As filed with the Securities and Exchange Commission on June 8, 2012
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)
Douglas G. Hess, President
Advisors Series Trust
c/o U.S. Bancorp Fund Services, LLC
777 East Wisconsin Avenue, 5th Floor
Milwaukee, WI 53202
(Name and address of agent for service)
(414) 765-6609
(Registrant's telephone number, including area code)
Date of fiscal year end: March 31, 2012
Date of reporting period: March 31, 2012
Item 1. Reports to Stockholders.
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Dear fellow shareholder:
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There are two reasons we’re especially pleased to bring you this report.
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First, we delivered a positive return of 5.72% for the period from April 1, 2011 to March 31, 2012 which is covered on the following pages. Even though we trailed the 8.54% return of the S&P 500® Index (our benchmark) for the same period, it was satisfying to be in the black at the end of such a tumultuous time.
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Second, as we close the period we mark the 10th anniversary of The Teberg Fund’s launch on April 1, 2002.
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Both achievements are significant in light of the challenges presented by the market during the past 12 months and the past 10 years.
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This 12-month reporting period is in some ways representative of The Teberg Fund’s first 10 years with historic market lows and surprising comebacks. Looking back to September 30, 2011 when we reported a -4.55% loss for the first six months of this period, ending up in the black seemed challenging.
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Dark days for the market...
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 |
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Human nature sometimes makes us remember the good versus the bad, so let’s briefly recap what caused such worry as we wound
down the first half of the period.
● There were fears of a “double-dip” recession.
● The Federal Reserve took a dim view of growth for the remainder of 2011.
● Partisan wrangling over raising the debt ceiling appeared at times only slightly more civilized than a professional wrestling match.
● There was an unprecedented downgrade of the U.S. Government’s credit rating.
● Financial crises in Greece and beyond left the global market in turmoil.
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-2-
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The Standard & Poor’s downgrade of the U.S. credit rating really got everyone’s attention during a dramatic week in August 2011 when the Dow Jones Industrial Average (“Dow”) had four 400-point swings in a row for the first time in its 115-year history. August 8, 2011 was the most frightening day as we watched the Dow plummet 634 points (its sixth worst point drop ever). The Dow also experienced its longest losing streak since the 2008 financial crisis with eight consecutive negative sessions in a row. Overall, this third quarter of 2011 was also considered the worst since 2008.
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It seems somewhat easier to figure out why the Dow ended August 8, 2011 at 10,809 and wavered back and forth through the remainder of the year than to explain why it seemed to turn the corner during the first quarter of 2012. What was negative in the latter half of 2011 seemed only slightly better in the first quarter of 2012. Certainly the U.S. economy was still tenuous with nearly stagnant job growth and declining housing prices. Greece and several other countries had been shored up temporarily but were still cause for concern. The U.S. Government debt continued to climb to record numbers and showed no signs of stopping.
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Followed by some brighter days . . .
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Still, there were bright spots at the start of 2012 that rallied investors eager for good news.
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●
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On January 25, the Federal Reserve committed to holding interest rates near historic lows through late 2014, and the Dow ended at an eight-month high of 12,756.
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●
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On February 9, federal and state officials announced a $26 billion foreclosure settlement with five of the nation’s largest banks aimed at addressing charges of substandard foreclosure practices dating back to 2008.
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●
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By February 28, the Dow reacted to growing confidence in the economy and closed above 13,000 for the first time since May 19, 2008, four months before the financial crisis. While this was cause for celebration, it’s also sobering that the Dow first broke the 13,000 mark on April 25, 2007. In effect, that means zero growth for the Dow over the past five years.
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Whatever made the market rally in the first quarter of 2012, it was good to see the Dow finish at 13,212.04 on March 30, 2012, the last day of this reporting period. It was also good to watch The Teberg Fund’s share price rise from $10.14 on April 1, 2011 to $10.70 on March 30, 2012, in addition to paying a 2011 dividend of approximately $0.19 cents per share.
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-3-
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One strategy – mixed results . . .
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What’s interesting about discussing the moves that either helped or hurt The Teberg Fund’s performance during this period is that one strategy did both. The move to increase our cash position to 83.53% of the portfolio in the first six months of the period helped us weather the market meltdown and contain our losses, although we wished we had made the move earlier to avoid a negative return. Conversely, we would have benefitted from being more fully invested at other times during the period when the market was on the rise. In the continuous balance of risk versus reward, we again chose to take what we considered the safer course and gave up some gain.
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Bonds again lead the way . . .
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As in the past, high yield bonds were the backbone of our portfolio for much of the period and helped our performance. Continued low interest rates made bonds attractive to investors and boosted their value. At the end of the period, bonds made up 66.30% of our portfolio and had appreciated through dividend income and increased share prices. An example is the Pioneer High Yield (Class A) Fund’s performance from our October 26, 2011 purchase date through March 31, 2012. Our $5 million dollar investment yielded over $111,000 in dividends, and the share price increased from $9.56 to $10.12, resulting in an ending value over $5,400,000. The other four high yield bond funds in the portfolio also performed well during the same period.
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Other leaders . . .
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Even though we dislike market volatility, we were able to use it to our advantage during the period with our carefully-timed round trips in and out of exchange-traded funds that mimic index performance. An example of a short-term gain is the appreciation of our three current holdings in the ProShares exchange-traded funds Ultra Dow 30, Ultra QQQ and Ultra S&P 500 purchased near the end of the period on March 12, 2012. A combined investment of approximately $3,301,000.00 had already increased to nearly $3,500,000.00 by March 31, 2012. Of course, making profit in the short term is much easier than sustaining growth over the long haul.
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-4-
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What we could have done better . . .
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Although low interest rates may have helped our high yield bond holdings, they hurt us when it came to earnings on our cash position, which were nonexistent. Even though we had greatly reduced our cash to 13.14% of the portfolio by the end of the period, this money would have been better allocated to almost any of the other holdings during the first quarter of 2012, when all increased in value. It’s easy to see this in hindsight, but we also refer back to the first quarter of 2011 when the market started strong only to collapse later in the year.
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After watching our long-held position in Europacific Growth Fund get tossed around during the European financial crisis, we made the decision to sell it in October when we were back in the black. As it turned out, we would have benefitted from holding it at least through the end of the period when international equities generally had improved performance.
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We took a loss on our sale of another long-term position in October, our holding in Janus Perkins Small Cap Value Fund. Like many small cap funds, this took a hard hit during recent market upheaval, and it seemed as good a time as any to book a loss and move on. Fortunately, we had a relatively small position.
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With the benefit of hindsight, it’s easy to see we should have been even more conservative in the middle of the period and more aggressive during the first and last quarters.
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On to the next milestone . . .
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As we look back on the years since The Teberg Fund’s start, it’s clear we had little idea what was ahead. Who would have predicted the demise of major financial firms that had become household names? That’s why we’re so gratified to have come through a very tumultuous decade with a track record we’re proud of and a strong shareholder base.
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Thank you for your continued trust and loyalty,
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Curtis A. Teberg
Portfolio Manager
-5-
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Past performance does not guarantee future results.
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The preceding discussion is based on the opinions of Curtis A. Teberg, given the current economic environment and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
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Because the Fund is a “fund of funds,” your cost of investing in the Fund may be higher than your cost of investing directly in the shares of the mutual funds in which the Fund invests. By investing in the Fund, you will indirectly bear your share of any fees and expenses charged by the underlying funds, in addition to indirectly bearing the principal risks of those funds. These risks include, but are not limited to, risks involved with non-diversification and investments in smaller capitalization companies and lower rated securities. The Fund may also commit up to 80% of its assets to high yield funds containing lower rated securities that are subject to a higher risk of default. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities.
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Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any security. References to other funds should not be interpreted as an offer of these securities.
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Please see the Schedule of Investments in this report for a complete list of Fund holdings.
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Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced and ratings may have been lower.
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The S&P 500® Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The Dow Jones Industrial Average (Dow) is an unmanaged index of common stocks comprised of major industrial companies and assumes reinvestment of dividends. You cannot invest directly in an index.
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This report must be preceded or accompanied by a prospectus.
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The Teberg Fund is distributed by Quasar Distributors, LLC. (05/2012)
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-6-
Total Return:
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One Year
|
Five Year
(Annualized)
|
Since Inception
(Cumulative)
|
Since Inception
(Annualized)
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|||||
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The Teberg Fund
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||||||||
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(Inception April 1, 2002)
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5.72%
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3.52 %
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64.39 %
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5.10 %
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||||
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S&P 500® Index
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8.54 %
|
2.01 %
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49.84 %
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4.13 %
|
||||
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Dow Jones Industrial Average
|
10.18 %
|
4.18 %
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63.81 %
|
5.06 %
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Performance data quoted represents past performance; 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 their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-209-1964.
Returns reflect reinvestment of dividends and capital gains distributions. Fee waivers are in effect. In the absence of fee waivers, returns would be reduced. The performance data and graph do not reflect the deduction of taxes that a shareholder may pay on dividends, capital gains distributions, or redemption of Fund shares. Indices do not incur expenses and are not available for investment.
The S&P 500® Index is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy.
The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.
-7-
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The Teberg Fund
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Expense Example
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at March 31, 2012 (Unaudited)
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As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, including redemption fees and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service fees; and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (10/1/11 – 3/31/12).
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Actual Expenses
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The first line of the following table provides information about actual account values and actual expenses, with actual net expenses being limited to 2.50% per the operating expenses limitation agreement. Although the Fund charges no sales loads, you will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. To the extent the Fund invests in shares of other investment companies as part of its investment strategy, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Fund invests in addition to the expenses of the Fund. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the example below. The Example below includes, but is not limited to, management fees, 12b-1 fees, fund accounting, custody and transfer agent fees. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
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-8-
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The Teberg Fund
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Expense Example
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at March 31, 2012 (Unaudited), continued
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Hypothetical Example for Comparison Purposes
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The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed 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 costs 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 the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees or exchange fees. 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 were included, your costs would have been higher.
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EXPENSE EXAMPLE
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Beginning
Account Value |
Ending
Account Value |
Expenses Paid
During Period
10/1/11 – 3/31/12*
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||||
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Actual
|
$1,000.00 | $1,107.70 | $12.54 | |||
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Hypothetical
|
$1,000.00 | $1,013.10 | $11.98 | |||
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(5% return before expenses)
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||||||
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*Expenses are equal to the Fund’s annualized expense ratio of 2.38%, multiplied by the average account value over the period, multiplied by 183 (days in most recent fiscal half-year)/366 days to reflect the one-half year expense.
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-9-
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The Teberg Fund
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Allocation of Portfolio Assets
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at March 31, 2012 (Unaudited)
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Percentages represent market value as a percentage of total investments.
-10-
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The Teberg Fund
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Schedule of Investments
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at March 31, 2012
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SHARES
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VALUE
|
|||
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COMMON STOCKS - 2.03%
|
||||
| 6 |
Berkshire Hathaway, Inc. - Class A*
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$ | 731,400 | |
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TOTAL COMMON STOCKS (Cost $714,296)
|
731,400 | |||
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EQUITY FUNDS - 9.23%
|
||||
| 7,823 |
BlackRock Energy & Resources Portfolio -
|
|||
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Class A
|
253,865 | |||
| 18,950 |
Brandywine Fund*
|
487,392 | ||
| 26,934 |
Columbia Seligman Communications and
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|||
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Information Fund - Class A*
|
1,345,377 | |||
| 13,825 |
Fidelity Low-Priced Stock Fund
|
562,940 | ||
| 3,669 |
FPA Capital Fund, Inc.*
|
165,508 | ||
| 14,946 |
MFS Mid Cap Growth Fund - Class A*
|
146,473 | ||
| 3,796 |
The Parnassus Fund
|
157,173 | ||
| 6,654 |
Prudential Jennison Mid-Cap Growth
|
|||
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Fund, Inc. - Class A
|
211,318 | |||
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TOTAL EQUITY FUNDS (Cost $2,639,745)
|
3,330,046 | |||
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EXCHANGE-TRADED FUNDS - 9.67%
|
||||
| 19,840 |
ProShares Ultra S&P500
|
1,157,069 | ||
| 16,165 |
Ultra Dow30 ProShares
|
1,140,279 | ||
| 10,011 |
Ultra QQQ ProShares*
|
1,191,509 | ||
|
TOTAL EXCHANGE-TRADED
|
||||
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FUNDS (Cost $3,301,731)
|
3,488,857 | |||
-11-
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The Teberg Fund
|
|
Schedule of Investments
|
|
at March 31, 2012, continued
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SHARES
|
VALUE
|
||||
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FIXED INCOME FUNDS - 66.30%
|
|||||
| 1,115,923 |
DWS High Income Fund - Institutional Class
|
$ | 5,356,431 | ||
| 210,985 |
Guggenheim High Yield Fund - Class A
|
2,449,531 | |||
| 1,555,041 |
John Hancock High Yield Fund - Class A
|
5,411,542 | |||
| 536,571 |
Pioneer High Yield Fund - Class A
|
5,430,099 | |||
| 526,584 |
Third Avenue Focused Credit Fund -
|
||||
|
Investor Class
|
5,265,841 | ||||
|
TOTAL FIXED INCOME FUNDS (Cost $23,283,436)
|
23,913,444 | ||||
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MONEY MARKET FUNDS - 13.14%
|
|||||
| 4,744,528 |
Invesco STIT - Liquid Assets Portfolio,
|
||||
|
Class I, 0.13%+
|
4,744,528 | ||||
|
TOTAL MONEY MARKET FUNDS (Cost $4,744,528)
|
4,744,528 | ||||
|
Total Investments (Cost $34,683,736) - 100.37%
|
36,208,275 | ||||
|
Liabilities in Excess of Other Assets - (0.37)%
|
(132,697 | ) | |||
|
NET ASSETS - 100.00%
|
$ | 36,075,578 | |||
* Non-income producing security.
+ Rate shown is the 7-day yield as of March 31, 2012.
The accompanying notes are an integral part of these financial statements.
-12-
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The Teberg Fund
|
|
Statement of Assets and Liabilities
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|
at March 31, 2012
|
|
ASSETS
|
|||
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Investments in securities, at value
|
|||
|
(identified cost $34,683,736)
|
$
|
36,208,275
|
|
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Receivables
|
|||
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Dividends and interest receivable
|
595
|
||
|
Funds shares sold
|
887
|
||
|
Prepaid expenses
|
3,762
|
||
|
Total assets
|
36,213,519
|
||
|
LIABILITIES
|
|||
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Payables
|
|||
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Fund shares redeemed
|
6,714
|
||
|
Due to advisor
|
45,977
|
||
|
Audit fees
|
17,200
|
||
|
Distribution fees
|
7,663
|
||
|
Administration fees
|
26,371
|
||
|
Transfer agent fees and expenses
|
12,034
|
||
|
Fund accounting fees
|
9,759
|
||
|
Legal fees
|
3,529
|
||
|
Chief Compliance Officer fee
|
2,333
|
||
|
Custodian fees
|
1,842
|
||
|
Shareholder reporting
|
3,526
|
||
|
Accrued other expenses
|
993
|
||
|
Total liabilities
|
137,941
|
||
|
NET ASSETS
|
$
|
36,075,578
|
|
|
Net asset value, offering and redemption price per share
|
|||
|
[$36,075,578 / 3,371,884) shares outstanding; unlimited
|
|||
|
number of shares (par value $0.01) authorized]
|
$
|
10.70
|
|
|
COMPONENTS OF NET ASSETS
|
|||
|
Paid-in capital
|
$
|
34,647,745
|
|
|
Undistributed net investment income
|
174,827
|
||
|
Accumulated net realized loss on investments
|
(271,533
|
)
|
|
|
Net unrealized appreciation on investments
|
1,524,539
|
||
|
NET ASSETS
|
$
|
36,075,578
|
The accompanying notes are an integral part of these financial statements.
-13-
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The Teberg Fund
|
|
Statement of Operations
|
|
For the Year Ended March 31, 2012
|
|
INVESTMENT INCOME
|
|||
|
Income
|
|||
|
Dividends
|
$
|
1,314,655
|
|
|
Interest
|
12,358
|
||
|
Total income
|
1,327,013
|
||
|
Expenses
|
|||
|
Advisory fees (Note 4)
|
529,235
|
||
|
Distribution fees (Note 5)
|
88,206
|
||
|
Administration fees (Note 4)
|
83,053
|
||
|
Transfer agent fees and expenses (Note 4)
|
38,020
|
||
|
Fund accounting fees (Note 4)
|
29,250
|
||
|
Audit fees
|
17,239
|
||
|
Legal fees
|
12,106
|
||
|
Shareholder reporting
|
8,105
|
||
|
Custody fees (Note 4)
|
7,749
|
||
|
Chief Compliance Officer fee (Note 4)
|
7,020
|
||
|
Trustee fees
|
6,159
|
||
|
Registration fees
|
5,314
|
||
|
Miscellaneous fees
|
4,061
|
||
|
Insurance
|
3,924
|
||
|
Total expenses
|
839,441
|
||
|
Less: expenses waived by Advisor (Note 4)
|
(12,063
|
)
|
|
|
Net expenses
|
827,378
|
||
|
Net investment income
|
499,635
|
||
|
REALIZED AND UNREALIZED
|
|||
|
GAIN/(LOSS) ON INVESTMENTS
|
|||
|
Net realized gain on security transactions
|
1,948,572
|
||
|
Capital gain distributions from regulated
|
|||
|
investment companies
|
211,010
|
||
|
Net change in unrealized depreciation on investments
|
(756,803
|
)
|
|
|
Net realized and unrealized gain on investments
|
1,402,779
|
||
|
Net Increase in Net Assets Resulting
|
|||
|
from Operations
|
$
|
1,902,414
|
The accompanying notes are an integral part of these financial statements.
-14-
|
The Teberg Fund
|
|
Statements of Changes in Net Assets
|
|
Year Ended
March 31, 2012
|
Year Ended
March 31, 2011
|
||||||
|
NET INCREASE/(DECREASE) IN NET ASSETS FROM:
|
|||||||
|
OPERATIONS
|
|||||||
|
Net investment income
|
$ | 499,635 | $ | 1,384,384 | |||
|
Net realized gain/(loss) on security transactions
|
1,948,572 | (96,655 | ) | ||||
|
Capital gain distributions from regulated
|
|||||||
|
investment companies
|
211,010 | 9,717 | |||||
|
Net change in unrealized
|
|||||||
|
appreciation/(depreciation) on investments
|
(756,803 | ) | 1,236,910 | ||||
|
Net increase in net assets
|
|||||||
|
resulting from operations
|
1,902,414 | 2,534,356 | |||||
|
DISTRIBUTIONS TO SHAREHOLDERS
|
|||||||
|
From net investment income
|
(651,805 | ) | (1,191,472 | ) | |||
|
CAPITAL SHARE TRANSACTIONS
|
|||||||
|
Net decrease in net assets derived
|
|||||||
|
from net change in outstanding shares (a)
|
(1,516,832 | ) | (1,738,870 | ) | |||
|
Total decrease in net assets
|
(266,223 | ) | (395,986 | ) | |||
|
NET ASSETS
|
|||||||
|
Beginning of year
|
36,341,801 | 36,737,787 | |||||
|
End of year
|
$ | 36,075,578 | $ | 36,341,801 | |||
|
Includes undistributed net investment
|
|||||||
|
income of:
|
$ | 174,827 | $ | 327,639 | |||
|
(a) A summary of share transactions is as follows:
|
|
Year Ended
March 31, 2012
|
Year Ended
March 31, 2011
|
||||||||||||
|
Shares
|
Paid-in Capital
|
Shares
|
Paid-in Capital
|
||||||||||
|
Shares sold
|
80,191
|
$
|
816,933
|
156,086
|
$
|
1,539,317
|
|||||||
|
Shares reinvested
|
66,201
|
651,417
|
118,202
|
1,191,472
|
|||||||||
|
Shares redeemed
|
(294,979
|
)
|
(2,985,182
|
)
|
(448,940
|
)
|
(4,469,659
|
)
|
|||||
|
Net decrease
|
(148,587
|
)
|
$
|
(1,516,832
|
)
|
(174,652
|
)
|
$
|
(1,738,870
|
)
|
|||
The accompanying notes are an integral part of these financial statements.
-15-
|
The Teberg Fund
|
|
Financial Highlights
|
|
For a share outstanding throughout each year
|
|
Year ended March 31,
|
|||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||
|
Net asset value, beginning of year
|
$ | 10.32 | $ | 9.94 | $ | 7.13 | $ | 9.84 | $ | 11.06 | |||||||||
|
Income from investment operations:
|
|||||||||||||||||||
|
Net investment income (1)
|
0.15 | 0.40 | 0.43 | 0.14 | 0.26 | ||||||||||||||
|
Net realized and unrealized gain/
|
|||||||||||||||||||
|
(loss) on investments
|
0.42 | 0.32 | 2.89 | (2.81 | ) | (0.44 | ) | ||||||||||||
|
Total from investment operations
|
0.57 | 0.72 | 3.32 | (2.67 | ) | (0.18 | ) | ||||||||||||
|
Less distributions:
|
|||||||||||||||||||
|
From net investment income
|
(0.19 | ) | (0.34 | ) | (0.51 | ) | (0.04 | ) | (0.32 | ) | |||||||||
|
From net realized gain on investments
|
- | - | - | - | (0.72 | ) | |||||||||||||
|
Total distributions
|
(0.19 | ) | (0.34 | ) | (0.51 | ) | (0.04 | ) | (1.04 | ) | |||||||||
|
Net asset value, end of year
|
$ | 10.70 | $ | 10.32 | $ | 9.94 | $ | 7.13 | $ | 9.84 | |||||||||
|
Total return
|
5.72 | % | 7.36 | % | 46.59 | % | -27.14 | % | -1.94 | % | |||||||||
|
Ratios/supplemental data:
|
|||||||||||||||||||
|
Net assets, end of year (thousands)
|
$ | 36,076 | $ | 36,342 | $ | 36,738 | $ | 25,924 | $ | 35,822 | |||||||||
|
Ratio of expenses to average net assets: (2)
|
|||||||||||||||||||
|
Before expense waiver
|
2.38 | % | 2.34 | % | 2.33 | % | 2.34 | % | 2.32 | % | |||||||||
|
After expense waiver
|
2.34 | % | 2.32 | % | 2.32 | % | 2.32 | % | 2.25 | % | |||||||||
|
Ratio of net investment income to average
|
|||||||||||||||||||
|
net assets: (2)
|
|||||||||||||||||||
|
Before expense waiver
|
1.38 | % | 3.87 | % | 4.52 | % | 1.64 | % | 2.27 | % | |||||||||
|
After expense waiver
|
1.42 | % | 3.89 | % | 4.53 | % | 1.66 | % | 2.34 | % | |||||||||
|
Portfolio turnover rate
|
224.14 | % | 86.88 | % | 142.44 | % | 183.32 | % | 198.92 | % | |||||||||
|
(1)
|
Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests.
|
|
(2)
|
Does not include expenses of investment companies in which the Fund invests.
|
The accompanying notes are an integral part of these financial statements.
-16-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012
|
NOTE 1 - ORGANIZATION
The Teberg Fund (the “Fund”) is a non-diversified series of Advisors Series Trust (the “Trust”), which is registered under the Investment Company Act of 1940 (the “1940 Act”) as an open-end management investment company. The Fund began operations on April 1, 2002. The investment objective of the Fund is to maximize total return (capital appreciation plus income).
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: All investments in securities are recorded at their estimated fair value, as described in note 3.
|
|
B.
|
Federal Income Taxes: It is the Fund’s policy to comply with the requirements of Subchapter M 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 or excise tax provision is required.
|
|
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more-likely-than-not” to be sustained assuming examination by the tax authorities. Management has analyzed the Fund’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2009-2011, or expected to be taken in the Fund’s 2012 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal and the state of Wisconsin; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
|
|
|
C.
|
Securities Transactions, Income and Distributions: Securities transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Interest income is recorded on an accrual basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date. The Fund distributes substantially all net investment income, if any, and net realized capital gains, if any, annually. 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 differ from accounting principles generally accepted in the United States of America. To the extent these book/tax differences are permanent, such amounts are reclassified with the capital accounts based on their Federal tax treatment.
|
-17-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
|
D.
|
Reclassification of Capital Accounts: Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
|
|
For the year ended March 31, 2012, the Fund made the following permanent tax adjustments on the statement of assets and liabilities:
|
|
Undistributed Net
|
Accumulated Net
|
|
|
Investment Income/(Loss)
|
Realized Gain/(Loss)
|
|
|
$(642)
|
$642
|
|
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.
|
|
F.
|
Events Subsequent to the Fiscal Year End: In preparing the financial statements as of March 31, 2012, management considered the impact of subsequent events for potential recognition or disclosure in the financial statements.
|
NOTE 3 – SECURITIES VALUATION
The Fund has adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for major security types. These inputs are summarized in the three broad levels listed below:
|
Level 1 –
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
|
|
Level 2 –
|
Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
|
-18-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
|
Level 3 –
|
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
|
Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis.
Equity Securities - 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 Global 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 securities which are not traded in the NASDAQ Global Market System shall be valued at the most recent sales price. Investments in other mutual funds are valued at their net asset value per share, determined at the close of the New York Stock Exchange (generally 3:00 p.m. central time) on the valuation date. Most underlying fund securities are valued primarily on the basis of current market quotations or on the basis of information furnished by a pricing service. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy.
Short-Term Securities - Short-term securities having a maturity of 60 days or less are valued at amortized cost, which approximates market value. To the extent the inputs are observable and timely, these securities would be classified in level 2 of the fair value hierarchy.
Securities for which market quotations are not readily available or if the closing price does not represent fair value, are valued following procedures approved by the Board of Trustees. These procedures consider many factors, including the type of security, size of holding, trading volume and news events. When the Fund is unable to receive an NAV from an underlying fund, shares of the underlying fund will be valued at its fair market value as determined in good faith by the Advisor and the Trust’s Valuation Committee. Depending on the relative significance of the valuation inputs, these securities may be classified in either level 2 or level 3 of the fair value hierarchy.
-19-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
If market quotations or information furnished by a pricing service is not readily available or does not accurately reflect fair value for a security held by an underlying fund, or if the value of a security held by an underlying fund has been materially affected by events occurring after the close of the applicable exchange or market on which the security is principally traded, that security may be valued at its fair market value as determined in good faith in accordance with procedures approved by the underlying funds’ Board of Trustees.
The inputs or methodology used for valuing securities is not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2012:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||
|
Common Stocks
|
||||||||||||
|
Financials
|
$ | 731,400 | $ | - | $ | - | $ | 731,400 | ||||
|
Total Common Stocks
|
731,400 | - | - | 731,400 | ||||||||
|
Equity Funds
|
3,330,046 | - | - | 3,330,046 | ||||||||
|
Exchange-Traded Funds
|
3,488,857 | - | - | 3,488,857 | ||||||||
|
Fixed Income Funds
|
23,913,444 | - | - | 23,913,444 | ||||||||
|
Short-Term Investments
|
4,744,528 | - | - | 4,744,528 | ||||||||
|
Total Investments
|
$ | 36,208,275 | $ | - | $ | - | $ | 36,208,275 | ||||
Refer to the Fund’s Schedule of Investments for additional detail. Transfers between levels are recognized at March 31, 2012, the end of the reporting period. The Fund recognized no transfers to/from level 1 or level 2. There were no level 3 securities held in the Fund during the year ended March 31, 2012.
New Accounting Pronouncement - On May 12, 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) modifying Topic 820, Fair Value Measurements and Disclosures. At the same time, the International Accounting Standards Board (“IASB”) issued International Financial Reporting Standard (“IFRS”) 13, Fair Value Measurement. The objective by the FASB and IASB is convergence of their guidance on fair value measurements and disclosures. Specifically, the ASU requires reporting entities to disclose i) the amounts of any transfers between Level 1 and Level 2, and the reasons for the transfers, ii) for Level 3 fair value measurements, a) quantitative information about significant unobservable inputs used, b) a description of the valuation processes used by the reporting entity and c) a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs might result in a significantly higher or lower fair value measurement. The effective date of the ASU is for interim and annual periods beginning after December 15, 2011. At this time, the Fund is evaluating the implications of this guidance and the impact it will have on the financial statement amounts and footnote disclosures, if any.
-20-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
In December 2011, FASB issued ASU No. 2011-11 related to disclosures about offsetting assets and liabilities. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance requires retrospective application for all comparative periods presented. The Fund is currently evaluating the impact ASU 2011-11 will have on the financial statement disclosures.
NOTE 4 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the year ended March 31, 2012, First Associated Investment Advisors, Inc. (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 1.50% based upon the average daily net assets of the Fund. For the year ended March 31, 2012, the Fund incurred $529,235 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 2.50% of average daily net assets. 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. 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. There were no expenses subject to recapture pursuant to the aforementioned conditions at March 31, 2012. For the year ended March 31, 2012, the Advisor received $12,063 in 12b-1 fees from underlying funds that were purchased through a broker. The 12b-1 fees received by the Fund are included in the expense waiver in the Statement of Operations.
-21-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
U.S. Bancorp Fund Services, LLC (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 the year ended March 31, 2012, the Fund incurred $83,053 in administration fees.
U.S. Bancorp Fund Services, LLC (“USBFS”) also serves as the fund accountant and transfer agent to the Fund. U.S. Bank N.A., an affiliate of USBFS, serves as the Fund’s custodian. For the year ended March 31, 2012, the Fund incurred $29,250, $18,729, and $7,749 in fund accounting, transfer agency (excluding out-of-pocket expenses), and custody fees, respectively.
Quasar Distributors, LLC (the “Distributor”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. The Distributor is an affiliate of the Administrator.
Certain officers of the Fund are also employees of the Administrator.
For the year ended March 31, 2012, the Fund was allocated $7,020 of the Chief Compliance Officer fee.
NOTE 5 – DISTRIBUTION FEES
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 0.25% of the Fund’s average daily net assets. 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 services 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 year ended March 31, 2012, the Fund paid the Distribution Coordinator $88,206.
-22-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
NOTE 6 – PURCHASES AND SALES OF SECURITIES
For the year ended March 31, 2012, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $54,142,904 and $59,275,178, respectively.
NOTE 7– LINE OF CREDIT
The Fund has a line of credit in the amount of $5,400,000. This line of credit is intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Fund’s custodian, U.S. Bank N.A. During the year ended March 31, 2012, the Fund did not draw upon its line of credit.
-23-
|
The Teberg Fund
|
|
Notes to Financial Statements
|
|
at March 31, 2012, continued
|
NOTE 8– INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the years ended March 31, 2012 and March 31, 2011 were as follows:
|
March 31, 2012
|
March 31, 2011
|
|||
|
Ordinary income
|
$651,805
|
$1,191,472
|
As of March 31, 2012, the components of accumulated earnings/(losses) on a tax basis were as follows:
|
Cost of investments (a)
|
$
|
34,684,966
|
|
Gross tax unrealized appreciation
|
1,729,438
|
|
|
Gross tax unrealized depreciation
|
(206,129)
|
|
|
Net tax unrealized appreciation
|
1,523,309
|
|
|
Undistributed ordinary income
|
174,827
|
|
|
Undistributed long-term capital gain
|
-
|
|
|
Total distributable earnings
|
174,827
|
|
|
Other accumulated gains/(losses)
|
(270,303)
|
|
|
Total accumulated earnings/(losses)
|
$
|
1,427,833
|
|
(a)
|
The difference between book-basis and tax-basis cost is attributable primarily to the tax deferral of losses on wash sale adjustments.
|
At March 31, 2012, the Fund had a capital loss carry forward of $270,303, which expires as follows:
|
Year
|
Amount
|
||
|
2018
|
$
|
137,905
|
|
|
2019
|
132,398
|
||
|
$
|
270,303
|
Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Under the law in effect prior to the Act, preenactment net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that postenactment net capital losses be used before pre-enactment net capital losses.
-24-
|
The Teberg Fund
|
|
Report of Independent Registered Public Accounting Firm
|
To the Board of Trustees
Advisors Series Trust and
Shareholders of
The Teberg Fund
We have audited the accompanying statement of assets and liabilities of The Teberg Fund, a series of Advisors Series Trust (the “Trust”), including the schedule of investments, as of March 31, 2012, and the related statement of operations for the year then ended, the 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 five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
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 Trust is not required to have, nor were we engaged to perform, an audit of its 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 Trust’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 as of March 31, 2012, by correspondence with the custodian. 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 Teberg Fund as of March 31, 2012, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
May 21, 2012
-25-
|
The Teberg Fund
|
|
Notice to Shareholders
|
|
at March 31, 2012, (Unaudited)
|
For the year ended March 31, 2012, The Teberg Fund designated $651,805 as ordinary income for purposes of the dividends paid deduction.
For the year ended March 31, 2012, certain dividends paid by The Teberg Fund may be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The percentage of dividends declared from net investment income designated as qualified dividend income was 15.70%.
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the year ended March 31, 2012 was 14.13%.
How to Obtain a Copy of the Fund’s Proxy Voting Policies
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-209-1964 or on the SEC’s website at http://www. sec.gov.
How to Obtain a Copy of The Teberg Fund’s Proxy Voting Records for the 12-Month Period Ended June 30, 2011
Information regarding how the Fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2011 is available without charge, upon request, by calling 1-866-209-1964. Furthermore, you can obtain the Fund’s proxy voting records on the SEC’s website at http://www.sec.gov.
Quarterly Filings on Form N-Q
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 Form N-Q is available on the SEC’s website at http://www.sec.gov. The Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC and information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090.
Information included in the Fund’s Form N-Q is also available by calling 1-866-209-1964.
-26-
|
The Teberg Fund
|
|
Approval of Investment Advisory Agreement (Unaudited)
|
At a meeting held on December 6-8, 2011, the Board, including all the persons who are Independent Trustees as defined under the Investment Company Act of 1940, as amended, considered and approved the continuance of the Advisory Agreement for The Teberg Fund with the Advisor for another annual term. At this meeting, and at a prior meeting held on October 26-27, 2011, the Board received and reviewed substantial information regarding the Fund, the Advisor and the services provided by the Advisor to the Fund under the Advisory Agreement. This information, together with the information provided to the Board throughout the course of the year, formed the primary (but not exclusive) basis for the Board’s determinations. Below is a summary of the factors considered by the Board and the conclusions that formed the basis for the Board’s continuance of the Advisory Agreement:
|
1.
|
THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED AND TO BE PROVIDED BY THE ADVISOR UNDER THE ADVISORY AGREEMENT. The Board considered the Advisor’s specific responsibilities in all aspects of day-to-day investment management of the Fund. The Board considered the qualifications, experience and responsibilities of the portfolio managers, as well as the responsibilities of other key personnel of the Advisor involved in the day-to-day activities of the Fund. The Board also considered the resources and compliance structure of the Advisor, including information regarding its compliance program, its chief compliance officer and the Advisor’s compliance record, and the Advisor’s business continuity plan. The Board also considered the prior relationship between the Advisor and the Trust, as well as the Board’s knowledge of the Advisor’s operations, and noted that during the course of the prior year they had met with the Advisor in person to discuss various marketing and compliance topics, including the Advisor’s diligence in risk oversight. The Board concluded that the Advisor had the quality and depth of personnel, resources, investment methods and compliance policies and procedures essential to performing its duties under the Advisory Agreement and that the nature, overall quality, cost and extent of such management services are satisfactory and reliable.
|
|
2.
|
THE FUND’S HISTORICAL YEAR-TO-DATE PERFORMANCE AND THE OVERALL PERFORMANCE OF THE ADVISOR. In assessing the quality of the portfolio management delivered by the Advisor, the Board reviewed the short-term and long-term performance of the Fund as of August 31, 2011 on both an absolute basis, and in comparison to its peer funds as classified by Lipper and Morningstar.
|
-27-
|
The Teberg Fund
|
|
Approval of Investment Advisory Agreement (Unaudited), continued
|
|
The Board noted that the Fund’s performance, with regard to its Lipper comparative universe, was above its peer group median and Lipper Index for the three-month and three-year periods, above its peer group median but below its Lipper Index for the since-inception period, and below its peer group median and Lipper Index for the year-to-date, one-year and five-year periods.
|
|
|
The Board noted that the Fund’s performance, with regard to its Morningstar comparative universe, was above its peer group median and average for the one-year period, and below its peer group median and average for all other relevant periods. In analyzing this performance, the Board also took into consideration the Advisor’s investment strategy for the Fund as an unaffiliated fund-of-funds.
|
|
|
The Board also considered that the Advisor did not manage any other accounts with the same or a similar strategy.
|
|
|
3.
|
THE COSTS OF THE SERVICES TO BE PROVIDED BY THE ADVISOR AND THE STRUCTURE OF THE ADVISOR’S FEE UNDER THE ADVISORY AGREEMENT. In considering the advisory fee and total fees and expenses of the Fund, the Board reviewed, among other things, comparisons to its Lipper peer funds and to separate accounts for other types of clients advised by the Advisor and all Fund expense waivers and reimbursements, as well as information regarding fee offsets for separate account clients invested in the Fund.
|
|
The Board noted that the Advisor had contractually agreed to maintain an annual expense ratio for the Fund of 2.50% (the “Expense Cap”) and that for the most recent period the Fund’s actual expense ratio was 2.40%. In addition, the Board noted that the Advisor has contractually agreed to pay to the Fund an amount equal to the Rule 12b-1 fees received by an affiliated broker from transactions involving the Fund. Additionally, the Board noted that the Fund’s total expense ratio was substantially above the peer group median and average, both before and after the adjustment of the peer group to include funds of a similar asset size. The Board also noted that the contractual advisory fee was substantially above the peer group median and average. The Board also took into consideration the services the Advisor provided to its separately managed account clients, comparing the fees charged for those management services to the management fees charged to the Fund. The Board found that the management fees charged to the Fund were lower than or in line with the fees charged to the Advisor’s separately managed account clients. The Board determined to continue to monitor the Fund’s expenses closely.
|
|
The Teberg Fund
|
|
Approval of Investment Advisory Agreement (Unaudited), continued
|
|
4.
|
ECONOMIES OF SCALE. The Board also considered that economies of scale would be expected to be realized by the Advisor as the assets of the Fund grow. The Board further noted that the Advisor has contractually agreed to reduce its advisory fees or reimburse Fund expenses so that the Fund does not exceed the Expense Cap. The Board concluded that there were no effective economies of scale to be shared with the Fund at current asset levels, but considered revisiting this issue in the future as circumstances changed and asset levels increased.
|
|
5.
|
THE PROFITS TO BE REALIZED BY THE ADVISOR AND ITS AFFILIATES FROM THEIR RELATIONSHIP WITH THE FUND. The Board reviewed the Advisor’s financial information and took into account both the direct benefits and the indirect benefits to the Advisor from advising the Fund. The Board considered the profitability to the Advisor from its relationship with the Fund and considered any additional benefits derived by the Advisor from its relationship with the Funds, such as benefits received in exchange for Rule 12b-1 fees. The Board also considered that the Fund does not utilize “soft dollars.” After such review, the Board determined that the profitability to the Advisor with respect to the Advisory Agreement was not excessive, and that the Advisor had maintained adequate profit levels to support the services it provides to the Fund.
|
|
No single factor was determinative of the Board’s decision to approve the continuance of the Advisory Agreement for The Teberg Fund, but rather the Board based its determination on the total mix of information available to them. Based on a consideration of all the factors in their totality, the Board determined that the advisory arrangement with the Advisor, including the advisory fees, were fair and reasonable. The Board therefore determined that the continuance of the Advisory Agreement for The Teberg Fund would be in the best interest of the Fund and its shareholders.
|
-28-
|
The Teberg Fund
|
|
Information about Trustees and Officers (Unaudited)
|
This chart provides information about the Trustees and Officers who oversee the Fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.
|
Name, Age
|
Position
Held
with the
Trust
|
Number of
Portfolios in
Fund Complex
Overseen by
Trustee (2)
|
|
Address
|
||
|
Term of Office and Length of Time Served
|
||
|
Principal Occupation During Past Five Years
|
||
|
Other Directorships Held During Past Five Years
|
Independent Trustees (1)
|
Sallie P. Diederich (age 62)
|
Trustee
|
1
|
|
615 E. Michigan Street, Milwaukee, WI 53202
Indefinite term since January 2011.
Independent Mutual Fund Consultant, (1995 to present); Corporate Controller, Trans-america Fund Management Company
(1994 to 1995); Senior Vice President, Putnam Investments (1992 to 1993); Vice President and Controller, American Capital Mutual Funds (1986 to 1992).
Trustee, Advisors Series Trust (for series not affiliated with the Fund).
|
||
|
Donald E. O’Connor (age 75)
|
Trustee
|
1
|
|
615 E. Michigan Street, Milwaukee, WI 53202
Indefinite term since February 1997.
Retired; former Financial Consultant and former Executive Vice President and Chief Operating Officer of ICI Mutual Insurance Company (until January 1997).
Trustee, Advisors Series Trust (for series not affiliated with the Fund); Trustee, The Forward Funds (37 portfolios).
|
||
|
George J. Rebhan (age 77)
|
||
|
615 E. Michigan Street, Milwaukee, WI 53202
|
Trustee
|
1
|
|
Indefinite term since May 2002.
Retired; formerly President, Hotchkis and Wiley Funds (mutual funds) (1985 to 1993).
Trustee, Advisors Series Trust (for series not affiliated with the Fund); Independent Trustee from 1999 to 2009, E*TRADE Funds.
|
||
George T. Wofford (age 72)
|
615 E. Michigan Street, Milwaukee, WI 53202
|
Trustee
|
1
|
|
Indefinite term since February 1997.
Retired; formerly Senior Vice President, Federal Home Loan Bank of San Francisco.
Trustee, Advisors Series Trust (for series not affiliated with the Fund).
|
||
Interested Trustee
|
Joe D. Redwine(3) (age 64)
|
Interested Trustee
|
1
|
|
615 E. Michigan Street, Milwaukee, WI 53202
Indefinite term since September 2008.
President, CEO, U.S. Bancorp Fund Services, LLC (May 1991 to present).
Trustee, Advisors Series Trust (for series not affiliated with the Fund).
|
||
-30-
|
The Teberg Fund
|
|
Information about Trustees and Officers (Unaudited), continued
|
|
Name, Age
|
|
Address
|
|
Position Held with the Trust
|
|
Term of Office and Length of Time Served
|
|
Principal Occupation During Past Five Years
|
Officers
Joe D. Redwine (age 64)
615 E. Michigan Street, Milwaukee, WI 53202
Chairman and Chief Executive Officer
Indefinite term since September 2007.
President, CEO, U.S. Bancorp Fund Services, LLC (May 1991 to present).
Douglas G. Hess (age 44)
615 E. Michigan Street, Milwaukee, WI 53202
President and Principal Executive Officer
Indefinite term since June 2003.
Senior Vice President, Compliance and Administration, U.S. Bancorp Fund Services, LLC (March 1997 to present).
Cheryl L. King (age 50)
615 E. Michigan Street, Milwaukee, WI 53202
Treasurer and Principal Financial Officer
Indefinite term since December 2007.
Vice President, Compliance and Administration, U.S. Bancorp Fund Services, LLC (October 1998 to present).
Michael L. Ceccato (age 54)
615 E. Michigan Street, Milwaukee, WI 53202
Vice President, Chief Compliance Officer and AML Officer
Indefinite term since September 2009.
Vice President, U.S. Bancorp Fund Services, LLC (February 2008 to present); General Counsel/Controller, Steinhafels, Inc. (September 1995 to February 2008).
Jeanine M. Bajczyk, Esq. (age 46)
615 E. Michigan Street, Milwaukee, WI 53202
Secretary
Indefinite term since June 2007.
Senior Vice President and Counsel, U.S. Bancorp Fund Services, LLC (May 2006 to present); Senior Counsel, Wells Fargo Funds Management, LLC (May 2005 to May 2006);
Senior Counsel, Strong Financial Corporation (January 2002 to April 2005).
-31-
|
The Teberg Fund
|
|
Information about Trustees and Officers (Unaudited), continued
|
|
(1)
|
The Trustees of the Trust who are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”).
|
|
(2)
|
The Trust is comprised of numerous portfolios managed by unaffiliated investment advisers. The term “Fund Complex” applies only to the Fund. The Fund does not hold itself out as related to any other series within the Trust for investment purposes, nor does it share the same investment adviser with any other series.
|
|
(3)
|
Mr. Redwine is an “interested person” of the Trust as defined by the 1940 Act. Mr. Redwine is an interested Trustee of the Trust by virtue of the fact that he is an interested person of Quasar Distributors, LLC who acts as principal underwriter to the series of the Trust.
|
The Statement of Additional Information includes additional information about the Fund’s Trustees and Officers and is available, without charge, upon request by calling 1-800-209-1964.
-32-
|
Householding (Unaudited)
|
In an effort to decrease costs, the Fund intends to reduce the number of duplicate prospectuses, annual and semi-annual reports, proxy statements and other similar documents you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Transfer Agent reasonably believes are from the same family or household. Once implemented, if you would like to discontinue householding for your accounts, please call toll-free at 1-866-209-1964 to request individual copies of these documents. Once the Transfer Agent receives notice to stop householding, the Transfer Agent will begin sending individual copies thirty days after receiving your request. This policy does not apply to account statements.
|
The Teberg Fund
|
|
Privacy Notice (Unaudited)
|
The Fund collects non-public information about you from the following sources:
|
●
|
Information we receive about you on applications or other forms;
|
|
●
|
Information you give us orally; and/or
|
|
●
|
Information about your transactions with us or others.
|
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Fund. We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities. We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
In the event that you hold shares of the Fund through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
-33-
(This page intentionally left blank)
Advisor
First Associated Investment Advisors, Inc.
5161 Miller Trunk Highway
Duluth, MN 55811
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
(866) 209-1964
Custodian
U.S. Bank N.A.
1555 North River Center Drive, Suite 302
Milwaukee, WI 53212
Independent Registered public Accounting Firm
Tait, Weller & Baker LLP
1818 Market Street, Suite 2400
Philadelphia, PA 19103
Legal Counsel
Paul Hastings, LLP
75 East 55th Street
New York, NY 10022
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 1-866-209-1964
-35-
.
 |
The Teberg Fund
U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
|
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.
A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that there is at least one audit committee financial expert serving on its audit committee. Ms. Sallie P. Diederich is the “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
|
FYE 3/31/2012
|
FYE 3/31/2011
|
|
|
Audit Fees
|
$14,300
|
$13,900
|
|
Audit-Related Fees
|
N/A
|
N/A
|
|
Tax Fees
|
$2,900
|
$2,800
|
|
All Other Fees
|
N/A
|
N/A
|
The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.
The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
|
FYE 3/31/2012
|
FYE 3/31/2011
|
|
|
Audit-Related Fees
|
0%
|
0%
|
|
Tax Fees
|
0%
|
0%
|
|
All Other Fees
|
0%
|
0%
|
All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years. The audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
|
Non-Audit Related Fees
|
FYE 3/31/2012
|
FYE 3/31/2011
|
|
Registrant
|
N/A
|
N/A
|
|
Registrant’s Investment Adviser
|
N/A
|
N/A
|
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
(a) Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
(b) Not Applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. Controls and Procedures.
|
(a)
|
The Registrant’s President/Principal Executive Officer and Treasurer/Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.
|
|
(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 fourth fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
|
Item 12. Exhibits.
|
(a)
|
(1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Filed herewith.
|
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
|
(b)
|
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/ Douglas G. Hess
Douglas G. Hess, President
Date 6/5/12
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/ Douglas G. Hess
Douglas G. Hess, President
Date 6/5/12
By (Signature and Title)*/s/ Cheryl L. King
Cheryl L. King, Treasurer
Date 6/5/12
* Print the name and title of each signing officer under his or her signature.