N-30D 1 mcf-a.txt MCCARTHY FUND (MGAMX) (MCCARTHY FUND LOGO) Annual Report June 30, 2002 MCCARTHY FUND (MGAMX) ANNUAL REPORT FOR THE PERIOD ENDED JUNE 30, 2002 Dear Fellow Shareholder: The McCarthy Fund's performance for the six months ended June 30, 2002, and cumulative performance from August 6, 2001 (inception) and the performance for the Standard & Poor's 500 Index are shown below: TIME MCCARTHY STANDARD & POOR'S RELATIVE PERIOD FUND 500 INDEX PERFORMANCE ------ -------- ----------------- ----------- Six months ended June 30, 2002 (21.45)% (13.15)% (8.30)% From August 6, 2001 Inception (18.40)% (16.46)% (1.94)% McCarthy Fund shareholders continue to experience a volatile, and declining, stock market environment. The Fund's decline for the last six months was the result of generally weak conditions in the U.S. stock market as well as poor short-term performance by a few portfolio positions. Various Fund portfolio positions have been the focus of negative publicity recently. In a couple of situations the negative tone was, and is, warranted. In other situations, we believe the negative tone is more the result of "noise" than facts. By noise, we refer to rumors and issues that seem important in the short-term but do not erode the long-term intrinsic value of a company. In our view the noise should be expected when the dominant emotion of investors is fear. Investors' level of fear seems heightened in the aftermath of the excessive greed that dominated investor emotion through early in the year 2000. The Fund experienced substantial declines in Adelphia Communications Corp. and Qwest Communications International. These declines were the result of more than noise. Adelphia's founding and controlling shareholders, the Rigas family, have been accused of improprieties that are unethical and possibly illegal. We have liquidated the Fund's Adelphia position. Qwest Communications has replaced its CEO, is being investigated for accounting irregularities and is looking to reduce debt through asset sales. Assuming a restructuring success, Qwest is likely a survivor. We continue to hold a position in Qwest, but it now represents a small percentage of Fund assets. Qwest and Adelphia share a trait that continues to weigh on the stock prices of cable television and telecommunications companies. Companies in these industries aggressively invested in their systems and were aggressive acquirers of businesses over the last several years. The companies issued substantial debt to fund expansion. The revenue to support the expansion has not, as yet at least, developed. The required debt and interest payments, however, remain an obligation for these companies. The Fund owns meaningful positions in Tyco International Ltd. and Liberty Media Corp. Although we accumulated our stock positions at prices far below the stock price highs, both stocks declined and hurt Fund performance over the last six months. Tyco has been controversial because of accounting questions and the actions of the company's former CEO. We are comfortable with the accounting issues, a capable CEO has recently been hired and we believe the value of Tyco's business assets present a compelling investment opportunity. Liberty Media Corp. owns a portfolio of media, communications and entertainment assets. Liberty's stock weakness has likely been due to its exposure to the cable television industry. Liberty's CEO, Dr. John Malone, has a reputation of building shareholder value. We believe the current market environment gives Dr. Malone opportunities to add under-valued assets to the formidable portfolio that he has already assembled. This Annual Report is meant to inform you, as Fund owners, about investment activities that have affected the value of your Fund shares. Because of the recent declines in the stock market, our discussion has accordingly focused on Fund investments that have declined in value. The McCarthy Fund is a diversified fund and several Fund investments gained or held up well over the last six months. For example, the Fund's financial services stocks performed very well. Those stocks include a significant Fund holding in Washington Mutual as well as various mortgage and property real estate investment trusts (REITs). Our contrarian nature interprets the current level of investor fear and pessimism as a positive sign for the future. The prospect of an improving economy and the increasing number of compelling investment prospects, generated by our investment process, are encouraging as well. It is said that bear markets return stocks to their rightful owners. Being a rightful owner can be frustrating, at times such as these, but has historically been the path to wealth accumulation. Thank you again for joining the Adviser's affiliated companies, our employees and our families as shareholders of the Fund. A significant percentage of the Fund's assets represent investment from our affiliates. The portfolio manager has invested, and continues to invest, his personal money, including all of his retirement assets, in the Fund. We stress to you, as a fellow shareholder, that we do not invest our own money like the Fund; we invest our money in the Fund. ---- -- We believe our investment in the Fund properly aligns our interests with yours. The companies that comprise the Fund's top ten holdings are listed on the following page. Thank you again for being our partners in the McCarthy Fund! Sincerely, McCarthy Group Asset Management, Inc. Richard L. Jarvis Art N. Burtscher Chairman - Chief Investment Officer President PAST PERFORMANCE OF THE FUND AND THE S&P 500 INDEX IS NOT INDICATIVE OF FUTURE PERFORMANCE. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original investment. The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy. Indexes are not available for direct investment and do not incur expenses. Cumulative return is from inception through the most recent calendar quarter end (06/30/02). Fund sector allocations and portfolio holdings are subject to change and are not recommendations to buy or sell any security. The information contained in this report is authorized for use when proceeded or accompanied by a prospectus for the McCarthy Fund, which includes more complete information on the charges and expenses related to an ongoing investment in the Fund. Please read the prospectus carefully before you invest or send money. 8/02 TEN LARGEST HOLDINGS (REPRESENT 38.48% OF NET ASSETS AT JUNE 30, 2002) LIBERTY MEDIA CORP CL A (L) 7.00% Holding company with subsidiaries and investments operating in the media, communications and entertainment industries. Brands and investments include Encore, STARZ!, Discovery, TV Guide, Fox, USA, QVC, AOL, CNN, TBS, Motorola and Sprint PCS. WASHINGTON MUTUAL, INC. (WM) 6.26% Financial services company that serves consumers and small to mid-sized businesses. Through its subsidiaries, Washington Mutual engages in consumer banking, mortgage banking, commercial banking, financial services and consumer finance. TYCO INTERNATIONAL LTD. (TYC) 5.39% Diversified manufacturing and service company that provides electrical and electronic components, energy solutions and power products; operates and maintains undersea cable communications systems; installs and services fire detection and suppression systems; provides electronic security systems; specialty valves; and disposable medical supplies and other specialty products. AOL TIME WARNER (AOL) 2.97% Diversified media and communications company. Business segments consist of America Online (internet), Cable Television, Filmed Entertainment, Networks, Music, and Publishing. CENDANT CORP (CD) 2.96% A leading global provider of real estate and travel services. Franchise brands include: Ramada, Howard Johnson, Avis, Coldwell Banker, Century 21 and Jackson Hewitt. IMS HEALTH, INC. (RX) 2.91% Provider of information solutions to the healthcare and pharmaceuticals industries, as well as a provider of solutions for software development and e- business maintenance. REPUBLIC SERVICES, INC. (RSG) 2.89% U.S. provider of non-hazardous solid waste services such as collection, transfer, disposal and recycling. WASTE MANAGEMENT, INC. (WMI) 2.84% World's largest provider of solid waste services such as collection, transfer, disposal and recycling. CITIZENS COMMUNICATIONS CO. (CZN) 2.72% Telecommunications company providing wireline communications services to rural areas and small and medium-sized towns and cities, including the Rochester, New York, metropolitan area, as an incumbent local exchange carrier. APOGENT TECHNOLOGIES, INC. (AOT) 2.54% Designs, manufactures and markets value-added laboratory and life science products for the clinical, research and industrial markets, worldwide. Comparison of the change in value of a $10,000 investment in the McCarthy Fund versus the S&P 500 Index Cumulative Total Return Period Ended June 30, 2002 Since Inception (8/6/01) -18.40% MCCARTHY FUND S&P 500 INDEX ------------- ------------- 8/6/2001 $10,000 $10,000 9/30/2001 $8,950 $8,691 12/31/2001 $10,389 $9,620 3/31/2002 $9,796 $9,646 6/30/2002 $8,160 $8,353 Past performance is not predictive of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The S&P 500 Index is a broad market-weighted average of U.S. blue-chip companies. The S&P 500 Index is unmanaged and returns include reinvested dividends. Commencement of operations on August 6, 2001. SCHEDULE OF INVESTMENTS AT JUNE 30, 2002 SHARES COMMON STOCKS: 93.4% MARKET VALUE ------ -------------------- ------------ ADVERTISING SERVICES: 0.7% 6,435 R.H. Donnelley Corp.* $ 179,987 ----------- BANKS: 7.0% 8,801 U.S. Bancorp 205,503 44,319 Washington Mutual, Inc. 1,644,678 ----------- 1,850,181 ----------- BATTERIES/BATTERY SYSTEMS: 1.9% 18,297 Energizer Holdings, Inc.* 501,704 ----------- BROADCAST SERVICE/PROGRAM: 7.0% 183,762 Liberty Media Corp.* 1,837,620 ----------- COMPUTER PRODUCTS: 0.5% 22,558 Brooktrout Inc.* 128,581 ----------- COMPUTER SERVICES: 4.1% 14,816 Electronic Data Systems Corp. 550,414 18,675 The Reynolds & Reynolds Co. 521,966 ----------- 1,072,380 ----------- CONSUMER PRODUCTS/MISCELLANEOUS: 1.0% 6,000 The Scotts Co.* 272,400 ----------- DATA PROCESSING/MANAGEMENT: 2.1% 57,476 eFunds Corp.* 545,390 ----------- DIVERSIFIED OPERATIONS: 9.5% 48,975 Cendant Corp.* 777,723 11,868 FirstService Corp.* 299,904 104,719 Tyco International Ltd. 1,414,754 ----------- 2,492,381 ----------- ELECTRONIC FORMS: 0.6% 5,898 Adobe Systems Inc. 168,093 ----------- ENTERPRISE SOFTWARE - SERVICES: 1.3% 93,908 Novell, Inc.* 301,445 5,144 Sybase, Inc.* 54,269 ----------- 355,714 ----------- FINANCE - COMMERCIAL SERVICES: 0.8% 4,442 H&R Block, Inc. 204,998 ----------- FINANCE - MORTGAGE LOAN/BANKING: 0.5% 2,347 Federal Home Loan Mortgage Corp. 143,636 ----------- FOOD: 1.5% 6,026 Dean Foods Co.* 224,770 7,072 McCormick & Co., Inc. 182,104 ----------- 406,874 ----------- GAS - DISTRIBUTION: 0.7% 6,957 Energen Corp. 191,318 ----------- IDENTIFICATION SYSTEMS/DEVELOPMENT: 0.4% 6,095 Paxar Corp.* 102,091 ----------- INSTRUMENTS - SCIENTIFIC: 0.9% 22,317 PerkinElmer, Inc. 246,603 ----------- INSURANCE: 3.2% 3,260 Allstate Corp. 120,555 229 Berkshire Hathaway Inc. - Class B* 511,586 5,370 Torchmark Corp. 205,134 ----------- 837,275 ----------- MEDIA: 3.0% 53,076 AOL Time Warner, Inc.* 780,748 ----------- MEDICAL - DRUGS: 5.0% 20,253 Applera Corp. - Celera Genomics Group* 243,036 6,443 Biogen, Inc.* 266,933 5,916 Merck & Co., Inc. 299,586 39,042 Perrigo Co.* 507,546 ----------- 1,317,101 ----------- MEDICAL - INFORMATION SYSTEMS: 2.9% 42,520 IMS Health, Inc. 763,234 ----------- MEDICAL - INSTRUMENTS: 4.7% 32,442 Apogent Technologies, Inc.* 667,332 6,918 Cantel Medical Corp.* 127,291 9,550 Conmed Corp.* 213,251 6,190 Vital Signs, Inc. 223,768 ----------- 1,231,642 ----------- OFFICE AUTOMATION & EQUIPMENT: 1.1% 15,000 Global Imaging Systems, Inc.* 284,850 ----------- OIL & GAS DRILLING: 0.8% 12,614 Pride International, Inc.* 197,535 ----------- OIL - EXPLORATION & PRODUCTION: 3.6% 4,556 Apache Corp. 261,879 5,227 Devon Energy Corp. 257,587 7,447 Newfield Exploration Co.* 276,805 3,954 Stone Energy Corp.* 159,149 ----------- 955,420 ----------- OIL - INTEGRATED: 2.0% 5,858 ChevronTexaco Corp. 518,433 ----------- PRINTING - COMMERCIAL: 0.8% 5,401 Valassis Communications, Inc.* 197,136 ----------- PHYSICAL PRACTICE MANAGEMENT: 0.9% 10,182 Orthodontic Centers of America, Inc.* 234,695 ----------- REAL ESTATE INVESTMENT TRUSTS: 8.5% 3,329 AMB Property Corp. 103,199 1,987 Apartment Investment & Management Co. 97,760 4,900 Archstone-Smith Trust 130,830 3,031 Arden Realty, Inc. 86,232 1,759 AvalonBay Communities, Inc. 82,145 2,239 Boston Properties, Inc. 89,448 16,000 Capital Automotive REIT 381,760 3,504 Chelsea Property Group, Inc. 117,209 5,000 Cousins Properties, Inc. 123,800 4,521 Equity Residential 129,979 7,200 FelCor Lodging Trust, Inc. 132,120 11,400 Host Marriott Corp.* 128,820 3,413 Kilroy Realty Corp. 91,298 6,532 Redwood Trust, Inc. 205,758 3,228 Regency Centers Corp. 95,710 5,940 Taubman Centers, Inc. 90,585 3,000 Vornado Realty Trust 138,600 ----------- 2,225,253 ----------- RETAIL: 0.9% 3,569 Casey's General Stores, Inc. 42,971 5,537 Zale Corp.* 200,716 ----------- 243,687 ----------- RETAIL - RESTAURANTS: 1.5% 13,184 IHOP Corp.* 388,269 ----------- TELECOMMUNICATIONS: 5.2% 85,386 Citizens Communications Co.* 713,827 49,661 Comverse Technology, Inc.* 459,861 64,242 Qwest Communications International, Inc.* 179,878 ----------- 1,353,566 ----------- TOYS: 2.3% 28,610 Mattel, Inc. 603,099 ----------- TRANSPORT - MARINE: 0.8% 5,383 Teekay Shipping Corp. 198,687 ----------- WASTE DISPOSAL: 5.7% 39,742 Republic Services, Inc.* 757,880 28,600 Waste Management, Inc. 745,030 ----------- 1,502,910 ----------- TOTAL COMMON STOCKS (cost $26,153,742) 24,533,491 ----------- PREFERRED STOCKS: 0.5% ---------------------- 9,000 Acceptance Insurance Cos., Inc. (cost $225,000) 132,750 ----------- PRINCIPAL AMOUNT SHORT-TERM INVESTMENT: 7.7% --------- --------------------------- MONEY MARKET INVESTMENT: $2,015,010 Cash Trust Series II - Treasury Fund (cost $2,015,010) 2,015,010 ----------- TOTAL INVESTMENTS IN SECURITIES: 101.6% (cost $28,393,752)+ 26,681,251 Liabilities in Excess of Other Assets: (1.6)% (430,024) ----------- NET ASSETS: 100% $26,251,227 ----------- ----------- * Non-income producing security. + At June 30, 2002, the cost of investments for federal income tax purposes was $28,857,671. Gross unrealized appreciation and depreciation of securities is as follows: Gross unrealized appreciation $ 2,474,446 Gross unrealized depreciation (4,650,866) ----------- Net unrealized depreciation $(2,176,420) ----------- ----------- See notes to financial statements. STATEMENT OF ASSETS AND LIABILITIES AT JUNE 30, 2002 ASSETS Investments, at market value (cost $28,393,752) $26,681,251 Cash 910 Due from advisor 813 Dividends and interest receivable 30,253 Prepaid expenses 11,192 ----------- Total Assets 26,724,419 ----------- LIABILITIES Payable for securities purchased 426,769 Payable for fund shares redeemed 4,731 Payable for administration fees 3,462 Accrued expenses 38,230 ----------- Total Liabilities 473,192 ----------- NET ASSETS $26,251,227 ----------- ----------- COMPONENTS OF NET ASSETS Paid-in capital $29,380,194 Accumulated undistributed net realized loss on investments (1,416,466) Net unrealized depreciation on investments (1,712,501) ----------- Total Net Assets $26,251,227 ----------- ----------- Shares outstanding (unlimited number of shares authorized, par value $0.01) 3,228,719 Net Asset Value, Redemption Price and Offering Price Per Share $8.13 ----- ----- See notes to financial statements. STATEMENT OF OPERATIONS FOR THE PERIOD ENDED JUNE 30, 2002* INVESTMENT INCOME Dividend income $ 210,346 Interest income 57,477 ----------- Total investment income 267,823 ----------- EXPENSES Advisory fees (Note 3) 175,258 Organization fees 35,000 Administration fees (Note 3) 33,600 Fund accounting fees 27,979 Professional fees 23,585 Transfer agent fees 19,808 Custody fees 9,701 Trustee fees 6,060 Registration fees 5,350 Shareholder reporting 4,427 Miscellaneous 2,387 Insurance 823 ----------- Total expenses 343,978 Less: advisory fee waiver and absorption (Note 3) (112,049) ----------- Net expenses 231,929 ----------- NET INVESTMENT INCOME 35,894 ----------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS Net realized loss on investments (1,394,470) Change in net unrealized appreciation/depreciation on investments (1,712,501) ----------- Net loss on investments (3,106,971) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,071,077) ----------- ----------- * Commenced operations on August 6, 2001. See notes to financial statements. STATEMENT OF CHANGES IN NET ASSETS PERIOD ENDED JUNE 30, 2002* ------------------ OPERATIONS Net investment income $ 35,894 Net realized loss on investments (1,394,470) Change in net unrealized appreciation/depreciation on investments (1,712,501) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (3,071,077) ----------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (44,980) From net realized gains (22,042) ----------- TOTAL DECREASE IN NET ASSETS RESULTING FROM DISTRIBUTIONS (67,022) ----------- CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 29,651,582 Proceeds from reinvestment of dividends 66,980 Cost of shares redeemed (329,236) ----------- NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS 29,389,326 ----------- TOTAL INCREASE IN NET ASSETS 26,251,227 NET ASSETS Beginning of period -- ----------- End of period $26,251,227 ----------- ----------- CHANGES IN SHARES OUTSTANDING Shares sold 3,256,949 Shares reinvested 6,685 Shares redeemed (34,915) ----------- Net increase in shares outstanding 3,228,719 ----------- ----------- * Commenced operations on August 6, 2001. See notes to financial statements. FINANCIAL HIGHLIGHTS For a fund share outstanding throughout the period PERIOD ENDED JUNE 30, 2002* ------------------ NET ASSET VALUE, BEGINNING OF PERIOD $10.00 ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 Net realized and unrealized loss on investments (1.85) ------ Total from investment operations (1.83) ------ LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.03) From net realized gains (0.01) ------ Total decrease from distributions (0.04) ------ NET ASSET VALUE, END OF PERIOD $ 8.13 ------ ------ TOTAL RETURN (18.40)%1 SUPPLEMENTAL DATA AND RATIOS: Net assets, end of period (in millions) $26.3 Ratio of net expenses to average net assets: Before expense reimbursement 1.85%2 After expense reimbursement 1.25%2 Ratio of net investment income/(loss) to average net assets: Before expense reimbursement (0.41)%2 After expense reimbursement 0.19%2 Portfolio turnover rate 46%1 * Commenced operations on August 6, 2001. 1 Not annualized. 2 Annualized. See notes to financial statements. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2002 NOTE 1 - ORGANIZATION The McCarthy Fund (the "Fund") is a series of shares of beneficial interest of Advisor Series Trust (the "Trust") which is registered under the Investment Company Act of 1940 (the "1940 Act") as a diversified, open-end management investment company. The Fund commenced operations on August 6, 2001. The investment objective of the Fund is to seek long-term growth of capital. The Fund pursues this objective by investing primarily in 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. Securities Valuation. Securities traded on a national exchange or Nasdaq are valued at the last reported sale price at the close of regular trading on the last business day of the period; securities traded on an exchange or Nasdaq for which there have been no sales, and other over- the-counter securities, are valued at the mean between the last reported bid and asked prices. Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees. Short-term investments are stated at cost which, when combined with accrued interest, approximates market value. U.S. Government securities with less than 60 days remaining to maturity when acquired by the Fund are valued on an amortized cost basis. U.S. Government securities with more than 60 days remaining to maturity are valued at their current market value (using the mean between the bid and asked price) until the 60th day prior to maturity, and are then valued at amortized cost based upon the value on such date unless the Board of Trustees determines during such 60 day period that amortized cost does not represent fair 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. Securities Transactions, Dividend 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. 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. 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. NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS McCarthy Group Asset Management, Inc. (the "Advisor") provides the Fund with investment management services under an Investment Advisory Agreement (the "Agreement"). Under the Agreement the Advisor furnishes all investment advice, office space, facilities, and most of the personnel needed by the Fund. As compensation for its services, the Advisor receives a monthly fee at the annual rate of 0.95% of the Fund's average daily net assets. For the period ended June 30, 2002, the Fund incurred $175,258 in advisory fees. The Fund is responsible for its own operating expenses. The Advisor has contractually agreed to limit the Fund's total operating expenses by reducing all or a portion of its fees and reimbursing the Fund's expenses, for a one year period, so that its ratio of expenses to average net assets will not exceed 1.25%. In the case of the Fund's initial period of operations any fee withheld or voluntarily reduced and/or any Fund expense absorbed by the Advisor pursuant to an agreed upon expense cap shall be reimbursed by the Fund to the Advisor, if so requested by the Advisor, anytime before the end of the fifth fiscal year following the year to which the fee waiver and/or expense absorption relates, provided the aggregate amount of the Fund's current operating expenses for such fiscal year does not exceed the applicable limitation on Fund expenses. For the period ended June 30, 2002, the Advisor absorbed expenses of $112,049. The Fund must pay its current ordinary operating expenses before the Advisor is entitled to any reimbursement of fees and/or expenses. Any such reimbursement is also contingent upon Board of Trustees review and approval prior to the time the reimbursement is initiated. 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; prepares reports and materials to be supplied to the trustees; monitors the activities of the Fund's custodian, transfer agent and accountant; coordinates the preparation and payment of Fund expenses and reviews the Fund's expense accruals. For its services, the Administrator receives a monthly fee at the following annual rates: Under $24 million $36,000 $24 to $100 million 0.15% of average daily net assets $100 to $150 million 0.10% of average daily net assets Over $150 million 0.05% of average daily net assets For the period ended June 30, 2002, the Fund incurred $33,600 in administration fees. U.S. Bancorp Fund Services, L.L.C. also provides fund accounting services for the Fund. Quasar Distributors, L.L.C. (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 and trustees of the Trust are also officers and/or directors of the Administrator. NOTE 4 - PURCHASES AND SALES OF SECURITIES The cost of purchases and proceeds from sales of securities, excluding short- term investments, for the period ended June 30, 2002, were $36,461,063 and $8,693,189 respectively. NOTE 5 - IN KIND CONTRIBUTION At the Fund's inception on August 6, 2001, certain shareholders purchased Fund shares through nontaxable in-kind contributions of securities with a market value totaling $8,442,758 (including contributed unrealized gain of $2,134,272). These securities were deemed to be in accordance with the investment objective of the Fund. NOTE 6 - DISTRIBUTIONS TO SHAREHOLDERS On December 17, 2001, a distribution of $0.04 per share was declared. The dividend was paid on December 18, 2001, to shareholders of record on December 14, 2001. The tax character of distributions paid during 2001 were as follows: 2001 ---- Distributions paid from: Ordinary Income $44,980 Long-term capital gain 22,042 ------- $67,022 ------- ------- As of June 30, 2002, the components of distributable earnings on a tax basis were as follows: Unrealized depreciation $(3,128,967) ------------ ------------ The difference between book basis and tax basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of wash sales and the deferral losses incurred after October 31. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees Advisors Series Trust Glendora, California We have audited the accompanying statement of assets and liabilities of McCarthy Fund, a series of shares of Advisor Series Trust, including the portfolio of investments, as of June 30, 2002, and the related statements of operations, changes in net assets and the financial highlights for the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 2002, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 McCarthy Fund as of June 30, 2002, the results of its operations, the changes in its net assets and its financial highlights for the period indicated thereon, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER Philadelphia, Pennsylvania August 7, 2002 RESULTS OF THE SPECIAL MEETING (UNAUDITED) A special meeting of the shareholders of the McCarthy Fund, a series of Trust for Investment Managers, was held on June 6, 2002 for shareholders of record as of April 30, 2002. The shareholders of the Fund voted on whether to approve a proposal to reorganize the Fund into a newly formed series of Advisors Series Trust. The results of the vote at the shareholder meeting held June 6, 2002 were as follows: 1. To approve the proposed reorganization into Advisors Series Trust: For Against Withheld --- ------- -------- 2,335,991 0 6,843 INFORMATION ABOUT TRUSTEES AND OFFICERS (UNAUDITED) The business and affairs of the Fund are managed under the direction of the Fund's Board of Trustees. Information pertaining to the Trustees and Officers of the Fund is set forth below. Unless noted otherwise, each person has held the position listed for a minimum of five years. The SAI includes additional information about the Fund's officers and trustees and is available, without charge, upon request by calling 1-877-829-8413. INDEPENDENT TRUSTEES -------------------- TERM OF PRINCIPAL # OF FUNDS OTHER POSITION OFFICE AND OCCUPATION IN COMPLEX DIRECTORSHIPS NAME, AGE HELD WITH LENGTH OF DURING PAST OVERSEEN HELD BY AND ADDRESS THE TRUST TIME SERVED FIVE YEARS BY TRUSTEE TRUSTEE ----------- --------- ----------- ----------- ---------- -------------- Walter E. Auch Trustee Indefinite Management Nineteen Nicholas-Applegate (Born 1921) Term Consultant. Funds, Salomon Smith 2020 E. Financial Way Barney Funds, Bayan Glendora, CA 91741 Since 1997 Strategic Realty Trust, Legend Properties, Pimco Advisors LLP, and Senele Group James Clayburn Trustee Indefinite Dean Emeritus, Nineteen Not Applicable LaForce Term John E. Anderson (Born 1927) Graduate School 2020 E. Financial Way Since of Management, Glendora, CA 91741 March 2002 University of California, Los Angeles. Donald E. O'Connor Trustee Indefinite Financial Consultant; Nineteen The Parnassus Fund (Born 1936) Term formerly Executive The Parnassus 2020 E. Financial Way Vice President and Income Fund Glendora, CA 91741 Since 1997 Chief Operating officer The Forward Funds of ICI Mutual Insurance Company (until January, 1997); Vice President, Operations, Investment Company Institute (until July, 1993). George J. Rebhan Trustee Indefinite Retired; formerly Nineteen Not Applicable (Born 1934) Term President, Hotchkis 2020 E. Financial Way and Wiley Funds Glendora, CA 91741 Since (mutual funds) March 2002 from 1985 to 1993. George T. Wofford III Trustee Indefinite Senior Vice Nineteen Not Applicable (Born 1939) Term President, 2020 E. Financial Way Information Services, Glendora, CA 91741 Since 1997 Federal Home Loan Bank of San Francisco.
INTERESTED TRUSTEES AND OFFICERS -------------------------------- # OF FUNDS TERM OF PRINCIPAL IN COMPLEX OTHER POSITION OFFICE AND OCCUPATION OVERSEEN DIRECTORSHIPS NAME, AGE HELD WITH LENGTH OF DURING PAST BY TRUSTEE HELD BY AND ADDRESS THE TRUST TIME SERVED FIVE YEARS OR OFFICER TRUSTEE OR OFFICER ----------- --------- ----------- ----------- ---------- ------------------ Eric M. Banhazl Trustee, Indefinite Senior Vice Nineteen None (Born 1957) President Term President, U.S. 2020 E. Financial Way & Treasurer Bancorp Fund Glendora, CA 91741 Since 1997 Services, LLC, the Fund's administrator (since July, 2001); Treasurer, Investec Funds; formerly, Executive Vice President, Investment Company Administration, LLC (ICA) (The Fund's former administrator). Chad E. Fickett Secretary Indefinite Compliance Nineteen None (Born 1973) Term Administrator, U.S. 615 E. Michigan Street Bancorp Fund Milwaukee, WI 53202 Since March Services, LLC since 2002 July 2000.
ADVISOR McCarthy Group Asset Management, Inc. 1125 South 103rd Street, Suite 450 Omaha, NE 68124-6019 DISTRIBUTOR Quasar Distributor, LLC 615 East Michigan Street Milwaukee, WI 53202 CUSTODIAN U.S. Bank, N.A. 425 Walnut Street M/L 6118 Cincinnati, OH 45202 TRANSFER AGENT Orbitex Data Services, Inc. 14707 California Street, Suite 5 Omaha, NE 68154 (866) 811-0228 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker 555 Flower Street, 23rd Floor Los Angeles, CA 90071-2371 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. 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.