-----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, ENksOfMqEAP4nfozvVzDIyyc7ao0jGc0CtMsaBqzDN5i7BUDUpw+lI+DDtHt5eB7 5SdeBGAKR4VU+GfyMllkQA== 0000950147-98-000997.txt : 19981202 0000950147-98-000997.hdr.sgml : 19981202 ACCESSION NUMBER: 0000950147-98-000997 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVISORS SERIES TRUST CENTRAL INDEX KEY: 0001027596 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07959 FILM NUMBER: 98761697 BUSINESS ADDRESS: STREET 1: 2025 E FINANCIAL WAY SUITE 101 CITY: GLENDORA STATE: CA ZIP: 91741 BUSINESS PHONE: 8188521033 MAIL ADDRESS: STREET 1: 2025 E FINANCIAL WAY STREET 2: SUITE 101 CITY: GLENDORA STATE: CA ZIP: 91741 N-30D 1 ANNUAL REPORT DATED 9/30/98 CHASE GROWTH FUND Annual Report dated September 30, 1998 ============= Chase Investment Counsel Corp. 300 Preston Avenue Suite 403 Charlottesville, Virginia 22902-5091 Advisor: 804-293-9104 Sharehold Servicing: 888-861-7556 Chase Growth Fund November 17, 1998 Dear fellow Shareholder: Let me start our first Annual review for the short fiscal year December 2, 1997 through September 30, 1998 by welcoming our new shareholders. As I write, 115 shareholders have $4.8 million invested in our new Chase Growth Fund ("CGF"). We appreciate the trust each of you has placed in our management and we are working very hard to earn your continued confidence. In our 41st year we are the oldest independent investment counsel firm domiciled in Virginia. For our customized separate accounts, we manage $700 million for 70 clients in twenty states. We intend to continue serving a relatively small number of separate accounts. The Chase Growth Fund is managed by the same senior portfolio managers, David Scott and myself, that manage our large separate accounts. As a smaller fund we have much more flexibility in buying and selling a broad array of large and mid-cap stocks without a significant market impact. As part of a new fund, shareholders are not buying into a portfolio which already has substantial imbedded capital gain tax liabilities on gains new shareholders did not even enjoy. There will be no 1998 capital gains taxes for the CGF and we plan to manage it so that most future net gains are long term. For the period from December 2, 1997 through September 30, 1998 our fund enjoyed a total return of 6.91% compared with 5.97% for the S&P "500" and 2.40% for the Lipper Growth Fund Index. We are pleased that our calendar year to date performance through September 30 was 4.81% compared with a 2.38% total return for the Lipper Growth Fund Index. What a difference a month makes! With the October recovery, our calendar year to date performance through October 31 was 9.81% compared with 9.47% for the Lipper Growth Fund Index; cumulative performance was 12.02% compared with 9.58% for the Lipper Growth Fund Index. On September 30, 80.1% of our fund was invested in 35 stocks. Our heaviest industry concentrations were in Computer Software and Services, Drugs, Financial Services, Insurance and Retail. During the last six months our best performing stocks were BMC Software +43.3%, SunAmerica Inc. +27.4%, Schering-Plough +26.8%, Walgreen +25.0%, Microsoft +23.0%, Becton Dickinson +20.8%, Gap Inc. +17.2% and Home Depot +16.8%. Several new purchases during the period also helped performance with EMC +21.3%, Lexmark International +17.4% and Cisco Systems +13.4%. We are in a difficult market environment. Based on historical norms, cap weighted equity indexes are ahead of fundamentals. Valuation measurements such as Price to Earnings, Price to Book Value, and Price to Dividends (yields) are near record high levels. For a couple of years, this has been a Supply/Demand driven market. As long as high levels of money flows (buying) continue to exceed selling and new stock offerings, prices should continue higher. We believe a number of stocks would be healthier if they consolidated the abnormally rapid gains of the last few years and let earnings and dividends catch up. Our investment process combines fundamental, quantitative, and technical research. We seek good quality companies with above average earnings growth, strong balance sheets, and reasonable prices. Currently we Chase Growth Fund are invested in stocks with relatively low volatility (betas) in our attempt to improve defensive qualities. We believe that the stocks of your fund's companies represent relatively outstanding investment values. In the table below, we compare the characteristics of our funds' stocks to the Standard & Poor's "500" Stock Composite Index. On average the CGF stocks have enjoyed more consistent and substantially higher five year earnings growth rates of 25% vs. 15%. They are significantly more profitable with a Return on Equity of 31% vs. 22%, and have stronger balance sheets with Debt to Total Capital of 14% vs. 33%, yet they sell at only a modest premium to the S&P "500"'s price/earnings multiple based on 1999 estimated earnings. CHASE GROWTH FUND STOCKS VS. S&P 500 September 30, 1998 CHASE GROWTH FUND STOCKS S&P 500 ------------------------ ------- Last 5 Year Earnings Growth 25% 15% Return on Equity 31% 22% Debt/Total Capital 14% 33% Reinvestment Rate 26% 14% Weighted Avg. Capitalization (Billions) 50.8 67.7 Price Earnings Estimated '99 26.9 23.4 Weighted Avg. Beta (Volatility) 1.00 1.00 SOURCE: CHASE INVESTMENT COUNSEL. THIS INFORMATION IS BASED ON CERTAIN ASSUMPTIONS AND HISTORICAL DATA AND IS NOT A PREDICTION OF FUTURE RESULTS FOR THE FUND OR COMPANIES HELD IN THE FUND'S PORTFOLIO. S&P 500 EARNINGS ARE BASED ON REPORTED FIGURES AFTER WRITE-OFFS. The market has experienced huge divergences between stocks in general and the leading indexes. During the period between June 1, 1998 and September 30, 1998, most stocks reached prices way below their respective highs recorded between January 1, 1997 and May 31, 1998. For instance, 70.7% of the NYSE traded stocks were down 30% or more and 91.2% of the NASDAQ shares had declined by 30% or more (69.6% by 50% or more). Even 60.7% of the S&P "500" component stocks were down 30% or more. Although stocks generally have been in a serious bear market, the recent decline did not correct the overvaluation among many of the large cap dominated indexes. 2 Chase Growth Fund Corporate earnings growth has slowed down to very modest rates and worldwide excess capacity and substantial expenditure to solve Year 2000 problems are expected to place increasing pressure on profit margins. We are mindful of studies that point out that completely withdrawing from stocks is very hazardous too. For instance, in one forty year period if you had missed only 6% of the months (the best ones) you would have missed 100% of the return in excess of T-bills. We assume most of our shareholders have some reserves. Since the CGF is an equity fund we are reluctant to go much below 80% invested. During the six months ended September 30, we have been placing emphasis on capital preservation by investing in "A" quality stocks on average with volatility (beta) around 1.00 (very low for a growth stock manager) and by averaging only 86% invested in equities. As the largest CGF shareholder, I can assure you that we will be working very hard to find, analyze and invest in relatively attractive stocks. The officers and employees of Chase Investment Counsel Corp., most of whom are fellow shareholders, appreciate your confidence and we look forward to a long investment relationship together. TOP 10 HOLDINGS 1. Schering - Plough Corp. 6. Cisco Systems, Inc. 2. Walgreen Co. 7. Wal-Mart Stores, Inc. 3. Microsoft, Inc. 8. Lexmark International 4. EMC Corp. 9. TJX Companies, Inc. 5. Pfizer, Inc. 10. BMC Software, Inc. /s/ Derwood S. Chase, Jr. Derwood S. Chase, Jr., President Chase Investment Counsel Corporation Performance figures of the fund and indexes referenced represent past performance and are not indicative of future performance of the fund or the indexes. Share value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original investment. Indexes do not incur expenses and are not available for investment. 3 Chase Growth Fund Comparison of the change in value of a $10,000 investment in the Chase Growth Fund versus the S&P 500 Composite Stock Price Index and the Lipper Growth Fund Index S&P 500 Composite Lipper Growth Chase Growth Fund Stock Price Index Fund Index ----------------- ----------------- ---------- DEC-97 10,000 10,000 10,000 JAN-98 10,251 10,115 10,076 FEB-98 10,911 10,838 10,786 MAR-98 11,432 11,393 11,248 APR-98 11,272 11,509 11,368 MAY-98 11,032 11,308 11,089 JUN-08 11,602 11,769 11,569 JUL-98 11,492 11,647 11,446 AUG-98 10,070 9,962 9,608 SEP-98 10,691 10,598 10,249 Past performance is not predictive of future performance. * The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy. * The Lipper Growth Fund Index comprises of the 30 largest growth funds. Growth funds invest in companies with long-term earnings expected to grow significantly faster than the earnings of the stocks represented in the major unmanaged stock indices. 4 Chase Growth Fund SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 1998 - -------------------------------------------------------------------------------- Shares COMMON STOCKS: 80.14% Market Value - -------------------------------------------------------------------------------- AIRLINES: 0.93% 1,300 Comair Holdings, Inc. ........................ $ 37,416 -------- BIOTECHNOLOGY: 2.15% 1,200 Genentech, Inc.*............................... 86,250 -------- BUILDING: 2.57% 2,604 Home Depot, Inc. ............................. 102,858 -------- COMPUTER HARDWARE: 3.99% 2,800 EMC Corp.* ................................... 160,125 -------- COMPUTER NETWORKING: 3.78% 2,450 Cisco Systems, Inc.* .......................... 151,517 -------- COMPUTER PERIPHERAL EQUIPMENT: 3.54% 2,050 Lexmark International* ........................ 142,091 -------- COMPUTER SOFTWARE & SERVICES: 9.14% 2,200 BMC Software, Inc.* .......................... 132,069 1,900 Keane, Inc.* ................................. 66,738 1,525 Microsoft, Inc.* ............................. 167,893 -------- 366,700 CONGLOMERATES: 0.98% 800 Hillenbrand Industries......................... 39,200 -------- DRUGS: 11.71% 850 Bristol-Myers Squibb Co. ..................... 88,294 1,450 Pfizer, Inc. ................................. 153,609 2,200 Schering-Plough Corp. ........................ 227,838 -------- 469,741 ENERGY / OIL SERVICE: 0.44% 680 Diamond Offshore Drilling .................... 17,680 -------- 5 Chase Growth Fund SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 1998, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- FINANCE / BANKS: 3.02% 975 Northern Trust Corp............................ $ 66,452 1,000 State Street Corp.............................. 54,562 -------- 121,014 FINANCIAL SERVICES: 4.48% 500 Fannie Mae .................................. 32,125 1,650 SunAmerica, Inc................................ 100,650 1,250 Travelers Group, Inc........................... 46,875 -------- 179,650 INSURANCE - LIFE / HEALTH: 3.37% 2,130 Protective Life Corp. ........................ 76,680 1,500 Reliastar Financial .......................... 58,500 -------- 135,180 INSURANCE - PROPERTY / CASUALTY: 1.29% 670 American Int'l Group, Inc. ................... 51,590 -------- LEISURE TIME: 3.25% 4,100 Carnival Corp. ............................... 130,431 -------- MEDICAL SUPPLIES: 4.07% 2,000 Becton, Dickinson and Co. .................... 82,250 1,400 Safeskin Corp.* .............................. 44,144 1,300 Steris Corp.* ................................ 36,766 -------- 163,160 OFFICE FURNITURE: 1.89% 3,800 Herman Miller, Inc. .......................... 75,763 -------- RETAIL: 4.34% 500 The Gap, Inc. ................................ 26,375 2,700 Wal-Mart Stores, Inc. ........................ 147,488 -------- 173,863 RETAIL DRUG STORES: 4.28% 3,900 Walgreen Co. ................................. 171,844 -------- 6 Chase Growth Fund SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 1998, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- RETAIL GROCERY STORES: 5.24% 1,800 Albertson's Inc. ............................. $ 97,425 2,250 Kroger Co.* .................................. 112,500 ---------- 209,925 RETAIL - SPECIALTY: 4.76% 1,800 Ross Stores, Inc. ............................. 51,862 7,800 TJX Companies, Inc. .......................... 138,937 ---------- 190,799 TELEPHONE AND TELEGRAPH APPARATUS: 0.92% 2,000 LM Ericsson Telephone Co. .................... 36,812 ---------- Total Common Stocks (cost $2,960,945) .......... 3,213,608 Principal Amount SHORT-TERM INVESTMENTS: 22.02% - -------------------------------------------------------------------------------- 882,985 Star Treasury Fund, 4.95% ................... 882,985 ---------- Total Investments in Securities (cost $3,843,930): 102.16%................... 4,096,593 Other Liabilities less Assests: (2.16%)....... (86,611) ---------- TOTAL NET ASSETS: 100.0%...................... $4,009,982 ========== * Non-income producing security. ++ At September 30, 1998, the cost of securities for Federal income tax purposes is $3,844,608. Gross unrealized appreciation and depreciation of securities were as follows: Gross unrealized appreciation................ $ 414,087 Gross unrealized depreciation................ (162,102) ---------- Net unrealized appreciation.......... $ 251,985 ========== See accompanying Notes to Financial Statements. 7 Chase Growth Fund STATEMENT OF ASSETS AND LIABILITIES AT SEPTEMBER 30, 1998 - -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost $3,843,930) ........................................ $4,096,593 Receivables: Due from Advisor ......................................... 2,223 Dividends and interest ................................... 4,547 Prepaid expenses ........................................... 3,775 ---------- Total assets ........................................... 4,107,138 ---------- LIABILITIES Payables: Administration fee ....................................... 2,516 Investment securities purchased .......................... 78,363 Accrued expenses ........................................... 16,277 ---------- Total liabilities ...................................... 97,156 ---------- NET ASSETS ................................................... $4,009,982 ========== NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE [$4,009,982/375,343 shares outstanding; unlimited number of shares (par value $.01) authorized] .. $ 10.68 ========== COMPONENTS OF NET ASSETS Paid-in capital ............................................ $3,954,535 Dividends in excess of net investment loss ................. (5,569) Accumulated net realized loss on investments ............... (191,647) Net unrealized appreciation of investments ................. 252,663 ---------- Net assets ............................................. $4,009,982 ========== See accompanying Notes to Financial Statements. 8 Chase Growth Fund STATEMENT OF OPERATIONS FOR THE PERIOD DECEMBER 2, 1997* THROUGH SEPTEMBER 30, 1998 - -------------------------------------------------------------------------------- INVESTMENT INCOME Income: Dividends .................................................. $ 12,305 Interest ................................................... 19,154 --------- Total income ............................................. 31,459 --------- Expenses: Advisory fees .............................................. 23,959 Administration fee ......................................... 20,444 Professional fees .......................................... 14,371 Fund accounting fees ....................................... 12,559 Transfer agent fees ........................................ 7,572 Custodian .................................................. 4,965 Trustees' fees ............................................. 4,507 Other ...................................................... 3,803 Reports to shareholders .................................... 3,483 Registration fees .......................................... 743 --------- Total expenses ........................................... 96,406 Less: Advisory fee waiver and absorption ................. (60,733) --------- Net expenses ............................................. 35,673 --------- NET INVESTMENT LOSS ................................ (4,214) --------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS Net realized loss on security transactions ................... (191,647) Net change in unrealized appreciation of investments ......... 222,098 --------- Net realized and unrealized gain on investments .......... 30,451 --------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................................... $ 26,237 ========= * Commencement of operations. See accompanying Notes to Financial Statements. 9 STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- December 2, 1997* through September 30, 1998 - -------------------------------------------------------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS Net investment loss ............................................. $ (4,214) Net realized loss on security transactions ...................... (191,647) Net change in unrealized appreciation of investments ............ 222,098 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...... 26,237 ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM Net investment income ........................................... (1,355) ----------- Total dividends and distributions to shareholders ......... (1,355) CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) ........................................ 3,954,535 ----------- TOTAL INCREASE IN NET ASSETS .............................. 3,979,417 NET ASSETS Beginning of period (b) ......................................... 30,565 ----------- END OF PERIOD (including dividends in excess of net investment income of $5,569)................................... $ 4,009,982 =========== (a) A summary of capital shares transactions is as follows: December 2, 1997* through September 30, 1998 - -------------------------------------------------------------------------------- Shares Paid In Capital - -------------------------------------------------------------------------------- Shares sold (b) ............................... 378,450 $ 3,987,216 Shares issued on reinvestments of distributions 134 1,355 Shares redeemed ............................... (3,241) (34,036) ------- ----------- Net increase .................................. 375,343 $ 3,954,535 ======= =========== * Commencement of operations. (b) Excludes the unrealized gain on the tax-free issuance of Fund shares for portfolio securities. The unrealized gain of $30,565 transferred into the Fund was credited to unrealized gain. See accompanying Notes to Financial Statements. 10 FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD - -------------------------------------------------------------------------------- December 2, 1997* through Septbember 30, 1998 - -------------------------------------------------------------------------------- Net asset value, beginning of period ....................... $ 10.00 --------- Income from investment operations: Net investment loss .................................. (0.01) Net realized and unrealized (loss) gain on investments ...................................... 0.70 --------- Total from investment operations ........................... 0.69 --------- Less distributions: From net investment income ........................... (0.01) --------- Net asset value, end of period ............................. $ 10.68 ========= TOTAL RETURN ............................................... 6.91%++ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000) ............................ $ 4,010 Ratio of expenses to average net assets: Before expense reimbursement ......................... 3.98%+ After expense reimbursement .......................... 1.47%+ Ratio of net investment loss to average net assets: After expense reimbursement .......................... (0.17%)+ Portfolio turnover rate .................................... 54.49% * Commencement of operations. + Annualized. ++ Not Annualized. See accompanying Notes to Financial Statements. 11 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION The Chase Growth Fund (the "Fund") is a series of shares of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund began operations on December 2, 1997. The Fund's objective is growth of capital. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with generally accepted accounting principles. A. SECURITY VALUATION: The Fund's investments are carried at fair value. Securities listed on an exchange or quoted on a National Market System are valued at the last sale price. Other securities are valued at the mean between the last bid and asked prices. Securities for which market quotations are not readily available, if any, are valued following procedures approved by the Board of Trustees. Short-term investments are valued at amortized cost, which approximates market value. B. FEDERAL INCOME TAXES: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. SECURITY TRANSACTIONS, DIVIDENDS AND DISTRIBUTIONS: Security transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Realized gains and losses on securities sold are determined on the basis of identified cost. D. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates. NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES For the period from inception through September 30, 1998, Chase Investment Counsel Corp. (the "Advisor") provided the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnished all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of 1.00% based upon the average daily net assets of the Fund. For the period ended September 30, 1998, the Fund incurred $23,959 in Advisory Fees. The Fund is responsible for its own operating expenses. The Advisor has agreed to reduce fees payable to it by the Fund and to pay Fund operating expenses to the extent necessary to limit the Fund's aggregate annual operating expenses to 1.48% of average net assets (the "expense cap"). Any such reductions made by the Advisor in its fees or payment of expenses which are the Fund's obligation are subject to reimbursement by the Fund to the Advisor, if so requested by the Advisor, in subsequent fiscal years if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the 12 NOTES TO FINANCIAL STATEMENTS, CONTINUED - -------------------------------------------------------------------------------- reimbursement) does not exceed 1.48% of average net assets annually. The Advisor is permitted to be reimbursed only for fee reductions and expense payments made in the previous three fiscal years, but is permitted to look back five years and four years, respectively, during the initial six years and seventh year of the Fund's operations. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Fund's payment of current ordinary operating expenses. For the period ended September 30, 1998, the Advisor reduced its fees and absorbed Fund expenses in the amount of $60,733; no amounts were reimbursed to the Advisor. Investment Company Administration Corporation (the "Administrator") acts as the Fund's Administrator under an Administration Agreement. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund; prepares reports and materials to be supplied to the trustees; monitors the activities of the Fund's custodian, transfer agent and accountants; coordinates the preparation and payment of the Fund's expenses and reviews the Fund's expense accruals. For its services, the Administrator receives a monthly fee at the annual rate of 0.20% of average daily net assets, subject to a minimum fee of $30,000 annually. First Fund Distributors, Inc. (the "Distributor") acts as the Fund's principal underwriter in a continuous public offering of the Fund's shares. The Distributor is an affiliate of the Administrator. Certain officers of the Fund are also officers and/or directors of the Administrator and the Distributor. NOTE 4 - SECURITIES TRANSACTIONS For the period ended September 30, 1998, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $4,493,183 and $1,310,073, respectively. For federal income tax purposes, the Fund has a capital loss carryforward of $190,969 available to offset realized gains. This carryforward expires in 2006. 13 INDEPENDENT AUDITOR'S REPORT THE BOARD OF TRUSTEES AND SHAREHOLDERS CHASE GROWTH FUND We have audited the accompanying statement of assets and liabilities, including the schedule of investments of Chase Growth Fund, series of Advisors Series Trust, as of September 30, 1998, and the related statements of operations, the statement of changes in net assets, and the financial highlights for the period indicated in the accompanying financial statements. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with the generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 1998, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly in all material respects, the financial position of Chase Growth Fund, series of Advisors Series Trust, as of September 30, 1998, the results of its operations, the changes in its net assets and the financial highlights for the period indicated, in conformity with generally accepted accounting principles. MCGLADREY & PULLEN, LLP New York, New York October 23, 1998 14 ADVISOR Chase Investment Counsel Corp. 300 Preston Avenue, Suite 403 Charlottesville, Virginia 22902-5091 =========== DISTRIBUTOR First Fund Distributors, Inc. 4455 E. Camelback Road, Suite 261-E Phoenix, Arizona 85018 =========== CUSTODIAN Star Bank, N.A. 425 Walnut Street, M/L 6118 Cincinnati, Ohio 45202 =========== TRANSFER AGENT American Data Services P.O. Box 5536 Hauppauge, New York 11788-0132 =========== LEGAL COUNSEL Paul, Hastings, Janofsky & Walker LLP 345 California Street San Francisco, California 94104 =========== AUDITORS McGladrey & Pullen LLP 555 Fifth Avenue, 8th Floor New York, NY 10017-2416 -----END PRIVACY-ENHANCED MESSAGE-----