-----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, Lc5CEQyXE1DBxkqgvYOni8SFlydsHkuXBxCAW7AJTodESE/yIH3vRXHQqZlWV3k1 F6hA58KLA+SFPY3xoB8FaA== 0000950147-99-000012.txt : 19990108 0000950147-99-000012.hdr.sgml : 19990108 ACCESSION NUMBER: 0000950147-99-000012 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19990107 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: 99502157 BUSINESS ADDRESS: STREET 1: 2025 E FINANCIAL WAY SUITE 101 CITY: GLENDORA STATE: CA ZIP: 91741 BUSINESS PHONE: 8188521033 MAIL ADDRESS: STREET 1: 2025 E FINANCIAL WAY STREET 2: SUITE 101 CITY: GLENDORA STATE: CA ZIP: 91741 N-30D 1 ANNUAL REPORT FOR THE PERIOD ENDED 10/31/98 ================================================================================ VAN DEVENTER & HOCH AMERICAN VALUE FUND ANNUAL REPORT OCTOBER 31, 1998 + + + VH ================================================================================ VAN DEVENTER & HOCH AMERICAN VALUE FUND November 30, 1998 Dear Shareholders: The Van Deventer & Hoch American Value Fund declined 7.75 percent in the Fund's six month period ended October 31, 1998. This compared with a modest loss for the S&P 500 Index of 0.40 percent during the same period. The Fund's disappointing returns can be attributed to the so-called capitalization effect. In selecting securities for American Value, Van Deventer & Hoch looks for what it considers to be the best values throughout the broadly-defined market without regard for capitalization. Currently, the average weighted market capitalization of the Fund's holdings is about one-third that of the S&P 500, and the Fund's median market cap of about $5 billion more closely resembles that of the S&P Mid-Cap Index. This focus on mid-sized companies is believed to be an intelligent strategy which will benefit shareholders over the long term. From our research, we have deduced that many of these companies have growth potential that appears far superior to that of their larger counterparts. As a group, they sell at prices which compare more favorably with their underlying assets, revenue and earnings. In the short term, however, the portfolio has been buffeted by the poor performance of these moderately-sized stocks. The S&P Mid-Cap Index, for instance, gained a comparatively modest 6.7 percent during the Fund's fiscal year. Van Deventer & Hoch will continue to focus American Value on reasonably priced issues which span various capitalization categories and have sound long-term potential. Though currently unpopular with some investors, it is believed that issues selected with conservative valuation characteristics are the most likely to achieve shareholders' long-term objectives of both safety and growth of capital. Cordially, /s/ Richard A. Snyders Richard A. Snyders President Van Deventer & Hoch COMPARISON OF CHANGE IN VALUE OF $10,000 INVERSTMENT IN THE VAN DEVENTER & HOCH AMERICAN VALUE FUND AND THE S & P 500 INDEX Average Annual Total Return Period Ended October 31, 1998 Cumulative Since Inception (4/30/98). -7.75% Van Deventer & Hoch American Value Fund S & P 500 Index ------------------- --------------- 30-Apr-98 $10,000 $10,000 31-May-98 9,686 9,828 30-Jun-98 9,619 10,227 31-Jul-98 9,158 10,119 31-Aug-98 8,189 8,657 30-Sep-98 8,803 9,210 31-Oct-98 9,225 9,960 Past performance is not predictive of future performance. The S&P 500 is a broad market-weighted average of U.S. blue-chip companies. The index is unmanaged and returns include reinvested dividends. VAN DEVENTER & HOCH AMERICAN VALUE FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 1998 - -------------------------------------------------------------------------------- Shares COMMON STOCKS - 78.1% Market Value - -------------------------------------------------------------------------------- BASIC MATERIALS - 6.7% 6,500 Crown Cork & Seal Co., Inc................................ $ 207,188 11,500 Longview Fiber Co......................................... 138,000 17,500 Louisiana-Pacific Corp.................................... 310,625 7,200 Reliance Steel & Aluminum Co.............................. 222,750 ---------- 878,563 ---------- CAPITAL GOODS - 3.8% 2,000 Flour Corp................................................ 77,625 4,000 Tecumseh Products Co., Class A............................ 208,000 7,000 Tenneco, Inc.............................................. 212,625 ---------- 498,250 ---------- CHEMICALS - 4.4% 5,200 Air Products & Chemicals, Inc............................. 196,300 4,800 Lubrizol Corp............................................. 133,800 6,000 Praxair, Inc.............................................. 241,500 ---------- 571,600 ---------- CONSUMER CYCLICAL - 8.1% 4,600 Dillard's, Inc............................................ 142,887 7,500 Fleetwood Enterprises, Inc................................ 241,875 7,000 Genuine Parts Co.......................................... 220,500 4,000 Goodyear Tire & Rubber Co................................. 215,500 6,500 ITT Industries, Inc....................................... 232,375 ---------- 1,053,137 ---------- CONSUMER PRODUCTS - 2.2% 9,500 ConAgra, Inc.............................................. 289,156 ---------- CONSUMER STAPLES - 4.8% 7,000 Albertson's, Inc.......................................... 388,938 5,000 Kimberly-Clark Corp....................................... 241,250 ---------- 630,188 ---------- ENERGY - 13.9% 2,400 Atlantic Richfield Co. (ARCO)............................. 165,300 3,500 Burlington Resources, Inc................................. 144,156 10,000 Enron Oil & Gas Co........................................ 166,875 3 VAN DEVENTER & HOCH AMERICAN VALUE FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 1998, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- ENERGY, CONTINUED 7,600 Halliburton Co............................................. $ 273,125 9,500 Occidental Petroleum Corp.................................. 188,813 5,600 Phillips Petroleum Co...................................... 242,200 5,000 Royal Dutch Petroleum Co................................... 246,250 5,000 Texas Pacific Land Trust................................... 210,000 13,000 Union Pacific Resources Group, Inc......................... 169,000 ---------- 1,805,719 ---------- FINANCIAL - 15.2% 10,000 Allstate Corp.............................................. 430,625 4,697 Banc One Corp.............................................. 229,566 3,168 BankAmerica Corp........................................... 181,962 6,400 Federal National Mortgage Assoc............................ 453,200 3,600 MBIA, Inc.................................................. 220,050 4,800 SAFECO Corp................................................ 207,900 6,720 Washington Mutual, Inc..................................... 251,580 ---------- 1,974,883 ---------- REAL ESTATE INVESTMENT TRUST - 1.8% 9,674 BRE Properties, Inc., Class A.............................. 233,385 ---------- TECHNOLOGY - 8.0% 6,000 Electronic Data Systems Corp............................... 244,125 5,000 Hewlett-Packard Co......................................... 300,938 4,000 Motorola, Inc.............................................. 208,000 5,000 Raytheon Co., Class B...................................... 290,312 ---------- 1,043,375 ---------- TELECOMMUNICATIONS - 3.4% 3,000 AT&T Corp.................................................. 186,750 4,400 GTE Corp................................................... 258,225 ---------- 444,975 ---------- TRANSPORTATION SERVICES - 4.1% 9,000 Norfolk Southern Corp...................................... 296,437 5,000 Union Pacific Corp......................................... 238,125 ---------- 534,562 ---------- 4 VAN DEVENTER & HOCH AMERICAN VALUE FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 1998, CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- UTILITIES - 1.7% 8,000 Central & South West Corp................................. $ 222,500 ----------- TOTAL COMMON STOCKS (Cost $8,375,075)......................................... 10,180,293 ----------- Principal Amount SHORT TERM INVESTMENTS - 21.3% - -------------------------------------------------------------------------------- MONEY MARKET - 0.1% $ 8,519 UMB Bank Money Market Fiduciary (Cost $8,519)............. 8,519 ----------- U.S. TREASURY - 5.9% 774,000 U.S. Treasury Bills, 3.96% due 01/21/99 (Cost $767,623)... 767,623 ----------- COMMERCIAL PAPER - 15.3% 461,500 American Express Credit Corp., 5.08% due 11/03/98......... 461,305 461,700 Asscociates Corp. of North America, 5.00% due 11/06/98.... 461,315 Ford Motor Credit Company................................. 250,000 5.08% due 11/10/98...................................... 249,683 320,300 5.12% due 11/18/98...................................... 319,480 502,500 General Electric Capital Corp., 5.10% due 11/13/98........ 501,574 ----------- Total Commercial Paper (Cost $1,993,357).................. 1,993,357 ----------- TOTAL SHORT TERM INVESTMENTS (Cost $2,769,499)......................................... 2,769,499 ----------- TOTAL INVESTMENTS - 99.4% (Cost $11,144,574) ....................................... 12,949,792 OTHER ASSETS IN EXCESS OF LIABILITIES - 0.6%.......... 73,797 ----------- NET ASSETS - 100.0%................................... $13,023,589 =========== See Accompanying Notes to Financial Statements. 5 VAN DEVENTER & HOCH AMERICAN VALUE FUND STATEMENT OF ASSETS AND LIABILITIES AS OF OCTOBER 31, 1998 - -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost $11,144,574) $12,949,792 Receivables: Due from advisor .......................................... 60,036 Interest and dividends .................................... 9,524 Deferred organization costs ..................................... 31,187 Other assets .................................................... 9,560 ----------- Total assets ........................................ 13,060,099 LIABILITIES Accrued expenses ................................................ 36,510 ----------- Total liabilities .............................. 36,510 NET ASSETS ....................................................... $13,023,589 =========== COMPOSITION OF NET ASSETS Paid-in capital ................................................. $10,467,725 Undistributed net investment income ............................. 95,565 Accumulated net realized gain on investment transactions ........ 655,081 Net unrealized appreciation of investments ...................... 1,805,218 ----------- Net assets ................................................ $13,023,589 =========== Shares outstanding (unlimited number of shares authorized) ...... 943,473 NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ........ $ 13.80 =========== See accompanying Notes to Financial Statements. 6 VAN DEVENTER & HOCH AMERICAN VALUE FUND STATEMENT OF OPERATIONS - MAY 1, 1998* TO OCTOBER 31, 1998 - -------------------------------------------------------------------------------- INVESTMENT INCOME Dividend income (net of withholding taxes of $1,211) ....... $ 117,310 Interest income ............................................ 43,355 ----------- Total investment income ................................. 160,665 Expenses Advisory fees (Note 3) ..................................... 43,806 Legal fees ................................................. 15,900 Distribution fees .......................................... 15,645 Accounting fees ............................................ 15,000 Administration fees (Note 3) ............................... 15,000 Shareholder reporting fees ................................. 14,001 Audit fees ................................................. 12,000 Transfer agent fees ........................................ 12,000 Registration fees .......................................... 8,550 Amortization of organization costs ......................... 3,495 Insurance fees ............................................. 2,275 Trustee fees ............................................... 1,133 Miscellaneous .............................................. 2,000 ----------- Total expenses .......................................... 160,805 Fees waived and expenses absorbed (Note 3) .............. (95,705) ----------- Net expenses ............................................ 65,100 NET INVESTMENT INCOME ................................. $ 95,565 =========== REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments ........................... $ 655,081 Change in net unrealized appreciation on investments ....... (1,735,604) ----------- NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS ......... (1,080,523) NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $ (984,958) =========== * Commencement of the Fund. See accompanying Notes to Financial Statements. 7 VAN DEVENTER & HOCH AMERICAN VALUE FUND STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- May 1, 1998* to October 31, 1998 - -------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment income ...................................... $ 95,565 Net realized gain on investments ........................... 655,081 Change in net unrealized appreciation on investments ....... (1,735,604) ------------ DECREASE IN NET ASSETS FROM OPERATIONS ................. (984,958) CAPITAL SHARE TRANSACTIONS Proceeds from shares sold .................................. 1,464,418 Cost of shares redeemed .................................... (892,848) ------------ NET INCREASE FROM SHARE TRANSACTIONS ................... 571,570 Total decrease in net assets ............................... (413,388) NET ASSETS Beginning of period ........................................ 13,436,977 ------------ END OF PERIOD .............................................. $ 13,023,589 ============ CAPITAL SHARE ACTIVITY Shares sold ................................................ 109,676 Shares redeemed ............................................ (64,289) ------------ Net share activity ..................................... 45,387 ============ * Commencement of the Fund. See accompanying Notes to Financial Statements. 8 VAN DEVENTER & HOCH AMERICAN VALUE FUND FINANCIAL HIGHLIGHTS FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD - -------------------------------------------------------------------------------- May 1, 1998* through October 31, 1998 - -------------------------------------------------------------------------------- Net asset value, beginning ...................................... $ 14.96 ------- Income from investment operations: Net investment income ......................................... 0.10 Net realized and unrealized loss on investments ............... (1.26) ------- Total from investment operations ................................ (1.16) Net asset value, end of period .................................. $ 13.80 ======= Total return** .................................................. (7.75)% Ratios/supplemental data: Net assets, end of period (000 omitted) ......................... $13,024 Ratio of expenses to average net assets+ ........................ 1.05% Ratio of expenses to average net assets before reimbursements+ .. 2.57% Ratio of net investment income to average net assets+ ........... 1.53% Portfolio turnover rate ......................................... 19.88% * Commencement of the Fund. ** Not Annualized. + Annualized. See accompanying Notes to Financial Statements. 9 VAN DEVENTER & HOCH AMERICAN VALUE FUND NOTES TO FINANCIAL STATEMENTS AT OCTOBER 31, 1998 - -------------------------------------------------------------------------------- 1. ORGANIZATION Van Deventer & Hoch American Value Fund (the "Fund") is a series of the Advisors Series Trust (the "Trust"). The Trust was organized as a business trust under the laws of the Commonwealth of Delaware on October 3, 1996. The Trust presently consists of thirteen separate series. The Fund is a diversified fund, as such term is defined in the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund commenced operations on May 1, 1998 pursuant to a tax free reorganization whereby substantially all of the assets of the Chase Vista American Value Fund were transferred to the Van Deventer & Hoch American Value Fund. The Van Deventer & Hoch American Value Fund (the "Fund") is a mutual fund that seeks to maximize total return, consisting of capital appreciation (both realized and unrealized) and income, by investing primarily in the equity securities of well-established U.S. companies (I.E. companies with at least a five-year operating history) which, in the opinion of the Fund's advisor, are undervalued by the market. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. SECURITY VALUATION The Fund's investments are carried at fair value. Equity securities listed on an exchange or quoted on a National Market System are valued at the last sale price. Other securities are valued at the mean between the last bid and asked prices. Fixed income securities are valued on the basis of valuations received from a pricing service, the use of which has been approved by the board of trustees. Short-term obligations are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available, if any, are valued following procedures approved by the Board of Trustees. ORGANIZATION COSTS Costs incurred by the Fund in connection with its organization, registration and the initial public offering of shares have been deferred and will be amortized over 5 years. FEDERAL INCOME TAXES It is the Fund's policy is to comply with the provisions 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. DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income will be declared and paid annually. Distributions of net realized gains, if any, will be declared at least annually. Distributions to shareholders are recorded on the ex-dividend date. 10 VAN DEVENTER & HOCH AMERICAN VALUE FUND NOTES TO FINANCIAL STATEMENTS, CONTINUED - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS Investment transactions are accounted for on the trade date (the date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Interest income is accrued as earned. Dividend income is recorded on the ex-dividend date. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Van Deventer & Hoch (the "Advisor") acts as the Investment Advisor to the Fund. As Investment Advisor, Van Deventer & Hoch supervises the investments of the Fund and for such services is paid a fee. The fee is computed daily and paid monthly at an annual rate equal to 0.70% of the Fund's average daily net assets. 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 1.05% of average net assets (the "expense cap") through December 31, 1998. The Advisor has agreed to an expense limitation of 1.32% for the calendar year ending December 31, 1999. Any such reductions made by the Advisor in the 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 years (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 it permitted to look back five years and four years, respectively, during the initial six and seventh year of the Fund's operations. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Fund's payment of current ordinary operating expenses. For the period ended October 31, 1998, the Advisor reduced its fees and absorbed Fund expenses in the amount of $95,705; no amounts were reimbursed to the Advisor. ADMINISTRATION FEES Pursuant to an Administration Agreement, Investment Company Administration, LLC (the "Administrator") provides certain administration services to the Fund. In consideration of the services provided by the Administrator, the Administrator receives from the Fund a fee computed daily and paid monthly at an annual rate equal to 0.10% of the Fund's average daily net assets (with an annual minimum of $30,000), on an annualized basis for the Fund's then-current fiscal year. 11 VAN DEVENTER & HOCH AMERICAN VALUE FUND NOTES TO FINANCIAL STATEMENTS, CONTINUED - -------------------------------------------------------------------------------- DISTRIBUTION FEES The Fund has adopted a Distribution Plan (the "Distribution Plan") in accordance with Rule 12b-1 under the 1940 Act. The Distribution Plan provides that the Fund shall pay distribution fees, including payments to the Distributor, at annual rates not to exceed 0.25% of the average daily net assets of the Fund. Distribution fees were waived for the six months ended October 31, 1998. SHAREHOLDER SERVICING FEES The Trust has entered into shareholder servicing agreements with certain shareholder servicing agents (including the Advisor). These agents have agreed to perform specified services to their customers who beneficially own shares of the Fund for a fee of up to .25% of the average daily net assets of the Fund held by investors for whom the agent maintains a servicing relationship. No amounts were accrued or paid under the plan for the six months ended October 31, 1998. 4. INVESTMENT TRANSACTIONS The aggregate purchases and sales of securities, excluding short-term investments, for the Fund for the six months ended October 31, 1998 is summarized below: Purchases $2,088,129 Sales 2,336,814 At October 31, 1998, gross unrealized appreciation and depreciation of investments, based on cost for Federal income tax purposes of $11,144,574 were as follows: Appreciation $2,248,832 Depreciation 443,614 ---------- Net appreciation on investments $1,805,218 12 REPORT OF INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- The Board of Trustees and Shareholders Van Deventer & Hoch American Value Fund We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the Van Deventer & Hoch American Value Fund series of Advisor Series Trust, as of October 31, 1998, and the related statements of operations, changes in net assets and the financial highlights for the period indicated in the accompanying financial statements. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with the generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1998, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Van Deventer & Hoch American Value Fund series of Advisors Series Trust, as of October 31, 1998, the results of its operations, the changes in its net assets, and the financial highlights for the period indicated, in conformity with generally accepted accounting principles. MCGLADREY & PULLEN LLP New York, New York December 4, 1998 13 ================================================================================ ADVISER Van Deventer & Hoch 800 North Brand Blvd., Suite 300 Glendale, CA 91203 ? + DISTRIBUTOR First Fund Distributors, Inc. 4455 East Camelback Road, Suite 261E Phoenix, AZ 85018 ? + CUSTODIAN United Missouri Bank, N.A. 928 Grand Blvd. Kansas City, MO 64106 ? + TRANSFER AGENT National Financial Data Services 330 West 9th Street Kansas City, MO 64105 ? + AUDITORS McGladrey & Pullen 555 Fifth Avenue, 8th Floor New York, NY 10017-2416 ? + LEGAL COUNSEL Paul, Hastings, Janofsky & Walker, LLP 345 California Street, 29th Floor San Francisco, CA 94104 This report is intended for the 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-----