-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F1YsQOjtgQ8GcF4d+nDxmtJFltsRxXQyTCzy26VQK6m72oJkxfEF8pwwXnAa+C89 xtLrayif+rfdSBtVxbDjOg== 0000898531-06-000293.txt : 20060908 0000898531-06-000293.hdr.sgml : 20060908 20060908151807 ACCESSION NUMBER: 0000898531-06-000293 CONFORMED SUBMISSION TYPE: N-CSRS/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20060908 DATE AS OF CHANGE: 20060908 EFFECTIVENESS DATE: 20060908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVISORS SERIES TRUST CENTRAL INDEX KEY: 0001027596 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-CSRS/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-07959 FILM NUMBER: 061081704 BUSINESS ADDRESS: STREET 1: U.S BANCORP FUND SERVICES, LLC STREET 2: 615 E MICHIGAN STREET CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 414-765-5340 MAIL ADDRESS: STREET 1: 615 E MICHIGAN STREET STREET 2: MK-WI-LC2 CITY: MILWAUKEE STATE: WI ZIP: 53202 0001027596 S000000024 The Al Frank Dividend Value Fund C000000037 Investor Class VALDX C000033043 Advisor Class VALEX 0001027596 S000005099 Al Frank Fund C000013893 Investor Class VALUX C000033044 Advisor Class VALAX N-CSRS/A 1 aff-ncsrse.txt 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 ST. MILWAUKEE, WI 53202 ------------------- (Address of principal executive offices) (Zip code) ERIC M. BANHAZL ADVISORS SERIES TRUST 2020 EAST FINANCIAL WAY, SUITE 100 GLENDORA, CA 91741 ------------------ (Name and address of agent for service) (414) 765-5340 -------------- Registrant's telephone number, including area code Date of fiscal year end: DECEMBER 31, 2006 ----------------- Date of reporting period: JUNE 30, 2006 ------------- ITEM 1. REPORT TO STOCKHOLDERS. - ------------------------------- (AL FRANK LOGO) AL FRANK FUND AL FRANK DIVIDEND VALUE FUND SEMI-ANNUAL REPORT JUNE 30, 2006 AL FRANK FUNDS 32392 COAST HIGHWAY, SUITE 260 LAGUNA BEACH, CA 92651 SHAREHOLDER SERVICES (888) 263-6443 WWW.ALFRANKFUNDS.COM AL FRANK ASSET MANAGEMENT, INC. 32392 Coast Highway, Suite 260, Laguna Beach, CA 92651 www.alfrankfunds.com August 2006 Dear Shareholder: Recognizing that many of our shareholders have only recently purchased their stakes in The Al Frank Fund and/or The Al Frank Dividend Value Fund, we offer the friendly reminder that we are buying and holding stocks based on their prospects for long-term, three-to-five year capital appreciation, not for how they may perform over a week, month, quarter, or even half-year. We are thus never overly concerned with interim returns as we will not alter our disciplined investment philosophy based on short-term fluctuations. It has been this strict adherence to our value-based approach, we believe, that has been responsible for our long-term results. We know that more than a few Al Frank Fund shareholders have been drawn to our market-beating 3-year, 5-year and life-of-fund performance figures, but it must be pointed out that those gains were not achieved without any setbacks. For example, The Al Frank Fund was down as much as 8.83% at one point in 2005, yet closed the year with a gain of 11.06%. And, we can't forget that after a rough time in 1998, the Fund roared back to return 60% in 1999, and that after dismal returns in 2002, The Al Frank Fund soared 78% in 2003. Not once during those difficult periods did we waver from our time-tested approach of buying and patiently holding undervalued stocks. In fact, some of the very same stocks that created the lousy returns were responsible for the tremendous recoveries! The table below documents the performance numbers of which I speak. Of course, despite the long-term results, we realize that many shareholders will continue to try to time their purchases and sales of our Funds, a practice we seek to discourage via a 2% redemption fee on shares not held for at least 60 days. Sadly, we are aware that quite a few short-term oriented folks have lost money investing in our Funds, even as both The Al Frank Fund and The Al Frank Dividend Value Fund have enjoyed handsome long-term returns since their respective inception dates. For what it is worth, rather than contemplating a sale, I have utilized periods of poor performance to add to my holdings, a strategy also employed by many of our longer-tenured shareholders. FUND PERFORMANCE AL FRANK AL FRANK DIVIDEND FUND VALUE FUND INVESTOR INVESTOR RUSSELL S&P WILSHIRE CLASS CLASS 2000 500 5000 -------- ---------- ------- --- -------- AVERAGE ANNUAL TOTAL RETURNS THROUGH 6/30/06 1 Year 12.87% 11.50% 14.58% 8.63% 9.92% 3 Years 23.63% n/a 18.70% 11.20% 12.98% 5 Years 13.00% n/a 8.50% 2.49% 4.02% Since 1/2/98* 15.99% n/a 7.44% 4.83% 5.36% Since 9/30/04* 17.11% 14.87% 15.71% 9.76% 11.60%
* Inception date is 1/2/98 for the Al Frank Fund and 9/30/04 for the Al Frank Dividend Value Fund. 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 Funds may be lower or higher than the performance quoted. Performance data to the most recent month end may be obtained by visiting www.alfrankfunds.com. The Funds impose a 2% redemption fee on shares held for less than 60 days. Performance data does not reflect redemption fee. Had the fee been included, returns would be lower. ****** Certainly, we are well aware that the performance of both The Al Frank Fund and The Al Frank Dividend Value Fund over the first half of 2006 have been below their historical returns, just as has been the performance of the market benchmarks to which we have been traditionally compared. We aren't trying to make excuses, but sky-high energy prices, a slowdown in the housing market, mixed data on inflation and the strength of the U.S. economy, several more quarter-point increases in interest rates from the Federal Reserve, fears of a slowdown in corporate profit growth, new trouble in the Middle East and a fresh terrorist scare are all factors negatively influencing stock prices so far in 2006. Nevertheless, with interest rates remaining low by historical standards, corporate balance sheets still flush with cash, merger & acquisition activity going strong, the Federal Reserve likely nearing the end of its tightening cycle and valuations on many stocks approaching their cheapest levels in the last two decades, we can't help but be optimistic about the future. And speaking of valuations, consider data gleaned from the web site of Standard & Poor's Investment Services (http://www2.standardandpoors.com/spf/xls/ ----------------------------------------- index/sp500pe_ratio.xls and http://www2.standardandpoors.com/spf/xls/index/ - ----------------------- ----------------------------------------------- SP500EPSEST.XLS) in regard to the widely-followed S&P 500 Index. Since 1996, the - --------------- average Price-to-Earnings ratio (P/E) based on operating earnings has been 22.5 and since 1988, the average P/E has been 19.7. Today, the P/E is 15.5 and on a forward-looking (next-12-months) basis, it drops to 14.7. Some may argue that stripping out non-recurring items by simply using operating earnings is a bit unfair, so S&P also calculates P/E ratios on an 'as-reported' basis. Looking at the numbers in this manner shows an average as-reported P/E of 27.5 since 1996 and an average P/E of 23.2 since 1988. Today, the figure stands at 17.0 on a trailing-12-month basis and 15.0 on a forward basis. Clearly, stocks appear to be cheap relative to where they have traded in the past two decades, though I do concede that they are less undervalued when one looks at the average P/E on the S&P 500 of 15.7 since 1935. ****** Given that both of our Funds are broadly diversified, one or two winning or losing stocks do not make or break performance and, as is generally the case, in the first half of 2006 favorable earnings comparisons powered the winning stocks while disappointing results drove the losers lower. The Al Frank Fund has benefited this year from strong gains in: energy stocks like Holly Corp, Oceaneering Int'l and Valero Energy; commodity stocks like Aleris Int'l & Archer Daniels Midland; technology stocks like Diodes and Lam Research construction- related stocks like Ameron Int'l; aerospace stocks like LMI Aerospace; transportation stocks like CSX Corp, retail stocks like American Eagle Outfitters and apparel & footwear stocks like Steven Madden. Also helping performance were buyout offers received on Applica, Inco, Maverick Tube and RSA Security. The Al Frank Dividend Value Fund was powered higher by some of the same Al Frank Fund stellar performers such as American Eagle Outfitters, Ameron Int'l, Archer Daniels Midland, CSX Corp and Valero Energy, but also by American Ecology, Empire Resources, Insteel Industries, Kerr McGee, NuCor & Trinity Industries. Obviously, not all of our picks were winners. In the first half of 2006, The Al Frank Fund was held back by Beazer Homes, D.R. Horton, Forgent Networks, Hovnanian Enterprises, KB Home, Optimal Group, Orbit Int'l, PXRE Group, Ryland Group and United Healthcare. In The Al Frank Dividend Value Fund, AdTran, Beazer Homes, D.R. Horton, KB Home, Lennar Corp, PXRE Group, Ryland Group, Standard Pacific, Talbots and Wellman were among the largest losers. Of course, shareholders should keep in mind that our largest holding in either Fund is less than 1.27% of total assets, so individual losers may not be very painful, and our historical experience has shown that our winners win more than our losers lose. We are always working to improve our research, but the same fundamental analysis that gave us the top performers also led us to the laggards. In fact, as readers of our commentary over the years are likely aware, many of this year's winners started out as short-term losers. Remember that as long as a stock is undervalued, we will generally continue to hold. Hence, despite big setbacks this year, we continue to support the homebuilding stocks, nearly all of which trade at single-digit multiples to current and projected earnings and at the low end of their historical price to book value ranges. Yes, we are well aware that housing has weakened considerably this year, industry news has been dismal of late, fears are mounting that a 'soft landing' in real estate may not materialize and homebuilding stocks have dominated the new-lows listings, but we remain convinced that the large, well-capitalized and geographically-diverse builders are solid long-term investments. In support of that assertion, we point to these observations: 1) The top 20 builders have plenty of room to grow as they had only a 27% market share at the end of 2004. 2) Demographic trends are favorable as baby boomers, echo boomers and immigrants are expected to fuel strong long-term housing demand. 3) The home ownership rate is likely to rise to 70%-72% by 2013, up from 64% in 1994. 4) The Harvard Joint Center for Housing Studies projects that housing starts will average two million per year over the next 10 years, up from 1.7 million over the past decade. 5) Land development restrictions are likely to intensify with the regulatory approval process becoming increasingly lengthy. 6) Large builders benefit from economies of scale that can enhance margins. 7) Interest rates, though now above the generational lows seen a few years ago, remain low by historical standards. Despite our enthusiasm for the long-term prospects of the homebuilders, shareholders should understand that our desire for broad portfolio diversification means that we invest in numerous industry groups, rarely placing big bets on any one particular sector. By way of example, consider that home construction stocks accounted for just 4.9% of our holdings in The Al Frank Fund and 3.2% in The Al Frank Dividend Value Fund as of June 30, 2006. ****** While we recognize that The Al Frank Fund and The Al Frank Dividend Value Fund are classified as Small- to Mid-Cap Value Funds, we remind shareholders that we are never constrained by asset allocation style boxes. Take a look at the Top 10 Holdings (as a percentage of total assets on June 30, 2006) of each Fund to see what I mean. In The Al Frank Fund, Valero Energy, Marathon Oil and Washington Mutual boast market capitalizations of more than $30 billion, not exactly small- cap, while in The Al Frank Dividend Value Fund, companies like Trinity Industries, Kerr McGee and Archer Daniels Midland could be considered more growth oriented as opposed to value-based. Of course, all of the companies in which we invest sport what we believe are inexpensive valuation metrics when we first add them to the Funds. TOP TEN HOLDINGS AS OF JUNE 30, 2006 THE AL FRANK FUND THE AL FRANK DIVIDEND VALUE FUND 1. Valero Energy 1.02% 1. Valero Energy 1.26% 2. Giant Industries 0.96% 2. Trinity Industries 1.06% 3. Holly Corp. 0.92% 3. Marathon Oil 1.01% 4. Maverick Tube 0.86% 4. Kerr-McGee 0.97% 5. Aleris Int'l. 0.86% 5. Ryerson Inc. 0.94% 6. Marathon Oil 0.85% 6. Bank of America 0.93% 7. Diodes 0.84% 7. Archer-Daniels-Midland 0.87% 8. Washington Mutual 0.83% 8. Ameron 0.82% 9. Transocean 0.82% 9. CSX 0.79% 10. Tesoro Corp. 0.81% 10. Nucor 0.76% Top Ten Holdings are subject to change. Fund holdings are subject to change and are not recommendations to buy or sell any security. We are proud of the fact that we are style agnostic as we seek bargains wherever they reside. If Blue-Chips are cheap, we will buy them. If technology stocks are undervalued, we will not hesitate to pick them up. After all, we believe that if we limit our investment universe by inflexible market-cap or classical value- versus-growth distinctions, then we are likely to limit our potential returns! Generally speaking, mid- and large-cap stocks have become more attractive on a relative basis these days as small-cap stocks have performed well over the past five years. Thus, new purchases in the mid- and large-cap areas are moving the median market capitalizations of both of our Funds higher. ****** For those whose confidence in our strategy may be wavering, I can offer the perspective that we have lived through difficult market conditions on numerous occasions in the past. While there can never be any guarantees, we always advise staying the course when the going gets tough as we know that our performance will never be uniform. We have had years in the past where we have lost money, years where we have enjoyed above-average gains and years that have been closer to the 10% to 12% annualized return that Ibbotson Associates has calculated as the average for equities over the past 80 years. And despite the inevitable ups and downs, we have nearly always been very happy with our patient, buy-and-hold- but-don't-forget strategy in the fullness of time. While many are already receiving our philosophical musings via their subscriptions to The Prudent Speculator newsletter, we encourage those who are not subscribers to visit www.alfrankfunds.com/sar06 for additional subscription information and to sign up for our free periodic Buckingham Report service. The next time the going gets tough, we hope that you will think twice before redeeming and we think the newsletter and the Buckingham Reports just might encourage you to keep the faith or even add to your holdings! All of us at Al Frank Asset Management appreciate the patronage of our long-term oriented shareholders and we continue to be guided by the motto, "In order to turn ordinary into extraordinary, you put in the extra." And why noto Our money is invested right beside yours. Sincerely, /s/John Buckingham John Buckingham President & Chief Portfolio Manager Opinions expressed are those of John Buckingham, which are subject to change and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. INVESTING IN SECURITIES OF SMALL AND MEDIUM-CAPITALIZATION COMPANIES INVOLVES GREATER PRICE VOLATILITY THAN LARGE-CAPITALIZATION COMPANIES. Investment performance reflects voluntary fee waivers. In the absence of such waivers, total returns would be reduced. The S&P 500, Russell 2000 and Wilshire 5000 are unmanaged indices commonly used to measure performance of U.S. stocks. The S&P 500 invests primarily in large- cap stocks; the Wilshire 5000 invests primarily in small-, mid- and large-cap stocks; and the Russell 2000 invests primarily in small-cap stocks. You cannot invest directly in an index. P/E Ratio is the current stock price divided by the earnings per share. Price to Book Value Ratio is the current stock price divided by common stockholders' equity per share. This material must be preceded or accompanied by a current prospectus. Read it carefully before investing. The Al Frank Funds are distributed by Quasar Distributors LLC. (8/06) AL FRANK FUNDS EXPENSE EXAMPLE AT JUNE 30, 2006 (UNAUDITED) Generally, shareholders of mutual funds incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; 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(s) 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 in the Investor Class at the beginning of the period and held for the entire period (1/1/06 - 6/30/06). The Example is also based on an investment of $1,000 invested in the Advisor Class at the beginning of the period and held for the entire period (4/30/06 - 6/30/06). ACTUAL EXPENSES The first line of the tables below provides information about actual account values and actual expenses, with actual net expenses being limited to 1.98% and 1.73% per the advisory agreement for the Investor Class and Advisor Class, respectively. Please note that the Al Frank Fund Investor and Advisor Classes operated below the expense cap at 1.57% and 1.32%, respectively. Although the Fund(s) charge no sales load or transaction fees, 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 Funds' transfer agent. 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 the first 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. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds' 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 Funds 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 sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the tables 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. AL FRANK FUND - INVESTOR CLASS BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD 1/1/06 6/30/06 1/1/06 - 6/30/06* ------------- ------------- --------------------- Actual $1,000.00 $1,029.90 $7.90 Hypothetical (5% return $1,000.00 $1,017.01 $7.85 before expenses) * Expenses are equal to the Fund's annualized expense ratio of 1.57%, multiplied by the average account value over the period, multiplied by 181 (days in most recent fiscal half-year) divided by 365 days to reflect the one-half year expense. AL FRANK FUND - ADVISOR CLASS BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD 4/30/06 6/30/06 4/30/06 - 6/30/06* ------------- ------------- ---------------------- Actual $1,000.00 $ 939.00 $2.14 Hypothetical (5% return $1,000.00 $1,018.25 $2.23 before expenses) * Expenses are equal to the Fund's annualized expense ratio of 1.32%, multiplied by the average account value over the period, multiplied by 61 (days since inception) divided by 365 days to reflect the expense since inception on April 30, 2006. AL FRANK DIVIDEND VALUE FUND - INVESTOR CLASS BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD 1/1/06 6/30/06 1/1/06 - 6/30/06* ------------- ------------- --------------------- Actual $1,000.00 $1,065.60 $10.14 Hypothetical (5% return $1,000.00 $1,014.98 $ 9.89 before expenses) * Expenses are equal to the Fund's annualized expense ratio of 1.98%, multiplied by the average account value over the period, multiplied by 181 (days in most recent fiscal half-year) divided by 365 days to reflect the one half-year expense. AL FRANK DIVIDEND VALUE FUND - ADVISOR CLASS BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD 4/30/06 6/30/06 4/30/06 - 6/30/06* ------------- ------------- ---------------------- Actual $1,000.00 $ 961.30 $2.84 Hypothetical (5% return $1,000.00 $1,016.22 $2.91 before expenses) * Expenses are equal to the Fund's annualized expense ratio of 1.73%, multiplied by the average account value over the period, multiplied by 61 (days since inception) divided by 365 days to reflect the expense since inception on April 30, 2006. AL FRANK FUNDS ALLOCATION OF PORTFOLIO ASSETS AT JUNE 30, 2006 (UNAUDITED) AL FRANK FUND Consumer Cyclical 17% Consumer Noncyclical 2% Energy 15% Financial 8% Health Care 7% Industrial 12% Technology 28% Basic Materials 7% Telecommunications 1% Short-Term Investments 3% AL FRANK DIVIDEND VALUE FUND Consumer Cyclical 22% Consumer Noncyclical 4% Energy 13% Financial 14% Health Care 7% Industrial 15% Technology 14% Basic Materials 6% Telecommunications 1% Short-Term Investments 4% AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 2006 (UNAUDITED) Shares Common Stocks: 96.99% Value ------ --------------------- ----- ADVANCED INDUSTRIAL EQUIPMENT: 1.06% 7,000 Eaton Corp. $ 527,800 45,000 The Lamson & Sessions Co.* 1,276,200 76,200 O.I. Corp. 958,215 65,000 Technology Research Corp. 330,850 ------------ 3,093,065 ------------ ADVANCED MEDICAL DEVICES: 0.52% 7,176 Advanced Medical Optics, Inc.* 363,823 273,300 Cathay Merchant Group, Inc.* 109,320 15,074 Utah Medical Products, Inc. 452,371 75,000 Vascular Solutions, Inc.* 592,500 ------------ 1,518,014 ------------ AEROSPACE & DEFENSE: 4.00% 24,100 AAR Corp.* 535,743 50,000 The Allied Defense Group, Inc.* 1,099,500 40,000 BE Aerospace, Inc.* 914,400 15,500 The Boeing Co. 1,269,605 40,000 Ducommun, Inc.* 740,800 50,000 Kaman Corp. - Class A 910,000 129,900 LMI Aerospace, Inc.* 2,364,180 22,000 Lockheed Martin Corp. 1,578,280 143,750 Orbit International Corp.* 1,036,437 4,529 Pemco Aviation Group, Inc.* 47,554 15,000 Raytheon Co. 668,550 110,700 SIFCO Industries, Inc.* 533,574 ------------ 11,698,623 ------------ AIRLINES: 1.43% 22,000 Air France ADR 515,020 80,000 Airtran Holdings, Inc.* 1,188,800 17,000 Alaska Air Group, Inc.* 670,140 95,000 Mesa Air Group, Inc.* 935,750 175,000 Midwest Air Group, Inc.* 883,750 ------------ 4,193,460 ------------ ALUMINUM: 0.59% 33,000 Alcoa, Inc. 1,067,880 15,000 BHP Billiton Limited ADR 646,050 ------------ 1,713,930 ------------ AUTOMOBILE MANUFACTURERS: 0.75% 20,000 DaimlerChrysler AG# 987,200 80,000 Ford Motor Co. 554,400 22,000 General Motors Corp. 655,380 ------------ 2,196,980 ------------ AUTOMOBILE PARTS & EQUIPMENT: 0.91% 35,000 ArvinMeritor, Inc. 601,650 23,000 Cooper Tire & Rubber Co. 256,220 200,000 Dura Automotive Systems, Inc.* 374,000 35,000 Lear Corp. 777,350 60,000 The Goodyear Tire & Rubber Co.* 666,000 ------------ 2,675,220 ------------ BANKS: 1.88% 31,019 Bank of America Corp. 1,492,014 20,000 BankAtlantic Bancorp, Inc. - Class A 296,800 102,480 BFC Financial Corp. - Class A* 709,162 65,000 Capstead Mortgage Corp. 493,350 22,000 Citigroup, Inc. 1,061,280 13,200 JPMorgan Chase & Co. 554,400 12,500 National City Corp. 452,375 21,000 Sovereign Bancorp, Inc. 426,510 ------------ 5,485,891 ------------ BROKERAGES: 0.80% 20,000 Lehman Brothers Holdings, Inc. 1,303,000 7,500 The Bear Stearns Companies, Inc. 1,050,600 ------------ 2,353,600 ------------ BUILDING MATERIALS: 2.11% 20,000 Ameron International Corp. 1,340,400 16,000 Building Materials Holding Corp. 445,920 100,000 Huttig Building Products, Inc.* 810,000 17,000 International Aluminum Corp. 646,000 60,000 JLG Industries, Inc. 1,350,000 30,000 Ready Mix, Inc.* 388,800 440,000 Smith-Midland Corp.*^ 1,188,000 ------------ 6,169,120 ------------ BUSINESS SERVICES: 3.06% 40,000 Ambassadors International, Inc. 930,000 245,000 Analysts International Corp.* 490,000 140,000 Computer Horizons Corp.* 660,800 110,000 Edgewater Technology, Inc.* 763,400 151,100 HealthStream, Inc.* 577,202 50,000 Insweb Corp.* 131,500 30,000 MasTec, Inc.* 396,300 125,000 Onvia.com, Inc.* 661,250 102,000 Optimal Group, Inc. - Class A*# 1,378,020 14,500 Technology Solutions Co.* 134,125 220,000 Traffix, Inc. 1,185,800 89,999 ValueClick, Inc.* 1,381,485 95,000 Vicon Industries, Inc.* 266,000 ------------ 8,955,882 ------------ CASINOS & CASINO EQUIPMENT: 0.36% 30,000 Bally Technologies, Inc.* 494,100 15,000 International Game Technology 569,100 ------------ 1,063,200 ------------ CHEMICALS, COMMODITY: 1.05% 15,000 E.I. Du Pont de Nemours and Co. 624,000 35,000 Lyondell Chemical Co. 793,100 60,000 Olin Corp. 1,075,800 15,000 The Dow Chemical Co. 585,450 ------------ 3,078,350 ------------ CHEMICALS, SPECIALTY: 0.52% 20,000 OM Group, Inc.* 617,000 25,000 The Mosaic Co.* 391,250 125,000 Wellman, Inc. 505,000 ------------ 1,513,250 ------------ CLOTHING/FABRICS: 1.44% 50,000 Delta Apparel, Inc. 857,000 120,000 Hartmarx Corp.* 720,000 10,000 Kellwood Co. 292,700 10,000 Oxford Industries, Inc. 394,100 60,000 Quaker Fabric Corp.* 81,600 80,000 Quiksilver, Inc.* 974,400 305,000 Unifi, Inc.* 884,500 ------------ 4,204,300 ------------ COMMUNICATIONS TECHNOLOGY: 4.77% 140,000 3Com Corp.* 716,800 45,000 Andrew Corp.* 398,700 350,000 APA Enterprises, Inc.* 465,500 150,000 AsiaInfo Holdings, Inc.* 643,500 57,500 Avaya, Inc.* 656,650 130,000 Avici Systems, Inc.* 751,400 241,000 Blonder Tongue Laboratories, Inc.* 409,700 65,000 Communications Systems, Inc. 665,600 30,000 Comverse Technology, Inc.* 593,100 230,000 deltathree, Inc. - Class A* 533,600 66,600 Digi International, Inc.* 834,498 369,476 Forgent Networks, Inc.* 247,586 90,000 McDATA Corp. - Class A* 367,200 30,000 Motorola, Inc. 604,500 135,000 Network Equipment Technologies, Inc.* 423,900 75,000 Novell, Inc.* 497,250 28,000 Polycom, Inc.* 613,760 100,000 Stratos International, Inc.* 685,000 27,609 Symmetricom, Inc.* 195,196 125,000 Tellabs, Inc.* 1,663,750 355,000 TII Network Technologies, Inc.* 1,146,650 80,000 TriQuint Semiconductor, Inc.* 356,800 180,000 Wireless Telecom Group, Inc. 477,000 ------------ 13,947,640 ------------ COMPUTERS/HARDWARE: 1.63% 55,000 AU Optronics Corp. ADR 783,200 20,000 Apple Computer, Inc.* 1,142,400 40,000 GTSI Corp.* 258,000 30,000 Hewlett Packard Co. 950,400 8,000 International Business Machines Corp. 614,560 20,000 SanDisk Corp.* 1,019,600 ------------ 4,768,160 ------------ CONTAINERS & PACKAGING: 0.62% 80,000 American Biltrite, Inc.* 833,600 103,043 Rock of Ages Corp. 499,759 180,000 Rotonics Manufacturing, Inc. 468,000 ------------ 1,801,359 ------------ COSMETICS/PERSONAL CARE: 0.06% 10,000 Helen of Troy Ltd.* # 184,000 ------------ DATA STORAGE/DISK DRIVES: 1.08% 80,000 Dot Hill Systems Corp.* 273,600 160,000 Innovex, Inc.* 611,200 35,000 Seagate Technology# 792,400 75,000 Western Digital Corp.* 1,485,750 ------------ 3,162,950 ------------ ELECTRICAL COMPONENTS & EQUIPMENT: 1.76% 31,000 American Power Conversion Corp. 604,190 50,000 AVX Corp. 789,500 60,000 C&D Technologies, Inc. 451,200 225,000 Fedders Corp. 544,500 55,000 Frequency Electronics, Inc. 713,900 65,000 Kemet Corp.* 599,300 91,500 Vishay Intertechnology, Inc.* 1,439,295 ------------ 5,141,885 ------------ ELECTRONIC MANUFACTURING SERVICES: 0.62% 65,000 Flextronics International LTD*# 690,300 30,000 Nam Tai Electronics, Inc. # 671,100 100,000 Sanmina-SCI Corp. 460,000 ------------ 1,821,400 ------------ FIBER OPTIC COMPONENTS: 0.64% 370,000 Alliance Fiber Optic Products, Inc.* 536,500 75,000 Bookham, Inc.* 252,000 45,000 Corning, Inc.* 1,088,550 ------------ 1,877,050 ------------ FINANCIAL SERVICES, DIVERSIFIED: 0.33% 40,000 H & R Block, Inc. 954,400 ------------ FIXED LINE COMMUNICATIONS: 0.37% 25,000 ADC Telecommunications, Inc.* 421,500 20,000 Verizon Communications, Inc. 669,800 ------------ 1,091,300 ------------ FOOD MANUFACTURERS: 0.87% 45,000 Archer-Daniels-Midland Co. 1,857,600 43,000 Sara Lee Corp. 688,860 ------------ 2,546,460 ------------ FOOTWEAR: 0.39% 21,000 Steven Madden, Ltd.* 622,020 20,000 The Timberland Co. - Class A* 522,000 ------------ 1,144,020 ------------ FOREST PRODUCTS: 0.14% 65,000 Pope & Talbot, Inc. 404,950 ------------ HEALTHCARE PROVIDERS: 2.82% 42,000 Aetna, Inc. 1,677,060 95,000 American Shared Hospital Services 580,450 20,000 HCA, Inc. 863,000 40,000 Humana, Inc.* 2,148,000 60,000 Res-Care, Inc.* 1,200,000 61,000 United American Healthcare Corp.* 231,800 34,667 UnitedHealth Group, Inc. 1,552,388 ------------ 8,252,698 ------------ HEAVY CONSTRUCTION: 0.10% 135,000 Williams Industries, Inc.* 279,436 ------------ HOME CONSTRUCTION: 4.91% 34,000 Beazer Homes USA, Inc. 1,559,580 20,000 Cavco Industries, Inc.* 888,800 22,500 Centex Corp. 1,131,750 46,666 D.R. Horton, Inc. 1,111,584 20,000 Hovanian Enterprises, Inc. - Class A* 601,600 25,000 KB Home 1,146,250 20,000 Lennar Corp. - Class A 887,400 13,000 M.D.C. Holdings, Inc. 675,090 13,000 Meritage Homes Corp.* 614,250 14,000 M/I Homes, Inc. 491,120 35,000 Orleans Homebuilders, Inc. 568,750 40,000 Pulte Homes, Inc. 1,151,600 25,000 Ryland Group, Inc. 1,089,250 40,000 Standard Pacific Corp. 1,028,000 28,000 Toll Brothers, Inc.* 715,960 35,000 WCI Communities, Inc.* 704,900 ------------ 14,365,884 ------------ HOME FURNISHINGS: 0.75% 175,000 Applica, Inc.* 773,500 32,700 Chromcraft Revington, Inc.* 380,955 6,000 Craftmade International, Inc. 100,500 33,896 The Dixie Group, Inc.* 450,478 6,000 Whirlpool Corp. 495,900 ------------ 2,201,333 ------------ HOMELAND SECURITY: 0.24% 40,000 OSI Systems, Inc.* 710,800 ------------ HOUSE, DURABLE: 0.21% 90,000 Global-Tech Appliances, Inc.*# 293,400 45,000 Lenox Group, Inc.* 319,050 ------------ 612,450 ------------ INDUSTRIAL DIVERSIFIED: 0.34% 35,000 McRae Industries, Inc. - Class A 437,500 44,900 P & F Industries, Inc. - Class A* 550,025 ------------ 987,525 ------------ INDUSTRIAL SERVICES & DISTRIBUTORS: 0.76% 30,000 Avnet, Inc.* 600,600 75,000 Nu Horizons Electronics Corp.* 723,750 48,400 Spectrum Control, Inc.* 447,700 75,000 Trio-Tech International* 458,250 ------------ 2,230,300 ------------ INSURANCE, FULL LINE: 0.29% 10,000 Hartford Financial Services Group, Inc. 846,000 ------------ INSURANCE, LIFE: 0.48% 2,500 National Western Life Insurance Co. - Class A* 599,125 45,000 UnumProvident Corp. 815,850 ------------ 1,414,975 ------------ INSURANCE, PROPERTY & CASUALTY: 1.82% 35,000 Direct General Corp. 592,200 15,000 Endurance Specialty Holdings Ltd.# 480,000 20,000 Merchants Group, Inc. 610,800 10,500 MGIC Investment Corp. 682,500 11,500 Radian Group, Inc. 710,470 25,000 RTW, Inc.* 270,875 20,000 The Allstate Corp. 1,094,600 20,000 The St. Paul Travelers Companies, Inc. 891,600 ------------ 5,333,045 ------------ MEDICAL SUPPLIES: 1.07% 25,000 Baxter International, Inc. 919,000 30,000 Boston Scientific Corp.* 505,200 36,000 McKesson Corp. 1,702,080 ------------ 3,126,280 ------------ NATURAL GAS: 0.30% 30,000 KCS Energy, Inc.* 891,000 ------------ OIL, EQUIPMENT & SERVICES: 2.83% 20,000 Bristow Group, Inc.* 720,000 50,000 Key Energy Services, Inc.* 762,500 11,000 Lone Star Technologies, Inc.* 594,220 40,000 Maverick Tube Corp.* 2,527,600 48,000 Oceaneering International, Inc.* 2,200,800 30,000 Tidewater Inc. 1,476,000 ------------ 8,281,120 ------------ OIL, EXPLORATION & PRODUCTION/DRILLING: 2.73% 20,000 Chesapeake Energy Corp. 605,000 35,000 GlobalSantaFe Corp.# 2,021,250 100,000 Grey Wolf, Inc.* 770,000 36,000 Nabors Industries, Ltd.* # 1,216,440 13,000 Noble Energy, Inc. 609,180 10,000 Rowan Companies, Inc. 355,900 30,000 Transocean, Inc.*# 2,409,600 ------------ 7,987,370 ------------ OIL, INTEGRATED MAJORS: 2.87% 35,000 Anadarko Petroleum Corp. 1,669,150 11,000 Chevron Corp. 682,660 10,000 ConocoPhillips 655,300 10,000 Exxon Mobil Corp. 613,500 30,000 Marathon Oil Corp. 2,499,000 16,800 Occidental Petroleum Corp. 1,722,840 19,000 Patterson-UTI Energy, Inc. 537,890 ------------ 8,380,340 ------------ OIL, REFINERS: 3.72% 42,000 Giant Industries, Inc.* 2,795,100 56,000 Holly Corp. 2,699,200 32,000 Tesoro Petroleum Corp. 2,379,520 45,000 Valero Energy Corp. 2,993,400 ------------ 10,867,220 ------------ OIL, SECONDARY: 0.61% 10,000 Apache Corp. 682,500 9,000 Devon Energy Corp. 543,690 12,000 Pogo Producing Co. 553,200 ------------ 1,779,390 ------------ OIL, TRANSPORTATION/SHIPPING: 2.60% 60,000 Dryships, Inc.# 647,400 20,000 Frontline LTD.# 757,000 15,000 General Maritime Corp.# 554,400 20,000 Nordic American Tanker Shipping LTD.# 729,000 90,000 OMI Corp.# 1,948,500 15,000 Overseas Shipholding Group, Inc. 887,250 5,200 Ship Finance International Ltd.# 90,012 23,000 Teekay Shipping Corp. # 962,320 25,000 Tsakos Energy Navigation LTD.# 1,042,000 ------------ 7,617,882 ------------ OTHER NON-FERROUS: 0.90% 20,000 Inco, Ltd.# 1,318,000 16,000 Phelps Dodge Corp. 1,314,560 ------------ 2,632,560 ------------ PAPER PRODUCTS: 0.19% 17,000 International Paper Co. 549,100 ------------ PHARMACEUTICALS: 2.83% 17,500 Abbott Laboratories 763,175 83,830 Bioveris Corp.* 674,831 30,000 Bristol-Myers Squibb Co. 775,800 11,000 Eli Lilly & Co. 607,970 12,000 Forest Laboratories, Inc.* 464,280 18,500 Johnson & Johnson 1,108,520 50,000 King Pharmaceuticals, Inc.* 850,000 20,000 Merck & Co. Inc. 728,600 30,000 Mylan Laboratories, Inc. 600,000 35,000 Pfizer, Inc. 821,450 20,000 Wyeth 888,200 ------------ 8,282,826 ------------ POLLUTION CONTROL/WASTE MANAGEMENT: 1.06% 55,000 Aleris International, Inc.* 2,521,750 22,000 American Ecology Corp. 583,000 ------------ 3,104,750 ------------ PRECIOUS METALS: 0.28% 65,000 Stillwater Mining Co.* 824,200 ------------ RAILROADS: 1.94% 32,000 CSX Corp. 2,254,080 40,000 Norfolk Southern Corp. 2,128,800 14,000 Union Pacific Corp. 1,301,440 ------------ 5,684,320 ------------ REAL ESTATE INVESTMENT TRUSTS: 0.47% 60,000 HRPT Properties Trust 693,600 15,000 New Century Financial Corp. 686,250 ------------ 1,379,850 ------------ RECREATIONAL PRODUCTS: 1.24% 15,000 Brunswick Corp. 498,750 30,000 Callaway Golf Co. 389,700 225,000 Concord Camera Corp.* 144,000 25,000 Eastman Kodak Co. 594,500 30,000 K2, Inc.* 328,200 30,000 The Nautilus Group, Inc. 471,300 40,000 The Walt Disney Co. 1,200,000 ------------ 3,626,450 ------------ RESTAURANTS: 0.28% 25,000 Landry's Restaurants, Inc. 811,250 ------------ RETAILERS, APPAREL: 1.19% 16,667 Abercrombie & Fitch Co. - Class A 923,852 50,000 American Eagle Outfitters, Inc. 1,702,000 20,000 AnnTaylor Stores Corp.* 867,600 ------------ 3,493,452 ------------ RETAILERS, BROADLINE: 0.85% 24,000 J. C. Penney Company, Inc. 1,620,240 10,000 Nordstrom, Inc. 365,000 10,000 Target Corp. 488,700 ------------ 2,473,940 ------------ RETAILERS, SPECIALTY: 1.23% 25,756 AutoNation, Inc.* 552,209 16,500 Bed Bath & Beyond, Inc.* 547,305 35,000 Jo-Ann Stores, Inc. - Class B* 512,750 16,000 OfficeMax, Inc. 652,000 29,000 The Home Depot, Inc. 1,037,910 40,000 Trans World Entertainment Corp.* 288,800 ------------ 3,590,974 ------------ SAVINGS & LOANS: 2.07% 23,000 Countrywide Financial Corp. 875,840 7,000 Downey Financial Corp. 474,950 16,000 FirstFed Financial Corp.* 922,720 7,000 Golden West Financial Corp. 519,400 12,000 IndyMac Bancorp, Inc. 550,200 29,524 PVF Capital Corp. 297,602 53,035 Washington Mutual, Inc. 2,417,335 ------------ 6,058,047 ------------ SEMICONDUCTOR, CAPITAL EQUIPMENT: 2.88% 130,000 Aetrium, Inc.* 590,200 45,000 Brooks Automation, Inc.* 531,000 45,000 Cohu, Inc. 789,750 75,000 Electroglas, Inc.* 228,000 75,000 Kulicke and Soffa Industries, Inc.* 555,750 37,500 Lam Research Corp.* 1,748,250 60,000 Mattson Technology, Inc.* 586,200 25,000 Novellus Systems, Inc.* 617,500 35,000 Teradyne, Inc.* 487,550 35,976 Ultratech, Inc.* 566,262 34,500 Varian Semiconductor Equipment Associates, Inc.* 1,125,045 25,000 Veeco Instruments, Inc.* 596,000 ------------ 8,421,507 ------------ SEMICONDUCTOR, GRAPHICS CHIPS: 0.64% 60,000 NVIDIA Corp.* 1,277,400 163,900 Tvia, Inc.* 590,040 ------------ 1,867,440 ------------ SEMICONDUCTOR, MICROPROCESSORS: 4.43% 60,000 Advanced Micro Devices, Inc.* 1,465,200 125,000 Atmel Corp.* 693,750 75,000 Ceva, Inc.* 433,500 30,000 Cypress Semiconductor Corp.* 436,200 140,000 Dataram Corp. 653,800 59,000 Diodes, Inc.* 2,444,960 45,000 Exar Corp.* 597,150 110,000 Integrated Silicon Solution, Inc.* 606,100 35,000 Intel Corp. 663,250 20,000 International Rectifier Corp.* 781,600 40,000 Micron Technology, Inc.* 602,400 40,000 National Semiconductor Corp. 954,000 45,000 PortalPlayer, Inc.* 441,450 70,000 Sigmatel, Inc.* 287,700 150,000 Silicon Storage Technology, Inc.* 609,000 56,649 Taiwan Semiconductor Manufacturing Company Ltd. ADR 520,042 25,000 Texas Instruments, Inc. 757,250 ------------ 12,947,352 ------------ SEMICONDUCTOR, PROGRAMMABLE LOGIC DEVICES: 0.87% 150,000 Applied Micro Circuits Corp.* 409,500 42,500 Genesis Microchip, Inc.* 491,300 75,000 Integrated Device Technology, Inc.* 1,063,500 70,000 Pericom Semiconductor Corp.* 581,000 ------------ 2,545,300 ------------ SOFTWARE: 4.68% 140,000 ActivIdentity Corp.* 638,400 170,500 American Software, Inc. - Class A 1,145,760 53,100 CAM Commerce Solutions, Inc. 1,166,076 100,000 Captaris, Inc.* 465,000 16,000 Click Commerce, Inc.* 315,680 145,000 Compuware Corp.* 971,500 35,000 Electronics for Imaging, Inc.* 730,800 85,000 iPass, Inc.* 476,000 100,000 Keynote Systems, Inc.* 1,031,000 30,000 Microsoft Corp. 699,000 50,000 Napster, Inc.* 154,000 90,000 NetManage, Inc.* 447,300 150,000 Peerless Systems Corp.* 769,500 45,000 Programmer's Paradise, Inc. 629,100 155,000 Quovadx, Inc.* 399,900 70,000 RealNetworks, Inc.* 749,000 30,000 RSA Security, Inc.* 815,700 20,000 SafeNet, Inc.* 354,400 185,000 Selectica, Inc.* 462,500 55,000 SonicWALL, Inc.* 494,450 50,000 Symantec Corp.* 777,000 ------------ 13,692,066 ------------ STEEL: 1.13% 70,000 Ryerson Tull, Inc. 1,890,000 20,000 United States Steel Corp. 1,402,400 ------------ 3,292,400 ------------ TOBACCO: 1.19% 90,000 Alliance One International, Inc. 399,600 10,000 Altria Group, Inc. 734,300 13,500 Reynolds American, Inc. 1,556,550 17,500 UST, Inc. 790,825 ------------ 3,481,275 ------------ TOYS: 1.15% 25,000 Hasbro, Inc. 452,750 60,000 Mattel, Inc. 990,600 37,000 The Topps Co. 304,140 75,000 THQ, Inc.* 1,620,000 ------------ 3,367,490 ------------ TRANSPORTATION EQUIPMENT: 0.57% 23,000 Navistar International Corp.* 566,030 27,000 Trinity Industries, Inc. 1,090,800 ------------ 1,656,830 ------------ TRUCKING: 0.66% 15,000 Arkansas Best Corp. 753,150 28,000 YRC Worldwide, Inc.* 1,179,080 ------------ 1,932,230 ------------ WIRELESS COMMUNICATIONS: 1.05% 84,000 Brightpoint, Inc.* 1,136,520 34,856 Sprint Nextel Corp. 696,771 40,000 Nokia Corp. ADR 810,400 150,000 Wireless Facilities, Inc.* 412,500 ------------ 3,056,191 ------------ Total Common Stocks (Cost $206,537,544) 283,695,307 ------------ Warrants: 0.01% --------------- 20,000 Air France ADR* Expiration 11/5/2007, Exercise Price $20.00 (Acquired 5/5/2004, Cost $18,752) 26,400 ------------ Short-Term Investments: 2.99% ----------------------------- MONEY MARKET FUNDS: 2.99% 7,951,908 AIM STIT-STIC Prime Portfolio 7,951,908 806,549 Fidelity Institutional Money Market Portfolio 806,549 ------------ 8,758,457 ------------ Total Short-Term Investments (Cost $8,758,457) 8,758,457 ------------ Total Investments in Securities (Cost $215,314,753): 99.99% 292,480,164 Assets in Excess of Liabilities: 0.01% 9,664 ------------ Net Assets: 100.00% $292,489,828 ------------ ------------ * Non-income producing security. # U.S. security of a foreign issuer. ^ Affiliated Company; the Fund owns 5% or more of the outstanding voting securities of the issuer. See Note 4 in the Notes to Financial Statements. ADR - American Depositary Receipt See accompanying Notes to Financial Statements. AL FRANK DIVIDEND VALUE FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 2006 (UNAUDITED) Shares Common Stocks: 95.75% Value ------ --------------------- ----- ADVANCED INDUSTRIAL EQUIPMENT: 1.08% 1,800 Eaton Corp. $ 135,720 7,334 Insteel Industries, Inc. 177,483 ----------- 313,203 ----------- AEROSPACE & DEFENSE: 1.50% 2,300 The Boeing Co. 188,393 5,500 Kaman Corp. - Class A 100,100 2,000 Lockheed Martin Corp. 143,480 ----------- 431,973 ----------- AIRLINES: 0.56% 6,500 SkyWest, Inc. 161,200 ----------- ALUMINUM: 0.94% 4,500 Alcoa, Inc. 145,620 2,900 BHP Billiton Limited ADR 124,903 ----------- 270,523 ----------- AUTOMOBILE MANUFACTURERS: 1.26% 12,000 Ford Motor Co. 83,160 4,500 General Motors Corp. 134,055 1,400 Toyota Motor Corp. ADR 146,426 ----------- 363,641 ----------- AUTOMOBILE PARTS & EQUIPMENT: 1.03% 9,000 ArvinMeritor, Inc. 154,710 5,500 Cooper Tire & Rubber Co. 61,270 4,500 Superior Industries International, Inc. 82,305 ----------- 298,285 ----------- BANKS: 3.27% 5,504 Bank of America Corp. 264,742 15,000 Capstead Mortgage Corp. 113,850 3,200 Citigroup, Inc. 154,368 3,000 Fifth Third Bancorp 110,850 3,700 JPMorgan Chase & Co. 155,400 4,000 National City Corp. 144,760 ----------- 943,970 ----------- BROKERAGES: 2.27% 2,800 Lehman Brothers Holdings, Inc. 182,420 2,500 Merrill Lynch & Co., Inc. 173,900 2,000 Morgan Stanley 126,420 1,150 The Goldman Sachs Group, Inc. 172,994 ----------- 655,734 ----------- BUILDING MATERIALS: 1.56% 3,500 Ameron International Corp. 234,570 3,000 Building Materials Holding Corp. 83,610 3,500 International Aluminum Corp. 133,000 ----------- 451,180 ----------- BUSINESS SERVICES: 2.24% 9,300 Ambassadors International, Inc. 216,225 13,000 IKON Office Solutions, Inc. 163,800 6,000 Sabre Holdings Corp. 132,000 25,000 Traffix, Inc. 134,750 ----------- 646,775 ----------- CASINOS & CASINO EQUIPMENT: 0.66% 5,000 International Game Technology 189,700 ----------- CHEMICALS, COMMODITY: 1.50% 2,700 E.I. Du Pont de Nemours and Co. 112,320 4,500 Lyondell Chemical Co. 101,970 6,000 Olin Corp. 107,580 2,700 The Dow Chemical Co. 105,381 403 Tronox Inc. - Class B 5,308 ----------- 432,559 ----------- CHEMICALS, SPECIALTY: 0.24% 17,000 Wellman, Inc. 68,680 ----------- CLOTHING/FABRICS: 1.78% 10,600 Delta Apparel, Inc. 181,684 4,000 Kellwood Co. 117,080 4,000 Kenneth Cole Productions, Inc. 89,320 7,000 Russell Corp. 127,120 ----------- 515,204 ----------- COMMUNICATIONS TECHNOLOGY: 2.04% 7,000 ADTRAN, Inc. 157,010 8,000 Motorola, Inc. 161,200 3,300 QUALCOMM, Inc. 132,231 52,000 Wireless Telecom Group, Inc. 137,800 ----------- 588,241 ----------- COMPUTERS/HARDWARE: 1.53% 10,682 AU Optronics Corp. ADR 152,112 6,000 Hewlett Packard Co. 190,080 1,300 International Business Machines Corp. 99,866 ----------- 442,058 ----------- CONSUMER SERVICES: 0.36% 6,000 Time Warner Inc. 103,800 ----------- CONTAINERS & PACKAGING: 0.38% 42,500 Rotonics Manufacturing, Inc. 110,500 ----------- DATA STORAGE/DISK DRIVES: 0.49% 6,200 Seagate Technology# 140,368 ----------- DISTILLERS & BREWERS: 0.38% 2,400 Anheuser-Busch Companies, Inc. 109,416 ----------- ELECTRICAL COMPONENTS & EQUIPMENT: 1.45% 4,900 American Power Conversion Corp. 95,501 9,700 AVX Corp. 153,163 13,000 Frequency Electronics, Inc. 168,740 ----------- 417,404 ----------- ELECTRONIC MANUFACTURING SERVICES: 0.83% 4,400 Jabil Circuit, Inc. 112,640 5,700 Nam Tai Electronics, Inc.# 127,509 ----------- 240,149 ----------- FINANCIAL SERVICES, DIVERSIFIED: 0.84% 2,300 Fannie Mae 110,630 647 Fidelity National Title Group, Inc. - Class A 12,726 5,000 H & R Block, Inc. 119,300 ----------- 242,656 ----------- FIXED LINE COMMUNICATIONS: 1.45% 5,500 AT&T, Inc. 153,395 4,300 BellSouth Corp. 155,660 3,300 Verizon Communications, Inc. 110,517 ----------- 419,572 ----------- FOOD MANUFACTURERS: 1.54% 6,000 Archer-Daniels-Midland Co. 247,680 4,800 Nash Finch Co. 102,192 6,000 Sara Lee Corp. 96,120 ----------- 445,992 ----------- FOOTWEAR: 0.34% 1,200 Nike, Inc. - Class B 97,200 ----------- HEALTHCARE PROVIDERS: 0.81% 17,000 American Shared Hospital Services 103,870 3,000 HCA, Inc. 129,450 ----------- 233,320 ----------- HEAVY MACHINERY: 1.25% 2,600 Caterpillar, Inc. 193,648 2,000 Deere & Co. 166,980 ----------- 360,628 ----------- HOME CONSTRUCTION: 3.18% 2,500 Beazer Homes USA, Inc. 114,675 4,400 D.R. Horton, Inc. 104,808 1,900 KB Home 87,115 2,700 Lennar Corp. - Class A 119,799 1,950 M.D.C. Holdings, Inc. 101,264 7,000 Orleans Homebuilders, Inc. 113,750 3,000 Pulte Homes, Inc. 86,370 1,900 Ryland Group, Inc. 82,783 4,200 Standard Pacific Corp. 107,940 ----------- 918,504 ----------- HOME FURNISHINGS: 0.58% 3,200 National Presto Industries, Inc. 167,296 ----------- HOUSE, DURABLE: 0.86% 1,585 Fortune Brands, Inc. 112,551 5,300 Newell Rubbermaid, Inc. 136,899 ----------- 249,450 ----------- HOUSE, NON-DURABLE: 0.46% 2,200 Colgate-Palmolive Co. 131,780 ----------- INDUSTRIAL DIVERSIFIED: 0.76% 1,500 3M Co. 121,155 3,000 General Electric Co. 98,880 ----------- 220,035 ----------- INSURANCE, FULL LINE: 1.55% 1,800 Hartford Financial Services Group, Inc. 152,280 2,500 MBIA, Inc. 146,375 3,000 The Chubb Corp. 149,700 ----------- 448,355 ----------- INSURANCE, LIFE: 0.41% 6,500 UnumProvident Corp. 117,845 ----------- INSURANCE, PROPERTY & CASUALTY: 3.88% 3,900 American Financial Group, Inc. 167,310 6,000 Direct General Corp. 101,520 3,300 Endurance Specialty Holdings Ltd.# 105,600 3,700 Fidelity National Financial, Inc. 144,115 2,000 MGIC Investment Corp. 130,000 2,400 The Allstate Corp. 131,352 3,300 The St. Paul Travelers Companies, Inc. 147,114 5,625 W.R. Berkley Corp. 191,981 ----------- 1,118,992 ----------- MEDICAL SUPPLIES: 1.10% 3,500 Baxter International, Inc. 128,660 4,000 McKesson Corp. 189,120 ----------- 317,780 ----------- OIL, EQUIPMENT & SERVICES: 0.51% 3,000 Tidewater Inc. 147,600 ----------- OIL, EXPLORATION & PRODUCTION/DRILLING: 1.52% 3,500 Chesapeake Energy Corp. 105,875 3,300 GlobalSantaFe Corp.# 190,575 3,000 Noble Energy, Inc. 140,580 ----------- 437,030 ----------- OIL, INTEGRATED MAJORS: 3.18% 3,400 Anadarko Petroleum Corp. 162,146 2,200 Chevron Corp. 136,532 2,800 ConocoPhillips 183,484 2,400 Exxon Mobil Corp. 147,240 3,472 Marathon Oil Corp. 289,218 ----------- 918,620 ----------- OIL, REFINERS: 1.24% 5,400 Valero Energy Corp. 359,208 ----------- OIL, SECONDARY: 3.44% 2,400 Apache Corp. 163,800 2,000 Ashland, Inc. 133,400 3,100 Devon Energy Corp. 187,271 2,100 Hess Corp. 110,985 4,000 Kerr-McGee Corp. 277,400 2,600 Pogo Producing Co. 119,860 ----------- 992,716 ----------- OIL, TRANSPORTATION/SHIPPING: 3.76% 11,000 Dryships, Inc.# 118,690 2,500 Frontline LTD.# 94,625 3,300 General Maritime Corp.# 121,968 3,200 Nordic American Tanker Shipping LTD.# 116,640 6,500 OMI Corp.# 140,725 2,000 Overseas Shipbuilding Group, Inc. 118,300 5,375 Ship Finance International LTD# 93,041 3,250 Teekay Shipping Corp.# 135,980 3,500 Tsakos Energy Navigation LTD.# 145,880 ----------- 1,085,849 ----------- PAPER PRODUCTS: 0.39% 3,500 International Paper Co. 113,050 ----------- PHARMACEUTICALS: 4.51% 2,800 Abbott Laboratories 122,108 5,050 Bristol-Myers Squibb Co. 130,593 2,500 Eli Lilly & Co. 138,175 2,300 GlaxoSmithKline plc ADR 128,340 1,900 Johnson & Johnson 113,848 3,900 Merck & Co. Inc. 142,077 7,500 Mylan Laboratories, Inc. 150,000 2,500 Novartis AG ADR 134,800 5,000 Pfizer, Inc. 117,350 2,800 Wyeth 124,348 ----------- 1,301,639 ----------- POLLUTION CONTROL/WASTE MANAGEMENT: 0.74% 8,000 American Ecology Corp. 212,000 ----------- RAILROADS: 2.69% 2,500 Burlington Northern Santa Fe Corp. 198,125 3,200 CSX Corp. 225,408 3,500 Norfolk Southern Corp. 186,270 1,800 Union Pacific Corp. 167,328 ----------- 777,131 ----------- REAL ESTATE INVESTMENT TRUSTS: 0.56% 3,500 New Century Financial Corp. 160,125 ----------- RECREATIONAL PRODUCTS: 2.47% 3,300 Brunswick Corp. 109,725 9,000 Callaway Golf Co. 116,910 4,000 Eastman Kodak Co. 95,120 2,100 Harley-Davidson, Inc. 115,269 8,000 Nautilus Group, Inc. 125,680 5,000 The Walt Disney Co. 150,000 ----------- 712,704 ----------- RESTAURANTS: 0.43% 3,700 McDonald's Corp. 124,320 ----------- RETAILERS, APPAREL: 2.35% 2,000 Abercrombie & Fitch Co. 110,860 6,000 American Eagle Outfitters, Inc. 204,240 4,500 Deb Shops, Inc. 108,495 6,800 The Finish Line, Inc. 80,444 5,500 The Gap, Inc. 95,700 4,300 The Talbots, Inc. 79,335 ----------- 679,074 ----------- RETAILERS, BROADLINE: 1.82% 4,100 Family Dollar Stores, Inc. 100,163 2,600 J. C. Penney Company, Inc. 175,526 4,000 Nordstrom, Inc. 146,000 2,170 Wal-Mart Stores, Inc. 104,529 ----------- 526,218 ----------- RETAILERS, SPECIALTY: 2.85% 3,750 Best Buy Co., Inc. 205,650 4,250 Circuit City Stores, Inc. 115,685 5,500 Claire's Stores, Inc. 140,305 3,900 OfficeMax, Inc. 158,925 3,500 The Home Depot, Inc. 125,265 6,500 The Pep Boys - Manny, Moe & Jack 76,245 ----------- 822,075 ----------- SAVINGS & LOANS: 1.89% 3,800 Countrywide Financial Corp. 144,704 1,600 Downey Financial Corp. 108,560 3,400 IndyMac Bancorp, Inc. 155,890 3,000 Washington Mutual, Inc. 136,740 ----------- 545,894 ----------- SEMICONDUCTOR, CAPITAL EQUIPMENT: 1.82% 8,500 Applied Materials, Inc. 138,380 5,000 Cognex Corp. 130,150 7,500 Cohu, Inc. 131,625 3,000 KLA-Tencor Corp. 124,710 ----------- 524,865 ----------- SEMICONDUCTOR, MICROPROCESSORS: 2.54% 3,200 Analog Devices, Inc. 102,848 21,000 Dataram Corp. 98,070 5,600 Intel Corp. 106,120 7,100 National Semiconductor Corp. 169,335 10,815 Taiwan Semiconductor Manufacturing Company Ltd. ADR 99,281 5,200 Texas Instruments, Inc. 157,508 ----------- 733,162 ----------- SEMICONDUCTOR, PROGRAMMABLE LOGIC DEVICES: 0.70% 3,000 Maxim Integrated Products, Inc. 96,330 4,700 Xilinx, Inc. 106,455 ----------- 202,785 ----------- SOFT DRINKS: 0.45% 3,000 The Coca-Cola Co. 129,060 ----------- SOFTWARE: 1.38% 23,000 American Software, Inc. - Class A 154,560 5,000 Microsoft Corp. 116,500 9,000 Programmer's Paradise, Inc. 125,820 ----------- 396,880 ----------- STEEL: 3.00% 4,000 Nucor Corp. 217,000 10,000 Ryerson, Inc. 270,000 5,000 The Timken Co. 167,550 3,000 United States Steel Corp. 210,360 ----------- 864,910 ----------- TOBACCO: 0.90% 1,675 Altria Group, Inc. 122,995 3,000 UST, Inc. 135,570 ----------- 258,565 ----------- TOYS: 0.46% 8,000 Mattel, Inc. 132,080 ----------- TRANSPORTATION EQUIPMENT: 2.11% 1,150 Cummins, Inc. 140,588 2,800 Ryder System, Inc. 163,604 7,500 Trinity Industries, Inc. 303,000 ----------- 607,192 ----------- TRUCKING: 1.09% 3,500 Arkansas Best Corp. 175,735 5,600 J.B. Hunt Transport Services, Inc. 139,496 ----------- 315,231 ----------- WIRELESS COMMUNICATIONS: 0.59% 8,400 Nokia Corp. ADR 170,184 ----------- Total Common Stocks (Cost $23,444,820) 27,634,135 ----------- Short-Term Investments: 3.55% ----------------------------- MONEY MARKET FUNDS: 3.55% 434,252 AIM STIT-STIC Prime Portfolio 434,252 590,290 Fidelity Institutional Money Market Portfolio 590,290 ----------- 1,024,542 ----------- Total Short-Term Investments (Cost $1,024,542) 1,024,542 ----------- Total Investments in Securities (Cost $24,469,362): 99.30% 28,658,677 Other Assets in Excess of Liabilities: 0.70% 202,749 ----------- Net Assets: 100.00% $28,861,426 ----------- ----------- # U.S. security of a foreign issuer. ADR - American Depositary Receipt See accompanying Notes to Financial Statements. AL FRANK FUNDS STATEMENTS OF ASSETS AND LIABILITIES AT JUNE 30, 2006 (UNAUDITED) AL FRANK AL FRANK DIVIDEND FUND VALUE FUND -------- ---------- ASSETS Investments in securities, at value: Non-affiliates (cost $214,860,305 and $24,469,362, respectively) $291,292,164 $28,658,677 Affiliates (cost $454,448 and $0, respectively) 1,188,000 -- ------------ ----------- Total investments in securities, at value 292,480,164 28,658,677 ------------ ----------- Cash 3,389 825 Receivables: Fund shares sold 332,442 195,000 Dividends and interest 277,473 49,780 Prepaid expenses 58,662 21,347 ------------ ----------- Total assets 293,152,130 28,925,629 ------------ ----------- LIABILITIES Payables: Fund shares redeemed 224,530 9,341 Due to advisor 240,101 16,583 Transfer agent fees and expenses 64,810 7,339 Distribution fees 59,992 5,711 Administration fees 24,334 4,586 Audit fees 12,040 8,510 Fund accounting fees 7,326 5,478 Chief Compliance Officer fee 1,766 235 Custody fees 805 532 Printing & Mailing fees 26,254 4,205 Accrued expenses 344 1,683 ------------ ----------- Total liabilities 662,302 64,203 ------------ ----------- NET ASSETS $292,489,828 $28,861,426 ------------ ----------- ------------ ----------- CALCULATION OF NET ASSET VALUE PER SHARE INVESTOR CLASS Net assets applicable to shares outstanding $291,883,578 $28,755,947 Shares issued and outstanding [unlimited number of shares (par value $0.01) authorized] 9,304,427 2,269,302 ------------ ----------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 31.37 $ 12.67 ------------ ----------- ------------ ----------- ADVISOR CLASS Net assets applicable to shares outstanding $ 606,250 $ 105,479 Shares issued and outstanding [unlimited number of shares (par value $0.01) authorized] 19,319 8,324 ------------ ----------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 31.38 $ 12.67 ------------ ----------- ------------ ----------- COMPONENTS OF NET ASSETS Paid-in capital $211,426,245 $24,259,545 Undistributed net investment income/(loss) (362,025) 74,742 Accumulated net realized gain on investments 4,260,197 337,824 Net unrealized appreciation on investments 77,165,411 4,189,315 ------------ ----------- Net assets $292,489,828 $28,861,426 ------------ ----------- ------------ -----------
See accompanying Notes to Financial Statements. AL FRANK FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2006 (UNAUDITED) AL FRANK AL FRANK DIVIDEND FUND VALUE FUND -------- ---------- INVESTMENT INCOME Income Dividends (Net of foreign taxes withheld of $16,491 and $1,720, respectively) $1,746,717 $ 312,304 Interest 317,025 26,800 ---------- ---------- Total income 2,063,742 339,104 ---------- ---------- Expenses Advisory fees (Note 3) 1,547,530 141,142 Distribution fees - Investor Class (Note 5) 386,826 35,242 Transfer agent fees and expenses 201,750 21,721 Administration fees (Note 3) 151,760 28,229 Fund accounting fees 32,208 18,435 Reports to shareholders 23,025 3,208 Custody fees 21,839 2,665 Professional fees 19,048 11,808 Registration expense 16,652 8,940 Miscellaneous 14,551 3,466 Trustee fees 7,097 3,720 Chief Compliance Officer fee (Note 3) 3,481 394 ---------- ---------- Total expenses 2,425,767 278,970 Less: Expenses recouped by advisor (Note 3) -- 454 ---------- ---------- Net expenses 2,425,767 279,424 ---------- ---------- NET INVESTMENT INCOME/(LOSS) (362,025) 59,680 ---------- ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments 1,434,278 248,748 Net change in unrealized appreciation on investments 5,614,457 1,392,350 ---------- ---------- Net realized and unrealized gain on investments 7,048,735 1,641,098 ---------- ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,686,710 $1,700,778 ---------- ---------- ---------- ----------
See accompanying Notes to Financial Statements. AL FRANK FUND STATEMENTS OF CHANGES IN NET ASSETS Six Months Ended Year Ended June 30, 2006 December 31, (Unaudited) 2005 ---------------- ------------ INCREASE/(DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment loss $ (362,025) $ (1,422,384) Net realized gain on investments 1,434,278 12,531,214 Net change in unrealized appreciation on investments 5,614,457 14,247,744 ------------ ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,686,710 25,356,574 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net realized gain on investments -- (9,305,640) ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase/(decrease) in net assets derived from net change in outstanding shares (a) 21,616,816 (11,171,607) ------------ ------------ TOTAL INCREASE IN NET ASSETS 28,303,526 4,879,327 ------------ ------------ NET ASSETS Beginning of period 264,186,302 259,306,975 ------------ ------------ END OF PERIOD $292,489,828 $264,186,302 ------------ ------------ ------------ ------------ Accumulated net investment loss $ (362,025) $ -- ------------ ------------ ------------ ------------
(a) A summary of share transactions is as follows: INVESTOR CLASS Six Months Ended Year Ended June 30, 2006 (Unaudited) December 31, 2005 --------------------------- --------------------------- Shares Paid-in Capital Shares Paid-in Capital ---------- --------------- ---------- --------------- Shares sold 2,825,000 $91,447,772 2,069,979 $ 60,195,223 Shares issued on reinvestment of distributions -- -- 290,553 8,774,712 Shares redeemed* (2,193,943) (70,433,725) (2,806,014) (80,141,542) ---------- ----------- ---------- ------------ Net increase/(decrease) 631,057 $21,014,047 (445,482) $(11,171,607) ---------- ----------- ---------- ------------ ---------- ----------- ---------- ------------ * Net of redemption fees of $ 48,558 $ 54,160 ----------- ------------ ----------- ------------
ADVISOR CLASS April 30, 2006** Through Year Ended June 30, 2006 (Unaudited) December 31, 2005 ----------------------------- --------------------------- Shares Paid-in Capital Shares Paid-in Capital ---------- --------------- ---------- --------------- Shares sold 19,319 $ 602,769 -- $ -- ---------- ----------- ---------- ------------ Net increase 19,319 $ 602,769 -- $ -- ---------- ----------- ---------- ------------ ---------- ----------- ---------- ------------
** Commencement of operations. See accompanying Notes to Financial Statements. AL FRANK DIVIDEND VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS Six Months Ended Year Ended June 30, 2006 December 31, (Unaudited) 2005 ---------------- ------------ INCREASE/(DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment income $ 59,680 $ 75,039 Net realized gain on investments 248,748 144,757 Net change in unrealized appreciation on investments 1,392,350 1,568,578 ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,700,778 1,788,374 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income -- (59,671) From net realized gain on investments -- (47,992) ----------- ----------- -- (107,663) ----------- ----------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) 1,210,303 8,125,945 ----------- ----------- TOTAL INCREASE IN NET ASSETS 2,911,081 9,806,656 ----------- ----------- NET ASSETS Beginning of period 25,950,345 16,143,689 ----------- ----------- END OF PERIOD $28,861,426 $25,950,345 ----------- ----------- ----------- ----------- Accumulated net investment income $ 74,742 $ 15,062 ----------- ----------- ----------- -----------
(a) A summary of share transactions is as follows: INVESTOR CLASS Six Months Ended Year Ended June 30, 2006 (Unaudited) December 31, 2005 --------------------------- --------------------------- Shares Paid-in Capital Shares Paid-in Capital ---------- --------------- ---------- --------------- Shares sold 377,238 $4,764,148 1,262,171 $14,240,295 Shares issued on reinvestment of distributions -- -- 8,645 102,794 Shares redeemed* (289,966) (3,663,549) (548,968) (6,217,144) -------- ---------- --------- ----------- Net increase 87,272 $1,100,599 721,848 $ 8,125,945 -------- ---------- --------- ----------- -------- ---------- --------- ----------- * Net of redemption fees of $ 2,067 $ 19,792 ---------- ----------- ---------- -----------
ADVISOR CLASS April 30, 2006** Through Year Ended June 30, 2006 (Unaudited) December 31, 2005 ----------------------------- --------------------------- Shares Paid-in Capital Shares Paid-in Capital ---------- --------------- ---------- --------------- Shares sold 8,324 $ 109,704 -- $ -- -------- ---------- --------- ----------- Net increase 8,324 $ 109,704 -- $ -- -------- ---------- --------- ----------- -------- ---------- --------- -----------
** Commencement of operations. See accompanying Notes to Financial Statements. AL FRANK FUND FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Investor Class Advisor Class Six Months April 30, 2006* Ended Through June 30, June 30, 2006 2006 (Unaudited) (Unaudited) -------------- -------------------- Net asset value, beginning of period $30.46 $33.42 ------ ------ Income from investment operations: Net investment loss (0.04)^ 0.03^ Net realized and unrealized gain/(loss) on investments 0.94 (2.07) ------ ------ Total from investment operations 0.90 (2.04) ------ ------ Less distributions: From net realized gain on investments -- -- ------ ------ Redemption fees retained 0.01^ -- ------ ------ Net asset value, end of period $31.37 $31.38 ------ ------ ------ ------ Total return 2.99%+ (6.10%)+ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $291,884 $606 Ratio of expenses to average net assets 1.57%** 1.32%** Ratio of net investment loss to average net assets (0.23%)** 0.47%** Portfolio turnover rate 9.88%+ 9.88%+
* Commencement of operations. ** Annualized. + Not annualized. ^ Based on average shares outstanding. See accompanying Notes to Financial Statements. AL FRANK FUND FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Investor Class Year Ended December 31, ---------------------------------------------------------------- 2005 2004 2003 2002 2001 ---- ---- ---- ---- ---- Net asset value, beginning of period $28.44 $24.56 $13.80 $18.77 $14.58 ------ ------ ------ ------ ------ Income from investment operations: Net investment loss (0.17)^ (0.11) (0.07) (0.23) (0.13) Net realized and unrealized gain/(loss) on investments 3.30 3.98 10.81 (4.66) 4.47 ------ ------ ------ ------ ------ Total from investment operations 3.13 3.87 10.74 (4.89) 4.34 ------ ------ ------ ------ ------ Less distributions: From net realized gain on investments (1.12) (0.01) -- (0.09) (0.15) ------ ------ ------ ------ ------ Redemption fees retained 0.01^ 0.02 0.02 0.01 -- ------ ------ ------ ------ ------ Net asset value, end of period $30.46 $28.44 $24.56 $13.80 $18.77 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total return 11.06% 15.83% 77.97% (25.99%) 29.83% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $264,186 $259,307 $180,380 $48,472 $47,243 Ratio of expenses to average net assets 1.63% 1.61% 1.79% 2.25% 2.25% Ratio of net investment loss to average net assets (0.57%) (0.41%) (0.74%) (1.34%) (1.15%) Portfolio turnover rate 3.84% 24.59% 13.64% 28.14% 18.11%
^ Based on average shares outstanding. See accompanying Notes to Financial Statements. AL FRANK DIVIDEND VALUE FUND FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Investor Class Investor Class Advisor Class ---------------------------- Six Months April 30, 2006* September 30, Ended Through Year Ended 2004* to June 30, 2006 June 30, 2006 December 31, December 31, (Unaudited) (Unaudited) 2005 2004 -------------- -------------------- ------------ ------------- Net asset value, beginning of period $11.89 $13.18 $11.06 $10.00 ------ ------ ------ ------ Income from investment operations: Net investment income 0.03^ 0.03^ 0.04^ 0.02 Net realized and unrealized gain on investments 0.75 (0.54) 0.83 1.06 ------ ------ ------ ------ Total from investment operations 0.78 (0.51) 0.87 1.08 ------ ------ ------ ------ Less distributions: From net investment income -- -- (0.03) (0.02) From net realized gain on investments -- -- (0.02) -- ------ ------ ------ ------ -- -- (0.05) (0.02) ------ ------ ------ ------ Redemption fees retained 0.00#^ -- 0.01^ 0.00# ------ ------ ------ ------ Net asset value, end of period $12.67 $12.67 $11.89 $11.06 ------ ------ ------ ------ ------ ------ ------ ------ Total return 6.56%+ (3.87%)+ 7.95% 10.77%+ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $28,756 $105 $25,950 $16,144 Ratio of expenses to average net assets: Before expense reimbursement/recoupment 1.98%** 1.73%** 2.13% 2.84%** After expense reimbursement/recoupment 1.98%** 1.73%** 1.98% 1.98%** Ratio of net investment income to average net assets: Before expense reimbursement/recoupment 0.42%** 1.28%** 0.17% (0.14%)** After expense reimbursement/recoupment 0.42%** 1.28%** 0.33% 0.75%** Portfolio turnover rate 4.31%+ 4.31%+ 8.83% 1.57%+
* Commencement of operations. ** Annualized. + Not annualized. # Amount is less than $0.01. ^ Based on average shares outstanding. See accompanying Notes to Financial Statements. AL FRANK FUNDS NOTES TO FINANCIAL STATEMENTS AT JUNE 30, 2006 (UNAUDITED) NOTE 1 - ORGANIZATION The Al Frank Fund and the Al Frank Dividend Value Fund (the "Funds") are each diversified series of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 as an open-end management investment company. The investment objective of the Al Frank Fund is to seek growth of capital, which it attempts to achieve by investing in out of favor and undervalued equity securities. The investment objective of the Al Frank Dividend Value Fund is long-term total return from both capital appreciation and, secondarily, dividend income, which it seeks to achieve by investing in dividend-paying equity securities that it believes are out of favor and undervalued. The Al Frank Fund Investor and Advisor Classes commenced operations on January 2, 1998 and April 30, 2006, respectively. The Al Frank Dividend Value Fund Investor and Advisor Classes commenced operations on September 30, 2004 and April 30, 2006, respectively. Prior to April 30, 2006, the shares of the Fund had no specific class designation. As of that date, all of the then outstanding shares were redesignated as Investor Class Shares. As part of its multiple class plan, the Funds now also offer Advisor Class Shares. Because the fees and expenses vary between the Investor Class Shares and the Advisor Class Shares, performance will vary with respect to each class. Under normal conditions, the Advisor Class shares are expected to have lower expenses than the investor Class Shares which will result in higher total returns. Advisor Class shares are offered primarily to qualified registered investment advisors, financial advisors and investors such as pension and profit sharing plans, employee benefit trusts, endowments, foundations and corporations. Advisor Class Shares may be purchased through certain financial intermediaries and mutual fund supermarkets that charge their customers transaction or other fees with respect to their customers' investment in the Funds. The Funds may also be purchased by qualified investors directly through the Funds' Transfer Agent. Wrap account programs established with broker- dealers or financial intermediaries may purchase Advisor Class Shares only if the program for which the shares are being acquired will not require the Funds to pay any type of distribution or administration payment to any third-party. A registered investment advisor may aggregate all client accounts investing in the Funds to meet the Advisor Class Shares investment minimum. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America. A. Security Valuation: The Funds' investments are carried at fair value. Securities that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price ("NOCP"). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter ("OTC") securities which are not traded in the NASDAQ National Market System shall be valued at the most recent trade price. Securities for which market quotations are not readily available, or if the closing price doesn't 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. Short-term investments are valued at amortized cost, which approximates market value. B. Federal Income Taxes: It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. Security Transactions, Dividends and Distributions: Security transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Dividend income and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions to shareholders from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations which differs from accounting principles generally accepted in the United States of America. To the extent these book/tax differences are permanent such amounts are reclassified within the capital accounts based on their Federal tax treatment. D. 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. E. 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. F. REITs: The Funds have made certain investments in real estate investment trusts ("REITs") which pay dividends to their shareholders based upon available funds from operations. It is quite common for these dividends to exceed the REIT's taxable earnings and profits resulting in the excess portion being designated as a return of capital. The Funds intend to include the gross dividends from such REIT's in its annual distributions to its shareholders and, accordingly, a portion of the Funds' distributions may also be designated as a return of capital. G. Redemption Fees: The Funds charge a 2% redemption fee to shareholders who redeem shares held for less than 60 days. Such fees are retained by the Fund and accounted for as an addition to paid-in capital. H. New Accounting Pronouncement: On July 13, 2006, the Financial Accounting Standards Board ("FASB") released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more- likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management believes that the adoption of FIN 48 will have no impact on the financial statements of the Fund. NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER AGREEMENTS For the six months ended June 30, 2006, Al Frank Asset Management, Inc. (the "Advisor") provided the Funds 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 Funds. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of 1.00% based upon the average daily net assets of each Fund. For the six months ended June 30, 2006, the Al Frank Fund and the Al Frank Dividend Value Fund incurred $1,547,530 and $141,142, respectively, in advisory fees. The Funds are responsible for their own operating expenses. For the six months ended June 30, 2006, the Advisor agreed to reduce fees payable to it by the Funds and to pay the Funds' operating expenses to the extent necessary to limit each Fund's Investor Class aggregate annual operating expenses to 1.98% of average daily net assets and each Fund's Advisor Class aggregate annual operating expenses to 1.73% of average daily net assets. Any such reduction made by the Advisor in its fees or payment of expenses which are a Fund's obligation are subject to reimbursement by the Fund to the Advisor, if so requested by the Advisor, in subsequent fiscal years if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the applicable limitation on Fund expenses. The Advisor is permitted to be reimbursed only for fee reductions and expense payments made in the previous three fiscal years, but is permitted to look back five years and four years, respectively, during the initial six years and seventh year of each Fund's operations. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Fund's payment of current ordinary operating expenses. For the six months ended June 30, 2006, there were no expenses of the Al Frank Fund subject to recapture pursuant to the aforementioned conditions. For the six months ended June 30, 2006, the Advisor recouped expenses in the amount of $454 for the Al Frank Dividend Value Fund. Cumulative expenses subject to recapture pursuant to the aforementioned conditions expire as follows: Year Amount ---- ------ 2009 $59,972 U.S. Bancorp Fund Services, LLC (the "Administrator") acts as the Funds' Administrator under an Administration Agreement. The Administrator prepares various federal and state regulatory filings, reports and returns for the Funds; prepares reports and materials to be supplied to the Trustees; monitors the activities of the Funds' custodian, transfer agent and accountants; coordinates the preparation and payment of the Funds' expenses and reviews the Funds' expense accruals. For its services, the Administrator receives a monthly fee at the following annual rate: Fund asset level Fee rate ---------------- -------- Less than $15 million $30,000 $15 million to less than $50 million 0.20% of average daily net assets $50 million to less than $100 million 0.15% of average daily net assets $100 million to less than $150 million 0.10% of average daily net assets More than $150 million 0.05% of average daily net assets In addition, the Administrator receives an annual fee of $10,000 for each Fund's Advisor Class. For the six months ended June 30, 2006, the Al Frank Fund and the Al Frank Dividend Value Fund incurred $151,760 and $28,229, respectively, in administration fees. U.S. Bancorp Fund Services, LLC also serves as the fund accountant and transfer agent to the Funds. U.S. Bank, N.A., an affiliate of U.S. Bancorp Fund Services, serves as the Funds' custodian. Quasar Distributors, LLC (the "Distributor") acts as the Funds' principal underwriter in a continuous public offering of the Funds' shares. Certain officers of the Funds are also employees of the Administrator. For the six months ended June 30, 2006, the Al Frank Fund and the Al Frank Dividend Value Fund were allocated $3,481 and $394, respectively, of the Chief Compliance Officer fee. NOTE 4 - OTHER AFFILIATES Investments representing 5% or more of the outstanding securities of a portfolio company result in that company being considered an affiliated company, as defined in the 1940 Act. The aggregate market value of all securities of affiliated companies as of June 30, 2006 amounted to $1,188,000 representing 0.41% of net assets. Transactions during the six months ended June 30, 2006 in which the issuer was an "affiliated person" are as follows: SMITH-MIDLAND CORP. ------------------- Beginning Shares 440,000 Beginning Cost $454,448 Purchase Cost $ -- Sales Cost $ -- -------- Ending Cost $454,448 -------- -------- Ending Shares 440,000 Dividend Income $ -- Net Realized Gain/(Loss) $ -- NOTE 5 - DISTRIBUTION COSTS The Funds have adopted a Distribution Plan pursuant to Rule 12b-1 (the "Plan") in the Investor Class only. The Plan permits the Funds to pay for distribution and related expenses at an annual rate of up to 0.25% of each Fund's average daily net assets annually. The expenses covered by the Plan may include the cost of preparing and distributing prospectuses and other sales material, advertising and public relations expenses, payments to financial intermediaries and compensation of personnel involved in selling shares of the Funds. Payments made pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred. Pursuant to a distribution coordination agreement adopted under the Plan, distribution fees are paid to the Advisor as "Distribution Coordinator". For the six months ended June 30, 2006, the Al Frank Fund - Investor Class and the Al Frank Dividend Value Fund - Investor Class paid the Distribution Coordinator $386,826 and $35,242, respectively. NOTE 6 - PURCHASES AND SALES OF SECURITIES For the six months ended June 30, 2006, the cost of purchases and the proceeds from sales of securities, excluding short-term securities for the Al Frank Fund, were $49,746,801 and $28,737,756, respectively. For the six months ended June 30, 2006, the cost of purchases and the proceeds from sales of securities, excluding short-term securities for the Al Frank Dividend Value Fund, were $1,912,292 and $1,170,995, respectively. NOTE 7 - LINE OF CREDIT The Al Frank Fund and Al Frank Dividend Value Fund have lines of credit in the amounts of $25,000,000 and $8,400,000, respectively. These lines of credit are intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Funds' custodian, U.S. Bank, N.A. During the six months ended June 30, 2006, the Funds did not draw upon the lines of credit. NOTE 8 - INCOME TAXES Net investment income/(loss) and net realized gains/(losses) differ for financial statement and tax purposes due to differing treatments of distributions received from Real Estate investment Trusts, wash sale losses deferred, and losses realized subsequent to October 31 on the sale of securities. The tax character of distributions paid during the six months ended June 30, 2006 and the year ended December 31, 2005 for the Al Frank Fund was as follows: 2006 2005 ---- ---- Long-term capital gains $ -- $9,305,640 The tax character of distributions paid during the six months ended June 30, 2006 and the year ended December 31, 2005 for the Al Frank Dividend Value Fund were as follows: 2006 2005 ---- ---- Ordinary income $ -- $71,965 Long-term capital gains $ -- $35,698 As of December 31, 2005, the Funds' most recently completed fiscal year end, the components of accumulated earnings/(losses) on a tax basis were as follows: AL FRANK AL FRANK DIVIDEND VALUE FUND FUND -------- -------------- Cost of investments $194,546,396 $23,415,952 ------------ ----------- Gross tax unrealized appreciation 91,974,513 4,055,038 Gross tax unrealized depreciation (20,530,515) (1,258,073) ------------ ----------- Net tax unrealized appreciation $ 71,443,998 $ 2,796,965 ------------ ----------- ------------ ----------- Undistributed ordinary income $ -- $ 71,448 Undistributed long-term capital gain 2,932,875 32,690 ------------ ----------- Total distributable earnings $ 2,932,875 $ 104,138 ------------ ----------- ------------ ----------- Other accumulated gains/(losses) $ -- $ -- ------------ ----------- Total accumulated earnings/(losses) $ 74,376,873 $ 2,901,103 ------------ ----------- ------------ ----------- The Al Frank Dividend Value Fund utilized its capital loss carryforward of $7,995 in the year ended December 31, 2005. AL FRANK FUNDS NOTICE TO SHAREHOLDERS AT JUNE 30, 2006 (UNAUDITED) HOW TO OBTAIN A COPY OF THE FUNDS' PROXY VOTING POLICIES A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling (888) 263-6443 or on the U.S. Securities and Exchange Commission's (SEC's) website at http://www.sec.gov. HOW TO OBTAIN A COPY OF THE FUNDS' PROXY VOTING RECORDS FOR THE 12-MONTH PERIOD ENDED JUNE 30, 2006 Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling (888) 263-6443. Furthermore, you can obtain the Funds' proxy voting records on the SEC's website at http://www.sec.gov. - ------------------ QUARTERLY FILINGS ON FORM N-Q The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC's website at http://www.sec.gov. The Funds' ------------------ Forms 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 (800) SEC-0330. Information included in the Funds' Form N-Q is also available by calling (888) 263-6443. ADVISOR Al Frank Asset Management, Inc. 32392 Coast Highway, Suite 260 Laguna Beach, CA 92651 www.alfrankfunds.com DISTRIBUTOR Quasar Distributors, LLC 615 East Michigan Street Milwaukee, WI 53202 TRANSFER AGENT U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, WI 53202 (888) 263-6443 CUSTODIAN U.S. Bank, N.A. 1555 North RiverCenter 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, Janofsky & Walker, LLP 55 Second Street, 24th Floor San Francisco, CA 94105 This report is intended for shareholders of the Funds and may not be used as sales literature unless preceded or accompanied by a current prospectus. Statements and other information herein are dated and are subject to change. ITEM 2. CODE OF ETHICS. - ----------------------- Not applicable for semi-annual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. - ---------------------------------------- Not applicable for semi-annual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. - ----------------------------------------------- Not applicable for semi-annual reports. 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. SCHEDULE OF INVESTMENTS. - -------------------------------- Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. 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. - ------------------------------------------------------------ The registrant's independent trustees serve as its nominating committee, however, they do not make use of a nominating committee charter. 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/Chief Executive Officer and Treasurer/Chief 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 second 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. Not Applicable. (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/ Eric M. Banhazl -------------------------------- Eric M. Banhazl, President Date 9/6/06 --------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Eric M. Banhazl -------------------------------- Eric M. Banhazl, President Date 9/6/06 --------------------------------------------------------- By (Signature and Title)* /s/ Douglas G. Hess -------------------------------- Douglas G. Hess, Treasurer Date 9/6/06 --------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 aff-ex99cert302.txt EX.99.CERT CERTIFICATIONS -------------- I, Eric M. Banhazl, certify that: 1. I have reviewed this report on Form N-CSR of Advisors Series Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 9/6/06 /s/ Eric M. Banhazl ---------- ------------------- Eric M. Banhazl President EX.99.CERT CERTIFICATIONS -------------- I, Douglas G. Hess, certify that: 1. I have reviewed this report on Form N-CSR of Advisors Series Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 9/6/06 /s/ Douglas G. Hess ---------- ------------------- Douglas G. Hess Treasurer EX-99.906 CERT 3 aff-ex99cert906.txt EX.99.906CERT CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT --------------------------------------------------------------- Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Advisors Series Trust, does hereby certify, to such officer's knowledge, that the report on Form N-CSR of the Advisors Series Trust for the period ended June 30, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Advisors Series Trust for the stated period. /s/ Eric M. Banhazl /s/ Douglas G. Hess - ------------------- ------------------- Eric M. Banhazl Douglas G. Hess President, Advisors Series Trust Treasurer, Advisors Series Trust Dated: 9/6/06 ------------ This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by Advisors Series Trust for purposes of Section 18 of the Securities Exchange Act of 1934. -----END PRIVACY-ENHANCED MESSAGE-----