-----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, JfMVYT7ihuWQOgvOSazuPtR4/l7gz/8+UWrcNIssCQBK+C9PS5nwTECVh+KS2DXm 2hg/Zf+Lw6D6U4UeT6eqRg== 0000950147-98-000311.txt : 19980430 0000950147-98-000311.hdr.sgml : 19980430 ACCESSION NUMBER: 0000950147-98-000311 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980429 SROS: NONE 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: 98604520 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 SEMI-ANNUAL REPORTS InformationTech 100(R) Fund 160 Sansome Street San Francisco, CA 94104 (415) 705-7777 Dear Fellow Shareholder, The past year was definitely the year of the bull in information technology (IT). After a major downturn in October 1997, technology rebounded strongly through the first quarter of 1998. Our shareholders have been well rewarded for staying the course. IT companies continue to enjoy record sales and profits despite the downturn in Asia and the slowing domestic economy. Year 2000 conversions, Euro currency consolidation, corporate intranets, and e-commerce are just some of the major issues driving the industry forward. The positive trend in IT spending is unlikely to slow given the strong economic benefits resulting from employee productivity gains, expense reduction and sales enhancement. The Portfolio: We ended the fund's fiscal year on February 28, 1998, up 50.75%. The Fund's total return inception through March 31, 1998 was 60.30%. The fund celebrated its one year anniversary with a 12 month return of 56.3% (inception on April 8, 1997 through April 7, 1998). The average total return for the Science & Technology Funds Group was 40.37%, according to Lipper Analytical Services, Inc. Among our best performers since inception through March 31, 1998 were: (1) Compuware, up 171%, (2) America Online, up 175%, (3) Dell, up 202%, (4) Lucent, up 125%, (5) CBT Group, up 115%, (6) PeopleSoft, up 169% and (7) SAP ADRs, up 157%. The networking stocks, excluding Cisco, continue to be laggards in the performance race along with specific software and hardware companies that disappoint Wall Street (ex: Sybase and Seagate). Outlook: Nothing goes up in a straight line. Technology, known to be volatile, will undoubtedly have some setbacks on the way up. We believe that IT companies are likely to be less volatile than other technology companies given their strong ties to the corporate markets...but they will not be immune. Short-term, share prices have gotten ahead of the fundamental values, especially in the Internet-related companies. However, we are still bullish in our long-term outlook as IT remains the fastest growing sector in the North American economy. /s/ William F.K. Schaff William F.K. Schaff Portfolio Manager InformationTech 100(R) Fund Comparison of the change in value of a $10,000 investment in the information Tech 100(R) Fund versus the Wilshire 5000 Equity Index Fund Wilshire 5000 Wilshire Raw Wilshire Change ---- ------------- ------------ --------------- 04/08/97 10,000 10,000 7305.75 1 05/31/97 11,740 10,292 7519.29 1.02922903192691 08/31/97 13,095 11,881 8679.98 1.18810252198611 11/28/97 13,080 12,514 9142.43 1.25140197789412 02/27/98 15,075 13,697 10006.4 1.36966088355063 (Somewhere in graph) * Fund total return from commencement of operations on April 6, 1997 to February 27, 1998: 50.75% (On bottom of graph) Past performance is not predictive of future performance. 2 InformationTech 100(R) Fund SCHEDULE OF INVESTMENTS at February 28, 1998
- -------------------------------------------------------------------------------------------------------------- Shares COMMON STOCKS: 80.17% Market Value - -------------------------------------------------------------------------------------------------------------- Audio and Video Equipment: 0.41% 145 Hitachi Ltd............................................................. $ 10,984 -------- Communications Equipment: 6.72% 1,800 ADC Telecommunications, Inc.*........................................... 46,519 500 Advanced Fibre Communications*.......................................... 14,984 230 Ericsson (L.M.) Telephone Co............................................ 10,422 500 Lucent Technologies..................................................... 54,187 120 Motorola, Inc........................................................... 6,690 220 Northern Telecom Ltd.................................................... 11,729 1,000 Pairgain Technology*.................................................... 20,156 250 Tellabs, Inc.*.......................................................... 15,102 -------- 179,789 -------- Communications Services: 12.31% 400 Airtouch Communications*................................................ 17,975 1,000 At-Home Corp., Series A*................................................ 34,187 150 AT&T Corp............................................................... 9,131 750 Cox Communications, Inc.*............................................... 28,922 900 First Data Corp......................................................... 30,600 100 MCI Communications...................................................... 4,784 1,600 Nextel Communications, Inc., Class A*................................... 47,250 2,100 Tele-Communications, Inc.*.............................................. 61,097 640 Viacom Inc., Class A*................................................... 30,240 1,700 Worldcom, Inc.*......................................................... 64,972 -------- 329,158 -------- Computer Hardware: 5.32% 1,470 Compaq Computer Corp.................................................... 47,132 250 Dell Computer Corp.*.................................................... 34,961 175 Digital Equipment*...................................................... 9,964 205 Hewlett-Packard Co...................................................... 13,735 200 IBM..................................................................... 20,887 325 Sun Microsystems*....................................................... 15,488 -------- 142,167 --------
See accompanying Notes to Financial Statements. 3 InformationTech 100(R) Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued
- -------------------------------------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------------------------------------- Computer Networks: 4.61% 280 Arbor Software*......................................................... $ 12,583 700 Bay Networks, Inc.*..................................................... 23,713 650 Cambridge Technology Partners*.......................................... 29,656 587 Cisco Systems*.......................................................... 38,687 165 Sapient Corp.*.......................................................... 13,050 400 Vanstar Corp.*.......................................................... 5,525 -------- 123,214 -------- Computer Peripherals: 1.24% 1,000 American Power Conversion Co.*.......................................... 29,031 116 3 Com Corp.*............................................................ 4,151 -------- 33,182 -------- Computer Services: 5.18% 250 Affiliated Computer Services, Inc.*..................................... 8,047 500 America Online*......................................................... 60,563 280 American Management Systems, Inc.*...................................... 7,332 240 Automatic Data Processing............................................... 14,655 400 Ceridian Corp.*......................................................... 18,625 85 Computer Sciences*...................................................... 8,898 155 EDS Corporation......................................................... 6,791 185 Gartner Group*.......................................................... 7,388 195 NCR Corp.*.............................................................. 6,118 -------- 138,417 -------- Computer Software: 2.06% 400 SAP (Sponsored) ADR..................................................... 55,000 -------- Computer Storage Devices: 0.94% 400 EMC Corp.*.............................................................. 15,300 145 Storage Technology*..................................................... 9,896 -------- 25,196 -------- Computer Systems - Desktop and Application: 0.60% 900 Unisys Corp.*........................................................... 16,088 --------
See accompanying Notes to Financial Statements. 4 InformationTech 100(R) Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued
- -------------------------------------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------------------------------------- Consulting and Integration Services: 4.42% 500 Computer Horizons Corp.*................................................ $ 26,062 500 Dataworks Corp.*........................................................ 12,656 700 HBO & Co................................................................ 37,909 200 Mastech Corp.*.......................................................... 10,563 150 Renaissance Worldwide, Inc.*............................................ 8,944 250 Systems & Computer Technology Corp.*.................................... 10,906 400 Wang Laboratories, Inc.*................................................ 11,175 -------- 118,215 -------- Database and Tools Software: 0.28% 200 Mercury Interactive Corp.*.............................................. 7,500 -------- Enterprise Application Software: 2.65% 150 Citrix Systems, Inc.*................................................... 6,323 200 HNC Software*........................................................... 7,150 100 I2 Technologies, Inc.*.................................................. 5,644 500 Siebel Systems, Inc.*................................................... 30,781 200 Veritas Software Corp.*................................................. 11,388 350 Viasoft Inc.*........................................................... 9,472 -------- 70,758 -------- Enterprise Software: 5.48% 3,000 Brooktrout Technology, Inc.*............................................ 47,625 1,600 Cendant Corp.*.......................................................... 60,000 600 Networks Associates, Inc.*.............................................. 38,813 -------- 146,438 -------- Insurance (Miscellaneous): 0.81% 300 Policy Management Systems*.............................................. 21,713 -------- Internet Services: 1.45% 500 Mindspring Enterprises, Inc.*........................................... 24,219 200 Yahoo! Inc.*............................................................ 14,637 -------- 38,856 -------- Office Equipment: 0.45% 135 Xerox Corp.............................................................. 11,973 --------
See accompanying Notes to Financial Statements. 5 InformationTech 100(R) Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued
- -------------------------------------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------------------------------------- Personal Productivity Software: 0.52% 300 Intuit Inc.*............................................................ $ 13,988 -------- Rental and Leasing: 0.33% 210 Comdisco, Inc........................................................... 8,754 -------- Semiconductors: 2.17% 375 Intel Corp.............................................................. 33,621 420 Texas Instruments....................................................... 24,308 -------- 57,929 -------- Software and Programming: 21.66% 170 Adobe Systems, Inc...................................................... 7,517 300 Aspen Technology, Inc.*................................................. 11,963 410 Baan Co.*............................................................... 18,437 450 BMC Software*........................................................... 34,439 500 CBT Group*.............................................................. 45,969 515 Check Point Software*................................................... 19,844 650 Computer Associates..................................................... 30,631 1,300 Compuware Corp.*........................................................ 54,803 500 Documentum, Inc.*....................................................... 23,281 240 Hummingbird Communications*............................................. 8,145 330 Hyperion Software*...................................................... 13,592 470 Keane, Inc.*............................................................ 21,855 700 Legato Systems, Inc.*................................................... 34,388 350 Manugistics Group*...................................................... 13,945 170 Microsoft Corp.*........................................................ 14,413 540 Oracle Corp.*........................................................... 13,314 1,200 Peoplesoft, Inc.*....................................................... 53,588 890 Platinum Technology*.................................................... 22,639 600 Saville Systems Ireland ADR*............................................ 27,975 200 Security Dynamics*...................................................... 7,113 800 Sterling Commerce, Inc.*................................................ 36,500 410 Sterling Software*...................................................... 21,602 475 Symantec Corp.*......................................................... 11,949 205 Transaction Systems Architects, Inc.*................................... 8,866 500 Vantive Corp.*.......................................................... 13,703 220 Wind River Systems*..................................................... 8,649 -------- 579,120 --------
See accompanying Notes to Financial Statements. 6 InformationTech 100(R) Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued
- -------------------------------------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------------------------------------- Telecommunications Infrastructure: 0.56% 150 Nokia Corp., ADR ...................................................... $ 15,113 ---------- Total Common Stocks (cost $1,718,980)................................... 2,143,552 ---------- Principal Amount SHORT-TERM INVESTMENTS: 6.83% - -------------------------------------------------------------------------------------------------------------- $182,532 Star Treasury Fund, 4.73% (cost $182,532)............................... 182,532 ---------- Total Investments in Securities (cost $1,901,512+): 87.00% ............. 2,326,084 Other Assets less Liabilities: 13.00%................................... 347,659 ---------- Total Net Assets: 100.0% ............................................... $2,673,743 ========== *Non-income producing security. + At February 28, 1998, the cost of securities for Federal tax purposes was the same as the basis for financial reporting. Unrealized appreciation and depreciation of securities were as follows: Gross unrealized appreciation........................................... $ 440,886 Gross unrealized depreciation........................................... (16,314) ---------- Net unrealized appreciation....................................... $ 424,572 =========
See accompanying Notes to Financial Statements. 7 InformationTech 100(R) Fund STATEMENT OF ASSETS AND LIABILITIES at February 28, 1998
- -------------------------------------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost $1,901,512) (Note 2) ............. $2,326,084 Receivables: Due from Advisor (Note 3)........................................................ 6,499 Dividends and interest .......................................................... 538 Fund shares sold................................................................. 323,557 Deferred organization costs (Note 2)................................................... 15,194 Prepaid expenses....................................................................... 18,464 ---------- Total assets .............................................................. 2,690,336 ---------- LIABILITIES Administration fee payable............................................................. 2,301 Accrued Expenses....................................................................... 14,292 ---------- Total liabilities.......................................................... 16,593 ---------- NET ASSETS .................................................................................. $2,673,743 ========== Net asset value, offering and redemption price per share ($2,673,743/88,685 shares outstanding; unlimited number of shares (par value $.01) authorized) ......................... $30.15 ====== COMPONENTS OF NET ASSETS Paid-in capital ....................................................................... $2,274,035 Net realized loss on investments....................................................... (24,864) Net unrealized appreciation on investments............................................. 424,572 ---------- Net assets ...................................................................... $2,673,743 ==========
See accompanying Notes to Financial Statements. 8 InformationTech 100(R) Fund STATEMENT OF OPERATIONS - For the Period from April 8, 1997* through February 28, 1998
- -------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends........................................................................ $ 1,446 Interest......................................................................... 2,917 --------- Total income............................................................... 4,363 --------- Expenses Administration fee (Note 3)...................................................... 26,794 Transfer agent fees.............................................................. 11,012 Fund accounting.................................................................. 10,856 Audit fees....................................................................... 9,826 Registration..................................................................... 9,214 Advisory fee (Note 3)............................................................ 8,353 Custody fees..................................................................... 6,073 Miscellaneous.................................................................... 6,026 Directors' fees.................................................................. 5,761 Legal fees....................................................................... 4,573 Reports to shareholders.......................................................... 4,466 Amortization of deferred organization costs (Note 2)............................. 3,306 Insurance........................................................................ 1,418 --------- Total expenses............................................................. 107,678 Less: expenses reimbursed/waived (Note 3).................................. (94,417) --------- Net expenses............................................................... 13,261 --------- Net investment loss ................................................. (8,898) --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized loss from security transactions..................................... (23,156) Net change in unrealized appreciation on investments............................. 424,572 --------- Net realized and unrealized gain on investments............................ 401,416 --------- Net Increase in Net Assets Resulting from Operations ................ $ 392,518 ========= *Commencement of operations.
See accompanying Notes to Financial Statements. 9 InformationTech 100(R) Fund STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------- April 8, 1997* through February 28, 1998 - ---------------------------------------------------------------------------------------------------------------- NET INCREASE IN ASSETS FROM OPERATIONS Net investment loss..................................................................... $ (8,898) Net realized loss from security transactions............................................ (23,156) Net change in unrealized appreciation on investments.................................... 424,572 ---------- Net increase in net assets resulting from operations ............................. 392,518 ---------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a)............ 2,281,225 ---------- Total increase in net assets ..................................................... 2,673,743 NET ASSETS Beginning of period..................................................................... -0- ---------- End of period .......................................................................... $2,673,743 ========== (a) A summary of capital shares transactions is as follows: April 8, 1997* through February 28, 1998 ----------------------- Shares Value ------- ---------- Shares sold.............................................................. 89,946 $2,313,271 Shares redeemed.......................................................... (1,261) (32,046) ------- ---------- Net increase............................................................. 88,685 $2,281,225 ======= ========== *Commencement of operations.
See accompanying Notes to Financial Statements. 10 InformationTech 100(R) Fund
FINANCIAL HIGHLIGHTS - For a capital share outstanding throughout the period - ------------------------------------------------------------------------------------------------------------------- April 8, 1997* through February 28, 1998 - ------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period....................................................... $ 20.00 Income from investment operations: Net investment income................................................................ (0.10) Net realized and unrealized gain on investments...................................... 10.25 -------- Total from investment operations........................................................... 10.15 -------- Net asset value, end of period............................................................. $ 30.15 ======== Total return............................................................................... 50.75%** Ratios/supplemental data: Net assets, end of period (thousands)...................................................... $ 2,674 Ratio of expenses to average net assets: Before expense reimbursement......................................................... 12.17%*** After expense reimbursement.......................................................... 1.50%*** Ratio of net investment loss to average net assets......................................... (1.01%)*** Portfolio turnover rate.................................................................... 32.78% Average commission rate paid per share..................................................... $ .1000 *Commencement of operations. **Not annualized. ***Annualized.
See accompanying Notes to Financial Statements. 11 InformationTech 100(R) Fund NOTES TO FINANCIAL STATEMENTS at February 28, 1998 - -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION The InformationTech 100 Fund (the "Fund") is a diversified series of shares of beneficial interest of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 (the "1940 Act") as a diversified open-end management investment company. The Fund began operations on April 8, 1997. 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 market 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 last quoted bid price. Short-term investments are stated at cost, which when combined with accrued interest, approximates market value. B. Federal Income Taxes. The Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute 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. D. Deferred Organization Costs. The Fund has incurred expenses of $18,500 in connection with the organization of the Fund. These costs have been deferred and are being amortized on a straight-line basis over a period of sixty months from the date 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS For the period ended February 28, 1998, Bay Isle Financial Corporation (the "Advisor") provided the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of .95% based upon the average daily net assets of the Fund. For the period ended February 28, 1998, the Fund incurred $8,353 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 1.5% 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 the first, second or third fiscal year next succeeding the fiscal year of the reduction or absorption 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 12 InformationTech 100(R) Fund NOTES TO FINANCIAL STATEMENTS, Continued - -------------------------------------------------------------------------------- expenses. With respect to the reimbursement of a particular fee reduction or expense payment, a reimbursement to the Advisor is permitted only within the three year period following the year in which the Advisor reduced the subject fee or paid the subject expense. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may be paid prior to the Fund's payment of current expenses if so requested by the Advisor even if that practice may require the Advisor to waive, reduce or absorb current Fund expenses. For the period ended February 28, 1998, the Advisor reduced its fees and absorbed Fund expenses in the amount of $94,417; no amounts were reimbursed. 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 Fund 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 net assets, subject to a $30,000 annual minimum. 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 and trustees of the Trust are also officers and/or directors of the Administrator and the Distributor. NOTE 4 - PURCHASES AND SALES OF SECURITIES The cost of purchases and the proceeds from sales of securities, other than short-term investments, for the period ended February 28, 1998, were $2,018,465 and $276,329, respectively. The Fund incurred a net capital loss of $24,864 for the period November 1, 1997 to February 28, 1998. In accordance with Federal income tax regulations the Fund has deferred this loss into the fiscal year commencing March 1, 1998 to offset future capital gains. 13 INDEPENDENT AUDITOR'S REPORT The Board of Trustees and Shareholders The InformationTech 100 Fund We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of The InformationTech 100 Fund as of February 28, 1998, and the related statements of operations, changes in net assets and the financial highlights for the period from April 8, 1997 (commencement of operations) to February 28, 1998. 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 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 February 28, 1998, by correspondence with the custodian. 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 The InformationTech 100 Fund as of February 28, 1998, the results of its operations, the changes in its net assets, and the financial highlights for the periods indicated, in conformity with generally accepted accounting principles. McGLADREY & PULLEN, LLP New York, New York April 3, 1998 This page intentionally left blank. Advisor Bay Isle Financial Corporation 160 Sansome Street, 17th Floor San Francisco, CA 94104 (415) 705-7777 Distributor First Fund Distributors, Inc. 4455 East Camelback Road, Suite 261E INFORMATIONTECH 100(R) Phoenix, AZ 85018 MUTUAL FUND Custodian Star Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 Transfer Agent American Data Services, Inc. Annual Report 150 Motor Parkway Hauppauge, NY 11788 (800) 385-7003 For the period ended February 28, 1998 Legal Counsel Paul, Hastings, Janofsky & Walker 345 California Street, 29th Floor San Francisco, CA 94104 This report is intended for shareholders of the Fund and may not be used as sales literature unless preceded or accompanied by a current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change. The American Trust Allegiance Fund One Court Street Lebanon, New Hampshire 03766 ANNUAL REPORT FOR THE PERIOD ENDED FEBRUARY 28, 1998 American Trust Allegiance One Court Street Lebanon, New Hampshire 03766 March 30, 1998 Dear Fellow Shareholder, We are pleased to send you the American Trust Allegiance Fund's first annual report. Our first year of operation has been encouraging in terms of growth of the Fund's assets, which totaled $6.9 million as of March 31, 1998. The Fund's investment performance was quite competitive, as it ranked in the top 15% of growth mutual funds in its first full year of operation according to Lipper Analytical Services, Inc. Based on total return, Lipper ranked the Fund 102 out of 858 growth funds for the year ending March 31, 1998. The past year was not without challenges. Heightened volatility, rapid rotation among industry sectors, international economic problems, and high valuation levels in the financial markets presented difficulties for long term investors. Our investment discipline is characterized by a "bottom up" focus, identifying companies that meet our social and financial investment guidelines. We do not attempt to forecast the stock market, interest rates, inflation, or the U.S. economy. Our job is to look through the day to day volatility of the U.S. stock market and track the operating performance of companies in our portfolio. Shifts in the competitive position and changes in the fundamentals of our companies will trigger a change in our portfolio holdings. Our research efforts continue to search for predominantly large capitalization, domestic, high quality companies which possess, on average, growth in earnings per share faster than that of the general stock market. In the current market environment, we feel companies that have demonstrated a more predictable, consistent record of growth in earnings per share are the most attractive. Our research continues to favor companies in the technology and financial services sectors and consequently, the Fund's portfolio is overweighted, relative to the S&P 500 Index, in these areas. We thank you for your support and look forward to helping you achieve your financial goals. /s/ Jeffrey M. Harris, CFA /s/ Paul H. Collins Jeffrey M. Harris, CFA Paul H. Collins American Trust Allegiance Fund TOP 10 HOLDINGS at February 28, 1998 - ------------------------------------------ Lucent Technologies Microsoft Corp. Computer Sciences Corp. Allied Signal, Inc. Cintas Corp. American International Group Walt Disney Company State Street Corp. Tellabs, Inc. Solectron Corp. 3 American Trust Allegiance Fund American Trust Allegiance Fund Comparison of the change in value of a $10,000 investment in the American Trust Allegiance Fund versus the S&P 500 Composite Stock Price Index. Fund S&P 500 S&P Raw S&P Change 03/11/97 10,000 10,000 2452.78 1 05/31/97 10,630 10,497 2574.69 1.04970278622624 08/31/97 11,450 11,175 2740.92 1.11747486525494 01/28/97 12,200 11,927 2925.49 1.19272417420233 02/27/98 13,480 13,151 3225.57 1.31506698521677 (Somewhere in graph) *Fund total return from commencement of operations on March 11, 1997 to February 28, 1997: 34.80% (On bottom of Graph) Past performances in not predictive of future performance. American Trust Allegiance Fund SCHEDULE OF INVESTMENTS at February 28, 1998 - -------------------------------------------------------------------------------- Shares COMMON STOCKS: 94.17% Market Value - -------------------------------------------------------------------------------- Airlines: 0.54% 1,200 Southwest Airlines $ 34,425 ---------- Banks - Major Regional: 8.33% 1,550 Fifth Third Bancorp 122,450 2,150 Mellon Bank 133,972 1,650 Northern Trust Corp. 125,245 2,400 State Street Corp. 148,350 ---------- 530,017 ---------- Communications Equipment: 4.92% 1,550 Lucent Technologies 167,981 2,400 Tellabs, Inc.* 144,975 ---------- 312,956 ---------- Computer Hardware: 2.14% 4,250 Compaq Computer Corp. 136,266 ---------- Computers - Networking: 1.96% 1,887 Cisco Systems, Inc.* 124,365 ---------- Computer Software / Services: 9.48% 2,125 Computer Associates International, Inc. 100,141 1,550 Computer Sciences Corp.* 162,266 1,950 Microsoft Corp.* 165,323 2,750 Oracle Corp.* 67,805 2,400 Peoplesoft, Inc.* 107,175 ---------- 602,710 ---------- Distributor - Food and Health: 2.00% 2,700 Sysco Corp. 127,069 ---------- Electrical Equipment: 6.58% 2,200 Emerson Electric Co. 140,387 4,500 Molex, Inc. 136,688 2,925 Solectron Corp.* 141,497 ---------- 418,572 ---------- 4 American Trust Allegiance Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- Electonics - Semiconductor: 4.13% 3,600 Applied Materials, Inc.* $ 132,637 1,450 Intel Corp. 130,002 ------------ 262,639 ------------ Entertainment: 2.38% 1,350 Walt Disney Company 151,116 ------------ Financial (Diverse): 3.67% 1,850 Federal National Mortgage Association 118,053 2,550 Sunamerica, Inc. 115,547 ------------ 233,600 ------------ Foods: 3.99% 2,350 Campbell Soup Co. 136,447 3,900 Conagra, Inc. 117,000 ------------ 253,447 ------------ Household Products: 4.34% 1,550 Clorox Company 136,013 1,725 Colgate - Palmolive Co. 140,048 ------------ 276,061 ------------ Insurance - Brokers: 1.91% 1,400 Marsh & McLennan, Inc. 121,362 ------------ Insurance - Multiline: 2.46% 1,300 American International Group 156,244 ------------ Investment Bank / Brokerage: 2.98% 1,900 Franklin Resources 96,900 1,400 T. Rowe Price Associates 92,925 ------------ 189,825 ------------ Manufacturer - Diverse: 4.68% 3,750 Allied Signal, Inc. 159,609 2,300 Illinois Tool Works 137,856 ------------ 297,465 ------------ 5 American Trust Allegiance Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- Manufacturer - Special 3.86% 2,550 Diebold $ 131,006 1,700 Sealed Air Corp.* 114,431 ----------- 245,437 ----------- Oil and Gas - Drilling and Equipment: 3.47% 1,650 Halliburton Co. 76,725 1,850 Nabors Industries, Inc.* 42,319 1,350 Schlumberger Ltd. 101,756 ----------- 220,800 ----------- Oil - International: 1.45% 1,700 Royal Dutch Petroleum 92,331 ----------- Personal Care: 2.04% 1,200 Gillette Co. 129,450 ----------- Retail - Specialty: 6.10% 3,400 Barnes & Noble, Inc.* 119,425 3,050 Bed Bath & Beyond, Inc.* 132,008 4,100 Borders Group, Inc.* 136,581 ----------- 388,014 ----------- Services - Commercial and Consumer: 2.48% 3,700 Cintas Corp. 157,944 ----------- Services - Computer Systems: 1.69% 3,150 Sungard Data Systems, Inc.* 107,691 ----------- Services - Data Processing: 3.15% 1,550 Automatic Data Processing 94,647 2,050 Paychex, Inc. 105,959 ----------- 200,606 ----------- Telephone: 1.84% 1,550 SBC Communications 117,219 ----------- 6 American Trust Allegiance Fund SCHEDULE OF INVESTMENTS at February 28, 1998, Continued - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- Textiles - Apparel: 1.60% 1,850 Jones Apparel Group, Inc.* $ 101,750 ----------- Total Common Stocks (cost $4,870,242) 5,989,381 ----------- Principal Amount SHORT-TERM INVESTMENTS: 5.50% - -------------------------------------------------------------------------------- $349,662 Star Treasury Fund, 4.62% (cost $349,662) 349,662 ----------- Total Investments in Securities (cost $5,219,904+): 99.67% 6,339,043 Other Assets less Liabilities: 0.33% 21,079 ----------- Total Net Assets: 100.0% $ 6,360,122 ============ *Non-income producing security. + At February 28, 1998, the cost of securities for Federal tax purposes was $5,230,019. Unrealized appreciation and depreciation of securities were as follows: Gross unrealized appreciation $ 1,170,045 Gross unrealized depreciation (61,021) ----------- Net unrealized appreciation $ 1,109,024 =========== See accompanying Notes to Financial Statements. 7 American Trust Allegiance Fund STATEMENT OF ASSETS AND LIABILITIES at February 28, 1998 - -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost $5,219,904) (Note 2) $6,339,043 Receivables: Due from Advisor 2,345 Dividends and interest 4,024 Subscriptions 2,335 Deferred organization costs (Note 2) 14,910 Prepaid expenses 17,957 ---------- Total assets 6,380,614 ---------- LIABILITIES Due to Administrator 2,301 Accrued expenses 18,191 ---------- Total liabilities 20,492 ---------- NET ASSETS $6,360,122 ========== Net asset value, offering and redemption price per share ($6,360,122/471,975 shares outstanding; unlimited number of shares (par value $.01) authorized) $13.48 ====== COMPONENTS OF NET ASSETS Paid-in capital $5,175,128 Undistributed net realized gain on investment transactions 65,855 Net unrealized appreciation on investments 1,119,139 ---------- Net assets $6,360,122 ========== See accompanying Notes to Financial Statements. 8 American Trust Allegiance Fund STATEMENT OF OPERATIONS - For the Period From March 11, 1997* through February 28, 1998 - -------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends $ 29,222 Interest 8,849 ----------- Total income 38,071 ----------- Expenses Advisory fees (Note 3) 34,946 Administration fees (Note 3) 29,095 Registration fees 12,990 Transfer agent fees 12,609 Fund accounting 12,507 Audit fees 10,669 Miscellaneous 8,022 Custody fees 6,095 Legal fees 5,880 Directors' fees 5,675 Reports to shareholders 4,850 Amortization of deferred organization costs 3,590 Insurance 2,275 ----------- Total expenses 149,203 ----------- Less: expenses reimbursed/ waived (95,674) ----------- Net expenses 53,529 ----------- Net investment loss (15,458) ----------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions 81,313 Net change in unrealized appreciation on investments 1,119,139 ----------- Net realized and unrealized gain on investments 1,200,452 ----------- Net Increase in Net Assets Resulting from Operations $ 1,184,994 =========== *Commencement of operations. See accompanying Notes to Financial Statements. 9 American Trust Allegiance Fund STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- March 11, 1997* through February 28, 1998 - -------------------------------------------------------------------------------- INCREASE IN NET ASSETS FROM: OPERATIONS Net investment loss $ (15,458) Net realized gain from security transactions 81,313 Net change in unrealized appreciation on investments 1,119,139 ----------- Net increase in net assets resulting from operations 1,184,994 ----------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) 5,175,128 ----------- Total increase in net assets 6,360,122 NET ASSETS Beginning of period -0- ----------- End of period $ 6,360,122 =========== (a) A summary of capital shares transactions is as follows: March 11, 1997* through February 28, 1998 ------------------------- Shares Value --------- ----------- Shares sold 480,212 $ 5,272,001 Shares redeemed (8,237) (96,873) ------- ----------- Net increase 471,975 $ 5,175,128 ======= =========== *Commencement of operations. See accompanying Notes to Financial Statements. 10 American Trust Allegiance Fund FINANCIAL HIGHLIGHTS - For a capital share outstanding throughout the period - -------------------------------------------------------------------------------- March 11, 1997* through February 28, 1998 - -------------------------------------------------------------------------------- Net asset value, beginning of period $10.00 ------ Income from investment operations: Net investment loss (0.03) Net realized and unrealized gain on investments 3.51 ------ Total from investment operations 3.48 ------ Net asset value, end of period $13.48 ====== Total return 34.80%** Ratios/supplemental data: Net assets, end of period (thousands) $6,360 Ratio of expenses to average net assets: Before expense reimbursement 4.04%*** After expense reimbursement 1.45%*** Ratio of net investment loss to average net assets (0.42%)*** Portfolio turnover rate 27.65% Average commission rate paid per share $.1204 *Commencement of operations. **Not annualized. ***Annualized. See accompanying Notes to Financial Statements. 11 American Trust Allegiance Fund NOTES TO FINANCIAL STATEMENTS at February 28, 1998 - -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION The American Trust Allegiance (the "Fund") is a diversified series of shares of beneficial interest of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 (the "1940 Act") as an open-end management investment company. The Fund began operations on March 11, 1997. 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 market 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 last quoted bid price. Short-term investments are stated at cost, which when combined with accrued interest, approximates market value. B. Federal Income Taxes. The Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. Security Transactions, Dividends and Distributions. As is common in the industry, security transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date. D. Deferred Organization Costs. The Fund has incurred expenses of $18,500 in connection with the organization of the Fund. These costs have been deferred and are being 12 American Trust Allegiance Fund NOTES TO FINANCIAL STATEMENTS, Continued - -------------------------------------------------------------------------------- amortized on a straight-line basis over a period of sixty months from the date 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS For the period ended February 28, 1998, American Trust Company (the "Advisor") provides the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnishes all investment advice, office space, facilities, and most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of .95% based upon the average daily net assets of the Fund. For the period ended February 28, 1998, the Fund incurred $34,946 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 1.45% 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 the first, second or third fiscal year next succeeding the fiscal year of the reduction or absorption 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. With respect to the reimbursement of a particular fee reduction or expense 13 American Trust Allegiance Fund NOTES TO FINANCIAL STATEMENTS, Continued - -------------------------------------------------------------------------------- payment, a reimbursement to the Advisor is permitted only within the three year period following the year in which the Advisor reduced the subject fee or paid the subject expense. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may be paid prior to the Fund's payment of current expenses if so requested by the Advisor even if that practice may require the Advisor to waive, reduce or absorb current Fund expenses. For the period ended February 28, 1998, the Advisor reduced its fees and absorbed Fund expenses in the amount of $95,674; no amounts were reimbursed. 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 Fund 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 net assets, subject to a $30,000 annual minimum. 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 and trustees of the Trust are also officers and/or directors of the Administrator and the Distributor. NOTE 4 - PURCHASES AND SALES OF SECURITES The cost of purchases and the proceeds from sales of securities, other than short-term investments, for the period ended February 28, 1998, were $5,750,414 and $961,486, respectively. 14 American Trust Allegiance Fund INDEPENDENT AUDITOR'S REPORT The Board of Trustees and Shareholders The American Trust Allegiance Fund We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of The American Trust Allegiance Fund as of February 28, 1998, and the related statements of operations, changes in net assets and the financial highlights for the period from March 11, 1997 (commencement of operations) to February 28, 1998. 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 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 February 28, 1998, by correspondence with the custodian. 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 The American Trust Allegiance Fund as of February 28, 1998, the results of its operations, the changes in its net assets, and the financial highlights for the periods indicated, in conformity with generally accepted accounting principles. McGLADREY & PULLEN, LLP New York, New York April 3, 1998 15 Advisor American Trust Company One Court Street Lebanon, NH 03766 1-800-788-8806 Distributor First Fund Distributors, Inc. 4455 East Camelback Road, Suite 261E Phoenix, AZ 85018 Custodian Star Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 Transfer Agent American Data Service, Inc. 150 Motor Parkway, Suite 109 Hauppauge, NY 11788 1-800-385-7003 Legal Counsel Paul, Hastings, Janofsky & Walker, LLP 345 California Street, 29th Floor San Francisco, CA 94104 This report is intended for shareholders of the Fund and may not be used as sales literature unless preceded or accompanied by a current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change. -----END PRIVACY-ENHANCED MESSAGE-----