow Fund was originally organized as a
series of the Flagship Admiral Funds Inc., a Maryland corporation. On June 26,
1998, pursuant to an Agreement and Plan of Reorganization, The Golden Rainbow
Fund was restructured through a tax-free reorganization as a series of the
Trust. The James Small Cap Fund and The James Market Neutral Fund each commenced
its public offering of shares on October 2, 1998. The James Large Cap Plus Fund
commenced its public offering of shares on November 1, 1999.
The Golden Rainbow Fund seeks to provide total return through a combination of
growth and income and preservation of capital in declining markets. The Fund
seeks to achieve its objective by investing primarily in common stocks and/or
debt securities that the Fund's adviser, James Investment Research, Inc.
("James"), believes are undervalued.
The James Small Cap Fund seeks to provide long term capital appreciation. The
Fund seeks to achieve its objective by investing primarily in common stocks of
small capitalization companies.
The James Market Neutral Fund seeks to provide positive returns regardless of
the direction of the stock markets. The Fund seeks to achieve its objective by
investing in common stocks that James believes are undervalued and more likely
to appreciate, and selling short common stocks that James believes are
overvalued and more likely to depreciate.
The James Large Cap Plus Fund seeks to provide long-term capital appreciation
and outperform the Standard & Poor's 500 Index (the "S&P 500 Index"). The Fund
seeks to achieve its objective by investing primarily in common stocks of U.S.
companies with large capitalizations. The Fund generally buys stocks in the S&P
500 Index and will typically hold 25-30 stocks.
The following is a summary of significant accounting policies followed by the
Funds in preparation of their financial statements, in accordance with
accounting principles generally accepted in the United States of America
("generally accepted accounting principles").
SHARE VALUATION
The net asset value per share of each Fund is calculated daily by dividing the
total value of the Fund's assets, less liabilities, by the number of shares
outstanding. The net asset value is determined as of the close of the NYSE
(generally, 4:00 p.m., Eastern time) on each day that the NYSE is open for
business, and on any other day on which there is sufficient trading in a Fund's
securities to materially affect the net asset value.
SECURITIES VALUATION
Each Fund's equity securities are valued based on market value. If a market
quotation for a security is not readily available, if an event occurs after the
close of the trading market (but before the Fund calculates its net asset value)
that materially affects a security's value, when the Adviser determines that the
market quotation does not accurately reflect the current value or when a
restricted security is being valued, that security will be valued at its fair
value as determined in good faith in conformity with guidelines adopted by and
subject to review of the Board of Trustees. The Funds may use pricing services
to determine market value for securities.
24
THE JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
Fixed-income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by a pricing service when James
believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at their fair value as determined in good faith in
accordance with consistently applied procedures established by and under the
general supervision of the Board of Trustees. Short-term investments in
fixed-income securities with maturities of less than 60 days when acquired, or
which subsequently are within 60 days of maturity, are valued by using the
amortized cost method of valuation, which the Board has determined will
represent fair value.
SECURITIES TRANSACTIONS
Securities transactions are recorded on a trade date basis. Realized gains and
losses from security transactions are determined using the specific
identification method. Securities purchased or sold on a when-issued or delayed
delivery basis may have extended settlement periods. Any securities so purchased
are subject to market fluctuation during this period. The Funds have instructed
their custodian to segregate assets in a separate account with a current value
at least equal to the amount of its when-issued and delayed delivery purchase
commitments.
SHORT SALES AND SEGREGATED CASH
The James Market Neutral Fund actively sells short common stocks. Short sales
are transactions in which the Fund sells a security it does not own in
anticipation of a decline in the market value of that security. To complete such
a transaction, the Fund must borrow the security to deliver to the buyer upon
the short sale; the Fund is then obligated to replace the security borrowed by
purchasing it in the open market at some later date.
The Fund will incur a loss if the market price of the security increases between
the date of the short sale and the date on which the Fund replaces the borrowed
security. The Fund will realize a gain if the security declines in value between
those dates. Dividends paid by the Fund in connection with such short sales are
recorded as expenses.
All short sales are fully collateralized. The Fund maintains the collateral in
segregated accounts consisting of cash and/or high-grade liquid assets
sufficient to collateralize the market value of its short positions.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Interest income is
determined on the basis of interest accrued, adjusted for amortization of
premiums and accretion of discounts on all debt securities.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, if any, is declared and distributed to shareholders of
each Fund quarterly. Net realized capital gains from security transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards. Distributions to shareholders of net
investment income and net realized capital gains are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations which may differ from generally accepted
accounting principles. Accordingly, temporary overdistributions as a result of
these differences may occur and will be classified as either distributions in
excess of net investment income and/or distributions in excess of net realized
gains from security transactions, where applicable.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period.
25
THE JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
FEDERAL INCOME TAXES
The Funds intend to distribute all taxable income and capital gains to
shareholders and to otherwise comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no federal tax provision is required.
The tax character of distributions paid for the years ended June 30, 2003 and
2002 was as follows:
- --------------------------------------------------------------------------------
THE GOLDEN RAINBOW THE JAMES SMALL CAP
FUND FUND
------------------------ ----------------------
2003 2002 2003 2002
- --------------------------------------------------------------------------------
From ordinary income ....... 1,318,738 1,888,471 68,743 8,354
From long-term capital gains 1,688,540 3,886,347 -- --
----------- ----------- ---------- ----------
$ 3,007,278 $ 5,774,818 $ 68,743 $ 8,354
=========== =========== ========== ==========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE JAMES MARKET THE JAMES LARGE
NEUTRAL FUND CAP PLUS FUND
------------------------ ----------------------
2003 2002 2003 2002
- --------------------------------------------------------------------------------
From ordinary income ....... $ -- $ 38,843 $ 27,940 $ 8,001
From long-term capital gains -- -- -- --
----------- ----------- ---------- ----------
$ -- $ 38,843 $ 27,940 $ 8,001
=========== =========== ========== ==========
- --------------------------------------------------------------------------------
The Golden Rainbow Fund, The James Small Cap Fund, and The James Large Cap Plus
Fund hereby designate the highest percentage, as ultimately determined, of
dividends declared from net investment income after December 31, 2002, as
qualified dividends under the Jobs and Growth Tax Relief Reconciliation Act of
2003.
The following information is computed on a tax basis for each item as of June
30, 2003:
- ----------------------------------------------------------------------------------------------------------
THE THE JAMES THE JAMES THE JAMES
GOLDEN RAINBOW SMALL CAP MARKET NEUTRAL LARGE CAP
FUND FUND FUND PLUS FUND
- ----------------------------------------------------------------------------------------------------------
Cost of portfolio investments .......... $ 58,059,932 $ 7,119,452 $ 11,808,691 $ 5,154,412
Gross unrealized appreciation .......... 11,633,979 2,441,548 1,670,136 578,258
Gross unrealized depreciation .......... (935,118) (366,476) (1,038,999) (357,656)
------------ ----------- ------------ -----------
Net unrealized appreciation/depreciation 10,698,861 2,075,071 631,137 220,602
============ =========== ============ ===========
Post-October losses .................... (2,398,589) (34,474) (750,046) (211,369)
============ =========== ============ ===========
Capital loss carryforward .............. (625,428) (485,489) (82,513) (3,535,498)
============ =========== ============ ===========
Undistributed ordinary income .......... -- -- -- --
============ =========== ============ ===========
Undistributed long-term gains .......... -- -- -- --
============ =========== ============ ===========
Accumulated earnings (deficit) ..... $ 7,674,845 $ 1,555,108 $ (201,421) $(3,526,265)
============ =========== ============ ===========
- ----------------------------------------------------------------------------------------------------------
The difference between the cost of portfolio investments and financial statement
cost for the Funds is due to certain timing differences in the recognition of
capital losses under income tax regulations and generally accepted accounting
principles.
26
THE JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The capital loss carryforwards as of June 30, 2003 in the table above expire as
follows:
- --------------------------------------------------------------------------------
AMOUNT EXPIRATION DATE
- --------------------------------------------------------------------------------
The Golden Rainbow ........................ $ 625,428 June 30, 2011
The James Small Cap ....................... $ 485,489 June 30, 2008
The James Market Neutral .................. $ 82,513 June 30, 2008
The James Large Cap Plus .................. $ 427,706 June 30, 2009
$2,976,912 June 30, 2010
$ 130,880 June 30, 2011
- --------------------------------------------------------------------------------
The capital loss carryforwards may be utilized in the current and future years
to offset net realized capital gains, if any, prior to distributing such gains
to shareholders.
2. SECURITIES TRANSACTIONS
Purchases and sales (including maturites) of investments in long-term U.S.
Government obligations for The Golden Rainbow Fund for the six months ended
December 31, 2003 were as follows:
- --------------------------------------------------------------------------------
PURCHASES SALES
- --------------------------------------------------------------------------------
The Golden Rainbow Fund ...................... $7,746,000 $1,672,031
- --------------------------------------------------------------------------------
Purchases and sales (including maturites) of investments in other long-term
securites for the six months ended December 31, 2003 were as follows:
- --------------------------------------------------------------------------------
PURCHASES SALES
- --------------------------------------------------------------------------------
The Golden Rainbow Fund ..................... $2,574,892 $7,501,918
The James Small Cap Fund .................... 2,358,619 2,021,366
The James Market Neutral Fund ............... 0 897,667
The James Large Cap Plus Fund ............... 1,835,812 1,697,664
- --------------------------------------------------------------------------------
For the six months ended December 31, 2003, the cost of securities purchased to
cover short sales and the proceeds from securities sold short were $2,391,438
and $1,795,013, respectively, for The James Market Neutral Fund.
3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Certain trustees and officers of the Trust are also officers of James or
Integrated Fund Services, Inc. ("IFS"), the administrative services agent,
shareholder services and transfer agent and accounting services agent for the
Trust, or of IFS Fund Distributors, Inc., the exclusive agent for the
distribution of the Funds' shares.
INVESTMENT MANAGEMENT AGREEMENT
The Funds retain James to manage the Funds' investments. The investment
decisions for the Funds are made by a committee of James' personnel, which is
primarily responsible for the day-to-day management of each Fund's portfolio.
The Golden Rainbow Fund is authorized to pay James a fee equal to an annual rate
of 0.74% of its average daily net assets. The Golden Rainbow Fund is responsible
for the payment of all operating expenses of the Fund.
James is authorized to receive a fee (a) equal to an annual rate of 1.25% of the
average daily net assets of The James Small Cap Fund and The James Large Cap
Plus Fund and 1.70% of The James Market Neutral Fund; minus (b) the fees and
27
THE JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
expenses of the non-interested person trustees incurred by the applicable Fund.
James is responsible for the payment of all operating expenses of The James
Small Cap Fund, The James Market Neutral Fund and The James Large Cap Plus Fund
except for brokerage fees and commissions, taxes, interest (including dividend
expense on securities sold short), 12b-1 expenses, fees and expenses of
non-interested person trustees and extraordinary expenses.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of an Administrative Services Agreement with the Trust, IFS
supplies executive and regulatory services, supervises the preparation of tax
returns, and coordinates the preparation of reports to shareholders and reports
to and filings with the Securities and Exchange Commission and state securities
authorities. For these services, IFS receives a monthly fee paid by The Golden
Rainbow Fund, and paid by James for The James Small Cap Fund, The James Market
Neutral Fund and The James Large Cap Plus Fund, based on each Fund's respective
average daily net assets, subject to a mininum monthly fee for each Fund.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGREEMENT
Under the terms of the Transfer, Dividend Disbursing, Shareholder Service and
Plan Agency Agreement with the Trust, IFS maintains the records of each
shareholder's account, answers shareholder inquiries concerning their accounts,
processes purchases and redemptions of each Funds' shares, acts as dividend and
distribution disbursing agent and performs other shareholder service functions.
For these services, IFS receives a monthly fee paid by The Golden Rainbow Fund,
and paid by James for The James Small Cap Fund, The James Market Neutral Fund
and The James Large Cap Plus Fund, subject to a minimum monthly fee for each
Fund. In addition, The Golden Rainbow Fund and James pay IFS out-of-pocket
expenses including, but not limited to, postage and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement with the Trust, IFS
calculates the daily net asset value per share and maintains the financial books
and records of each Fund. For these services, IFS receives a monthly fee from
The Golden Rainbow Fund and from James with respect to each of The James Small
Cap Fund, The James Market Neutral Fund and The James Large Cap Plus Fund. In
addition, IFS is reimbursed by The Golden Rainbow Fund and James for certain
out-of-pocket expenses incurred by IFS in obtaining valuations of the Funds'
portfolio securities.
PLAN OF DISTRIBUTION
Each Fund has a Plan of Distribution (the "Plan") under which the Fund may incur
or reimburse James for expenses related to the distribution and promotion of its
shares. The annual limitation for payment of such expenses under the Plans of
The Golden Rainbow Fund, The James Small Cap Fund, The James Market Neutral Fund
and The James Large Cap Plus Fund is 0.25% of the average daily net assets of
each respective Fund.
4. DIVIDENDS RECEIVED DEDUCTION
For corporate shareholders the following ordinary dividends paid during the year
ended December 31, 2003 qualify for the corporate dividends received deduction:
The James Golden Rainbow Fund 40%
The James Small Cap Fund 100%
The James Large Cap Plus Fund 100%
28
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INVESTMENT ADVISER ===========================================
James Investment Research, Inc.
P.O. Box 8
Alpha, Ohio 45301
info@jamesfunds.com
-------------
o [LOGO]
JAMES
CUSTODIAN ADVANTAGE
U.S. Bank FUNDS
425 Walnut Street -------------
Cincinnati, Ohio 45202
o
TRANSFER AGENT Advised by James Investment Research, Inc.
Integrated Fund Services, Inc. www.jamesfunds.com
P.O. Box 5354
Cincinnati, Ohio 45201-5354
o
o
INDEPENDENT AUDITORS
Deloitte & Touche LLP
155 E. Broad St.
Columbus, Ohio 43215 December 31, 2003
Semi-Annual Report
o (Unaudited)
DISTRIBUTOR
IFS Fund Distributors, Inc.
221 East Fourth Street
Suite 300 o
Cincinnati, Ohio 45202
o
LEGAL COUNSEL THE GOLDEN RAINBOW FUND
Thompson Hine LLP
312 Walnut Street THE JAMES SMALL CAP FUND
14th Floor
Cincinnati, Ohio 45202 THE JAMES MARKET NEUTRAL FUND
www.jamesfunds.com THE JAMES LARGE CAP PLUS FUND
FORM IFS-163-0201 ===========================================
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 COMPANIES. Not applicable.
ITEM 6. RESERVED.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END FUNDS.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END FUNDS. Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of February 25, 2003, the disclosure controls and procedures are
reasonably designed to ensure that the information required in filings on Forms
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that have materially affected, or are reasonably likely to materially affect,
the registrant's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications required by Item 10(a) of Form N-CSR are filed herewith.
(a)(3) Not applicable.
(b) Certifications required by Item 10(b) of Form N-CSR are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) The James Advantage Funds
By (Signature and Title)
/s/ Barry R. James
- ---------------------------
Barry R. James
President
Date: February 25, 2004
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/ Barry R. James
- ---------------------------
Barry R. James
President
Date: February 25, 2004
By (Signature and Title)
/s/ Thomas L. Mangan
- ---------------------------
Thomas L. Mangan
Treasurer and Chief Financial Officer
Date: February 25, 2004