-----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, DhSr/usuh1ohv/mdkD0Sr0ViceZ5tZr8goD+aXcg8dDEL2IVpW0K9gb/Wg+WhGJH BB9VjDwKQHxbSc+Kh/xZEw== 0000950147-01-500688.txt : 20010410 0000950147-01-500688.hdr.sgml : 20010410 ACCESSION NUMBER: 0000950147-01-500688 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010404 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: 1595223 BUSINESS ADDRESS: STREET 1: 2020 E FINANCIAL WAY SUITE 100 CITY: GLENDORA STATE: CA ZIP: 91741 BUSINESS PHONE: 8188521033 MAIL ADDRESS: STREET 1: 2020 E FINANCIAL WAY STREET 2: SUITE 100 CITY: GLENDORA STATE: CA ZIP: 91741 N-30D 1 e-6590.txt ANNUAL REPORT FOR THE YEAR ENDED 12/31/00 [LOGO] THE AL FRANK FUND ANNUAL REPORT DECEMBER 31, 2000 THE AL FRANK FUND 465 FOREST AVENUE, SUITE I LAGUNA BEACH, CA 92651 SHAREHOLDER SERVICES (888) 263-6443 DAILY NAV: (877) 654-1325 WWW.ALFRANK.COM AL FRANK ASSET MANAGEMENT, INC. PUBLISHER OF THE PRUDENT SPECULATOR P.O. Box 1438, Laguna Beach, CA 92652 Phone 949-497-7657 Fax 949-497-7658 www.alfrank.com Dear Fund Shareholder: While every year is unique, the year 2000 was especially fascinating as stocks in general, and technology issues in particular, endured a wild roller-coaster ride, with the Nasdaq Composite Index down 39.29%, turning in its worst year ever. After a promising start to the year, we saw air rapidly rush out of Internet stocks as the dot.com bubble was pricked. Momentum players also suffered as the "Greater Fool" investment theory failed to deliver, wiping out much or all of the outsized gains from 1999. Considering that the industry-standard benchmark, the S&P 500, was also down more than 9% in 2000, we have to be pleased that the Al Frank Fund (VALUX) held its own, ending the year up nearly 7%. Now we take no pleasure in the trials and tribulations of other investors, but we must admit to a small sense of satisfaction that we were generally vindicated for staying true to our value-oriented discipline. Many dyed-in-the-wool value followers threw in the towel during 2000, including several legendary gurus, yet almost as the obituary was being written for this, in our opinion, historically most profitable investment strategy, the tide began to turn. While the JDS Uniphases, Yahoos and Ciscos of the investment universe underwent dizzying corrections, money flowed into "old economy" companies like home builders, banks, insurers and a variety of smaller capitalization stocks. In fact, with valuations so inexpensive for much of the year, we saw a high number of our stocks acquired by rivals, management-led groups or buyout firms. Happily, The Al Frank Fund was able to outperform the major market averages as its so-called "New Economy" technology stocks performed extremely well in the first quarter of the year, causing us to capture some or all of our profits on many of the formerly inexpensive "Value" stocks that had suddenly become high-flying momentum investor "must-haves". While our relatively heavy technology weighting caused the Fund to give up a portion of its early-year gains, our "Old Economy" and Small Capitalization lended enough support so that the overall year-to-date performance remained solidly in the black. One of our goals in managing the Fund is to be as tax-efficient as possible. We expect our turnover to be no more than 25% a year given that we are generally "buy-and-hold" investors. This lower turnover, generally, but not always, can mean smaller and fewer capital gains distributions to shareholders which many would perceive as tax-friendly. Because we had captured some or all of our profits on many of our biggest winners early in the year, we made our first ever (the Fund's inception date was January 2, 1998) distribution of $1.0677 per share on September 19, 2000. We did our best to mitigate this gain by offsetting a portion with capital losses on less-promising stocks. The dynamics of the 2000 market led to significant year-end tax-loss selling as many investors were practically forced to sell stocks in November and December to reduce giant tax burdens incurred in the first half of the year. This unprecedented bout of selling, especially in the small and micro capitalization stocks, created incredible bargains as 2000 ended, so much so that the "January Effect" in 2001 was as strong as any that we can remember, carrying VALUX up nearly 20% for the first month of the year. Alas, February has experienced a dizzying correction with the Nasdaq Composite wiping out an earlier 12% gain by tumbling to a loss of 6% as of this writing on February 26. Despite the market-wide downturn, VALUX was still ahead nearly 15% so far in 2001. THE AL FRANK FUND Of course, short term results are not as meaningful as our long term performance. We continue to be proud of the fact that The Al Frank Fund, since its inception, on 1/2/98 has outperformed its peers and its benchmark S&P 500 Index by a significant margin. As of this writing on February 26, 2001, VALUX has enjoyed an annualized rate of return of 20.20% since inception (18.06%, adjusted for the maximum sales load). Because we continue to have a historically high 100 purchase candidates on our recommended list, we remain very positive about the outlook for the Fund over the remainder of 2001, especially as the shortsighted market seems to have already priced in a far-from-certain recession in many industries. Of course, many are starting to believe that the friendly Federal Reserve, which ignited the "January Effect" on the second trading day of the year with a surprising 50 basis point interest rate cut, will be successful in engineering a so-called "soft landing". Throw in likelihood of additional interest rate cuts in the near future and the continued bifurcation of the stock markets where valuations for the majority of stocks remain at historically low levels, even as many large capitalization companies trade for dangerously high multiples, and we can't help but continue to be very bullish for the near and long term prospects for the Al Frank Fund. The Fund continues to maintain a healthy balance between "old economy" traditional value investments and undervalued technology stocks. We have utilized this "best of both worlds" philosophy throughout our many years of managing private accounts and we expect VALUX to continue to benefit from our brand of "Value" investing. We thank you for the opportunity to serve your investment needs and we remind shareholders that Al Frank Asset Management is among the largest shareholders in The Al Frank Fund. Sincerely, /s/ John Buckingham /s/ Al Frank John Buckingham and Al Frank Footnotes: Performance figures of the Fund referenced represent past performance and are not indicative of future performance. Share value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original investment. This report is authorized for use when preceded or accompanied by a current prospectus for the Fund. The prospectus contains more information about the risks and on-going expenses of an investment in the Fund. The Fund's total return for the year ended December 31, 2000 was 6.98% and since inception (January 2, 1998) through December 31, 2000 was 15.91%. If the maximum sales charge were reflected, the Fund's returns for the same periods would have been 1.10% and 13.74%, respectively. The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to represent the broad domestic economy. The NASDAQ Stock Market is the largest electronic, screen-based market in the world with over 5,100 companies listed. The Fund is distributed by First Fund Distributors, Inc., Phoenix, AZ. 2 THE AL FRANK FUND THE AL FRANK FUND Comparison of the change in value of a $10,000 investment in The Al Frank Fund versus the Russell 2000 Index, the Wilshire 5000 Equity Index and the S&P/Barra Value Index. Average Annual Total Return(1) 1 year............................1.10% Since inception (1/2/98).........13.74% Wilshire 5000 Russell S&P/Barra The Al Frank Fund Equity Index 2000 Index Value Index ----------------- ------------ ---------- ----------- 2-Jan-98 $10,000 $10,000 $10,000 $10,000 31-Mar-98 $10,575 $11,287 $10,999 $11,161 30-Jun-98 $ 9,289 $11,468 $10,695 $11,219 30-Sep-98 $ 7,201 $10,052 $ 8,320 $ 9,518 31-Dec-98 $ 8,571 $12,172 $ 9,655 $11,177 31-Mar-99 $ 7,985 $12,591 $ 9,099 $11,496 30-Jun-99 $10,726 $13,533 $10,473 $12,737 30-Sep-99 $10,641 $12,753 $ 9,778 $11,562 31-Dec-99 $13,750 $14,855 $11,550 $12,599 31-Mar-00 $16,481 $15,423 $12,335 $12,628 30-Jun-00 $15,271 $14,730 $11,835 $12,086 30-Sep-00 $15,668 $14,755 $11,930 $13,151 31-Dec-00 $14,710 $13,237 $11,064 $13,365 Past performance is no guarantee of future results. Share value will fluctuate, so that an investors shares, when redeemed, may be worth more or less than the original investment. Indices do not incur expenses and are not available for investment. (1) Average Annual Total Return represents the average change in account value over the periods indicated and includes the maximum sales charge. The Wilshire 5000 Equity Index tracks the performance of all equity securities issued by the U.S. head-quartered companies regardless of exchange. As of 12/00, the index was comprised of 6,590 companies. The valuation calculation for the Wilshire 5000 Equity Index is for the period December 31, 1997 through December 31, 2000. The Russell 2000 Index is a widely regarded small cap index of the 2,000 smallest securities of the Russell 3000 Index which is comprised of the 3,000 largest U.S. securities as determined by total market capitalization. The S&P/Barra Value Index is an unmanaged capitalization-weighted index that contains approximately 50% of the stocks in the S&P 500 with lower price-to-book ratios. 3 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000 - -------------------------------------------------------------------------------- Shares COMMON STOCKS: 97.44% Market Value - -------------------------------------------------------------------------------- ADVANCED INDUSTRIAL EQUIPMENT: 1.34% 3,000 KLA-Tencor Corp.*..................................... $ 101,063 4,002 MTS Systems Corp...................................... 29,015 11,600 Stratasys, Inc.*...................................... 30,450 10,000 The Lamson & Sessions Co.*............................ 105,000 ----------- 265,528 ----------- ADVANCED MEDICAL DEVICES: 1.05% 20,000 Laserscope*........................................... 21,876 13,774 Utah Medical Products, Inc.*.......................... 103,305 8,000 VISX, Inc.*........................................... 83,500 ----------- 208,681 ----------- AEROSPACE & DEFENSE: 3.62% 11,000 Allied Research Corp.*................................ 94,188 8,000 Barringer Technologies, Inc.*......................... 59,500 6,000 BE Aerospace, Inc.*................................... 96,000 3,100 Ducommun, Inc.*....................................... 34,294 3,000 Kaman Corp............................................ 50,625 1,000 Litton Industries, Inc.*.............................. 78,688 8,000 LMI Aerospace, Inc.*.................................. 17,500 1,200 Lockheed Martin Corp.................................. 40,740 1,600 Primex Technologies, Inc.............................. 51,000 1,500 Raytheon Co. - Class B................................ 46,594 1,000 Sequa Corp.*.......................................... 36,375 10,000 SIFCO Industries, Inc................................. 47,500 20,000 TransTechnology Corp.*................................ 63,750 ----------- 716,754 ----------- AIRLINES: 1.92% 3,000 AMR Corp.*............................................ 117,563 1,500 Delta Air Lines, Inc.................................. 75,281 4,000 KLM Royal Dutch Airlines*............................. 90,000 2,500 UAL Corp.............................................. 97,344 ----------- 380,188 ----------- ALUMINUM: 0.59% 3,500 Alcoa, Inc............................................ 117,250 ----------- See Notes to Financial Statements. 4 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- AUTOMOBILE MANUFACTURERS: 0.77% 2,000 DaimlerChrysler Corp.................................. $ 82,400 3,000 Ford Motor Co......................................... 70,313 ----------- 152,713 ----------- AUTOMOBILE PARTS & EQUIPMENT: 2.67% 3,350 ArvinMeritor, Inc.*................................... 38,106 6,000 Cooper Tire & Rubber.................................. 63,750 11,999 Dura Automotive Systems, Inc.*........................ 62,995 4,500 Genuine Parts Co...................................... 117,844 3,000 Lear Corp.*........................................... 74,438 5,000 The Goodyear Tire & Rubber Co......................... 114,950 5,000 Visteon Corp.*........................................ 57,500 ----------- 529,583 ----------- BANKS: 2.91% 2,000 Bank of America Corp.................................. 91,750 1,000 BANK ONE CORP......................................... 36,625 20,000 Bankatlantic Bancorp., Inc............................ 75,000 8,000 Bay View Capital Corp.*............................... 50,000 2,000 Capstead Mortgage Corp................................ 21,750 1,100 Citigroup Inc......................................... 56,169 819 First Union Corp...................................... 22,778 8,000 Pacific Century Financial Corp........................ 141,500 10,000 Soverign BanCorp., Inc................................ 81,250 ----------- 576,822 ----------- BIOTECHNOLOGY: 0.26% 20,000 Zonagen, Inc.*........................................ 52,500 ----------- BUILDING MATERIALS: 2.07% 900 Ameron International Corp............................. 33,525 4,000 Hughes Supply......................................... 71,760 7,000 JLG Industries, Inc................................... 74,375 1,700 NCI Building System, Inc.*............................ 31,981 3,000 Nortek, Inc.*........................................ 71,063 5,500 OMNOVA Solutions, Inc.*............................... 33,000 5,650 Pope & Talbot, Inc.................................... 94,991 ----------- 410,695 ----------- See Notes to Financial Statements. 5 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- BUSINESS SERVICES: 2.84% 13,900 Ablest, Inc.*......................................... $ 72,975 20,000 Analysts International Corp........................... 76,250 9,500 Cambridge Technology Partners (Massachusetts), Inc.*.. 24,938 8,000 Comdisco, Inc......................................... 91,500 19,600 Computer Horizons Corp.*.............................. 47,775 20,000 Encompass Services Corp.*............................. 101,250 7,000 IKON Office Solutions, Inc............................ 17,500 2,500 Right Management Consultants, Inc.*................... 39,375 25,000 SOS Staffing Services, Inc.*.......................... 43,750 27,720 Vicon Industries, Inc.*............................... 46,778 ----------- 562,091 ----------- CHEMICALS - COMMODITY: 1.11% 5,000 Olin Corp............................................. 110,625 3,000 The Dow Chemical Co................................... 109,875 ----------- 220,500 ----------- CHEMICALS - SPECIALTY: 1.98% 7,000 Crompton Corp......................................... 73,500 7,000 IMC Global, Inc....................................... 108,938 2,200 Octel Corp.*.......................................... 25,300 8,000 Spartech Corp......................................... 164,500 1,400 Wellman, Inc.......................................... 19,775 ----------- 392,013 ----------- CLOTHING/FABRICS: 1.95% 1,000 Garan, Inc............................................ 23,375 10,000 Guess?, Inc.*......................................... 53,125 4,500 Kellwood Co........................................... 95,063 5,000 Oxford Industries..................................... 76,250 3,000 Quicksilver, Inc.*.................................... 58,125 5,000 Tommy Hilfiger Corp.*................................. 49,063 3,500 Unifi, Inc.*.......................................... 31,281 ----------- 386,282 ----------- See Notes to Financial Statements. 6 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- COMMUNICATIONS TECHNOLOGY: 2.52% 186 Avaya, Inc.*.......................................... $ 1,918 3,334 Cabletron Systems, Inc.*.............................. 50,218 8,000 Clarent Corp.*........................................ 90,500 4,000 Davox Corp.*.......................................... 39,000 10,000 Digi International, Inc.*............................. 61,250 15,000 Glenayre Technologies, Inc.*.......................... 52,969 2,233 Lucent Technologies, Inc.............................. 30,146 10,000 Network Peripherals, Inc.*............................ 64,375 50,000 VTEL Corp.*........................................... 43,750 20,000 Zoom Telephonics, Inc.*............................... 66,250 ----------- 500,376 ----------- COMPUTERS: 3.57% 8,000 Adaptec, Inc.*........................................ 82,000 6,000 Apple Computer, Inc.*................................. 89,250 10,400 Applied Graphics Technologies, Inc.*.................. 35,100 4,000 Compaq Computer Corp.................................. 60,200 12,000 Exabyte Corp.*........................................ 41,250 20,000 Iomega Corp.*......................................... 67,400 1,785 MicroTouch Systems, Inc.*............................. 37,290 3,000 Quantum Corp. - DLT & Storage Systems Group*.......... 39,938 4,500 Quantum Corp. - Hard Disk Drive Group*................ 36,000 16,000 Read-Rite Corp.*...................................... 64,500 8,000 Storage Technology Corp.*............................. 72,000 18,475 Trident Microsystems, Inc.*........................... 83,138 ----------- 708,066 ----------- CONSUMER SERVICES: 0.87% 20,000 ANC Rental Corp.*..................................... 70,000 2,500 H&R Block, Inc........................................ 103,438 ----------- 173,438 ----------- CONTAINERS & PACKAGING: 0.31% 20,000 Applied Extrusion Technology, Inc.*................... 61,875 ----------- COSMETICS/PERSONAL CARE: 0.26% 10,000 Allou Health & Beauty Care, Inc.*..................... 32,500 4,000 Helen of Troy Ltd.*................................... 19,500 ----------- 52,000 ----------- See Notes to Financial Statements. 7 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- ELECTRICAL COMPONENTS & EQUIPMENT: 4.31% 30,000 Aerovox, Inc.*........................................ $ 60,000 10,000 Aetrium, Inc.*........................................ 27,500 5,000 American Power Conversion Corp.*.................... 61,875 4,000 AVX Corp.............................................. 65,500 4,000 Bel Fuse Inc. - Class B............................... 136,000 60,000 InVision Technologies, Inc.*.......................... 86,250 8,289 Nam Tai Electronics, Inc.............................. 126,407 5,000 PRI Automation, Inc.*................................. 93,750 5,400 Recoton Corp.*........................................ 41,175 7,600 RF Industries, Ltd.*.................................. 20,900 3,100 Thomas & Betts Corp................................... 50,181 5,625 Vishay Intertechnology, Inc.*......................... 85,078 ----------- 854,616 ----------- FINANCIAL SERVICES, DIVERSIFIED: 0.32% 4,847 Conseco, Inc.......................................... 63,920 ----------- FIXED LINE COMMUNICATIONS: 0.70% 4,000 AT&T Corp............................................. 69,250 5,000 WorldCom, Inc.*....................................... 70,000 ----------- 139,250 ----------- FOOD: 0.27% 2,200 Sara Lee Corp......................................... 54,038 ----------- FOOD RETAILERS: 0.47% 3,500 Albertson's, Inc...................................... 92,750 ----------- FOOTWEAR: 1.38% 5,000 Maxwell Shoe Co., Inc.*............................... 53,750 1,800 Reebok International Ltd.*............................ 49,212 5,000 R. G. Barry Corp.*.................................... 11,876 3,199 Saucony, Inc. - Class B*.............................. 25,792 2,000 The Timberland Co. - Class A*......................... 133,750 ----------- 274,380 ----------- See Notes to Financial Statements. 8 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- FOREST PRODUCTS: 0.39% 2,500 Georgia-Pacific Corp.................................. $ 77,813 ----------- HEALTHCARE PROVIDERS: 1.96% 750 Aetna, Inc............................................ 30,797 11,500 Curative Health Services, Inc.*....................... 63,969 12,000 HEALTHSOUTH Corp.*.................................... 195,750 35,000 LCA-Vision, Inc.*..................................... 37,187 13,500 Res-Care, Inc.*....................................... 60,750 ----------- 388,453 ----------- HEAVY MACHINERY: 0.15% 1,800 A.O. Smith Corp....................................... 30,713 ----------- HOME CONSTRUCTION: 2.98% 16,000 Cavalier Homes, Inc.*................................. 14,000 10,000 Champion Enterprises, Inc.*........................... 27,500 4,000 Clayton Homes, Inc.................................... 46,000 4,360 D.R. Horton, Inc...................................... 106,548 8,000 Fleetwood Enterprises, Inc............................ 84,000 3,000 Kaufman and Broad Home Corp........................... 101,063 11,000 SMC Corp.*............................................ 23,375 6,000 Standard Pacific Corp................................. 140,250 1,200 Toll Brothers, Inc.*.................................. 49,050 ----------- 591,786 ----------- HOME FURNISHINGS: 2.05% 14,000 Applica, Inc.*........................................ 68,250 4,000 Chromcraft Revington, Inc.*........................... 40,000 6,000 Craftmade International, Inc.......................... 42,375 3,100 Maytag Corp........................................... 100,169 25,000 The Dixie Group, Inc.*................................ 59,375 2,000 Whirlpool Corp........................................ 95,375 ----------- 405,544 ----------- HOUSE-DURABLE: 1.28% 3,000 Department 56, Inc.*.................................. 34,500 3,500 Springs Industries, Inc............................... 113,531 4,000 The Sherwin-Williams Co............................... 105,250 ----------- 253,281 ----------- See Notes to Financial Statements. 9 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- HOUSE-NON-DURABLE: 0.29% 8,400 Central Garden & Pet Company - Class A*............... $ 57,750 ----------- INDUSTRIAL & COMMERCIAL SERVICES: 1.06% 4,500 Avnet, Inc............................................ 96,750 10,000 Nu Horizons Electronics Corp.*........................ 89,375 8,000 Trio-Tech International*.............................. 24,000 ----------- 210,125 ----------- INDUSTRIAL DIVERSIFIED: 1.21% 8,000 GenCorp, Inc.......................................... 77,000 15,300 McRae Industries, Inc................................. 80,325 7,000 P & F Industries, Inc. - Class A*..................... 35,875 1,000 Rockwell International Corp........................... 47,625 ----------- 240,825 ----------- INSURANCE, LIFE: 0.77% 400 National Western Life Insurance Co.*.................. 41,225 1,500 Torchmark Corp........................................ 57,656 2,000 UnumProvident Corp.................................... 53,750 ----------- 152,631 ----------- INSURANCE, PROPERTY & CASUALTY: 1.27% 2,000 E.W. Blanch Holdings.................................. 34,875 5,000 Enhance Financial Services Group, Inc................. 77,188 800 MGIC Investment Corp.................................. 53,950 1,000 The Allstate Corp..................................... 43,563 1,700 Trenwick Group, Inc................................... 42,181 ----------- 251,757 ----------- MARINE TRANSPORTATION: 0.69% 5,000 Sea Containers Ltd. - Class A......................... 108,750 1,900 Stolt-Nielsen S.A. ADR................................ 28,738 ----------- 137,488 ----------- MEDICAL SUPPLIES: 1.22% 7,000 Bergen Brunswig Corp.................................. 110,810 5,000 Boston Scientific Corp.*.............................. 68,438 10,000 Minntech Corp......................................... 61,875 ----------- 241,123 ----------- See Notes to Financial Statements. 10 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- OIL, DRILLING: 0.61% 2,300 Global Marine, Inc.*.................................. $ 65,263 16,400 Harken Energy Corp.*.................................. 55,350 ----------- 120,613 ----------- OIL, EQUIPMENT & SERVICES: 2.31% 10,000 Giant Industries, Inc.*............................... 73,125 5,000 Holly Corp............................................ 93,750 6,000 Maverick Tube Corp.*.................................. 135,750 5,000 Oceaneering International, Inc.*...................... 97,188 2,700 Offshore Logistics, Inc.*............................. 58,177 ----------- 457,990 ----------- OIL, SECONDARY: 1.75% 10,000 Friede Goldman Halter*................................ 35,625 6,000 Ocean Energy, Inc..................................... 104,250 10,000 Range Resources Corp.*................................ 68,750 1,500 Ultramar Diamond Shamrock Corp........................ 46,313 2,500 Valero Energy Corp.................................... 92,969 ----------- 347,907 ----------- OTHER NON-FERROUS: 0.69% 4,000 Cleveland-Cliffs, Inc................................. 86,250 899 Phelps Dodge Corp..................................... 50,175 ----------- 136,425 ----------- PAPER PRODUCTS: 0.62% 3,000 International Paper Co................................ 122,438 ----------- PHARMACEUTICALS: 0.48% 4,000 Nature's Sunshine Products, Inc....................... 27,250 40,000 Twinlab Corp.*........................................ 67,500 ----------- 94,750 ----------- POLLUTION CONTROL/WASTE MANAGEMENT: 0.16% 6,000 IMCO Recycling, Inc................................... 31,875 ----------- PRECIOUS METALS: 0.34% 2,500 De Beers Consolidated Mines Ltd. ADR.................. 66,875 ----------- See Notes to Financial Statements. 11 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- RAILROADS: 0.92% 3,500 CSX Corp.............................................. $ 90,781 1,800 Union Pacific Corp.................................... 91,350 ----------- 182,131 ----------- REAL ESTATE INVESTMENT: 0.64% 8,000 HRPT Properties Turst................................. 60,500 3,000 LNR Property Corp..................................... 66,000 ----------- 126,500 ----------- RECREATIONAL PRODUCTS: 1.82% 4,000 Brunswick Corp........................................ 65,750 2,200 Callaway Golf Co...................................... 40,975 3,600 Coastcast Corp........................................ 63,000 2,000 Eastman Kodak Co...................................... 78,750 6,000 K2, Inc.*............................................. 48,000 4,000 Mikasa, Inc........................................... 65,250 ----------- 361,725 ----------- RESTAURANTS: 0.67% 3,500 Landry's Seafood Restaurants, Inc..................... 34,781 3,000 TRICON Global Restaurants, Inc.*...................... 99,000 ----------- 133,781 ----------- RETAILERS, APPAREL: 2.09% 1,000 American Eagle Outfitters, Inc.*...................... 42,250 5,000 AnnTaylor, Inc.*...................................... 124,688 2,500 Burlington Coat Factory Warehouse Corp................ 47,344 5,000 Gadzooks, Inc.*....................................... 73,750 100,000 One Price Clothing Stores, Inc.*..................... 62,500 2,500 Pacific Sunwear of California, Inc.*.................. 64,063 ----------- 414,595 ----------- RETAILERS, BROADLINE: 1.44% 5,000 J. C. Penney Company, Inc............................. 54,375 10,000 Kmart Corp.*.......................................... 53,125 5,000 Nordstrom, Inc........................................ 90,938 2,500 Sears, Roebuck and Co................................. 86,875 ----------- 285,313 ----------- See Notes to Financial Statements. 12 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- RETAILERS, SPECIALTY: 3.72% 4,500 A.C. Moore Arts & Crafts, Inc.*....................... $ 36,844 10,000 AutoNation, Inc.*..................................... 60,000 4,000 Barnes & Noble, Inc.*................................. 106,000 17,000 Friedman's, Inc....................................... 78,625 15,000 HomeBase, Inc.*...................................... 15,000 5,000 Jo-Ann Stores, Inc.*.................................. 21,250 5,000 Michaels Stores, Inc.*................................ 132,500 5,000 Office Depot, Inc.*................................... 35,625 15,000 OfficeMax*............................................ 43,125 4,000 Rex Stores Corp.*..................................... 66,500 8,000 TBC Corp.*............................................ 36,500 4,000 The Pep Boys - Manny, Moe & Jack...................... 14,500 4,000 Toys "R" Us, Inc.*.................................... 66,750 2,700 Trans World Entertainment Corp.*...................... 24,131 ----------- 737,350 ----------- SAVINGS & LOAN: 1.27% 2,400 FirstFed Financial Corp.*............................. 77,550 2,200 Golden State Bancorp, Inc............................. 69,163 2,750 PVF Capital Corp...................................... 26,125 1,500 Washington Mutual, Inc................................ 79,594 ----------- 252,432 ----------- SECURITIES BROKER: 0.48% 750 Lehman Brothers Holdings, Inc......................... 50,719 882 The Bear Stearns Companies Inc........................ 44,706 ----------- 95,425 ----------- SEMICONDUCTOR & RELATED: 10.15% 4,000 Advanced Micro Devices, Inc.*......................... 55,250 1,500 Applied Materials, Inc.*.............................. 57,281 6,668 Atmel Corporation*.................................... 77,516 5,000 Cohu, Inc............................................. 69,688 4,500 Credence Systems Corp.*............................... 103,500 4,000 Cypress Semiconductor Corp.*.......................... 78,750 4,000 Dataram Corp.*........................................ 46,500 2,300 Diodes, Inc.*......................................... 23,863 6,000 Electroglas, Inc.*.................................... 91,875 See Notes to Financial Statements. 13 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- SEMICONDUCTOR & RELATED, CONTINUED 10,690 ESS Technology, Inc.*................................. $ 54,786 12,000 General Semiconductor, Inc.*.......................... 75,000 2,000 Integrated Device Technology, Inc.*................... 66,250 12,000 Integrated Silicon Solutions, Inc.*................... 172,500 3,500 International Rectifier Corp.*........................ 105,000 4,000 KEMET Corp.*.......................................... 60,500 8,000 Kulicke and Soffa Industries, Inc.*................... 90,000 5,000 Lam Research Corp.*................................... 72,500 4,000 LSI Logic Corp.*...................................... 68,360 2,000 Micron Technology, Inc.*.............................. 71,000 4,000 National Semiconductor Corp.*......................... 80,500 3,000 Novellus Systems, Inc.*............................... 107,813 1,500 Silicon Valley Group, Inc.*........................... 43,125 4,449 Siliconix, Inc.*...................................... 100,103 10,000 Sonicblue, Inc.*...................................... 41,250 1,250 Standard Microsystems Corp.*.......................... 25,313 2,000 Teradyne, Inc.*....................................... 74,500 4,200 Varian Semiconductor Equipment Associates, Inc.*...... 99,750 ----------- 2,012,473 ----------- SOFTWARE: 4.28% 37,000 American Software, Inc. - Class A*.................... 50,875 4,000 Autodesk, Inc......................................... 107,750 2,000 BMC Software, Inc.*................................... 28,000 15,000 CAM Commerce Solutions, Inc.*......................... 52,500 4,000 Computer Associates International, Inc................ 78,000 10,000 Compuware Corp.*...................................... 62,500 1,500 Electronics for Imaging, Inc.*........................ 20,906 35,000 Netmanage, Inc.*...................................... 32,813 63,200 Peerless Systems Corp.*............................... 61,228 2,800 Progress Software Corp.*.............................. 40,425 27,500 SEEC, Inc.*........................................... 67,031 2,500 Software Spectrum, Inc.*.............................. 15,156 2,400 Symantec Corp.*....................................... 80,100 1,100 Synopsys, Inc.*....................................... 52,181 3,500 Unisys Corp.*......................................... 51,188 558 VERITAS Software Corp.*............................... 48,825 ----------- 849,478 ----------- See Notes to Financial Statements. 14 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- STEEL: 1.40% 10,000 AK Steel ............................................. $ 87,500 40,000 Rouge Industries, Inc. - Class A...................... 72,500 1,351 Ryerson Tull, Inc..................................... 11,146 100,000 The LTV Corp.*........................................ 34,380 4,000 USX-US Steel Group.................................... 72,000 ----------- 277,526 ----------- TOBACCO: 0.86% 1,000 Philip Morris Companies, Inc.......................... 44,000 1,600 R.J. Reynolds Tobacco Holdings, Inc................... 78,000 1,700 UST, Inc.............................................. 47,706 ----------- 169,706 ----------- TOYS: 1.55% 6,000 Hasbro, Inc........................................... 63,750 6,000 Mattel, Inc........................................... 86,640 3,000 THQ, Inc.*............................................ 73,125 9,000 Topps Co.*............................................ 82,688 ----------- 306,203 ----------- TRANSPORTATION EQUIPMENT: 1.39% 2,000 Cummins Engine Co..................................... 75,875 3,000 Navistar International Corp.*......................... 78,563 433 Sabre Holdings Corp................................... 18,673 4,000 Trinity Industries, Inc............................... 100,000 ----------- 273,111 ----------- TRUCKING: 2.06% 150 American Freightways Corp.*........................... 4,191 5,000 Arkansas Best Corp.*.................................. 91,563 33,800 Cannon Express, Inc.*................................. 35,913 15,000 Consolidated Freightways Corp.*..................... 62,813 3,000 Old Dominion Freight Line, Inc.*...................... 28,500 4,300 Roadway Express, Inc.................................. 91,106 4,500 Yellow Corp.*......................................... 91,617 ----------- 405,703 ----------- See Notes to Financial Statements. 15 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT DECEMBER 31, 2000, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- WIRELESS COMMUNICATIONS: 0.36% 20,000 Brightpoint, Inc.*.................................... $ 69,981 ----------- Total Common Stocks (Cost $18,157,052)................ 19,317,904 ----------- Principal Amount SHORT-TERM INVESTMENTS: 4.84% - -------------------------------------------------------------------------------- $209,868 Firstar Stellar Treasury Fund......................... 209,868 750,000 Ford Motor Credit Corp, Interest Bearing Commercial Paper, 1/02/01, 6.528%................... 750,000 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $959,868).......... 959,868 ----------- Total Investment in Securities (Cost $19,116,920): 102.28%......................... 20,277,772 Liabilities in excess of Other Assets: (2.28%)........ (451,654) ----------- Net Assets: 100.00%................................... $19,826,118 =========== * Non-income producing security. + At December 31, 2000, the cost of securities for Fedreal tax purposes was $19,127,154. Gross unrealized appreciation and depreciation of securities is as follows: Gross unrealized appreciation............................. $ 3,373,772 Gross unrealized depreciation............................. (2,223,154) ----------- Net unrealized appreciation........................... $ 1,150,618 =========== See Notes to Financial Statements. 16 THE AL FRANK FUND STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2000 - -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (cost $19,116,920) ......... $20,277,772 Cash ........................................................... 136,436 Receivables: Dividends and interest ....................................... 17,819 Fund shares sold ............................................. 186,121 Securities sold .............................................. 67,458 Deferred organization costs .................................... 14,017 Prepaid expenses ............................................... 32,508 ----------- Total assets ............................................. 20,732,131 ----------- LIABILITIES Payables: Securities purchased ......................................... 762,771 Due to advisor ............................................... 20,586 Fund shares redeemed ......................................... 112,104 Administration fees .......................................... 6,419 Distribution fees ............................................ 4,133 ----------- Total liabilities ........................................ 906,013 ----------- NET ASSETS ....................................................... $19,826,118 =========== NET ASSET VALUE AND REDEMPTION* PRICE PER SHARE [$19,862,118 / 1,359,732 shares outstanding; unlimited number of shares (par value $.01) authorized] ....................... $ 14.58 =========== OFFERING PRICE PER SHARE ($14.58 / .9450) ...................... $ 15.43 =========== COMPONENTS OF NET ASSETS Paid-in capital ................................................ $18,321,732 Accumulated net realized gain on investments ................... 343,534 Net unrealized appreciation on investments ..................... 1,160,852 ----------- Net assets ............................................... $19,826,118 =========== See Notes to Financial Statements. 17 THE AL FRANK FUND STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 2000 - -------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends ..................................................... $ 136,615 Interest ...................................................... 55,055 --------- Total income .............................................. 191,670 --------- Expenses Advisory fees (note 3) ........................................ 131,328 Administration fees (Note 3) .................................. 31,734 Distribution fees (note 4) .................................... 32,832 Transfer agent fees ........................................... 25,067 Fund accounting fees .......................................... 16,044 Professional fees ............................................. 21,060 Registration expense .......................................... 12,034 Deferred organization expense ................................. 7,020 Custody fees .................................................. 5,014 Reports to shareholders ....................................... 4,011 Trustee fees .................................................. 4,050 Miscellaneous ................................................. 4,291 Insurance expense ............................................. 1,484 --------- Total expenses ............................................ 295,969 --------- NET INVESTMENT LOSS ................................... (104,299) --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments ................................ 362,231 Net change in unrealized depreciation on investments ............ (319,164) --------- Net realized and unrealized gain on investments ........... 43,067 --------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .. $ (61,232) ========= See Notes to Financial Statements. 18 THE AL FRANK FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
Year Year Ended Ended December 31, 2000 December 31, 1999 ----------------- ----------------- NET INCREASE (DECREASE) IN ASSETS FROM OPERATIONS OPERATIONS Net investment loss .................................................. $ (104,299) $ (87,003) Net realized gain on investments ..................................... 362,231 996,478 Net change in unrealized depreciation on investments ................. (319,164) 2,273,900 ------------ ------------ Net decrease in net assets resulting from operations .............. (61,232) 3,183,375 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS Net realized gain on security transactions ........................... (886,353) -- ------------ ------------ TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net increase / (decrease) in net assets derived from net change in outstanding shares (a)................................. 13,111,125 (2,562,764) ------------ ------------ Total increase in net assets ......................................... 12,163,540 620,611 NET ASSETS Beginning of year .................................................... 7,662,578 7,041,967 ------------ ------------ End of year .......................................................... $ 19,826,118 $ 7,662,578 ============ ============ (a) A summary of share transactions is as follows: Year Year Ended Ended December 31, 2000 December 31, 1999 ---------------------------- ---------------------------- Shares Paid in Capital Shares Paid in Capital ------ --------------- ------ --------------- Shares sold ...................................... 975,413 $15,365,513 155,390 $ 1,691,973 -------- ----------- -------- ----------- Shares issued on reinvestment of distributions.... 55,209 881,129 -- -- Shares redeemed .................................. (197,647) (3,135,517) (405,050) (4,254,737) -------- ----------- -------- ----------- Net increase (decrease) .......................... 832,975 $13,111,125 (249,660) $(2,562,764) ======== =========== ======== ===========
See Notes to Financial Statements. 19 FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -------------------------------------------------------------------------------- Year Year January 2, 1998* Ended Ended through December 31, 2000 December 31, 1999 December 31, 1998 ----------------- ----------------- ----------------- Net asset value, beginning of period ................. $ 14.55 $ 9.07 $ 10.00 -------- -------- -------- Income from investment operations: Net investment loss ................................ (0.08) (0.21) (0.08) Net realized and unrealized gain (loss) on investments ................................... 1.18 5.69 (0.85) -------- -------- -------- Total from investment operations ..................... 1.10 5.48 (0.93) -------- -------- -------- Less distributions: From net realized gain on investments .............. (1.07) -- -- -------- -------- -------- Net asset value, end of period ....................... $ 14.58 $ 14.55 $ 9.07 ======== ======== ======== Total return ......................................... 6.98% 60.42% (9.30%)+ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) ................ $ 19,826 $ 7,663 $ 7,042 Ratio of expenses to average net assets: Before expense reimbursement ....................... 2.25% 3.60% 3.74%** After expense reimbursement ........................ 2.25% 2.20% 2.25%** Ratio of net investment loss to average net assets: After expense reimbursement ........................ (0.79%) (1.32%) (1.28%)** Portfolio turnover rate .............................. 30.17% 19.00% 5.82%+
* Commencement of operations. ** Annualized. + Not Annualized. See Notes to Financial Statements. 20 THE AL FRANK FUND NOTES TO FINANCIAL STATEMENTS AT DECEMBER 31, 2000 - -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION The Al Frank Fund (the "Fund") is a series of shares of beneficial interest of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund began operations on January 2, 1998. The investment objective of the Fund is to seek growth of capital. The Fund seeks to achieve its objective by investing in out of favor and undervalued equity securities. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with generally accepted accounting principles. A. SECURITY VALUATION: The Fund's investments are carried at fair value. Securities that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ National Market System for which market quotations are readily available shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter ("OTC") securities which are not traded in the NASDAQ National Market System shall be valued at the most recent trade price. Securities for which market quotations are not readily available, if any, are valued following procedures approved by the Board of Trustees. Short-term investments are valued at amortized cost, which approximates market value. B. FEDERAL INCOME TAXES: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. SECURITY TRANSACTIONS, DIVIDENDS AND DISTRIBUTIONS: Security transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Dividend income and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions to shareholders from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations which differs from generally accepted accounting principles. To the extent these book/tax differences are permanent such amounts are reclassified within the capital accounts based on their Federal tax treatment. The reclassification relates primarily to the net operating loss of the Fund which is not deductible for tax purposes and was reclassified to paid-in capital. D. DEFERRED ORGANIZATION COSTS: The fund has incurred expenses of $35,000 in connection with its organization. These costs have been deferred and are being amortized on a straight-line basis over a period of sixty months from the date of the Fund commenced investment operations. E. USE OF ESTIMATES: The preparation of financial statements in conformity with 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 21 THE AL FRANK FUND NOTES TO FINANCIAL STATEMENTS, CONTINUED - -------------------------------------------------------------------------------- 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 year ended December 31, 2000, Al Frank Asset Management (the "Advisor") provided the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnished all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of 1.00% based upon the average daily net assets of the Fund. For the year ended December 31, 2000, the Fund incurred $131,328 in Advisory Fees. The Fund is responsible for its own operating expenses. The Advisor has agreed to reduce fees payable to it by the Fund and to pay Fund operating expenses to the extent necessary to limit the Fund's aggregate annual operating expenses to 2.25% of average net assets (the "expense cap"). Any such reduction made by the Advisor in its fees or payment of expenses which are the Fund's obligation are subject to reimbursement by the Fund to the Advisor, if so requested by the Advisor, in subsequent fiscal years if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the applicable limitation on Fund expenses. The Advisor is permitted to be reimbursed only for fee reductions and expense payments made in the previous three fiscal years, but is permitted to look back five years and four years, respectively, during the initial six years and seventh year of the Funds 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 year ended no amounts were reimbursed to the Advisor. Cumulative expenses subject to recapture pursuant to the aforementioned conditions amounted to $164,652 at December 31, 2000, all of which expires in 2003. Investment Company Administration, L.L.C. (the "Administrator") acts as the Fund's Administrator under an Administration Agreement. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund; prepares reports and materials to be supplied to the trustees; monitors the activities of the Fund's custodian, transfer agent and accountants; coordinates the preparation and payment of the Fund's expenses and reviews the Fund's expense accruals. For its services, the Administrator receives a monthly fee at the following annual rate: Fund asset level Fee rate - ---------------- -------- Less than $15 million $30,000 $15 million to less than $50 million 0.20% of average daily net assets $50 million to less than $100 million 0.15% of average daily net assets $100 million to less than $150 million 0.10% of average daily net assets More than $150 million 0.05% of average daily net assets 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. 22 THE AL FRANK FUND NOTES TO FINANCIAL STATEMENTS, CONTINUED - -------------------------------------------------------------------------------- NOTE 4 - DISTRIBUTION COSTS The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 (the "Plan"). The Plan permits the Fund to pay for distribution and related expenses at an annual rate of up to 0.25% of the Fund's average daily net assets annually. The expenses covered by the Plan may include the cost of preparing and distributing prospectuses and other sales material, advertising and public relations expenses, payments to financial intermediaries and compensation of personnel involved in selling shares of the Fund. Payments made pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred. Pursuant to a distribution coordination agreement adopted under the Plan, distribution fees are paid to the Advisor as "Distribution Coordinator". For the year ended December 31, 2000, the Fund paid the Distribution Coordinator $32,832. NOTE 5 - PURCHASES AND SALES OF SECURITIES For the year ended December 31, 2000, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $15,377,042 and $3,664,642, respectively. 23 INDEPENDENT AUDITOR'S REPORT - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS THE AL FRANK FUND In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Al Frank Fund (the "Fund"), a series of Advisors Series Trust, at December 31, 2000, the results of its operations for the year then ended, the changes in its net assets and financial highlights for the each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights for the period from January 2, 1998 (commencement of operations) through December 31, 1998 were audited by other independent accountants whose report, dated January 29, 1999, expressed an unqualified opinion on those statements. PricewaterhouseCoopers LLP New York, New York February 15, 2001 24 ADVISOR Al Frank Asset Management, Inc. 465 Forest Avenue, Suite I Laguna Beach, California 92651 www.alfrank.com DISTRIBUTOR First Fund Distributors, Inc. 4455 E. Camelback Road, Suite 261-E Phoenix, Arizona 85018 CUSTODIAN Firstar Institutional Custody Services 425 Walnut Street, M/L 6118 Cincinnati, Ohio 45202 TRANSFER AGENT American Data Services, Inc. 150 Motor Parkway, Suite 109 Hauppauge, New York 11788 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker, LLP 345 California Street San Francisco, California 94104 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, New York 10036 -----END PRIVACY-ENHANCED MESSAGE-----