As filed with the Securities and Exchange Commission on March 7, 2008
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 811-08507
IRONWOOD SERIES TRUST
P.O. Box 182218
Columbus, OH 43218-2218
(800) 472-6114
Warren J. Isabelle, President
Suite 240
21 Custom House Street
Boston, MA 02109
(800) 472-6114
Date of fiscal year end: DECEMBER 31
Date of reporting period: JANUARY 1, 2007 - DECEMBER 31, 2007
ITEM 1. REPORT TO STOCKHOLDERS.
[LOGO]
IRONWOOD SERIES TRUST
www.ironwoodfunds.com
-----------------
IRONWOOD ISABELLE SMALL COMPANY
STOCK FUND
Investment Shares Symbol: IZZYX
Institutional Shares Symbol: IZZIX
Annual Report
December 31, 2007
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
TABLE OF CONTENTS
Shareholder Letter 1
Portfolio of Investments 7
Statement of Assets and Liabilities 10
Statement of Operations 11
Statements of Changes in Net Assets 12
Financial Highlights 14
Notes to Financial Statements 18
Report of Independent Registered Public Accounting Firm 26
Additional Information 28
Fund Trustee and Officers 31
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
SHAREHOLDER LETTER
January 2008
For a longer term perspective, the Fund's 5-year and since inception
(03/09/98) average annual returns were 13.67% and 6.74%. Performance data is
for the period ended 12/31/2007, represents past performance and is no
guarantee of future results. Current performance may be higher or lower than
the performance data quoted. Investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. As stated in the current prospectus, the Fund's annual
operating expense ratio (gross) for Investment shares is 2.14%. However, the
Fund's adviser has contractually agreed to waive a portion of its fees and/or
reimburse expenses such that total operating expenses do not exceed 1.95%.
Contractual waivers may be changed or eliminated at any time with consent of
the Board of Trustees. Shares redeemed within 30 days of purchase will be
charged a 2.00% redemption fee. For the most recent month-end performance,
please call 800 472 6114.
To our loyal shareholders:
Unquestionably this was one of the worst quarterly performances in the history
of the Fund, and my career as a portfolio manager. I was deeply disappointed,
the more so having seen the portfolio perform well through the first three
quarters of a tumultuous year. For the year ended 2007, the portfolio returned
- -12.35% versus the Russell 2000 Index ("Index") benchmark which returned
- -1.57%. The contrast is dramatic when compared with the results going into the
last quarter: At that point the portfolio had gained 4.01%, ahead of the Index
which had advanced 3.16%. There are no excuses; there can be none. The results
turned in during the last quarter were poor indeed, but deliberately, the
composition of the Fund's holdings remains nearly unchanged as we remain
steadfast in our positive investment outlook for the individual holdings. It is
difficult to offer encouragement following such a period, but I have personally
seen several periods come and go, learning through them that the merits of a
sound investment philosophy could eventually be realized in spite of the near
term and sometimes severe price swings caused quite literally by fear and
panic. I believe that this was indeed the case
1
going into November, as the sub-prime credit crisis mushroomed and then was
extrapolated to account for all manner of untoward economic difficulties that
might follow. For us, a 'perfect storm' of sorts developed with small-caps said
to be 'past peak' in their investment cycle, already losing ground relative to
the broader markets, with the smaller, less liquid companies quickly declining.
Long time shareholders are no doubt aware that the Fund often gets involved
with such issues as we are willing to put in the time to analyze them
thoroughly and recognize the potential which may be realized with patience. In
addition, many of the portfolio holdings are in some stage of flux with regard
to their business fortunes, whether in the midst of a business cycle or by
reason of the need to change, commonly referred to as a turnaround. Whenever a
major negative exogenous economic event occurs, many investors seem to lose all
sense of direction, and the uncertainty which ensues invariably gives rise to a
false perception that safety can be had with larger, established, and therefore
implicitly more easily tradable names. Few of the Fund's holdings fit this mold
and were abandoned in summary fashion as events unfolded. Worse, those declines
came right in front of the traditional tax-loss selling period which added yet
another dimension of pain for many of the portfolio's positions.
It is certainly fair to ask why I didn't anticipate or react to these
conditions more vigorously. In hindsight, with many of the positions trading at
much lower levels, it would seem obvious to suggest that valuations were rich
and some selling should have occurred. In some instances this is arguable, but
the bulk of the names, I felt, had decidedly more upside from an economic value
perspective, and therefore were not candidates for sale. Further, to 'trade'
out and back into many of these positions while preserving or bettering our
cost basis, in my estimation would have been difficult to accomplish.
In the absence then of the fundamentals deteriorating, I will not shuffle the
portfolio in reaction to what I consider a short-term situation. Yes, the Fund
fared badly during this period and as portfolio manager the blame is rightly
cast squarely on me. So be it. I am a shareholder as well and I believe that
the composition of the Fund could provide positive returns as investors 'come
to their senses.' The task at hand, and we have been about it for some time, is
to 'circle the wagons', reviewing yet again all of our holdings, trimming some,
though they may be attractive, to enhance the leverage provided by our best
ideas. I cannot reiterate strongly enough that I have practiced just this
approach in similar situations and it had
2
positive results thereafter. For example, your Fund had nearly the same
experience in 1998 during its first year with the sudden melt down created by
what has been termed the 'Long Term Credit (Fund) Crisis'. Through the first
year the Fund struggled, and was severely tested, falling some 24% during the
second half of the year, and ultimately resulting in a 30.90% loss for the year
in 1998. However, that nearly identical portfolio returned 49.49% the following
year in 1999. I was then asked "What did you do differently to turn performance
around?" I replied, "Essentially nothing: We had good paper to begin with." I
feel that I can relate all of this to you in good conscience because I have
lived and worked through both the downs and the ups of such periods. Make no
mistake about it; my job is to make money for our shareholders. However, unlike
many in the mutual fund business today who are caught up in the game of beating
the index, I feel that my best talent, for better or worse, is to find
individual money making ideas that I can in a considered, deliberate way, make
a long term investment in. Short-term we sometimes don't look so good, but we
strive toward building positive, longer term returns in a cumulative fashion.
I will NOT go into the gory details of the performance of the individual
portfolio holdings save to say that we did not add on any new names, we began
the process of selling one, Cherokee International, after it became clear to us
that the company's ability to control its destiny in the supply of telecom
equipment into Europe, would not afford the economic upside we had anticipated.
We briefly held two new holdings, First Franklin Bancorp and Media General
(which we had owned before), but quickly concluded that neither the banking
sector nor traditional media were on firm ground just yet.
As we continue to review our holdings, it appears to us that the sky is not
falling and absent any other large, unseen shoes dropping, that the economy
will not contract, but rather slow for a time. If that is the case, I would
point out that many of our companies have worked long and hard at
restructuring, repositioning, and becoming more productive. Further, even the
smallest entities have become more global in their operations and thus are
today less dependent on the changing fortunes of the domestic economy than was
the case historically. Finally, while input prices for many companies have
risen dramatically, pricing has struggled to match them. That scenario is
gradually changing as pricing power is shifting toward manufacturers, aided in
part by a weaker dollar. For many of the process industries holdings, as we
have asserted in the past, a little
3
inflation is not necessarily a bad thing. The result is that as businesses they
should weather the current 'storm' in good stead, displaying excellent leverage
as trends improve. Most importantly, however, I can tell you that one thing I
have painfully learned from experience is not to take balance sheet risk in
times like these, however short-lived. This is how we address risk.
If credit does tighten rapidly, those companies on the wrong side of that
balance sheet may get into great difficulty, if they survive. On the way up,
when money is flowing, these situations can often be very rewarding. But on the
way down, the old adage from Maine more likely will apply: "You can't get there
from here."
With the above in mind and sensitive to recent results, I submit that we will
continue to examine our existing holdings, attempting to ascertain that we have
made the right investment, have not overlooked anything substantive, and that
the investment potential remains intact and can be realized. Of course we will
be looking for new ideas, but we are very wary of trading the devil you know
for one that you don't, even if it appears that there is a bargain to be had.
In closing I would personally ask for your continued support and patience over
the near-term, and consider that a distinct opportunity may be at hand.
/s/ Warren J. Isabelle
- -----------------------------------
Warren J. Isabelle
Portfolio Manager and Shareholder
- --------
For additional performance information and related disclosure please refer to
the Performance Chart and Analysis section on pages 5 and 6.
Investments in smaller companies carry greater risk than is customarily
associated with larger companies for various reasons such as narrower product
lines, limited financial resources, and less depth in management. Returns shown
are for the Fund's Investment Shares; other share class returns will vary.
The views in this letter were those of the Fund managers as of December 31,
2007, and may not necessarily reflect their views on the date this letter is
first published or anytime thereafter. These views are intended to assist
shareholders in understanding the Fund's present investment methodology and do
not constitute investment advice.
4
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND INVESTMENT CLASS
ILLUSTRATION OF $10,000 INVESTMENT
The graph below reflects the change in value of a hypothetical $10,000
investment in the Ironwood Isabelle Small Company Stock Fund (the "Fund")
Investment Class compared with a broad-based securities market index since the
Investment Class' inception. The Russell 2000 Index is composed of the 2,000
smallest stocks in the Russell 3000 Index, a market weighted index of the 3,000
largest U.S. publicly traded companies. The total return of the Fund includes
operating expenses that reduce returns, while the total return of the index
does not include expenses. The Fund is professionally managed while the Index
is unmanaged and not available for investment.
[CHART]
Ironwood Isabelle Small Company Stock
Investment Value Report
Fund Inception (3/9/1998) to 12/31/2007
Fund Number: 3800101
Fund Name: Ironwood Isabelle Small Company Stock
Initial Investment: 10,000
Datapoint Frequency: Monthly
Currency: United States Dollar
3800101 RUSSELL2000
- --------------------- --------------------------------
Ironwood
Isabelle Small Russell
Company Stock 2000
Fund Index
- -------------- -------
No No
Date Load Load Date Load Load
- ---- ------ ------ ---------- ------- ------
3/9/1998 10,000 10,000 3/9/1998 10,000 10,000
3/31/1998 10,000 10,000 3/31/1998 10,431 10,431
4/30/1998 9,900 9,900 4/30/1998 10,488 10,488
5/31/1998 9,460 9,460 5/31/1998 9,924 9,924
6/30/1998 9,040 9,040 6/30/1998 9,944 9,944
7/31/1998 7,770 7,770 7/31/1998 9,139 9,139
8/31/1998 5,910 5,910 8/31/1998 7,365 7,365
9/30/1998 6,110 6,110 9/30/1998 7,941 7,941
10/31/1998 6,480 6,480 10/31/1998 8,265 8,265
11/30/1998 6,730 6,730 11/30/1998 8,698 8,698
12/31/1998 6,910 6,910 12/31/1998 9,236 9,236
1/31/1999 7,250 7,250 1/31/1999 9,359 9,359
2/28/1999 6,920 6,920 2/28/1999 8,601 8,601
3/31/1999 6,690 6,690 3/31/1999 8,735 8,735
4/30/1999 7,550 7,550 4/30/1999 9,518 9,518
5/31/1999 8,260 8,260 5/31/1999 9,657 9,657
6/30/1999 8,390 8,390 6/30/1999 10,094 10,094
7/31/1999 8,390 8,390 7/31/1999 9,817 9,817
8/31/1999 8,390 8,390 8/31/1999 9,453 9,453
9/30/1999 8,250 8,250 9/30/1999 9,455 9,455
10/31/1999 8,370 8,370 10/31/1999 9,494 9,494
11/30/1999 9,280 9,280 11/30/1999 10,061 10,061
12/31/1999 10,330 10,330 12/31/1999 11,199 11,199
1/31/2000 10,860 10,860 1/31/2000 11,020 11,020
2/29/2000 11,690 11,690 2/29/2000 12,839 12,839
3/31/2000 11,880 11,880 3/31/2000 11,993 11,993
4/30/2000 11,740 11,740 4/30/2000 11,271 11,271
5/31/2000 11,260 11,260 5/31/2000 10,614 10,614
6/30/2000 11,690 11,690 6/30/2000 11,540 11,540
7/31/2000 11,530 11,530 7/31/2000 11,168 11,168
8/31/2000 11,710 11,710 8/31/2000 12,020 12,020
9/30/2000 12,050 12,050 9/30/2000 11,667 11,667
10/31/2000 11,300 11,300 10/31/2000 11,146 11,146
11/30/2000 10,840 10,840 11/30/2000 10,002 10,002
12/31/2000 11,129 11,129 12/31/2000 10,861 10,861
1/31/2001 12,009 12,009 1/31/2001 11,427 11,427
2/28/2001 11,835 11,835 2/28/2001 10,677 10,677
3/31/2001 11,794 11,794 3/31/2001 10,155 10,155
4/30/2001 12,347 12,347 4/30/2001 10,949 10,949
5/31/2001 13,043 13,043 5/31/2001 11,218 11,218
6/30/2001 14,067 14,067 6/30/2001 11,605 11,605
7/31/2001 12,808 12,808 7/31/2001 10,977 10,977
8/31/2001 12,224 12,224 8/31/2001 10,623 10,623
9/30/2001 9,972 9,972 9/30/2001 9,193 9,193
10/31/2001 10,545 10,545 10/31/2001 9,731 9,731
11/30/2001 11,067 11,067 11/30/2001 10,484 10,484
12/31/2001 12,101 12,101 12/31/2001 11,131 11,131
1/31/2002 12,071 12,071 1/31/2002 11,015 11,015
2/28/2002 11,886 11,886 2/28/2002 10,713 10,713
3/31/2002 13,699 13,699 3/31/2002 11,575 11,575
4/30/2002 13,955 13,955 4/30/2002 11,680 11,680
5/31/2002 13,473 13,473 5/31/2002 11,162 11,162
6/30/2002 13,658 13,658 6/30/2002 10,608 10,608
7/31/2002 11,549 11,549 7/31/2002 9,006 9,006
8/31/2002 10,965 10,965 8/31/2002 8,983 8,983
9/30/2002 9,829 9,829 9/30/2002 8,338 8,338
10/31/2002 9,798 9,798 10/31/2002 8,605 8,605
11/30/2002 10,811 10,811 11/30/2002 9,373 9,373
12/31/2002 9,992 9,992 12/31/2002 8,851 8,851
1/31/2003 9,409 9,409 1/31/2003 8,606 8,606
2/28/2003 8,559 8,559 2/28/2003 8,346 8,346
3/31/2003 8,426 8,426 3/31/2003 8,454 8,454
4/30/2003 9,378 9,378 4/30/2003 9,255 9,255
5/31/2003 10,494 10,494 5/31/2003 10,248 10,248
6/30/2003 11,108 11,108 6/30/2003 10,434 10,434
7/31/2003 11,293 11,293 7/31/2003 11,087 11,087
8/31/2003 12,081 12,081 8/31/2003 11,595 11,595
9/30/2003 11,999 11,999 9/30/2003 11,381 11,381
10/31/2003 12,736 12,736 10/31/2003 12,337 12,337
11/30/2003 13,310 13,310 11/30/2003 12,774 12,774
12/31/2003 14,129 14,129 12/31/2003 13,034 13,034
1/31/2004 14,722 14,722 1/31/2004 13,600 13,600
2/29/2004 15,040 15,040 2/29/2004 13,722 13,722
3/31/2004 14,866 14,866 3/31/2004 13,850 13,850
4/30/2004 14,907 14,907 4/30/2004 13,143 13,143
5/31/2004 14,630 14,630 5/31/2004 13,353 13,353
6/30/2004 15,255 15,255 6/30/2004 13,915 13,915
7/31/2004 13,944 13,944 7/31/2004 12,978 12,978
8/31/2004 13,617 13,617 8/31/2004 12,911 12,911
9/30/2004 14,303 14,303 9/30/2004 13,517 13,517
10/31/2004 14,323 14,323 10/31/2004 13,784 13,784
11/30/2004 15,582 15,582 11/30/2004 14,979 14,979
12/31/2004 16,688 16,688 12/31/2004 15,423 15,423
1/31/2005 16,023 16,023 1/31/2005 14,779 14,779
2/28/2005 16,350 16,350 2/28/2005 15,029 15,029
3/31/2005 15,767 15,767 3/31/2005 14,599 14,599
4/30/2005 14,518 14,518 4/30/2005 13,763 13,763
5/31/2005 15,337 15,337 5/31/2005 14,664 14,664
6/30/2005 16,176 16,176 6/30/2005 15,229 15,229
7/31/2005 17,180 17,180 7/31/2005 16,194 16,194
8/31/2005 16,811 16,811 8/31/2005 15,894 15,894
9/30/2005 17,251 17,251 9/30/2005 15,944 15,944
10/31/2005 16,606 16,606 10/31/2005 15,449 15,449
11/30/2005 17,062 17,062 11/30/2005 16,199 16,199
12/31/2005 17,491 17,491 12/31/2005 16,125 16,125
1/31/2006 19,269 19,269 1/31/2006 17,571 17,571
2/28/2006 19,821 19,821 2/28/2006 17,522 17,522
3/31/2006 20,913 20,913 3/31/2006 18,373 18,373
4/30/2006 20,717 20,717 4/30/2006 18,370 18,370
5/31/2006 19,331 19,331 5/31/2006 17,338 17,338
6/30/2006 19,012 19,012 6/30/2006 17,449 17,449
7/31/2006 18,166 18,166 7/31/2006 16,882 16,882
8/31/2006 19,417 19,417 8/31/2006 17,381 17,381
9/30/2006 19,220 19,220 9/30/2006 17,526 17,526
10/31/2006 21,453 21,453 10/31/2006 18,535 18,535
11/30/2006 21,456 21,456 11/30/2006 19,023 19,023
12/31/2006 21,633 21,633 12/31/2006 19,087 19,087
1/31/2007 21,842 21,842 1/31/2007 19,406 19,406
2/28/2007 21,810 21,810 2/28/2007 19,252 19,252
3/31/2007 22,180 22,180 3/31/2007 19,458 19,458
4/30/2007 22,357 22,357 4/30/2007 19,808 19,808
5/31/2007 23,354 23,354 5/31/2007 20,619 20,619
6/30/2007 23,563 23,563 6/30/2007 20,317 20,317
7/31/2007 22,083 22,083 7/31/2007 18,928 18,928
8/31/2007 21,649 21,649 8/31/2007 19,357 19,357
9/30/2007 22,501 22,501 9/30/2007 19,689 19,689
10/31/2007 22,292 22,292 10/31/2007 20,254 20,254
11/30/2007 19,262 19,262 11/30/2007 18,799 18,799
12/31/2007 18,962 18,962 12/31/2007 18,788 18,788
Performance data quoted represents past performance and is no guarantee of
future results.
Current performance may be lower or higher than the performance data quoted.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than original cost. As stated
in the current prospectus, the Fund's annual operating expense ratio (gross) is
2.14%. However, the Fund's adviser has agreed to contractually waive a portion
of its fees and/or reimburse expenses such that total operating expenses do not
exceed 1.95%. For the most recent month end performance, please call
(800) 472-6114. The performance table and graph do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares. Total return figures include the reinvestment of dividends and
capital gains. Some of the Fund's fees have been waived or expenses reimbursed;
otherwise total return would have been lower.
5
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
INSTITUTIONAL CLASS
ILLUSTRATION OF $10,000 INVESTMENT
The graph below reflects the change in value of a hypothetical $10,000
investment in the Ironwood Isabelle Small Company Stock Fund (the "Fund")
Institutional Class compared with a broad-based securities market index since
the Institutional Class' inception. The Russell 2000 Index is composed of the
2,000 smallest stocks in the Russell 3000 Index, a market weighted index of the
3,000 largest U.S. publicly traded companies. The total return of the Fund
includes operating expenses that reduce returns, while the total return of the
index does not include expenses. The Fund is professionally managed while the
Index is unmanaged and not available for investment.
[CHART]
Ironwood Isabelle Small Company Stock
Investment Value Report
Fund Inception (3/27/1998) to 12/31/2007
Fund Number: 3800102
Fund Name: Ironwood Isabelle Small Company Stock
Initial Investment: 10,000
Datapoint Frequency: Monthly
Currency: United States Dollar
3800102 RUSSELL2000
-------------- ---------------
Date Load No Load Date Load No Load
- -------------- ------ ------- ---------- ------- -------
Ironwood
Isabelle Small Russell
Company Stock 2000
Fund index
- -------------- -------
3/27/1998 10,000 10,000 3/27/1998 10,000 10,000
3/31/1998 9,970 9,970 3/31/1998 10,074 10,074
4/30/1998 9,870 9,870 4/30/1998 10,130 10,130
5/31/1998 9,460 9,460 5/31/1998 9,584 9,584
6/30/1998 9,040 9,040 6/30/1998 9,605 9,605
7/31/1998 7,780 7,780 7/31/1998 8,827 8,827
8/31/1998 5,920 5,920 8/31/1998 7,113 7,113
9/30/1998 6,120 6,120 9/30/1998 7,670 7,670
10/31/1998 6,480 6,480 10/31/1998 7,982 7,982
11/30/1998 6,740 6,740 11/30/1998 8,401 8,401
12/31/1998 6,920 6,920 12/31/1998 8,920 8,920
1/31/1999 7,260 7,260 1/31/1999 9,039 9,039
2/28/1999 6,940 6,940 2/28/1999 8,307 8,307
3/31/1999 6,690 6,690 3/31/1999 8,437 8,437
4/30/1999 7,560 7,560 4/30/1999 9,193 9,193
5/31/1999 8,270 8,270 5/31/1999 9,327 9,327
6/30/1999 8,400 8,400 6/30/1999 9,749 9,749
7/31/1999 8,400 8,400 7/31/1999 9,481 9,481
8/31/1999 8,400 8,400 8/31/1999 9,130 9,130
9/30/1999 8,270 8,270 9/30/1999 9,132 9,132
10/31/1999 8,390 8,390 10/31/1999 9,169 9,169
11/30/1999 9,300 9,300 11/30/1999 9,717 9,717
12/31/1999 10,360 10,360 12/31/1999 10,817 10,817
1/31/2000 10,890 10,890 1/31/2000 10,643 10,643
2/29/2000 11,720 11,720 2/29/2000 12,400 12,400
3/31/2000 11,920 11,920 3/31/2000 11,583 11,583
4/30/2000 11,780 11,780 4/30/2000 10,886 10,886
5/31/2000 11,300 11,300 5/31/2000 10,251 10,251
6/30/2000 11,740 11,740 6/30/2000 11,145 11,145
7/31/2000 11,580 11,580 7/31/2000 10,787 10,787
8/31/2000 11,760 11,760 8/31/2000 11,610 11,610
9/30/2000 12,100 12,100 9/30/2000 11,268 11,268
10/31/2000 11,350 11,350 10/31/2000 10,765 10,765
11/30/2000 10,900 10,900 11/30/2000 9,660 9,660
12/31/2000 11,179 11,179 12/31/2000 10,490 10,490
1/31/2001 12,079 12,079 1/31/2001 11,036 11,036
2/28/2001 11,905 11,905 2/28/2001 10,312 10,312
3/31/2001 11,854 11,854 3/31/2001 9,807 9,807
4/30/2001 12,417 12,417 4/30/2001 10,575 10,575
5/31/2001 13,113 13,113 5/31/2001 10,835 10,835
6/30/2001 14,147 14,147 6/30/2001 11,209 11,209
7/31/2001 12,888 12,888 7/31/2001 10,602 10,602
8/31/2001 12,315 12,315 8/31/2001 10,260 10,260
9/30/2001 10,042 10,042 9/30/2001 8,879 8,879
10/31/2001 10,636 10,636 10/31/2001 9,398 9,398
11/30/2001 11,158 11,158 11/30/2001 10,126 10,126
12/31/2001 12,233 12,233 12/31/2001 10,751 10,751
1/31/2002 12,202 12,202 1/31/2002 10,639 10,639
2/28/2002 12,018 12,018 2/28/2002 10,347 10,347
3/31/2002 13,850 13,850 3/31/2002 11,179 11,179
4/30/2002 14,116 14,116 4/30/2002 11,281 11,281
5/31/2002 13,625 13,625 5/31/2002 10,780 10,780
6/30/2002 13,820 13,820 6/30/2002 10,245 10,245
7/31/2002 11,690 11,690 7/31/2002 8,698 8,698
8/31/2002 11,107 11,107 8/31/2002 8,676 8,676
9/30/2002 9,950 9,950 9/30/2002 8,053 8,053
10/31/2002 9,930 9,930 10/31/2002 8,311 8,311
11/30/2002 10,953 10,953 11/30/2002 9,053 9,053
12/31/2002 10,124 10,124 12/31/2002 8,549 8,549
1/31/2003 9,541 9,541 1/31/2003 8,312 8,312
2/28/2003 8,681 8,681 2/28/2003 8,061 8,061
3/31/2003 8,548 8,548 3/31/2003 8,165 8,165
4/30/2003 9,510 9,510 4/30/2003 8,939 8,939
5/31/2003 10,646 10,646 5/31/2003 9,898 9,898
6/30/2003 11,281 11,281 6/30/2003 10,077 10,077
7/31/2003 11,465 11,465 7/31/2003 10,708 10,708
8/31/2003 12,264 12,264 8/31/2003 11,199 11,199
9/30/2003 12,182 12,182 9/30/2003 10,992 10,992
10/31/2003 12,939 12,939 10/31/2003 11,915 11,915
11/30/2003 13,523 13,523 11/30/2003 12,338 12,338
12/31/2003 14,362 14,362 12/31/2003 12,588 12,588
1/31/2004 14,976 14,976 1/31/2004 13,135 13,135
2/29/2004 15,294 15,294 2/29/2004 13,253 13,253
3/31/2004 15,130 15,130 3/31/2004 13,376 13,376
4/30/2004 15,171 15,171 4/30/2004 12,694 12,694
5/31/2004 14,894 14,894 5/31/2004 12,896 12,896
6/30/2004 15,539 15,539 6/30/2004 13,439 13,439
7/31/2004 14,198 14,198 7/31/2004 12,534 12,534
8/31/2004 13,871 13,871 8/31/2004 12,470 12,470
9/30/2004 14,577 14,577 9/30/2004 13,055 13,055
10/31/2004 14,598 14,598 10/31/2004 13,312 13,312
11/30/2004 15,877 15,877 11/30/2004 14,467 14,467
12/31/2004 17,013 17,013 12/31/2004 14,895 14,895
1/31/2005 16,338 16,338 1/31/2005 14,274 14,274
2/28/2005 16,676 16,676 2/28/2005 14,516 14,516
3/31/2005 16,092 16,092 3/31/2005 14,100 14,100
4/30/2005 14,813 14,813 4/30/2005 13,293 13,293
5/31/2005 15,652 15,652 5/31/2005 14,163 14,163
6/30/2005 16,563 16,563 6/30/2005 14,709 14,709
7/31/2005 17,576 17,576 7/31/2005 15,641 15,641
8/31/2005 17,218 17,218 8/31/2005 15,351 15,351
9/30/2005 17,679 17,679 9/30/2005 15,399 15,399
10/31/2005 17,013 17,013 10/31/2005 14,921 14,921
11/30/2005 17,478 17,478 11/30/2005 15,645 15,645
12/31/2005 17,918 17,918 12/31/2005 15,574 15,574
1/31/2006 19,748 19,748 1/31/2006 16,970 16,970
2/28/2006 20,334 20,334 2/28/2006 16,923 16,923
3/31/2006 21,457 21,457 3/31/2006 17,744 17,744
4/30/2006 21,262 21,262 4/30/2006 17,742 17,742
5/31/2006 19,846 19,846 5/31/2006 16,745 16,745
6/30/2006 19,517 19,517 6/30/2006 16,853 16,853
7/31/2006 18,650 18,650 7/31/2006 16,305 16,305
8/31/2006 19,944 19,944 8/31/2006 16,787 16,787
9/30/2006 19,748 19,748 9/30/2006 16,927 16,927
10/31/2006 22,043 22,043 10/31/2006 17,902 17,902
11/30/2006 22,060 22,060 11/30/2006 18,373 18,373
12/31/2006 22,234 22,234 12/31/2006 18,434 18,434
1/31/2007 22,456 22,456 1/31/2007 18,743 18,743
2/28/2007 22,424 22,424 2/28/2007 18,594 18,594
3/31/2007 22,820 22,820 3/31/2007 18,793 18,793
4/30/2007 23,011 23,011 4/30/2007 19,130 19,130
5/31/2007 24,025 24,025 5/31/2007 19,914 19,914
6/30/2007 24,247 24,247 6/30/2007 19,623 19,623
7/31/2007 22,725 22,725 7/31/2007 18,281 18,281
8/31/2007 22,297 22,297 8/31/2007 18,695 18,695
9/30/2007 23,169 23,169 9/30/2007 19,016 19,016
10/31/2007 22,963 22,963 10/31/2007 19,561 19,561
11/30/2007 19,834 19,834 11/30/2007 18,157 18,157
12/31/2007 19,542 19,542 12/31/2007 18,145 18,145
Performance data quoted represents past performance and is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than original cost.
As stated in the current prospectus, the Fund's annual operating expense ratio
(gross) is 2.28%. However, the Fund's adviser has agreed to contractually waive
a portion of its fees and/or reimburse expenses such that total operating
expenses do not exceed 1.70%. For the most recent month end performance, please
call (800) 472-6114. The performance table and graph do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares. Total return figures include the reinvestment of
dividends and capital gains. Some of the Fund's fees have been waived or
expenses reimbursed; otherwise total return would have been lower.
6
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2007
Market
Shares Security Value
- ------ -------- ----------
Common Stock - 99.60%
Consumer Discretionary & Services - 10.68%
65,775 4Kids Entertainment, Inc. + $ 864,941
694,205 Danka Business Systems plc, ADR+ 128,428
33,585 Hooker Furniture Corp. 675,059
312,257 Westaff, Inc. + 1,249,028
----------
2,917,456
----------
Consumer Staples - 3.09%
45,925 Chiquita Brands International, Inc. + 844,561
----------
Energy - 9.51%
107,325 CE Franklin, Ltd. + 697,612
177,630 International Coal Group, Inc. + 952,097
54,800 Petrohawk Energy Corp. + 948,588
----------
2,598,297
----------
Financial Services - 7.36%
36,645 Citizens First Bancorp, Inc. 449,634
41,040 Eastern Insurance Holdings, Inc. 675,518
19,320 Hanover Insurance Group, Inc. 884,856
----------
2,010,008
----------
Health Care - 16.97%
14,770 Analogic Corp. 1,000,224
169,701 ARIAD Pharmaceuticals, Inc. + 721,229
203,515 Durect Corp. + 1,308,601
345,068 Gene Logic, Inc. + 282,956
396,720 Novavax, Inc. + 1,321,078
----------
4,634,088
----------
Materials & Processing - 29.52%
29,900 AM Castle & Co. 812,981
17,575 Ampco-Pittsburgh Corp. 670,135
69,400 Beacon Roofing Supply, Inc. + 584,348
105,300 Chemtura Corp. 821,340
74,075 ICO, Inc. + 951,123
421,400 Industrial Enterprises of America, Inc. + 227,556
105,135 Material Sciences Corp. + 781,153
25,175 MFRI, Inc. + 268,617
71,475 Novagold Resources, Inc. + 583,236
36,050 Olin Corp. 696,847
The accompanying notes are an integral part of the financial statements.
7
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2007 - (Continued)
Market
Shares Security Value
- ------ -------- -----------
Materials & Processing - continued
162,170 Omnova Solutions, Inc. + $ 715,170
144,645 PolyOne Corp. + 951,764
-----------
Producer Durables - 12.39% 8,064,270
-----------
157,850 Allied Defense Group, Inc. + 910,794
37,650 Cherokee International Corp. + 76,806
243,150 Magnetek, Inc. + 1,040,682
196,450 Proliance International, Inc. + 353,610
58,600 Williams Controls, Inc. + 1,002,646
-----------
3,384,538
-----------
Technology - 10.08%
176,559 ActivIdentity Corp. + 685,049
438,805 InFocus Corp. + 798,625
120,250 Iomega Corp. + 417,268
472,894 SoftBrands, Inc. + 851,209
-----------
2,752,151
-----------
Total Common Stock (Cost $24,106,141) 27,205,369
-----------
Total Investments (Cost $24,106,141)* - 99.60% $27,205,369
-----------
Other Assets Net of Liabilities - 0.40% 108,494
-----------
NET ASSETS - 100.00% $27,313,863
===========
- --------
+ Non-income producing security.
ADR American Depositary Receipt.
* Cost for Federal income tax purposes is $24,583,879 and net unrealized
appreciation (depreciation) consists of:
Gross Unrealized Appreciation $ 6,306,621
Gross Unrealized Depreciation (3,685,131)
-----------
Net Unrealized Appreciation (Depreciation) $ 2,621,490
===========
The accompanying notes are an integral part of the financial statements.
8
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2007 - (Continued)
Portfolio Holdings
% of Total Investments
[LOGO]
The accompanying notes are an integral part of the financial statements.
9
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
ASSETS:
Investments in securities at market value
(cost $24,106,141) $27,205,369
Receivable for securities sold 760,962
Receivable for Fund shares sold 5,866
Interest and dividends receivable 4,858
Prepaid expenses 5,758
-----------
TOTAL ASSETS 27,982,813
-----------
LIABILITIES:
Payable for securities purchased 273,212
Due to custodian 32,614
Payable for Fund shares redeemed 247,922
Payable to investment adviser 3,918
Payable for compliance services fees 7,105
Payable for trustees' fees and expenses 2,194
Other accrued expenses 101,985
-----------
TOTAL LIABILITIES 668,950
-----------
NET ASSETS $27,313,863
===========
NET ASSETS CONSIST OF:
Paid in capital 24,741,792
Accumulated net realized gain (loss) on investments (527,157)
Net unrealized appreciation (depreciation) of investments 3,099,228
-----------
NET ASSETS $27,313,863
===========
Investment Class Shares:
Net Assets (unlimited shares of $0.001 par beneficial
interest authorized; 2,844,986 shares outstanding) $25,127,234
-----------
Net asset value, offering and redemption price* per
Investment Class Share $ 8.83
-----------
Institutional Class Shares:
Net Assets (unlimited shares of $0.001 par beneficial
interest authorized; 233,338 shares outstanding) $ 2,186,629
-----------
Net asset value, offering and redemption price* per
Institutional Class Share $ 9.37
-----------
- --------
* In general, shares of the Fund may be redeemed at net asset value, however
shareholders holding their position in the Fund for less than 30 days are
subject to a 2.00% redemption fee, which would reduce their redemption value.
The accompanying notes are an integral part of the financial statements.
10
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
STATEMENT OF OPERATIONS
Year Ended
December 31, 2007
-----------------
INVESTMENT INCOME
Dividends $ 198,333
Interest 3,269
------------
TOTAL INCOME 201,602
------------
EXPENSES
Investment advisory fees 404,634
Administration fees 36,418
Transfer agent fees
Investment Class Shares 62,582
Institutional Class Shares 10,655
Distribution fees
Investment Class Shares 92,558
Accounting fees 52,953
Custodian fees 8,006
Professional fees 200,527
Registration fees 37,398
Trustees' fees and expenses 28,204
Compliance services fees 33,517
Treasurer services fees 13,413
Miscellaneous fees 52,721
------------
TOTAL EXPENSES 1,033,586
Fees waived and expenses reimbursed (253,150)
------------
NET EXPENSES 780,436
------------
NET INVESTMENT INCOME (LOSS) (578,834)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 7,806,603
Net increase from payments by affiliates and net
gains (losses) realized on the disposal of
investments in violation of restrictions 0
Net change in unrealized appreciation (depreciation)
of investments (11,097,456)
------------
Net realized and unrealized gain (loss) on investments (3,290,853)
------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (3,869,687)
============
The accompanying notes are an integral part of the financial statements.
11
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
2007 2006
------------ ------------
OPERATIONS
Net investment income (loss) $ (578,834) $ (909,268)
Net realized gain (loss) on investments 7,806,603 9,758,029
Net increase from payments by affiliates
and net gains (losses) realized on the
disposal of investments in violation of
restrictions 0 --
Net change in unrealized appreciation
(depreciation) of investments (11,097,456) (1,733,844)
------------ ------------
Increase (decrease) in net assets resulting
from operations (3,869,687) 7,114,917
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gains:
Investment Class (6,967,854) (11,290,626)
Institutional Class (587,620) (848,162)
------------ ------------
Return of capital:
Investment Class (581,225) --
Institutional Class (49,017) --
------------ ------------
Total distributions to shareholders (8,185,716) (12,138,788)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares subscribed:
Investment Class 5,288,446 76,340,325
Institutional Class 101,241 1,251,221
Reinvestment of distributions:
Investment Class 7,369,864 11,021,168
Institutional Class 630,855 754,704
Redemption of shares:
Investment Class (22,655,469) (85,552,148)
Institutional Class (1,120,793) (10,783,631)
Redemption fees:
Investment Class 850 --
------------ ------------
Increase (Decrease) in net assets from
capital share transactions (a) (10,385,006) (6,968,361)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (22,440,409) (11,992,232)
------------ ------------
The accompanying notes are an integral part of the financial statements.
12
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
STATEMENTS OF CHANGES IN NET ASSETS - (Continued)
Year Ended Year Ended
December 31, 2007 December 31, 2006
----------------- -----------------
NET ASSETS
Beginning of period 49,754,272 61,746,504
----------- -----------
End of period (including
accumulated net investment loss
of $0, and $0, respectively) $27,313,863 $49,754,272
=========== ===========
(a) Transactions in capital stock
were:
Investment Class
Shares sold 407,543 4,685,871
Reinvestment of distributions 780,706 835,570
Shares redeemed (1,776,996) (5,606,838)
----------- -----------
Increase (Decrease) in shares
outstanding (588,747) (85,397)
=========== ===========
Institutional Class
Shares sold 8,759 75,280
Reinvestment of distributions 63,022 54,848
Shares redeemed (92,669) (664,149)
----------- -----------
Increase (Decrease) in shares
outstanding (20,888) (534,021)
=========== ===========
The accompanying notes are an integral part of the financial statements.
13
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each year or period indicated.
Year Ended Year Ended
December 31, December 31,
Investment Class 2007 2006
- ---------------- ------------ ------------
Net Asset Value, Beginning of Period $ 13.45 $ 14.26
------- -------
Increase (decrease) from investment operations:
Net investment loss (a) (0.19) (0.21)
Net realized and unrealized gains (losses) on
investments (1.27) 3.51
------- -------
Net increase (decrease) from investment
operations (1.46) 3.30
------- -------
Less distributions from:
Net realized gains (2.92) (4.11)
Return of capital (0.24) --
------- -------
Total distributions to shareholders (3.16) (4.11)
------- -------
Redemption Fees (a) -- (b) --
Net Asset Value, End of Period $ 8.83 $ 13.45
======= =======
Total Return (c) (12.35)% 23.68%
Ratios/Supplemental Data
Net assets, end of period (in 000s) $25,127 $46,187
Ratio of expenses to average net assets:
Before waivers and/or reimbursements 2.54% 2.13%
After waivers and/or reimbursements 1.95% 1.90%
Ratio of net investment income (loss) to
average net assets (1.45)% (1.35)%
Portfolio turnover rate 42.76% 131.30%
- --------
(a)Calculated based on average shares outstanding during the period.
(b)Less than $0.01 per share.
(c)Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at the end of the period. Total return reflects performance based
on net operating expenses. During any period in which fees were waived or
expenses reimbursed, total return would have been lower if expenses had not
been reduced.
The accompanying notes are an integral part of the financial statements.
14
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FINANCIAL HIGHLIGHTS - (Continued)
Year Ended Year Ended Year Ended
December 31, 2005 December 31, 2004 December 31, 2003
- ----------------- ----------------- -----------------
$ 16.31 $ 13.80 $ 9.76
------- ------- -------
(0.23) (0.19) (0.13)
0.91 2.70 4.17
------- ------- -------
0.68 2.51 4.04
------- ------- -------
(2.73) -- --
-- -- --
------- ------- -------
(2.73) -- --
------- ------- -------
$ 14.26 $ 16.31 $ 13.80
======= ======= =======
4.81% 18.12% 41.39%
$50,171 $70,825 $67,983
2.04% 1.89% 1.94%
1.95% 1.86% 1.88%
(1.47)% (1.35)% (1.26)%
65.68% 90.58% 51.70%
The accompanying notes are an integral part of the financial statements.
15
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each year or period indicated.
Year Ended Year Ended
December 31, December 31,
Institutional Class 2007 2006
- ------------------- ------------ ------------
Net Asset Value, Beginning of Period $ 14.03 $ 14.68
------- -------
Increase (decrease) from investment
operations:
Net investment loss (a) (0.17) (0.18)
Net realized and unrealized gains
(losses) on investments (1.33) 3.64
------- -------
Net increase (decrease) from investment
operations (1.50) 3.46
------- -------
Less distributions from:
Net realized gains (2.92) (4.11)
Return of capital (0.24) --
------- -------
Total distributions to shareholders (3.16) (4.11)
------- -------
Net Asset Value, End of Period $ 9.37 $ 14.03
======= =======
Total Return (b) (12.11)% 24.09%
Ratios/Supplemental Data
Net assets, end of period (in 000s) $ 2,187 $ 3,568
Ratio of expenses to average net assets:
Before waivers and/or reimbursements 2.68% 2.27%
After waivers and/or reimbursements 1.70% 1.69%
Ratio of net investment income (loss) to
average net assets (1.20)% (1.15)%
Portfolio turnover rate 42.76% 131.30%
- --------
(a)Calculated based on average shares outstanding during the period.
(b)Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of the
investment at the end of the period. Total return reflects performance based
on net operating expenses. During any period in which fees were waived or
expenses reimbursed, total return would have been lower if expenses had not
been reduced.
The accompanying notes are an integral part of the financial statements.
16
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FINANCIAL HIGHLIGHTS - (Continued)
Year Ended Year Ended Year Ended
December 31, 2005 December 31, 2004 December 31, 2003
- ----------------- ----------------- -----------------
$ 16.63 $ 14.03 $ 9.89
------- ------- -------
(0.20) (0.16) (0.10)
0.98 2.76 4.24
------- ------- -------
0.78 2.60 4.14
------- ------- -------
(2.73) -- --
-- -- --
------- ------- -------
(2.73) -- --
------- ------- -------
$ 14.68 $ 16.63 $ 14.03
======= ======= =======
5.31% 18.46% 41.86%
$11,576 $15,193 $18,253
1.81% 1.63% 1.61%
1.70% 1.61% 1.55%
(1.24)% (1.10)% (0.93)%
65.68% 90.58% 51.70%
The accompanying notes are an integral part of the financial statements.
17
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
Note 1 - Organization
Ironwood Isabelle Small Company Stock Fund (formerly known as ICM/Isabelle
Small Cap Value Fund) (the "Fund") is a series of Ironwood Series Trust
(formerly known as ICM Series Trust) (the "Trust"), which was organized as a
Massachusetts business trust pursuant to a Declaration of Trust dated
November 18, 1997. The Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund offers two classes of shares,
Investment Shares and Institutional Shares (collectively, the "Shares"), each
of which has equal rights as to class and voting privileges. The Investment
Shares have exclusive voting rights with respect to its distribution plan
pursuant to Rule 12b-1 under the 1940 Act ("12b-1 Plan") and are subject to
12b-1 Plan expenses. The Fund commenced operations on March 9, 1998 (March 27,
1998 for the Institutional Shares). The investment objective of the Fund is to
seek capital appreciation by investing its assets primarily in relatively
undervalued common stocks of domestic small companies.
Note 2 - Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with accounting principles generally accepted in the
United States of America ("generally accepted accounting principles").
Security Valuation. Exchange traded securities and over-the-counter
securities listed on the NASDAQ National Market System for which market
quotations are readily available are valued using the last reported sales
price or the NASDAQ Official Closing Price ("NOCP"), provided by independent
pricing services as of the close of trading on the New York Stock Exchange
on each business day. In the absence of a sale or NOCP, such securities are
valued at the mean of the last bid and asked price. Non-exchange traded
securities for which quotations are available are generally valued at the
mean between the current bid and asked prices. Money market instruments that
mature in sixty days or less will be valued at amortized cost.
18
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
The Fund values securities at fair value pursuant to procedures adopted by
the Trust's Board of Trustees if (1) market quotations are insufficient or
not readily available; or (2) the Adviser believes that the prices or values
available are unreliable. Fair valuation is based on subjective factors and
as a result, the fair value price of an asset may differ from the asset's
market price and may not be the price at which the asset may be sold. Fair
valuation could result in a different net asset value ("NAV") than a NAV
determined by using market quotes.
Investment Income and Securities Transactions. Securities transactions are
accounted for on the date the securities are purchased or sold (trade date).
Realized gains and losses are based on the identified cost basis for both
financial statement and federal income tax purposes. Dividend income is
accrued and recorded on the ex-dividend date. Interest income and expenses
are accrued daily.
Federal Income Taxes. The Fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code and distribute all
of its net investment income and capital gains to shareholders. Accordingly
no provision for Federal income tax is required.
Income and Expenses. Expenses directly attributable to a particular class
are charged directly to such class. In calculating net asset value per share
of each class, investment income, realized and unrealized gains and losses
and expenses, other than class specific expenses, are allocated daily to
each class of shares based on the proportion of net assets of each class at
the beginning of that day.
Repurchase Agreements. The Fund may invest in repurchase agreements. The
Fund will require the financial institution with which the Fund enters into
a repurchase agreement to maintain collateral at all times with a value
equal to the amount the Fund paid for the securities. In the event of
default, the Fund may have difficulties with the disposition of any
securities held as collateral.
19
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
Redemption Fees. A shareholder who redeems or exchanges shares within 30
days of purchase will incur a redemption fee of 2.00% of the current net
asset value of shares redeemed or exchanged, subject to certain limitations.
The fee is charged for the benefit of the remaining shareholders and will be
paid to the Fund to help offset transaction costs. The fee is accounted for
as an addition to paid-in capital. The Fund reserves the right to modify the
terms of or terminate the fee at any time. There are limited exceptions to
the imposition of the redemption fee.
Distributions to Shareholders. Distributions to shareholders from net
investment income and net capital gain if any, are declared and paid at
least annually. The amount of the distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. The differences are due primarily to differing
treatments of income and gain on various investment securities held by the
Fund timing differences and differing characterizations of distributions
made by the Fund.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management makes estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements, as well as the reported amounts for
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
New Accounting Pronouncements. In June 2006, the Financial Accounting
Standards Board (FASB) issued FASB Interpretation No. 48 ("FIN 48"),
"Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109". FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in accordance with FASB Statement No. 109,
"Accounting for Income Taxes". This interpretation prescribes a recognition
threshold and measurement attribute for the financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax
return. It also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. FIN 48 is effective on the last
20
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
business day of the first required financial reporting period for fiscal
years beginning after December 15, 2006. Management has concluded that as of
December 31, 2007, there are no uncertain tax positions that would require
financial statement recognition, de-recognition, or disclosure. Each of the
Fund's Federal tax returns filed in the 3-year period ended December 31,
2007 remains subject to examination by the Internal Revenue Service.
In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157 "Fair Value Measurements" ("SFAS 157") which is effective
for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. SFAS 157 defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurements.
Management is evaluating the application of SFAS 157, and has not at this
time determined the impact, if any, resulting from its adoption on the
Fund's financial statements.
Note 3 - Purchases and Sales of Securities
Purchases and sales of securities, other than short-term investments,
aggregated $16,926,337 and $36,722,073, respectively, for the year ended
December 31, 2007.
Note 4 - Advisory Fees, Servicing Fees, and Other Transactions with Related
Parties
Investment Adviser - Ironwood Investment Management, LLC (formerly known as
Ironwood Capital Management, LLC) ("Ironwood") serves as the investment adviser
for the Fund pursuant to an investment advisory agreement (the "Agreement").
Under the terms of the Agreement, Ironwood receives an investment advisory fee
from the Fund, accrued daily and paid monthly, at an annual rate of 1.00% of
the average daily net assets of the Fund. Pursuant to the terms of the
Agreement, Ironwood is obligated for as long as the Agreement remains in
effect, to limit total annual Fund operating expenses to 1.95% of the average
daily net assets annually for the Investment Shares and 1.70% of
21
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
the average daily net assets annually for the Institutional Shares, and to
waive such fees and reimburse expenses to the extent that they exceed these
amounts. For the year ended December 31, 2007, advisory fees of $249,972 were
waived by Ironwood.
Distributor - Foreside Fund Services, LLC is the Fund's distributor (the
"Distributor). The Distributor is not affiliated with the Adviser or Citi Fund
Services, LLC, ("Citi"), or its affiliated companies.
The Fund has adopted a 12b-1 Plan with the respect to the Investment Shares in
accordance with Rule 12-1 of the 1940 Act. Under the 12b-1 Plan, the Fund
compensates the Distributor, at a rate of up to 0.25% of average daily net
assets of the Investment Shares for distribution expenses borne or paid to
others, by the Distributor.
Other Service Providers - Citi provides administration, portfolio accounting
and transfer agency services to the Fund. Certain employees of Citi are also
Officers of the Trust.
Foreside Compliance Services, LLC ("FCS"), an affiliate of the Distributor,
provides a Chief Compliance Officer, an Anti-Money Laundering Officer and
certain other compliance support services to the Fund ("Compliance Services").
Prior to February 22, 2007, Compliance Services were provided by the
Distributor. Commencing June 12, 2007, Foreside Management Services, LLC
("FMS"), another affiliate of the Distributor, has provided a Principal
Financial Officer/Treasurer to the Fund. Neither FCS nor FCM has a role in
determining the investment policies or which securities are to be purchased or
sold by the Fund.
In addition, the Fund enters into separate service and operating agreements
with financial intermediaries whereby the intermediaries make shares of the
Fund available and provide account level services to their clients in exchange
for a servicing fee. A portion of the fees paid to the intermediaries are
included in transfer agent fees on the Statement of Operations. For the year
ended December 31, 2007, Bank of New York Securities ("BONY Securities")
reimbursement accruals of $2,898 were received by the Fund due to the Fund's
direction of portfolio transactions to BONY Securities during the period.
22
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
The custodian, Fifth Third Bank (the "Custodian"), has agreed to compensate the
Fund and decrease custody fees for interest on any cash balances left
uninvested. For the year ended December 31, 2007, the Fund was reimbursed
expenses of $280 by the Custodian.
No Trustee, officer or employee of Ironwood, FCS, FMS or Citi, or any affiliate
thereof, receives any compensation from the Trust for serving as a Trustee or
officer of the Trust. Disinterested trustees received $28,694 in compensation
from the Trust during the year ended December 31, 2007.
Note 5 - Line of Credit
The Fund has entered into a line of credit agreement with the Custodian to be
used for temporary purposes, primarily for financing redemptions. The agreement
provides that the Fund may borrow up to $5,000,000. The aggregate outstanding
principal amount of all loans may not exceed $5,000,000. Interest is charged to
the Fund, based on its borrowings, at a rate equal to the rate of interest on
overnight facilities which the Custodian is offering to other borrowers and
potential borrowers of comparable financial condition on the business day that
a loan is made pursuant to the agreement.
During the year ended December 31, 2007, the Fund accrued $2,961 of interest
expense from borrowings under the line of credit. As of December 31, 2007, the
Fund had loans outstanding of $31,383 under the line of credit and the interest
rate was 5.51%. During the year ended December 31, 2007 the average borrowing
was $316,759 and the average interest rate was 6.75%.
Note 6 - Payments by Affiliate
For the year ended December 31, 2007, Ironwood reimbursed the Fund $7,972 for
the realized loss on an investment that did not meet the investment guidelines
of the Fund. The realized loss on this investment was $7,972. The reimbursement
and realized loss are netted and the net amount is reflected on the Statement
of Operations and on the Statement of Changes in Net Assets. The reimbursement
had no effect on the total return of the Fund.
23
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
Note 7 - Other Information
On December 31, 2007, two shareholders held approximately 43% of the
outstanding shares of the Fund's Investment Shares. These shareholders are
omnibus accounts, which are held on behalf of several individual shareholders.
As of the same date, four shareholders held approximately 90% of the
outstanding shares of the Fund's Institutional Shares. Three of these
shareholders are omnibus accounts, which are held on behalf of several
individual shareholders.
Note 8 - Federal Income Tax and Investment Transactions
As of December 31, 2007, distributable earnings on a tax basis were as follows:
Unrealized Appreciation (Depreciation) $2,621,490
Capital and Other Losses (49,419)
-----------
$ 2,572,071
===========
2007 2006
---------- -----------
Ordinary Income $1,065,281 $ 396,930
Return of Capital 630,242 --
Long-Term Capital Gain 6,490,193 11,741,585
---------- -----------
Total $8,185,716 $12,138,515
========== ===========
For tax purposes, the Fund has a current year deferred post-October loss of
$49,419. This loss will be recognized for tax purposes on the first business
day of the Fund's next year.
For the fiscal year ended December 31, 2007, the Fund reclassified $578,834 to
increase net investment income (loss), $630,242 to decrease accumulated net
realized loss on investments and $1,209,076 to decrease paid-in-capital. The
reclassification has no impact on the net asset value of the Fund and is
primarily due to net operating losses and distributions in excess of earnings
and profits.
24
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 - (Continued)
Note 9 - Subsequent Event
On February 15, 2008, certain Managing Directors of Ironwood entered into an
agreement with Ironwood's corporate parent and sole owner, MB Investment
Partners & Associates, LLC ("MBA"), for the purchase of a majority interest in
Ironwood from MBA (the "Transaction"). It is anticipated that the Transaction
will close on or about May 14, 2008. Following the closing of the Transaction,
these directors will own approximately 61.8% of Ironwood. MBA will retain
approximately 38.2% of the ownership interests of Ironwood.
25
Ironwood Isabelle Small Company Stock Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Shareholders and Board of Trustees
of the Ironwood Series Trust:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Ironwood Isabelle Small Company Stock
Fund, a series of the Ironwood Series Trust (the "Fund"), as of December 31,
2007, and the related statement of operations for the year then ended, these
statements of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the three years in the
period then ended. The financial highlights for the two years ended
December 31, 2004 were audited by another independent registered public
accounting firm whose report dated February 17, 2005 expressed an unqualified
opinion on those statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Fund is not required to have, nor were we engaged to perform
an audit of the Fund's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting. Accordingly we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned
26
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
as of December 31, 2007, by correspondence with the custodian and brokers or by
other appropriate auditing procedures where replies from brokers were not
received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Ironwood Isabelle Small Company Stock Fund as of December 31, 2007, the results
of its operations for the year then ended, changes in net assets for each of
the two years in the period then ended, and financial highlights for each of
the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Grant Thornton LLP
Boston, Massachusetts
February 22, 2008
27
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
ADDITIONAL INFORMATION
DECEMBER 31, 2007 - (Unaudited)
Investment Advisory Contract Approval
The Investment Advisory Agreement (the "Advisory Agreement") between the
Adviser and the Trust, on behalf of the Fund, was approved by the Fund's
shareholders at a special meeting held on April 18, 2006 and by the Board at
its October 17, 2005 meeting for an initial term of two years. The basis of the
Board's approval of the Advisory Agreement is set forth in the Fund's Annual
Report dated December 31, 2005.
The Board will be considering re-approval of the Advisory Agreement prior to
the conclusion of the current term on April 18, 2008.
Proxy Voting Information
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to securities held in the Fund's portfolio is
available, without charge and upon request, by calling (800) 472-6114 and on
the SEC's website at www.sec.gov. The Fund's proxy voting record for the
twelve-month period ended June 30, 2007 is available, without charge and upon
request, by calling (800) 472-6114, on the Fund's website www.ironwoodfunds.com
and on the SEC's website at www.sec.gov.
Availability of Quarterly Portfolio Schedules
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available, without charge and upon request, on the SEC's website at
www.sec.gov. or may be reviewed and copied at the SEC's Public Reference Room
in Washington, D.C. Information on the operation of the Public Reference Room
may be obtained by calling (800) SEC-0330.
Shareholder Expenses
As a shareholder of the Fund you incur two types of costs: (1) transactional
costs (i.e. redemption fees) and (2) ongoing costs, including management fees,
distribution fees with respect to Investment Shares and other Fund expenses.
This example is intended to help you understand these ongoing costs (in
dollars) of investing in the Fund and to compare these costs with the ongoing
costs of investing in other mutual funds.
28
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
ADDITIONAL INFORMATION
DECEMBER 31, 2007 - (Unaudited), (Continued)
The following example is based on $1,000 invested at the beginning of the year
and held for the entire period from July 1, 2007 through December 31, 2007.
Actual Expenses - The first line of the table below provides information about
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 "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
provides information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio and an assumed rate of return
of 5% per year 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 cost of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs. Therefore, the
second 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 had been included, your costs would have
been higher.
29
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
ADDITIONAL INFORMATION
DECEMBER 31, 2007 - (Unaudited), (Continued)
Beginning Ending Expenses
Account Value Account Value Paid During
July 1, 2007 December 31, 2007 Period*
------------- ----------------- -----------
Investment Shares
Actual Return $1,000.00 $ 804.72 $8.87
Hypothetical Return $1,000.00 $1,015.38 $9.91
Institutional Shares
Actual Return $1,000.00 $ 805.97 $7.74
Hypothetical Return $1,000.00 $1,016.64 $8.64
- --------
* Expenses are equal to the Fund's annualized expense ratios of 1.95% and 1.70%
for Investment Shares and Institutional Shares, respectively, multiplied by
the average account value over the period, multiplied by the number of days
in most recent fiscal half-year/365 (to reflect the half-year period).
Federal Tax Status of Dividends Declared during the Tax Year
Income Dividends - All the income and any short-term capital gain dividends
paid by the Fund were ordinary income for Federal income tax purposes. The Fund
designates 14.55% of its income dividend distributed as qualifying for the
corporate dividends-received deduction (DRD) and 14.34% for the qualified
dividend rate (QDI) as defined in Section 1(h)(11) of the Internal Revenue
Code. The Fund also designates 100.00% as qualified short-term capital gain
dividends exempt from U.S. tax for foreign shareholders (QSD).
Capital Gain Dividends - The Fund paid long-term capital gain dividends of
$6,490,193 for the tax year ended December 31, 2007.
30
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FUND TRUSTEE AND OFFICERS
DECEMBER 31, 2007 - (Unaudited)
LENGTH PRINCIPAL
NAME, ADDRESS AND POSITION(S) OF TIME OCCUPATION(S) DURING
YEAR OF BIRTH WITH THE TRUST SERVED/(1)/ THE PAST FIVE YEARS
- ----------------- -------------- ----------------- --------------------
INTERESTED TRUSTEES
WARREN J. Trustee, March 1998 to Chief Investment
ISABELLE, CFA/(2)/ President and Present Officer, Ironwood
Ironwood Investment Chairman of Investment
Management, LLC the Board, Management, LLC,
21 Custom House Street Valuation August 1997 to
Suite 240 Committee present. Managing
Boston, MA 02110 (member) Member, Ironwood
Born: 1952 Investment
Management, LLC,
August 1997 to
January 2006.
INDEPENDENT TRUSTEES
DONALD A. Trustee, Audit March 1998 to Associate
NELSON, CPA Committee, Present Professor,
c/o Ironwood Series Nominating Department of
Trust Committee, Accounting and
P.O. Box 182218 Valuation Finance, Merrimack
Columbus, OH Committee and College, 1975 to
43218-2218 Qualified present; Certified
Born: 1946 Legal Public Accountant,
Compliance 1972 to present.
Committee
(member)
31
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FUND TRUSTEE AND OFFICERS
DECEMBER 31, 2007 - (Unaudited), (Continued)
LENGTH PRINCIPAL
NAME, ADDRESS AND POSITION(S) OF TIME OCCUPATION(S) DURING
YEAR OF BIRTH WITH THE TRUST SERVED/(1)/ THE PAST FIVE YEARS
- ----------------- ------------------- --------------- --------------------
JOHN A. FIFFY Trustee, Audit March 1998 to Acquisition
c/o Ironwood Series Committee, Present Consultant, Hewlett
Trust Nominating Packard Co. (a
P.O. Box 182218 Committee, computer hardware
Columbus, OH Valuation Committee company), 1993 to
43218-2218 and Qualified Legal present.
Born: 1950 Compliance
Committee (member)
THOMAS R. Trustee, Audit May 2003 to President & CEO,
VENABLES Committee, Present Benjamin Franklin
c/o Ironwood Series Nominating Bancorp (Nasdaq:
Trust Committee, BFBC), 2002 to
P.O. Box 182218 Valuation Committee present; President
Columbus, OH and Qualified Legal & CEO, Benjamin
43218-2218 Compliance Franklin Bank, 2002
Born: 1955 Committee (member) to present.
32
IRONWOOD ISABELLE SMALL COMPANY STOCK FUND
FUND TRUSTEE AND OFFICERS
DECEMBER 31, 2007 - (Unaudited), (Continued)
Length Principal
Name, Address and Position(s) of Time Occupation(s) During
Year of Birth with the Trust Served/(1)/ the Past Five Years
- ----------------- ------------------- --------------- --------------------
Officers
CHARLES J. DALY, Vice President, June 2007 to Chief Compliance
ESQ. Secretary Present Officer, Counsel,
Ironwood Investment Ironwood Investment
Management, LLC Management, LLC
21 Custom House since 2006; Senior
Street Counsel, BISYS Fund
Suite 240 Services, Inc.
Boston, MA 02110 2003-2006;
Born: 1971 Associate, Goodwin
Proctor, LP,
2001-2003.
TRUDANCE L.C. Treasurer; June 2007 to Director, Foreside
BAKKE Principal Financial Present Management Service,
Two Portland Square Officer LLC since 2006;
Portland, ME 04101 Product Manager,
Born: 1971 Citigroup
2003-2006; Senior
Manager of
Corporate Finance,
Forum 1999 - 2003.
Ms. Bakke serves as
an officer to other
unaffiliated mutual
funds or closed-end
funds for which the
Distributor or its
affiliates, act as
distributor or
provider of other
services.
- --------
(1) Term of service is indefinite.
(2) Mr. Isabelle owns a controlling interest in MB Investment Partners &
Associates, LLC, the parent company of Ironwood Investment Management, LLC
("Ironwood" or the "Adviser") and is the portfolio manager of the Fund.
Each Trustee oversees the Fund, which is the only portfolio within the complex.
No Trustee holds other directorships or trusteeships. The Statement of
Additional Information ("SAI") contains additional information about the Fund's
Trustees. The SAI is available for free, by contacting the Fund at
(800) 472-6114.
33
IRONWOOD INVESTMENT MANAGEMENT, LLC
AND IRONWOOD FUNDS
The Ironwood Tree
is a small, hardy tree, which yields a very useful and solid wood. Patiently,
these trees remain under the forest canopy until taller neighbors fall.
Once given the opportunity, the Ironwood grows quickly
to reach its full potential. We believe this imagery is appropriate
for our firm as well as our investment style.
Ironwood Investment Management, LLC,
the investment manager of the Ironwood Isabelle Small Company
Stock Fund, is an independently managed investment management firm
specializing in investing in small company stocks.
Ironwood Series Trust
P.O. Box 182218
Columbus, OH 43218-2218
1-800-472-6114
DISTRIBUTOR
Foreside Fund Services, LLC
Two Portland Square, 1st Floor
Portland, ME 04101
www.foresides.com
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective prospectus, which includes information
regarding the Fund's risks, objectives, fees and expenses, experience of its
management, and other information.
There are risks associated with investing in funds of this type that invest in
stocks of small-sized companies, which tend to be more volatile and less liquid
than stocks of larger companies. Past Fund performance is not indicative of
future results.
For account information, current performance and prices, call 1-800-472-6114
between the hours of 9:00 a.m. and 5:00 p.m. (Eastern Time), Monday through
Friday.
138-AR-1207
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, Ironwood Series Trust (the
"Registrant") has adopted a code of ethics, as defined in Item 2 of Form N-CSR,
that applies to its President and Treasurer. A copy of the code of ethics is
filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Mr. Donald A. Nelson has been approved as the "Audit Committee financial
expert." The Board of Trustees of the Registrant has determined that he is
"independent" for purposes of this item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a)Audit Fees--The aggregate fees billed for each of the last two fiscal
years (the "Reporting Periods") for professional services rendered by
the Registrant's principal accountant for the audit of the Registrant's
annual financial statements, or services that are normally provided by
the principal accountant in connection with the statutory and regulatory
filings or engagements for the Reporting Periods, were $25,125 in 2006
and $27,000 in 2007.
(b)Audit-Related Fees--The aggregate fees billed in the Reporting Periods
for assurance and related services rendered by the principal accountant
that were reasonably related to the performance of the audit of the
Registrant's financial statements and are not reported under paragraph
(a) of this Item 4 were $0 in 2006 and $0 in 2007.
(c)Tax Fees--The aggregate fees billed in the Reporting Periods for
professional services rendered by the principal accountant to the
Registrant for tax compliance, tax advice and tax planning ("Tax
Services") were $2,800 in 2006 and $2,940 in 2007. These services
consisted of review or preparation of U.S. federal, state, local and
excise tax returns.
(d)Other Fees--There were no other fees billed in the Reporting Periods for
products and services provided to the Registrant by the principal
accountant, other than the services reported above.
(e)(1) Pursuant to the Registrant's Audit Committee Charter (the
"Charter"), before an auditor is engaged by the Registrant to render
audit services, the Audit Committee must review and approve the
engagement. In addition, the Registrant's Audit Committee must review
and approve in advance any proposal that the Registrant employ its
auditor to render "permissible non-audit services" (as defined in the
Charter consistent with Rule 2-01(c)(4) of Regulation S-X), except as
described below. The Committee must also review and approve in advance
any proposal (except as set forth below) that the investment adviser,
and any entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the Registrant (an
"Adviser-affiliated service provider"), employ the Registrant's auditor
to render non-audit services, if the engagement would relate directly to
the operations and financial reporting of the Registrant. As a part of
its review, the Committee must consider whether the provision of such
services is consistent with the auditor's independence. Pre-approval by
the Committee of non-audit services is not required if: (1) (A) with
respect to the Registrant, the aggregate amount of all such permissible
non-audit services provided to the Registrant constitutes no more than
5% of the total amount of revenues paid to the auditor by the Registrant
during the fiscal year in which the services are provided or (B) with
respect to the adviser and any Adviser-affiliated service provider, the
aggregate amount of all such non-audit services provided constitutes no
more than 5% of the total amount of revenues (of the type that would
have to be pre-approved by the Committee) paid to the auditor by the
Registrant, the Adviser and any Adviser-affiliated service provider
during the fiscal year in which the services are provided; (2) such
services were not recognized by the Registrant at the time of the
engagement to be non-audit services; and (3) such services are promptly
brought to the attention of the Committee and approved prior to the
completion of the audit by the Committee or its Delegate(s) (as defined
below). The Committee may delegate to one or more of its members
("Delegates") authority to pre-approve the auditor's
provision of audit services or permissible non-audit services to the
Registrant, or the provision of non-audit services to the Adviser or any
Adviser-affiliated service provider. Any pre-approval determination made
by a Delegate shall be presented to the full Committee at its next
meeting. The Committee shall communicate any pre-approval made by it or
a Delegate to Registrant's fund administrator, who will ensure that the
appropriate disclosure is made in the Registrant's periodic reports and
other documents as required under the federal securities laws.
(e)(2) No services included in (b)-(d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f)Not applicable as less than 50%.
(g)The aggregate non-audit fees billed by the principal accountant for
services rendered to the Registrant for the Reporting Periods were
$2,800 in 2006 and $2,940 in 2007. There were no fees billed in each of
the Reporting Periods for non-audit services rendered by the principal
accountant to the investment adviser.
(h)The Registrant's Audit Committee has considered whether the provision of
any non-audit services rendered to the investment adviser, to the extent
applicable, that were not pre-approved (not requiring pre-approval) is
compatible with maintaining the Auditor's independence. Any services
provided by the principal accountant to the Registrant or to the
investment adviser requiring pre-approval were pre-approved as required.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included as part of report to stockholders under Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES
(a)The registrant's President and Treasurer have concluded that the
registrant's disclosure controls and procedures (as defined in rule
30a-3(c) under the Investment Company Act of 1940 (the "Act")) are
effective, based on their evaluation of these disclosure controls and
procedures as of a date within 90 days of the filing date of this report.
(b)There were no changes in the registrant's internal control over
financial reporting (as defined in rule 30a-3(d) under the Act) that
occurred during the registrant's second fiscal quarter of the period
covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(a)(1 Code of Ethics (Exhibit filed herewith).
(a)(2) Certifications pursuant to Rule 30a-2(a) of the Investment Company Act
of 1940 as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 (Exhibit
filed herewith).
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) of the Investment Company Act of
1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 (Exhibit
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 Ironwood Series Trust
By /S/ WARREN J. ISABELLE
---------------------------------
WARREN J. ISABELLE, PRESIDENT
Date 2/28/2008
---------------------------
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 /S/ WARREN J. ISABELLE
-----------------------------------
WARREN J. ISABELLE, PRESIDENT
Date 2/28/2008
---------------------------
By /S/ TRUDANCE L.C. BAKKE
-----------------------------------
TRUDANCE L.C. BAKKE, TREASURER
Date 2/28/2008
---------------------------