N-CSR 1 combined.txt CERTIFIED SHAREHOLDER REPORT As filed with the Securities and Exchange Commission September 5, 2003 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 811-07959 Advisors Series Trust (Exact name of registrant as specified in charter) 615 East Michigan Street Milwaukee, WI 53202 (Address of principal executive offices) (Zip code) Eric M. Banhazl Advisors Series Trust 2020 East Financial Way, Suite 100 Glendora, CA 91741 (Name and address of agent for service) (414) 765-5344 Registrant's telephone number, including area code Date of fiscal year end: December 31, 2003 ----------------- Date of reporting period: June 30, 2003 ------------- Item 1. Report to Stockholders. The Al Frank Fund SEMI-ANNUAL REPORT June 30, 2003 The Al Frank Fund P.O. Box 1438 Laguna Beach, CA 92652 Shareholder Services (888) 263-6443 www.alfrankfund.com Al Frank Asset Management, Inc. P.O. Box 1438, Laguna Beach, CA 92652 www.alfrank.com August 2003 With The Al Frank Fund (VALUX) up 36.67% year-to-date, as I compose this semi-annual missive on August 15th, the media is constantly asking why we are performing so well in 2003. The answer is quite simple! We had the patience and discipline to stick with our undervalued stocks even as they did poorly last year. In fact, many of 2002's 'dogs' have become 2003's heroes and our stellar returns of late can be directly attributed to the same stocks that caused the disappointing experience of a year ago. This should be of little surprise as it has occurred throughout the 26-year history of Al Frank Asset Management's investment newsletter, The Prudent Speculator, as well as the relatively short five-and-one-half year lifespan of The Al Frank Fund. For example, in 1999 VALUX saw a handsome 60.42% rebound following 1998's dismal -9.35% loss. Then, as now, we did not alter our time-tested patient strategy of buying and holding undervalued equities for their long-term appreciation potential. Yes, it is not always easy to keep the faith, but I believe that the biggest mistake investors can make is constantly switching from one mutual fund to another in search of the latest hot performer. Fund Performance: (periods ended 06/30/03)
YTD Through 2nd Qtr. June Life of Fund 6/30/03 2003 2003 5 Years 3 Years 1 Year (1/2/98) ------------------------------------------------------------------------ Al Frank Fund 24.78% 30.95% 3.99% 13.66% 4.89% -1.68% 12.01% Russell 2000 17.88% 23.42% 1.81% 0.97% -3.30% -1.64% 1.76% S&P 500 11.76% 15.39% 1.28% -1.61% -11.20% 0.25% 1.50% Wilshire 5000 12.90% 16.50% 1.48% -1.31% -10.59% 1.27% 1.43%
Our approach, like any other, will not always generate positive returns in the short run, but the table above certainly illustrates the merits of our strategy. Top-of-table short-term performance numbers are nice, but I am proudest of the last column as The Al Frank Fund has turned in a 12.01% annualized return since its inception on January 2, 1998, easily besting all appropriate benchmarks! Sometimes, we are rewarded immediately, but it usually takes time for the market to recognize our out-of-favor bargains, for cyclical conditions to improve, for short-term operating difficulties to be overcome or for investor sentiment to shift. Like the farmer, we plant our seeds, tend our crops and hope to eventually harvest our bounty. While I remain very enthusiastic about the near- and long-term prospects for stocks in general and our holdings in particular, we have been busy harvesting portions of many of our big winners as we move to lock in some of our outsized gains, even as we hold the balance of our shares for higher valuations. Happily, investors have rediscovered many of our technology holdings, sending some of these volatile stocks sharply higher and turning short-term declines into longer-term capital gains! Though the equity markets have struggled a bit over the last few weeks, a condition that is not all that surprising given the big gains posted earlier in the year, the weight of the evidence continues to support the bullish argument in my opinion. The economy has shown signs of life (improving data on consumer confidence, worker productivity, GDP, manufacturing, new home sales, unemployment, etc.), numerous corporations have boosted or initiated dividends, merger and acquisition activity has picked up and second quarter earnings reporting season went pretty well. Those who subscribe to The Prudent Speculator are well aware of the many other reasons to be optimistic, as I have been detailing them for the last several months. I believe that the third year of the Presidential cycle, unappealing alternative investments, more favorable tax treatment for equities and an investor-friendly Federal Reserve that will likely keep interest rates low are all reasons to remain loyal to equities. New Free Email Update and Newsletter Program -------------------------------------------- Al Frank Asset Management, as advisor to the Al Frank Fund, is working hard to improve communications with shareholders of the Al Frank Fund and is launching some very exciting email newsletters and updates. Please visit www.alfrankfund.com/ar for additional information and to sign up for this free service. I continue to put my money where my mouth is as I have added to my Al Frank Fund holdings this year and I am happy to report that many of our shareholders are doing the same. Again I thank our shareholders for their patronage and I continue to promise that we will put forth the "extra" that can turn an ordinary mutual fund into an extraordinary one! Sincerely, /s/ John Buckingham John Buckingham Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Investment performance reflects voluntary fee waivers in effect 1998 and 1999. In the absence of such waivers, total return would have been reduced. The advisor has since received reimbursement from the fund for these waivers. Mutual fund investing involves risk; loss of principal is possible. Opinions expressed are those of John Buckingham, which are subject to change and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. The S&P 500, Russell 2000, and Wilshire 5000 Indices are unmanaged indices commonly used to measure performance of U.S. stocks. You cannot invest directly in an index. 08/03 The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited) -------------------------------------------------------------------------------- Shares Common Stocks: 99.14% Market Value -------------------------------------------------------------------------------- Advanced Industrial Equipment: 0.61% 4,002 MTS Systems Corp. . . . . . . . . . . . . . . . $ 58,989 60,000 The Lamson & Sessions Co.*. . . . . . . . . . . 289,200 -------------- 348,189 -------------- Advanced Medical Devices: 1.94% 273,300 Equidyne Corp.* . . . . . . . . . . . . . . . . 133,917 26,550 Laserscope*. . . . . . . . . . . . . . . . . . . 212,134 15,074 Utah Medical Products, Inc.* . . . . . . . . . . 302,234 144,950 Vascular Solutions, Inc.*. . . . . . . . . . . . 314,541 8,000 VISX, Inc.* . . . . . . . . . . . . . . . . . . 138,800 -------------- 1,101,626 -------------- Aerospace & Defense: 3.23% 24,100 AAR Corp. . . . . . . . . . . . . . . . . . . . 170,146 25,000 BE Aerospace, Inc.* . . . . . . . . . . . . . . 82,750 14,000 Ducommun, Inc.* . . . . . . . . . . . . . . . . 197,400 3,000 Kaman Corp. - Class A . . . . . . . . . . . . . 35,070 35,000 LMI Aerospace, Inc.* . . . . . . . . . . . . . . 71,750 1,700 Lockheed Martin Corp. . . . . . . . . . . . . . 80,869 12,300 Pemco Aviation Group, Inc.* . . . . . . . . . . 289,050 5,000 Precision Castparts Corp. . . . . . . . . . . . 155,500 1,500 Raytheon Co. . . . . . . . . . . . . . . . . . . 49,260 5,000 Rockwell Collins, Inc. . . . . . . . . . . . . . 123,150 44,000 SIFCO Industries, Inc.* . . . . . . . . . . . . 88,440 13,400 The Allied Defense Group, Inc.* . . . . . . . . 247,230 7,000 The Boeing Co. . . . . . . . . . . . . . . . . . 240,240 -------------- 1,830,855 -------------- Air Freight/Couriers: 0.01% 99 FedEx Corp. . . . . . . . . . . . . . . . . . . 6,141 -------------- Airlines: 0.67% 11,500 Delta Air Lines, Inc. . . . . . . . . . . . . . 168,820 20,000 Koninklijke Luchtvaart Maatschappij # . . . . . 169,200 15,000 Midwest Express Holdings, Inc.* . . . . . . . . 39,300 -------------- 377,320 -------------- Aluminum: 0.16% 3,500 Alcoa, Inc. . . . . . . . . . . . . . . . . . . 89,250 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Automobile Manufacturers: 0.87% 4,000 DaimlerChrysler AG # . . . . . . . . . . . . . .$ 138,880 19,000 Ford Motor Co. . . . . . . . . . . . . . . . . . 208,810 4,000 General Motors Corp. . . . . . . . . . . . . . . 144,000 -------------- 491,690 -------------- Automobile Parts & Equipment: 0.87% 2,500 ArvinMeritor, Inc. . . . . . . . . . . . . . . . 50,450 6,000 Cooper Tire & Rubber Co. . . . . . . . . . . . . 105,540 11,999 Dura Automotive Systems, Inc.* . . . . . . . . . 117,710 13,000 The Goodyear Tire & Rubber Co. . . . . . . . . . 68,250 22,000 Visteon Corp. . . . . . . . . . . . . . . . . . 151,140 -------------- 493,090 -------------- Automobile Repair Centers: 0.34% 16,000 Midas, Inc. . . . . . . . . . . . . . . . . . . 193,920 -------------- Banks: 2.84% 41,975 BFC Financial Corp. - Class A*. . . . . . . . . 350,491 2,000 Bank of America Corp. . . . . . . . . . . . . . 158,060 2,500 Bank One Corp. . . . . . . . . . . . . . . . . . 92,950 20,000 BankAtlantic Bancorp, Inc. - Class A . . . . . . 237,800 13,000 Capstead Mortgage Corp. . . . . . . . . . . . . 146,510 4,000 Citigroup, Inc. . . . . . . . . . . . . . . . . 171,200 1,605 HSBC Holdings plc - ADR # . . . . . . . . . . . 94,872 10,000 Sovereign Bancorp, Inc. . . . . . . . . . . . . 156,500 5,010 Wachovia Corp. . . . . . . . . . . . . . . . . . 200,200 -------------- 1,608,583 -------------- Biotechnology: 0.49% 170,100 Zonagen, Inc.* . . . . . . . . . . . . . . . . . 278,964 -------------- Building Materials: 1.41% 2,000 Hughes Supply, Inc. . . . . . . . . . . . . . . 69,400 10,000 International Aluminum Corp. . . . . . . . . . . 218,500 20,000 JLG Industries, Inc. . . . . . . . . . . . . . . 136,000 3,000 NCI Building Systems, Inc.* . . . . . . . . . . 50,100 20,000 Omnova Solutions, Inc.*. . . . . . . . . . . . . 80,800 180,500 Smith-Midland Corp.* . . . . . . . . . . . . . . 135,375 4,000 The Sherwin-Williams Co. . . . . . . . . . . . . 107,520 -------------- 797,695 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Business Services: 5.03% 55,600 Analysts International Corp.* . . . . . . . . . $ 138,555 65,000 Computer Horizons Corp.*. . . . . . . . . . . . 295,100 174,500 HealthStream, Inc.* . . . . . . . . . . . . . . 450,210 7,000 IKON Office Solutions, Inc. . . . . . . . . . . 62,300 19,000 InFocus Corp.* . . . . . . . . . . . . . . . . . 89,680 45,000 MasTec, Inc.* . . . . . . . . . . . . . . . . . 259,200 173,600 Pinnacor Inc.* . . . . . . . . . . . . . . . . . 333,312 49,630 Quotesmith.com, Inc.* . . . . . . . . . . . . . 254,106 5,061 Right Management Consultants, Inc.* . . . . . . 64,022 101,600 SOS Staffing Services, Inc.*. . . . . . . . . . 37,592 98,823 ValueClick, Inc.*. . . . . . . . . . . . . . . . 595,903 85,000 Vicon Industries, Inc.* . . . . . . . . . . . . 272,000 -------------- 2,851,980 -------------- Casinos: 0.52% 5,000 MGM MIRAGE* . . . . . . . . . . . . . . . . . . 170,900 5,000 Station Casinos, Inc.* . . . . . . . . . . . . . 126,250 -------------- 297,150 -------------- Chemicals - Commodity: 0.69% 12,000 Olin Corp. . . . . . . . . . . . . . . . . . . . 205,200 6,000 The Dow Chemical Co. . . . . . . . . . . . . . . 185,760 -------------- 390,960 -------------- Chemicals - Specialty: 1.67% 14,000 Crompton Corp. . . . . . . . . . . . . . . . . . 98,700 6,000 Great Lakes Chemical Corp. . . . . . . . . . . . 122,400 8,000 IMC Global, Inc. . . . . . . . . . . . . . . . . 53,680 9,000 Octel Corp. #. . . . . . . . . . . . . . . . . . 125,100 20,000 OM Group, Inc.*. . . . . . . . . . . . . . . . . 294,600 4,000 Spartech Corp. . . . . . . . . . . . . . . . . . 84,840 15,000 Wellman, Inc. . . . . . . . . . . . . . . . . . 168,000 -------------- 947,320 -------------- Clothing/Fabrics: 2.69% 20,000 Goody's Family Clothing, Inc.* . . . . . . . . . 173,000 17,000 Haggar Corp. . . . . . . . . . . . . . . . . . . 212,500 30,000 Hartmarx Corp.* . . . . . . . . . . . . . . . . 89,700 5,075 Kellwood Co. . . . . . . . . . . . . . . . . . . 160,522 5,000 Oxford Industries, Inc. . . . . . . . . . . . . 207,600 See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Clothing/Fabrics (continued) 10,000 Phillips-Van Heusen Corp. . . . . . . . . . . . $ 136,300 14,000 Quaker Fabric Corp.* . . . . . . . . . . . . . . 92,400 14,000 Quiksilver, Inc.* . . . . . . . . . . . . . . . 230,860 10,000 Tommy Hilfiger Corp.*#. . . . . . . . . . . . . 92,400 5,350 Tropical Sportswear International Corp.*. . . . 38,787 15,000 Unifi, Inc.* . . . . . . . . . . . . . . . . . . 93,000 -------------- 1,527,069 -------------- Communications Technology: 6.18% 55,000 3Com Corp.*. . . . . . . . . . . . . . . . . . . 257,400 98,000 Avanex Corp.*. . . . . . . . . . . . . . . . . . 392,000 28,700 Avici Systems, Inc.* . . . . . . . . . . . . . . 175,070 105,000 Blonder Tongue Laboratories, Inc.* . . . . . . . 240,450 16,000 Communications Systems, Inc.*. . . . . . . . . . 125,920 13,000 Comverse Technology, Inc.*. . . . . . . . . . . 195,390 36,870 Cosine Communications, Inc.*. . . . . . . . . . 224,096 256,800 deltathree, Inc. - Class A* . . . . . . . . . . 166,920 61,000 Digi International, Inc.* . . . . . . . . . . . 350,750 85,000 Forgent Networks, Inc.* . . . . . . . . . . . . 230,350 30,500 Net2Phone, Inc.*. . . . . . . . . . . . . . . . 132,065 10,110 Netro Corp.* . . . . . . . . . . . . . . . . . . 29,117 55,700 Network Equipment Technologies, Inc.* . . . . . 468,994 46,346 Novell, Inc.* . . . . . . . . . . . . . . . . . 142,746 15,000 Polycom, Inc.* . . . . . . . . . . . . . . . . . 207,900 27,609 Symmetricom, Inc.* . . . . . . . . . . . . . . . 121,480 98,900 TII Network Technologies, Inc.* . . . . . . . . 41,043 -------------- 3,501,691 -------------- Computers: 2.04% 30,000 Adaptec, Inc.* . . . . . . . . . . . . . . . . . 233,400 11,000 Apple Computer, Inc.* . . . . . . . . . . . . . 210,320 232,900 Applied Graphics Technologies, Inc.* . . . . . . 190,978 15,000 Computer Network Technology Corp.* . . . . . . . 121,500 3,412 SanDisk Corp.*. . . . . . . . . . . . . . . . . 137,674 4,000 Storage Technology Corp.*. . . . . . . . . . . . 102,960 35,000 Sun Microsystems, Inc.*. . . . . . . . . . . . . 161,000 -------------- 1,157,832 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Consumer Services: 0.70% 150,700 FairMarket, Inc.*. . . . . . . . . . . . . . . .$ 251,669 7,000 SINA.com* # . . . . . . . . . . . . . . . . . . 142,310 -------------- 393,979 -------------- Containers & Packaging: 0.50% 24,000 American Biltrite, Inc. . . . . . . . . . . . . 170,400 47,200 Applied Extrusion Technologies, Inc.*. . . . . . 114,224 -------------- 284,624 -------------- Cosmetics/Personal Care: 0.27% 30,000 Allou Health & Beauty Care, Inc. - Class A* . . 300 10,000 Helen of Troy Ltd.* # . . . . . . . . . . . . . 151,600 -------------- 151,900 -------------- Electric & Gas: 1.06% 20,000 Aquila, Inc. . . . . . . . . . . . . . . . . . . 51,600 35,000 Calpine Corp.* . . . . . . . . . . . . . . . . . 231,000 70,000 Mirant Corp.* . . . . . . . . . . . . . . . . . 203,000 7,500 Xcel Energy, Inc. . . . . . . . . . . . . . . . 112,800 -------------- 598,400 -------------- Electrical Components & Equipment: 4.01% 114,900 Aetrium, Inc.* . . . . . . . . . . . . . . . . . 168,903 10,000 American Power Conversion Corp.* . . . . . . . . 155,900 4,000 Bel Fuse, Inc. - Class B . . . . . . . . . . . . 91,600 129,600 BMC Industries, Inc.*. . . . . . . . . . . . . . 69,984 12,500 C&D Technologies, Inc. . . . . . . . . . . . . . 179,500 20,000 Flextronics International Ltd.* #. . . . . . . . 207,800 14,800 Frequency Electronics, Inc. . . . . . . . . . . 134,680 15,000 Innovex, Inc.* . . . . . . . . . . . . . . . . . 151,500 10,000 InVision Technologies, Inc.* . . . . . . . . . . 248,500 14,000 KEMET Corp.*. . . . . . . . . . . . . . . . . . 141,400 8,289 Nam Tai Electronics, Inc. #. . . . . . . . . . . 351,454 7,600 RF Industries, Ltd.* . . . . . . . . . . . . . . 25,080 50,000 Solectron Corp.* . . . . . . . . . . . . . . . . 187,000 12,256 Vishay Intertechnology, Inc.* . . . . . . . . . 161,779 -------------- 2,275,080 -------------- Financial Services, Diversified: 0.69% 42,000 Providian Financial Corp. * . . . . . . . . . . 388,920 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Fixed Line Communications: 0.57% 50,000 ADC Telecommunications, Inc.* . . . . . . . . . $ 116,400 78,786 Endwave Corp.* . . . . . . . . . . . . . . . . . 207,995 -------------- 324,395 -------------- Food: 0.17% 5,000 Sara Lee Corp. . . . . . . . . . . . . . . . . . 94,050 -------------- Food Retailers: 0.20% 5,850 Albertson's, Inc. . . . . . . . . . . . . . . . 112,320 -------------- Footwear: 2.19% 57,200 Deckers Outdoor Corp.* . . . . . . . . . . . . . 371,228 7,500 Maxwell Shoe Company, Inc. - Class A*. . . . . . 108,000 5,000 R. G. Barry Corp.* . . . . . . . . . . . . . . . 22,900 28,000 Saucony, Inc. - Class B*. . . . . . . . . . . . 338,240 11,000 Steve Madden, Ltd.* . . . . . . . . . . . . . . 240,240 3,000 The Timberland Co. - Class A* . . . . . . . . . 158,580 -------------- 1,239,188 -------------- Forest Products: 0.50% 8,000 Georgia-Pacific Corp. . . . . . . . . . . . . . 151,600 11,900 Pope & Talbot, Inc. . . . . . . . . . . . . . . 131,495 -------------- 283,095 -------------- Healthcare Providers: 3.42% 4,000 Aetna, Inc. . . . . . . . . . . . . . . . . . . 240,800 57,000 American Shared Hospital Services . . . . . . . 285,000 130 Five Star Quality Care, Inc.* . . . . . . . . . 196 27,000 HEALTHSOUTH Corp.* . . . . . . . . . . . . . . . 14,040 10,000 Humana, Inc.*. . . . . . . . . . . . . . . . . . 151,000 58,865 LCA-Vision, Inc.*. . . . . . . . . . . . . . . . 528,608 90,000 Magellan Health Services, Inc.* . . . . . . . . 4,050 3,500 Oxford Health Plans, Inc.* . . . . . . . . . . . 147,105 9,400 PacifiCare Health Systems, Inc.* . . . . . . . . 463,702 23,400 Res-Care, Inc.* . . . . . . . . . . . . . . . . 106,938 -------------- 1,941,439 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Heavy Machinery: 0.17% 1,800 A.O. Smith Corp. . . . . . . . . . . . . . . . .$ 50,670 9,700 Katy Industries, Inc.* . . . . . . . . . . . . . 47,336 -------------- 98,006 -------------- Home Construction: 3.37% 2,000 Beazer Homes USA, Inc.* . . . . . . . . . . . . 167,000 2,000 Centex, Corp. . . . . . . . . . . . . . . . . . 155,580 13,000 D.R. Horton, Inc. . . . . . . . . . . . . . . . 365,300 15,000 Fleetwood Enterprises, Inc.*. . . . . . . . . . 111,000 4,500 KB Home . . . . . . . . . . . . . . . . . . . . 278,910 5,000 Pulte Homes, Inc. . . . . . . . . . . . . . . . 308,300 29,000 Rexhall Industries, Inc.* . . . . . . . . . . . 68,150 6,000 Standard Pacific Corp. . . . . . . . . . . . . . 198,960 9,000 Toll Brothers, Inc.* . . . . . . . . . . . . . . 254,790 -------------- 1,907,990 -------------- Home Furnishings: 0.99% 14,000 Applica, Inc.* . . . . . . . . . . . . . . . . . 119,000 4,000 Chromcraft Revington, Inc.* . . . . . . . . . . 49,760 6,000 Craftmade International, Inc. . . . . . . . . . 108,054 45,000 The Dixie Group, Inc.* . . . . . . . . . . . . . 154,800 2,000 Whirlpool Corp. . . . . . . . . . . . . . . . . 127,400 -------------- 559,014 -------------- House-Durable: 0.54% 20,000 Department 56, Inc.*. . . . . . . . . . . . . . 306,600 -------------- House-Non-Durable: 0.29% 7,000 Central Garden & Pet Co.* . . . . . . . . . . . 166,950 -------------- Industrial & Commercial Services: 1.04% 10,000 Avnet, Inc.*. . . . . . . . . . . . . . . . . . 126,800 25,000 Nu Horizons Electronics Corp.*. . . . . . . . . 150,000 27,000 Spectrum Control, Inc.* . . . . . . . . . . . . 151,740 65,000 Trio-Tech International* . . . . . . . . . . . . 162,500 -------------- 591,040 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Industrial Diversified: 0.94% 8,000 GenCorp, Inc. . . . . . . . . . . . . . . . . . $ 71,120 14,100 McRae Industries, Inc. . . . . . . . . . . . . . 87,138 48,700 Orbit International Corp.*. . . . . . . . . . . 280,512 14,400 P & F Industries, Inc. - Class A* . . . . . . . 96,480 -------------- 535,250 -------------- Insurance, Life: 0.41% 1,600 National Western Life Insurance Co. - Class A* . 176,688 1,500 Torchmark Corp. . . . . . . . . . . . . . . . . 55,875 -------------- 232,563 -------------- Insurance, Property & Casualty: 0.77% 800 MGIC Investment Corp. . . . . . . . . . . . . . 37,312 4,000 Radian Group, Inc. . . . . . . . . . . . . . . . 146,600 25,000 RTW, Inc.* . . . . . . . . . . . . . . . . . . . 88,375 4,000 The Allstate Corp. . . . . . . . . . . . . . . . 142,600 172 Travelers Property Casualty Corp. - Class A* . . 2,735 355 Travelers Property Casualty Corp. - Class B* . . 5,598 45,000 Trenwick Group Ltd. # . . . . . . . . . . . . . 13,500 -------------- 436,720 -------------- Lodging: 0.43% 20,000 RFS Hotel Investors, Inc. . . . . . . . . . . . 246,400 -------------- Marine Transportation: 0.48% 20,000 Sea Containers Ltd. - Class A . . . . . . . . . 227,800 6,500 Stolt-Nielsen S.A. - ADR # . . . . . . . . . . . 42,965 -------------- 270,765 -------------- Medical Supplies: 0.25% 10,824 Cantel Medical Corp.* . . . . . . . . . . . . . 145,258 -------------- Oil, Drilling: 1.71% 2,484 Devon Energy Corp. . . . . . . . . . . . . . . . 132,646 4,655 GlobalSantaFe Corp. . . . . . . . . . . . . . . 108,648 6,000 Nabors Industries, Ltd.* #. . . . . . . . . . . 237,300 4,000 Rowan Companies, Inc. . . . . . . . . . . . . . 89,600 40,000 The Wiser Oil Co.* . . . . . . . . . . . . . . . 230,400 See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Oil, Drilling (continued) 5,000 Transocean, Inc. . . . . . . . . . . . . . . . .$ 109,850 3,000 Unit Corp.* . . . . . . . . . . . . . . . . . . 62,730 -------------- 971,174 -------------- Oil, Equipment & Services: 3.06% 47,400 Giant Industries, Inc.*. . . . . . . . . . . . . 282,504 5,000 Holly Corp. . . . . . . . . . . . . . . . . . . 138,000 20,000 Key Energy Services, Inc.*. . . . . . . . . . . 214,400 14,000 Maverick Tube Corp.* . . . . . . . . . . . . . . 268,100 5,000 Oceaneering International, Inc.*. . . . . . . . 127,750 2,700 Offshore Logistics, Inc.*. . . . . . . . . . . . 58,725 65,000 OMI Corp.* # . . . . . . . . . . . . . . . . . . 400,400 3,000 Teekay Shipping Corp. #. . . . . . . . . . . . . 128,700 4,000 Tidewater Inc. . . . . . . . . . . . . . . . . . 117,480 -------------- 1,736,059 -------------- Oil, Secondary: 1.65% 1,690 Apache Corp. . . . . . . . . . . . . . . . . . . 109,951 45,000 Tesoro Petroleum Corp.* . . . . . . . . . . . . 309,600 6,500 Valero Energy Corp. . . . . . . . . . . . . . . 236,145 25,000 Vintage Petroleum, Inc. . . . . . . . . . . . . 282,000 -------------- 937,696 -------------- Other Non-Ferrous: 0.65% 10,000 Cleveland-Cliffs, Inc.* . . . . . . . . . . . . 178,500 5,000 Phelps Dodge Corp.* . . . . . . . . . . . . . . 191,700 -------------- 370,200 -------------- Paper Products: 0.21% 3,275 International Paper Co. . . . . . . . . . . . . 117,016 -------------- Pharmaceuticals: 1.43% 10,500 Bristol-Myers Squibb Co. . . . . . . . . . . . . 285,075 5,000 Merck & Co. Inc. . . . . . . . . . . . . . . . . 302,750 12,000 Schering-Plough Corp. . . . . . . . . . . . . . 223,200 -------------- 811,025 -------------- Pollution Control/Waste Management: 0.26% 22,400 IMCO Recycling, Inc.*. . . . . . . . . . . . . . 148,736 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Precious Metals: 0.13% 14,000 Stillwater Mining Co.* . . . . . . . . . . . . .$ 71,960 -------------- Railroads: 0.37% 3,500 CSX Corp. . . . . . . . . . . . . . . . . . . . 105,315 1,800 Union Pacific Corp. . . . . . . . . . . . . . . 104,436 -------------- 209,751 -------------- Real Estate Investment: 1.10% 30,000 HRPT Properties Trust . . . . . . . . . . . . . 276,000 85,000 Jameson Inns, Inc. . . . . . . . . . . . . . . . 238,000 3,000 LNR Property Corp. . . . . . . . . . . . . . . . 112,200 -------------- 626,200 -------------- Recreational Products: 2.05% 7,000 Brunswick Corp. . . . . . . . . . . . . . . . . 175,140 10,000 Callaway Golf Co. . . . . . . . . . . . . . . . 132,200 62,200 Coastcast Corp.* . . . . . . . . . . . . . . . . 127,510 26,100 Concord Camera Corp.* . . . . . . . . . . . . . 185,049 30,000 Huffy Corp.* . . . . . . . . . . . . . . . . . . 210,000 20,000 K2, Inc.* . . . . . . . . . . . . . . . . . . . 245,000 7,000 The Nautilus Group, Inc. . . . . . . . . . . . . 86,800 -------------- 1,161,699 -------------- Restaurants: 0.63% 178,000 BRIAZZ, Inc.* . . . . . . . . . . . . . . . . . 32,040 20,000 CKE Restaurants, Inc.*. . . . . . . . . . . . . 111,800 3,500 Landry's Restaurants, Inc. . . . . . . . . . . . 82,600 6,000 McDonald's Corp. . . . . . . . . . . . . . . . . 132,360 -------------- 358,800 -------------- Retailers, Apparel: 1.26% 8,262 American Eagle Outfitters, Inc.* . . . . . . . . 151,525 6,000 AnnTaylor Stores Corp.* . . . . . . . . . . . . 173,700 10,000 Burlington Coat Factory Warehouse Corp. . . . . 179,000 25,000 Gadzooks, Inc.* . . . . . . . . . . . . . . . . 142,000 86,566 One Price Clothing Stores, Inc.*. . . . . . . . 69,253 -------------- 715,478 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Retailers, Broadline: 0.62% 10,000 J. C. Penney Company, Inc. . . . . . . . . . . .$ 168,500 5,000 Nordstrom, Inc. . . . . . . . . . . . . . . . . 97,600 2,500 Sears, Roebuck and Co. . . . . . . . . . . . . . 84,100 -------------- 350,200 -------------- Retailers, Specialty: 3.40% 5,000 AutoNation, Inc.* . . . . . . . . . . . . . . . 78,600 3,800 Barnes & Noble, Inc.* . . . . . . . . . . . . . 87,590 21,000 Friedman's Inc. - Class A . . . . . . . . . . . 238,770 12,217 Jo-Ann Stores, Inc. - Class B* . . . . . . . . . 270,607 5,000 Michaels Stores, Inc.*. . . . . . . . . . . . . 190,300 50,000 OfficeMax, Inc.* . . . . . . . . . . . . . . . . 327,500 6,000 REX Stores Corp.* . . . . . . . . . . . . . . . 72,660 8,000 TBC Corp.*. . . . . . . . . . . . . . . . . . . 152,400 4,000 The Home Depot, Inc. . . . . . . . . . . . . . . 132,480 4,000 The Pep Boys - Manny, Moe & Jack . . . . . . . . 54,040 18,000 Toys "R" Us, Inc.* . . . . . . . . . . . . . . . 218,160 20,000 Trans World Entertainment Corp.* . . . . . . . . 102,400 -------------- 1,925,507 -------------- Savings & Loans: 1.61% 8,000 FirstFed Financial Corp.* . . . . . . . . . . . 282,320 2,000 Golden West Financial Corp. . . . . . . . . . . 160,020 11,687 PVF Capital Corp. . . . . . . . . . . . . . . . 163,150 7,500 Washington Mutual, Inc. . . . . . . . . . . . . 309,750 -------------- 915,240 -------------- Securities Brokers: 0.23% 1,000 Lehman Brothers Holdings, Inc. . . . . . . . . . 66,480 882 The Bear Stearns Companies, Inc. . . . . . . . . 63,874 -------------- 130,354 -------------- Semiconductor & Related: 8.07% 25,000 Advanced Micro Devices, Inc.* . . . . . . . . . 160,250 646 Agere Systems, Inc. - Class A* . . . . . . . . . 1,505 15,873 Agere Systems, Inc. - Class B* . . . . . . . . . 36,508 8,000 Applied Materials, Inc.* . . . . . . . . . . . . 126,880 40,000 Atmel Corp.*. . . . . . . . . . . . . . . . . . 101,200 5,000 Cohu, Inc. . . . . . . . . . . . . . . . . . . . 78,000 See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Semiconductor & Related (continued) 15,000 Credence Systems Corp.* . . . . . . . . . . . . $ 127,050 12,000 Cypress Semiconductor Corp.* . . . . . . . . . . 144,000 46,400 Dataram Corp.*. . . . . . . . . . . . . . . . . 141,613 30,400 Diodes, Inc.* . . . . . . . . . . . . . . . . . 582,464 30,000 Electroglas, Inc.* . . . . . . . . . . . . . . . 39,300 17,000 ESS Technology, Inc.* . . . . . . . . . . . . . 165,750 15,011 Genesis Microchip, Inc.* . . . . . . . . . . . . 203,249 30,000 Integrated Silicon Solution, Inc.* . . . . . . . 208,200 5,000 International Rectifier Corp.* . . . . . . . . . 134,100 25,000 Kulicke and Soffa Industries, Inc.*. . . . . . . 159,750 12,500 Lam Research Corp.* . . . . . . . . . . . . . . 227,625 10,000 Lattice Semiconductor Corp.* . . . . . . . . . . 82,300 26,000 LSI Logic Corp.* . . . . . . . . . . . . . . . . 184,080 37,000 Mattson Technology, Inc.* . . . . . . . . . . . 114,330 8,000 Micron Technology, Inc.* . . . . . . . . . . . . 93,040 4,375 National Semiconductor Corp.* . . . . . . . . . 86,275 3,000 Novellus Systems, Inc.* . . . . . . . . . . . . 109,863 10,000 NVIDIA Corp.* . . . . . . . . . . . . . . . . . 230,100 4,449 Siliconix, Inc.* . . . . . . . . . . . . . . . . 160,609 38,200 Tower Semiconductor Ltd.* #. . . . . . . . . . . 182,214 30,000 Trident Microsystems, Inc.* . . . . . . . . . . 273,000 213,900 Tvia, Inc.* . . . . . . . . . . . . . . . . . . 222,456 4,500 Varian Semiconductor Equipment Associates, Inc.* 133,920 205,288 Vialta, Inc. - Class A*. . . . . . . . . . . . . 67,745 -------------- 4,577,376 -------------- Software: 9.24% 89,300 American Software, Inc. - Class A*. . . . . . . 392,920 134,100 Apropos Technology, Inc.* . . . . . . . . . . . 343,430 60,000 Aspect Communications Corp.* . . . . . . . . . . 232,200 6,000 Autodesk, Inc. . . . . . . . . . . . . . . . . . 96,960 10,000 BMC Software, Inc.* . . . . . . . . . . . . . . 163,300 53,100 CAM Commerce Solutions, Inc.*. . . . . . . . . . 236,295 75,000 Captaris, Inc.* . . . . . . . . . . . . . . . . 256,500 10,000 Citrix Systems, Inc.*. . . . . . . . . . . . . . 203,600 16,900 Click Commerce, Inc.* . . . . . . . . . . . . . 24,505 See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Software (continued) 40,000 Compuware Corp.* . . . . . . . . . . . . . . . .$ 230,800 15,800 Concerto Software, Inc.* . . . . . . . . . . . . 145,202 251,286 Corio, Inc.* . . . . . . . . . . . . . . . . . . 402,058 110,200 Cysive, Inc.* . . . . . . . . . . . . . . . . . 353,742 6,000 Electronics for Imaging, Inc.* . . . . . . . . . 121,740 38,000 Keynote Systems, Inc.*. . . . . . . . . . . . . 398,240 219,100 Net Perceptions, Inc.*. . . . . . . . . . . . . 350,560 4,999 NetManage, Inc.* . . . . . . . . . . . . . . . . 14,897 82,700 Peerless Systems Corp.* . . . . . . . . . . . . 209,231 48,100 Previo, Inc.* . . . . . . . . . . . . . . . . . 6,253 13,336 Quovadx, Inc.* . . . . . . . . . . . . . . . . . 36,407 35,000 Rainbow Technologies, Inc.* . . . . . . . . . . 294,350 21,398 Roxio, Inc.*. . . . . . . . . . . . . . . . . . 143,153 155,400 SEEC, Inc.*. . . . . . . . . . . . . . . . . . . 214,452 3,500 Unisys Corp.* . . . . . . . . . . . . . . . . . 42,980 328,500 VIA NET.WORKS, Inc.* . . . . . . . . . . . . . . 325,215 -------------- 5,238,990 -------------- Steel: 0.81% 20,000 AK Steel Holding Corp.* . . . . . . . . . . . . 72,400 65,500 Rouge Industries, Inc. - Class A*. . . . . . . . 39,955 11,351 Ryerson Tull, Inc. . . . . . . . . . . . . . . . 99,662 15,000 United States Steel Corp. . . . . . . . . . . . 245,550 -------------- 457,567 -------------- Tobacco: 0.62% 4,000 Altria Group, Inc. . . . . . . . . . . . . . . . 181,760 3,000 R.J. Reynolds Tobacco Holdings, Inc. . . . . . . 111,630 1,700 UST, Inc. . . . . . . . . . . . . . . . . . . . 59,551 -------------- 352,941 -------------- Toys: 0.73% 52,000 Acclaim Entertainment, Inc.* . . . . . . . . . . 35,360 6,800 Hasbro, Inc. . . . . . . . . . . . . . . . . . . 118,932 6,000 Mattel, Inc. . . . . . . . . . . . . . . . . . . 113,520 17,000 The Topps Co.* . . . . . . . . . . . . . . . . . 146,030 -------------- 413,842 -------------- See accompanying Notes to Financial Statements. The Al Frank Fund SCHEDULE OF INVESTMENTS at June 30, 2003 (Unaudited), Continued -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- Transportation Equipment: 0.28% 2,225 Cummins, Inc. . . . . . . . . . . . . . . . . . $ 79,855 4,300 Trinity Industries, Inc. . . . . . . . . . . . . 79,593 -------------- 159,448 -------------- Trucking: 0.63% 4,000 Arkansas Best Corp.* . . . . . . . . . . . . . . 95,160 4,650 Old Dominion Freight Line, Inc.* . . . . . . . . 100,533 2,750 SCS Transportation, Inc.*. . . . . . . . . . . . 34,732 5,500 Yellow Corp.* . . . . . . . . . . . . . . . . . 127,325 -------------- 357,750 -------------- Wireless Communications: 2.17% 75,000 Aether Systems, Inc.* . . . . . . . . . . . . . 367,500 20,000 Brightpoint, Inc.* . . . . . . . . . . . . . . . 246,000 45,000 Corning, Inc.* . . . . . . . . . . . . . . . . . 332,550 93,333 Vyyo, Inc.* . . . . . . . . . . . . . . . . . . 282,799 -------------- 1,228,849 -------------- Total Common Stocks (Cost $54,660,763). . . . . 56,219,129 -------------- Short-Term Investments: 1.37% 774,370 SEI Daily Income Treasury Government - Class B (Cost $774,370) . . . . . . . . . . . 774,370 -------------- Total Investments in Securities (Cost $55,435,133): 100.51% . . . . . . . . . 56,993,499 Liabilities in Excess of Other Assets: (0.51%) . (287,039) -------------- Net Assets: 100.00% . . . . . . . . . . . . . . $56,706,460 ============== See accompanying Notes to Financial Statements. The Al Frank Fund STATEMENT OF ASSETS AND LIABILITIES at June 30, 2003 (Unaudited) -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (cost $55,435,133) . $56,993,499 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 36,204 Receivables: Securities sold . . . . . . . . . . . . . . . . . . . 11,389 Fund shares sold . . . . . . . . . . . . . . . . . . 10,490 Dividends . . . . . . . . . . . . . . . . . . . . . . 37,204 Prepaid expenses . . . . . . . . . . . . . . . . . . . . 8,616 -------------- Total assets . . . . . . . . . . . . . . . . . . 57,097,402 -------------- LIABILITIES Payables: Securities purchased . . . . . . . . . . . . . . . . 95,347 Fund shares redeemed . . . . . . . . . . . . . . . . 181,187 Due to advisor . . . . . . . . . . . . . . . . . . . 46,692 Due to custodian . . . . . . . . . . . . . . . . . . 14,924 Distribution and service fees . . . . . . . . . . . . 11,673 Administration fees . . . . . . . . . . . . . . . . . 9,059 Accrued expenses . . . . . . . . . . . . . . . . . . . . 32,060 -------------- Total liabilities . . . . . . . . . . . . . . . 390,942 -------------- NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $56,706,460 ============== Net asset value, offering and redemption price per share [$56,706,460/3,293,321 shares outstanding; unlimited number of shares (par value $.01) authorized] . . . . . . . . . . . . $ 17.22 ============== COMPONENTS OF NET ASSETS Paid-in capital . . . . . . . . . . . . . . . . . . . . . $59,398,811 Accumulated net investment loss . . . . . . . . . . . . . (153,704) Accumulated net realized loss on investments . . . . . . (4,097,013) Net unrealized appreciation on investments . . . . . . . 1,558,366 -------------- Net assets . . . . . . . . . . . . . . . . . . . $56,706,460 ============== See accompanying Notes to Financial Statements. The Al Frank Fund STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2003 (Unaudited) -------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends (Net of foreign tax $1,930) . . . . . . . .$ 335,224 Interest . . . . . . . . . . . . . . . . . . . . . . 2,305 -------------- Total income . . . . . . . . . . . . . . . . . . 337,529 -------------- Expenses Advisory fees (Note 3) . . . . . . . . . . . . . . . 244,520 Distribution fees (Note 4) . . . . . . . . . . . . . 61,130 Transfer agent fees . . . . . . . . . . . . . . . . . 51,538 Administration fees (Note 3) . . . . . . . . . . . . 48,537 Fund accounting fees . . . . . . . . . . . . . . . . 22,834 Custody fees . . . . . . . . . . . . . . . . . . . . 16,866 Professional fees . . . . . . . . . . . . . . . . . . 13,735 Registration expense . . . . . . . . . . . . . . . . 13,044 Reports to shareholders . . . . . . . . . . . . . . . 11,119 Trustee fees . . . . . . . . . . . . . . . . . . . . 3,105 Insurance expense . . . . . . . . . . . . . . . . . . 1,984 Miscellaneous . . . . . . . . . . . . . . . . . . . . 1,433 Deferred organization expense . . . . . . . . . . . . 16 -------------- Total expenses . . . . . . . . . . . . . . . . . 489,861 -------------- Add: expenses recouped by advisor (Note 3) . . . 1,372 -------------- Net expenses . . . . . . . . . . . . . . . . 491,233 -------------- Net investment loss . . . . . . . . (153,704) -------------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized loss on investments . . . . . . . . . . . . . . . (700,188) Net change in unrealized appreciation on investments . . . . . 12,110,198 -------------- Net realized and unrealized gain on investments . . . . . . . 11,410,010 -------------- Net increase in net assets resulting from operations $11,256,306 ============== See accompanying Notes to Financial Statements. The Al Frank Fund STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- Six Months Ended Year Ended June 30, 2003 December 31, (Unaudited) 2002 INCREASE (DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment loss . . . . . . . . . . . . . . . . $ (153,704) $ (825,043) Net realized loss on investments . . . . . . . . . . (700,188) (3,387,477) Net change in unrealized appreciation/(depreciation) on investments. 12,110,198 (18,654,754) ----------- ------------ Net increase/(decrease) in net assets resulting from operations . . . . 11,256,306 (22,867,274) DISTRIBUTIONS TO SHAREHOLDERS Net realized gain on security transactions . . . . . -- (317,963) TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net decrease/(increase) in net assets derived from net change in outstanding shares (a) . . . . . (3,021,639) 24,413,698 ----------- ------------ Total increase in net assets . . . . . . . . . . . . 8,234,667 1,228,461 ----------- ------------ NET ASSETS Beginning of year . . . . . . . . . . . . . . . . . 48,471,793 47,243,332 ----------- ------------ End of year . . . . . . . . . . . . . . . . . . . . $56,706,460 $48,471,793 =========== ============ (a) A summary of share transactions is as follows:
Six Months Ended Year June 30, 2003 Ended (Unaudited) December 31, 2002 ------------------------- -------------------------- Shares Paid in Capital Shares Paid in Capital ------ --------------- ------ --------------- Shares sold . . . . . . . . 325,611 $ 4,772,278 3,515,561 $66,821,346 Shares issued on reinvestment of distributions 81 1,112 22,541 309,074 Shares redeemed* . . . . . . . (545,813) (7,795,029) (2,541,192) (42,716,722) --------- ----------- ----------- ------------ Net increase . . . . . . . .(220,121) $(3,021,639) 996,910 $24,413,698 ========= ============ =========== ============ *Net of redemption fees of: $2,641 $47,421 ============ ============
See accompanying Notes to Financial Statements. The Al Frank Fund FINANCIAL HIGHLIGHTS - For a share outstanding throughout each period --------------------------------------------------------------------------------
January 2, Six Months 1998* Ended Year Ended December 31, through June 30, 2003 ----------------------------------- December 31, (Unaudited) 2002 2001 2000 1999 1998 ------------------------------------------------------------------------------------------------------- Net asset value, beginning of period..................... $13.80 $18.77 $14.58 $14.55 $ 9.07 $10.00 ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment gain/(loss)........... (0.05) (0.23) (0.13) (0.08) (0.21) (0.08) Net realized and unrealized gain/(loss) on investments........... 3.47 (4.65) 4.47 1.18 5.69 (0.85) ------ ------ ------ ------ ------ ------ Total from investment operations................... 3.42 (4.88) 4.34 1.10 5.48 (0.93) ------ ------ ------ ------ ------ ------ Less distributions: From net realized gain on investments................ -- (0.09) (0.15) (1.07) -- -- ------ ------ ------ ------ ------ ------ Net asset value, end of period............ $17.22 $13.80 $18.77 $14.58 $14.55 $ 9.07 ====== ====== ====== ====== ====== ====== Total return.............................. 24.78% (25.99%) 29.83% 6.91% 60.42% (9.30%)+ . Ratios/supplemental data: Net assets, end of period (thousands)......................$56,706 $48,471 $47,243 $19,826 $7,663 $7,042 Ratio of expenses to average net assets: Before expense recoupment/ reimbursement ....................... 2.00%** 2.25% 2.25% 2.25% 3.60% 3.74%** After expense recoupment/ reimbursement ....................... 2.01%** 2.25% 2.25% 2.25% 2.20% 2.25%** Ratio of net investment loss to average net assets After expense recoupment/ reimbursement........................ (0.63%)** (1.34%) (1.15%) (0.79%) (1.32%) (1.28%)** Portfolio turnover rate .................. 0.81%+ 28.14% 18.11% 30.17% 19.00% 5.82%+
* Commencement of operations. ** Annualized. + Not Annualized. See accompanying Notes to Financial Statements. The Al Frank Fund NOTES TO FINANCIAL STATEMENTS at June 30, 2003 (Unaudited) NOTE 1 - ORGANIZATION The Al Frank Fund (the "Fund") is a series of shares of beneficial interest of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund began operation on January 2, 1998. The investment objective of the Fund is to seek growth of capital. The Fund seeks to achieve its objective by investing in out of favor and undervalued equity securities. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America. A. Security Valuation: The Fund's investments are carried at fair value. Securities that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price ("NOCP"). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter ("OTC") securities which are not traded in the NASDAQ National Market System shall be valued at the most recent trade price. Securities for which market quotations are not readily available, if any, are valued following procedures approved by the Board of Trustees. Short-term investments are valued at amortized cost, which approximates market value. B. Federal Income Taxes: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. Security Transactions, Dividends and Distributions: Security transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Dividend income and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions to shareholders from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations which differs from accounting principles generally accepted in the United States of America. To the extent these book/tax differences are permanent such amounts are reclassified within the capital accounts based on their Federal tax treatment. D. Deferred Organization Costs: The Fund has incurred expenses of $35,000 in connection with its organization. These costs have been deferred and are being amortized on a straight-line basis over a period of sixty months from the date of the Fund commenced investment operations. E. 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 at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates. The Al Frank Fund NOTES TO FINANCIAL STATEMENTS at June 30, 2003 (Unaudited), Continued NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES For six months ended June 30, 2003, Al Frank Asset Management (the "Advisor") provided the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnished all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of 1.00% based upon the average daily net assets of the Fund. For the six months ended June 30, 2003, the Fund incurred $244,520 in Advisory Fees. The Fund is responsible for its own operating expenses. The Advisor has agreed to reduce fees payable to it by the Fund and to pay Fund operating expenses to the extent necessary to limit the Fund's aggregate annual operating expenses to 2.25% of average net assets (the "expense cap"). Any such reduction made by the Advisor in its fees or payment of expenses which are the Fund's obligation are subject to reimbursement by the Fund to the Advisor, if so requested by the Advisor, in subsequent fiscal years if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the applicable limitation on Fund expenses. The Advisor is permitted to be reimbursed only for fee reductions and expense payments made in the previous three fiscal years, but is permitted to look back five years and four years, respectively, during the initial six years and seventh year of the Fund's operations. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Fund's payment of current ordinary operating expenses. For the six months ended June 30, 2003, the Advisor recouped $1,372 of such expenses it previously reimbursed to the Fund. There were no expenses subject to recapture pursuant to the aforementioned conditions at June 30, 2003. U.S. Bancorp Fund Services, L.L.C. (the "Administrator") acts as the Fund's Administrator under an Administration Agreement. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund; prepares reports and materials to be supplied to the Trustees; monitors the activities of the Fund's custodian, transfer agent and accountants; coordinates the preparation and payment of the Fund's expenses and reviews the Fund's expense accruals. For its services, the Administrator receives a monthly fee at the following annual rate: Fund asset level Fee rate ---------------- -------- Less than $15 million $30,000 $15 million to less than $50 million 0.20% of average daily net assets $50 million to less than $100 million 0.15% of average daily net assets $100 million to less than $150 million 0.10% of average daily net assets More than $150 million 0.05% of average daily net assets Quasar Distributors, LLC (the "Distributor") acts as the Fund's principal underwriter in a continuous public offering of the Fund's shares. Certain officers of the Fund are also officers of the Administrator and Distributor. The Al Frank Fund NOTES TO FINANCIAL STATEMENTS at June 30, 2003 (Unaudited), Continued NOTE 4 - DISTRIBUTION COSTS The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 (the "Plan"). The Plan permits the Fund to pay for distribution and related expenses at an annual rate of up to 0.25% of the Fund's average daily net assets annually. The expenses covered by the Plan may include the cost of preparing and distributing prospectuses and other sales material, advertising and public relations expenses, payments to financial intermediaries and compensation of personnel involved in selling shares of the Fund. Payments made pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred. Pursuant to a distribution coordination agreement adopted under the Plan, distribution fees are paid to the Advisor as "Distribution Coordinator". For the six months ended June 30, 2003, the Fund paid the Distribution Coordinator $61,130. NOTE 5 - PURCHASES AND SALES OF SECURITIES For the six months ended June 30, 2003, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $395,554 and $3,818,990 respectively. NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS Net realized losses differ for financial statement and tax purposes due to differing treatments for wash sale losses deferred. As of June 30, 2003, the cost of investments on a tax basis were as follows: Tax cost of investments $ 55,619,786 Gross tax unrealized appreciation $ 13,200,590 Gross tax unrealized depreciation (11,826,878) ------------- Net tax unrealized appreciation $ 1,373,712 ============= The tax character of distributions paid during the six months ended June 30, 2003 and the year ended December 31, 2002 were as follows: 2003 2002 ---- ---- Long-term capital gain $ -- $317,963 ---------- -------- As of June 30, 2003, there were no distributable earnings on a tax basis. As of December 31, 2002, the Fund's most recent fiscal year end, the components of net assets (excluding paid in capital) on a tax basis were as follows: Undistributed ordinary income $ 0 ============== Tax basis capital loss carryforward expiring 2010 $(2,903,325) Post October capital loss (260,008) -------------- Accumulated capital loss $(3,163,333) ============== The Fund had post October capital losses which it elected to treat as arising on January 1, 2003. The Al Frank Fund NOTES TO FINANCIAL STATEMENTS at June 30, 2003 (Unaudited), Continued NOTE 7 - CHANGE OF AUDITORS On June 13, 2003, PricewaterhouseCoopers LLP ("PwC") resigned as the independent accountants for the Al Frank Fund (the "Fund"), a series of Advisors Series Trust (the "Company"). On June 13, 2003, the Company retained Tait Weller & Baker CPA's, LLP ("Tait") as the independent accountants for the Fund. The retention of Tait as the independent accountants of the Fund has been approved by the Company's Audit Committee and Board of Trustees. The reports of PwC on the financial statements of the Fund for the past two fiscal years contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles In connection with its audits for the two most recent fiscal years and through June 13, 2003, there have been no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PwC would have caused them to make reference thereto in their report on the financial statements for such years. Advisor Al Frank Asset Management, Inc. P.O. Box 1438 Laguna Beach, CA 92652 www.alfrank.com Distributor Quasar Distributors, LLC 615 East Michigan Street Milwaukee, WI 53202 Transfer Agent U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, WI 53202 (888) 263-6443 Custodian U.S. Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 Independent Accountants Tait, Weller & Baker 1818 Market Street, Suite 2400 Philadelphia, PA 19103 Legal Counsel Paul, Hastings, Janofsky & Walker, LLP 55 Second Street, 24th Floor San Francisco, CA 94105 This report is intended for shareholders of the Fund and may not be used as sales literature unless preceded or accompanied by a current prospectus. For a current prospectus please call 1-888-263-6443. Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change. Item 2. Code of Ethics. Not applicable to semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable to semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable to semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable to open-end investment companies. Item 6. [Reserved] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable. Item 8. [Reserved] Item 9. Controls and Procedures. (a) Based on their evaluation of the Registrant's Disclosure Controls and Procedures as of a date within 90 days of the Filing Date, the Registrant's President and Treasurer/CFO have determined that the Disclosure Controls and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to ensure that information required to be disclosed by the Registrant is recorded, processed, summarized and reported by the filing Date, and that information required to be disclosed in the report is communicated to the Registrant's management, as appropriate, to allow timely decisions regarding required disclosure. (b) There were no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, and there were no corrective actions with regard to significant deficiencies and material weaknesses. Item 10. Exhibits. (a) Any code of ethics or amendment thereto. Not applicable to semi-annual reports. (b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. (c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished 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) Advisors Series Trust By (Signature and Title)/s/ Eric M. Banhazl ----------------------------------- Eric M. Banhazl, President Date September 4, 2003 ------------------ 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/ Eric M. Banhazl ----------------------------------- Eric M. Banhazl, President Date September 4, 2003 ----------------- By (Signature and Title) /s/ Douglas G. Hess -------------------------------------- Douglas G. Hess, Treasurer Date September 4, 2003 -----------------