-----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, GZKNMCJxfI6iT4oVEI9H1Hhu6vbP5LiDNl9NVs65Hj7998DVli6MAgLr7zRsO/lK /gtz7oYTNS0dDAotK4+jLQ== 0001144204-10-011924.txt : 20100308 0001144204-10-011924.hdr.sgml : 20100308 20100308100416 ACCESSION NUMBER: 0001144204-10-011924 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100308 DATE AS OF CHANGE: 20100308 EFFECTIVENESS DATE: 20100308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JAMES ADVANTAGE FUNDS CENTRAL INDEX KEY: 0001045487 IRS NUMBER: 000000000 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08411 FILM NUMBER: 10662524 BUSINESS ADDRESS: STREET 1: 1349 FAIRGROUND RD CITY: BEAVERCREEK STATE: OH ZIP: 45385 BUSINESS PHONE: 9374267640 MAIL ADDRESS: STREET 1: 1349 FAIRGROUND RD CITY: BEAVERCREEK STATE: OH ZIP: 45385 FORMER COMPANY: FORMER CONFORMED NAME: JAMES FUNDS DATE OF NAME CHANGE: 19970904 0001045487 S000003560 James Balanced: Golden Rainbow Fund C000009900 James Balanced: Golden Rainbow Fund GLRBX C000075008 Institutional Class 0001045487 S000003561 James Equity Fund C000009901 James Equity Fund JALCX 0001045487 S000003562 James Market Neutral Fund C000009902 James Market Neutral Fund JAMNX 0001045487 S000003563 James Small Cap Fund C000009903 James Small Cap Fund JASCX 0001045487 S000012708 James Mid Cap Fund C000034244 James Mid Cap Fund N-CSRS 1 v176065_n-csr.htm Unassociated Document
UNITED STATES
SECURITI1 AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
FORM N-CSR
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
 
Investment Company Act file number 811-8411

James Advantage Funds

 (Exact name of registrant as specified in charter)

1349 Fairground Road, Beavercreek, Ohio 45385

 (Address of principal executive offices)   (Zip code)

Barry R. James, P.O. Box 8, Alpha, Ohio 45301 

(Name and address of agent for service)

Registrant's telephone number, including area code: (937) 426-7640

Date of fiscal year end: 6/30                      

Date of reporting period: 12/31/09

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).  The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public.  A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
 

 
Item 1. Reports to Stockholders.

James Advantage Funds Semi-Annual Report
 

 
Semi-Annual Report
 
 
 
December 31, 2009
(Unaudited)
 
 

James Balanced:
Golden Rainbow Fund
James Small Cap Fund
James Market Neutral Fund
James Equity Fund
James Mid Cap Fund

 
 


 

937 - 426 - -7640
 
www.jamesfunds.com




 
 
 

LETTER TO SHAREHOLDERS
OF THE JAMES ADVANTAGE FUNDS

 
The James Advantage Funds returned to profitability in 2009, except for the Market Neutral Fund, which suffered as lower quality stocks rebounded more sharply than stocks that were not as severely punished in the bear market. While it is good to see the market doing better, investors need to realize that the market is still far from its 2007 peak. Concerns about the ability of the U.S. economy to resume sustained, non-inflationary growth and to bring down the unemployment rate are very real and will have a significant impact on the market’s performance in 2010.
 
The Markets Over the Past Six Months
 
A powerful rally off the market lows set in March continued through the second half of 2009, but at a somewhat slower pace. Stock markets around the world rallied as emerging and newly developed economies returned to growth. These economies were not as seriously burdened by the financial crisis in the U.S. and Western Europe and they benefitted from their own stimulus plans as well as sharply lower interest rates. Strengthening domestic demand coupled with an increase in demand from the West contributed to growth in India, China and most other emerging economies.
 
Investment Goals and Objectives
 
The James Balanced: Golden Rainbow Fund seeks to preserve capital in declining markets and to provide income and growth over the long term. The Treasury securities that helped keep the Fund’s losses low in 2008 lost value as interest rates rose in the second half of 2009. However, moving out of many of the long term Treasury bonds and into sovereign bonds was a plus for the Fund. Holdings in municipal bonds and GNMAs also helped the Fund meet its objectives of capital preservation and income. The Fund maintained equity levels between forty percent and fifty percent of total assets.
 
The James Equity Fund, The James Small Cap Fund and The James Mid Cap Fund moved higher over the last six months as the broad stock market advanced. All three Funds seek to outperform their benchmarks, the S&P 500, the Russell 2000 and the Mid Cap Value but they lagged due to the allocation to cash. The Adviser’s research points to a significant correction in stock prices. After the huge advance in stocks, a correction would be normal and lowering equity levels is a good way to prepare for that correction.
 
The James Market Neutral Fund did not have a good year. The Fund’s methodology is based on the Adviser’s research, which is value based. Growth stocks (those that are dependent on growing future earnings) led this rally while value stocks (those with stronger current earnings) lagged. Since the Market Neutral was short these more speculative stocks with high PEs and other characteristics, the Fund lost money in 2009.
 
Investment Philosophy
 
We believe that preservation of capital in down markets is the key to long term success. For example, while the S&P 500 rose almost 70 percent from its March, 2009 lows to its December 2009 highs, at the end of the year it was still about 30 percent below the highs set in October 2007. Avoiding even a part of those losses in 2008 went a long way to keeping shareholders whole. For example, the Balanced: Golden Rainbow Fund approached its all time high in 2009, missing by just a few pennies. This Fund’s performance is a good example of the importance of conservative investing.
 
Strategy for Meeting Fund Objectives
 
The Funds will be managed under a conservative strategy in 2010. Preservation of capital will remain the focus as the nation sorts out the implications and fallout of the various initiatives of the current administration. The Congressional elections in November add another element of risk and the eventual decisions of the Supreme Court will also likely have a major impact on the markets’ longer term course. We remain very concerned about the future, and we believe significantly higher rates of inflation, a weaker US dollar and increased regulation should be part of our strategy.
 
1

 
Your Funds will continue to hold positions in mining companies and other basic material producers that benefit from rising inflation. The municipal bonds in the Golden Rainbow will add value if tax rates rise, and we believe they will. The Funds have increased their exposure to foreign stocks, which will benefit if the U.S. dollar weakens again in 2010. The Golden Rainbow has taken positions in the highest quality sovereign bonds issued by governments in Europe, Australia, Canada and New Zealand. In addition to the income they pay, they will also add value if the U.S. dollar continues to weaken.
 
The Equity Fund, Small Cap Fund and Mid Cap Fund are holding cash in reserve, in anticipation of a significant correction in stock prices. While the timing of that correction can never be known in advance, our research concludes the correction is probable and a conservative allocation to stocks is warranted.
 
Fund Performance
 
The James Balanced: Golden Rainbow Fund
 
Over the final six months of 2009 James Balanced: Golden Rainbow Fund earned an 8.72 percent total return. The Fund’s benchmark blend (25% S&P 500, 25% Russell 2000 and 50% Barclay’s intermediate Bond Index) returned 13.40 percent. We note that growth stocks and Junk Bonds did very well in 2009, and that these are not part of the strategy your Fund employs. Still, your Fund approached an all-time NAV high, regaining all ground lost in 2008, plus more. That compared favorably with the S&P 500, which lost 37 percent in 2008 and remained about 23 percent below its December 31, 2007 level at the end of 2009. Your Fund returned 7.12 percent for the year after a dividend payment of 7.2 cents per share on December 31 compared with a return of 16.44  percent on its benchmark blend and of 26.46 percent on the S&P500.
 
The James Equity Fund

Over the last six months of 2009, the James Equity Fund returned 15.79 percent, compared with a return of 22.58 percent on its benchmark, the S&P 500. For the year, the Fund returned 20.96 percent compared to a 26.46 percent return on the S&P 500. As we noted, the current stock rally continues to favor Growth stocks. Examining over 8,500 stocks in our database, we note that Growth stocks outperformed Value stocks by more than 8 percent during the quarter alone and large stocks outperformed smaller issues by over 3 percent. Periods of time when junk runs are usually confined, and over longer periods, a better investment strategy is to seek bargain stocks. These stocks include companies which enjoy better relative value, profitability, and strength. During this current volatile investing environment, we continue to seek companies which are generally unloved by Wall Street, but favored by insiders. We also continue to invest in securities of all market capitalizations. Additionally, we currently enjoy somewhat higher levels of cash, as we seek future opportunities.
 
The James Small Cap Fund
 
During the last six months of 2009, the James Small Cap Fund gained 18.12 percent and its benchmark index, the Russell 2000 gained 23.90 percent. For the year, the Fund returned 20.04 percent and the benchmark rose 27.19 percent. Clearly, this past year has been a difficult environment for bargain investing. Our investing techniques don’t always work over the short term. However, over the last decade, your James Small Cap Fund almost doubled the return of the Russell 2000. The James Small Cap returned a cumulative 83.18 percent, while the Russell 2000 returned 41.85 percent. Sticking to our discipline of bargain investing has paid off during the long-term.  Throughout the quarter, the best performing sectors in your James Small Cap Fund were Consumer Non-Cyclicals (returning 12.79 percent) and Utilities (gaining 7.92 percent). We continue to look for bargain securities with good relative value, profitability, and strength. Flexibility, not indexing, will likely be key during 2010.
 
The James Mid Cap Fund
 
For the last 6 months of 2009, your James Mid Cap Fund showed a return of 25.18 percent, while the Mid Cap Value Index advanced 28.18 percent. The Fund did not pay a dividend for the quarter. Performance was aided due to strong returns in Mining stocks, as well as in the Technology and Utility Sectors. DTE Energy (2.8% of portfolio) was up very strongly in spite of economic problems in Michigan. In addition, LifePoint Hospitals (2.7% of portfolio) and miner Silver Wheaton (4.4% of portfolio) had good quarters.
 
2

 
Finance stocks did poorly, but we held a relatively light position in Finance. Still, it was encouraging to see this market revert to more normal performance. That is, relatively cheap stocks, with good earnings and solid price strength, are once more starting to outperform lower quality stocks. This is a positive development that could continue for a while. However, stocks may face some retrenchment after the big run we have seen since March. Your Fund advanced about 67 percent from the market low on March 6, 2009. Mid Cap stocks continue to provide excellent diversification from either Large or Small Cap stocks.
 
The James Market Neutral Fund
 
It was a particularly difficult year for the James Market Neutral Fund. The Fund was down 17.78 percent, while at that same time, equity markets advanced. The Fund’s benchmark, the 90 day U.S. Treasury Bill rose 0.21  percent. Those stocks that rallied the most after the March lows were often the ones that declined the most in the previous nine months. Unfortunately, those stocks were also the ones that held many overvalued qualities. In many instances, the stocks that had advanced rapidly in 2009 were the ones that were losing the most money. While the rally was led by those stocks of lesser quality, we believe that a move back to a more traditional investing style will make sense for the future. This is why we continue to invest the Market Neutral Fund with longs that have strong earnings, good fundamentals and often pay a solid dividend. We will also continue to sell short those stocks which we believe to have risen too quickly, or which have many overvalued characteristics. Should we see a retrenchment in this current rally, the James Market Neutral Fund may provide a unique opportunity.
 
Expectations for the Future
 
We do not believe that the bear market has run its course or that the U.S. economy is out of the woods yet. There are too many uncertainties, especially on the political front, to justify a belief that the recession is over and stocks will continue to rally. Rather, it is more likely that 2010 will again show weakness in the economy and a decline in stock prices. We see continued problems in real estate, both residential and commercial, and a consumer that is still rebuilding the family balance sheet. Unemployment is likely to rise significantly in 2010, although temporary government hiring for the census may mask the underlying employment crisis. The markets will see through that mask, and the effects of additional government regulation and interference will eventually push stock prices lower. While a declining U.S. dollar will create opportunities in foreign stocks and bonds, it will also usher in greater inflation and raise inflation expectations. Our strategy in all our funds is to invest in value stocks that are more likely to resist the decline and to have some cash available to reinvest in stocks at much more favorable prices.
 

 
Thomas L. Mangan
CFO
 
 
3

 

 
   Average Annual Total Returns
As of December31, 2009
 
   
Six
Months**
   
One
Year
   
Five
Years
   
Ten
Years
   
Since
Inception
 
James Balanced: Golden Rainbow Fund
    8.72 %     7.12 %     5.15 %     6.21 %     8.13 %
Standard & Poor's 500 Index
    22.58 %     26.46 %     0.42 %     -0 .95 %     8.29 %
Blended Index*
    13.40 %     16.44 %     3.04 %     4.13 %     7.94 %
(Inception 7/1/91)
                                       
James Small Cap Fund
    18.12 %     20.04 %     -2 .61 %     6.26 %     5.67 %
Russell 2000 Index
    23.90 %     27.19 %     0.51 %     3.51 %     6.67 %
(Inception 10/2/98)
                                       
James Market Neutral Fund
    -3 .90 %     -1 7.78 %     -2 .20 %     1.89 %     0.82 %
90-Day U.S. Treasury Bill Index
    0.11 %     0.21 %     3.02 %     2.99 %     3.19 %
(Inception 10/2/98)
                                       
James Equity Fund
    15.79 %     20.96 %     0.42 %     -3 .24 %     -1 .23 %
Standard & Poor's 500 Index
    22.58 %     26.46 %     0.42 %     -0 .95 %     -0 .18 %
(Inception 11/1/99)
                                       
James Mid Cap Fund
    25.18 %     27.57 %  
NA
   
NA
      -3 .18 %
Standard & Poor's 400 Value Index
    28.18 %     33.77 %  
NA
   
NA
      -1 .09 %
(Inception 6/30/06)
                                       
Past performance is not predictive of future results.  The performance of the above Funds does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
 
Current performance may be lower or higher than the performance data quoted.  Please call 1-800-995-2637 for most recent month-end performance information.
 
*
The Blended Index is comprised of a 25% weighting in the Standard & Poor's 500 Index, a 25% weighting in the Russell 2000 Index and a 50% weighting in the Barclays Capital Intermediate Government/Credit Index.
 
**
Returns not annualized.
 
 
4

 

JAMES ADVANTAGE FUNDS
REPRESENTATION OF PORTFOLIOS OF INVESTMENTS
December 31, 2009 (Unaudited)

The illustrations below provide the industry sectors for the James Balanced:  Golden Rainbow Fund, James Small Cap Fund, James Market Neutral Fund, James Equity Fund and James Mid Cap Fund.
 
James Balanced: Golden Rainbow Fund
Industry Sector Allocation (% of Net Assets)





James Small Cap Fund
Industry Sector Allocation (% of Net Assets)
 

 
 
5

 
JAMES ADVANTAGE FUNDS
REPRESENTATION OF PORTFOLIOS OF INVESTMENTS  
(Continued)

James Market Neutral Fund
Industry Sector Allocation (% of Net Assets)
(Cash, Cash Equivalents and Other Assets in Excess of Liabilities not included)



 
James Equity Fund
Industry Sector Allocation (% of Net Assets)
 


6

 
JAMES ADVANTAGE FUNDS
REPRESENTATION OF PORTFOLIOS OF INVESTMENTS   
(Continued)

James Mid Cap Fund
Industry Sector Allocation (% of Net Assets)
 

 
 
7

 

JAMES ADVANTAGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2009 (Unaudited)

 
   
James
Balanced:
Golden Rainbow
Fund
   
James
Small Cap
Fund
   
James
Market Neutral
Fund
   
James
Equity
Fund
   
James
 Mid Cap
Fund
 
ASSETS
                             
Investment securities:
                             
At cost
  $ 497,481,417     $ 50,333,557     $ 20,153,775     $ 8,852,159     $ 3,815,450  
At value
  $ 547,887,709     $ 62,307,736     $ 23,695,186     $ 10,153,831     $ 4,479,803  
Segregated cash with brokers
                20,325,019              
Cash
    9,194,420       9,477,397       16,455,365       1,094,400       264,857  
Dividends and interest receivable
    4,243,271       51,789       42,849       20,946       8,133  
Receivable for securities sold
    1,091,722                          
Receivable for capital shares sold
    1,155,882       102,538       168,456       207,912        
Other assets
    60,163                          
TOTAL ASSETS
    563,633,167       71,939,460       60,686,875       11,477,089       4,752,793  
                                         
LIABILITIES
                                       
Dividends payable
    193,857                          
Payable for securities sold short (proceeds $24,537,363)
                25,033,787              
Payable for dividends on securities sold short
                322              
Payable for capital shares re deemed
    989,741       171,795       24,503       10,777        
Payable for securities purchased
    287,527                          
Accrued expenses:
                                       
Management fees
    353,104       80,704       49,317       9,016       1,991  
12b-1 distribution and service fees
    118,756       16,634       7,653       2,410       1,017  
Trustees' fees
    1,983                          
Compliance expenses and servicing fees
    93,495                          
Other
    52,757                          
TOTAL LIABILITIES
    2,091,220       269,133       25,115,582       22,203       3,008  
                                         
NET ASSETS
  $ 561,541,947     $ 71,670,327     $ 35,571,293     $ 11,454,886     $ 4,749,785  
                                         
NET ASSETS CONSIST OF:
                                       
Paid-in capital
  $ 519,611,604     $ 123,830,581     $ 44,049,793     $ 11,996,576     $ 5,552,726  
Accumulated net investment income (loss)
    69,954       93,386       (122,825 )     23,704       3,592  
Accumulated net realized losses from security and foreign currency transactions
    ( 8,545,903 )     (64,227,819 )     (11,400,661 )     (1,867,066 )     (1,470,886 )
Net unrealized appreciation on investments, foreign currency translations, and securities sold short
    50,406,292       11,974,179       3,044,986       1,301,672       664,353  
                                         
NET ASSETS
  $ 561,541,947     $ 71,670,327     $ 35,571,293     $ 11,454,886     $ 4,749,785  

 
8

 
 
JAMES ADVANTAGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (Continued)

 
   
James
Balanced:
Golden
Rainbow
Fund
   
James
Small Cap
Fund
   
James
Market Neutral
Fund
   
James
Equity
Fund
   
James
Mid Cap
Fund
 
PRICING OF RETAIL
                             
CLASS SHARES (A)
                             
Net assets attributable to
                             
Retail Class shares
  $ 561,189,889     $ 71,670,327     $ 35,571,293     $ 11,454,886     $ 4,749,785  
                                         
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par)
    31,177,890       4,278,833       3,697,217       1,547,314       538,803  
                                         
Net asset value, offering price and redemption price per share
  $ 18.00     $ 16.75     $ 9.62     $ 7.40     $ 8.82  
                                         
PRICING OF INSTITUTIONAL
                                       
CLASS SHARES
                                       
                                         
Net assets attributable to Institutional Class shares
  $ 352,058       N/A       N/A       N/A       N/A  
                                         
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par)
    19,555       N/A       N/A       N/A       N/A  
                                         
Net asset value, offering price and redemption price per share
  $ 18.00       N/A       N/A       N/A       N/A  
 
(A)
The James Small Cap Fund, James Market Neutral Fund, James Equity Fund, and James Mid Cap Fund will be presented as Retail Class shares throughout this report for financial reporting presentation purposes only.
 
See accompanying Notes to Financial Statements.
 
9

 
JAMES ADVANTAGE FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended December 31, 2009 (Unaudited)


   
James Balanced:
Golden Rainbow
 Fund
   
James
Small Cap
Fund
   
James
Market Neutral
Fund
   
James
Equity
Fund
   
James
Mid Cap
Fund
 
INVESTMENT INCOME
                             
Dividends (Net of withholding taxes of $3,030, $251, $0, $100 and $22, respectively)
  $ 2,480,500     $ 846,624     $ 228,327     $ 124,355     $ 41,390  
Interest (Net of foreign taxes of $29,825 for James Balanced: Golden Rainbow Fund)
    5,412,063       10,360             1,498        
TOTAL INVESTMENT INCOME
    7,892,563       856,984       228,327       125,853       41,390  
EXPENSES
                                       
Management fees
    2,047,976       627,418       285,909       64,921       22,553  
12b-1 distribution and service fees -Retail Class
    691,722       126,828       43,034       14,328       5,854  
Dividend expense on securities sold short
                18,579              
Servicing fees
    298,228                          
Professional fees
    94,080                          
Trustees' fees
    3,423       6,720       6,720       6,720       6,720  
Registration fees
    32,720                          
Custodian fees and expenses
    36,360                          
Shareholder report printing and mailing
    28,041                          
Postage and supplies
    15,474                          
Compliance fees and expenses
    6,522                          
Other expenses
    14,322                          
TOTAL EXPENSES
    3,268,868       760,966       354,242       85,969       35,127  
NET INVESTMENT INCOME (LOSS)
    4,623,695       96,018       ( 125,915 )     39,884       6,263  
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
                                       
Net realized gains (losses) from security transactions
    1,852,451       626,854       ( 639,028 )     130,863       ( 165,725 )
Net realized losses on closed short positions
                ( 887,715 )            
Net change in unrealized appreciation/depreciation on investments and securities sold short
    38,091,259       16,217,792       293,509       1,481,832       1,203,284  
Net change in unrealized appreciation/depreciation on foreign currency translation
    858,182                          
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
    40,801,892       16,844,646       ( 1,233,234 )     1,612,695       1,037,559  
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
  $ 45,425,587     $ 16,940,664     $ ( 1,359,149 )   $ 1,652,579     $ 1,043,822  
 
See accompanying Notes to Financial Statements.
 
10

 
JAMES BALANCED:  GOLDEN RAINBOW FUND
STATEMENTS OF CHANGES IN NET ASSETS

 
   
Six Months
Ended
December 31,
2009
 (Unaudited)
   
Year
Ended
June 30,
 2009(A)
 
FROM OPERATIONS
           
Net investment income
  $ 4,623,695     $ 9,124,700  
Net realized gains (losses) from security and foreign currency transactions
    1,852,451       (8,458,231 )
Net change in unrealized appreciation/depreciation on investments and  foreign currency translation
    38,949,441       (30,639,895 )
Net increase (decrease) in net assets from operations
    45,425,587       (29,973,426 )
                 
FROM DISTRIBUTIONS TO SHAREHOLDERS
               
Retail Class:
               
Dividends from net investment income
    (4,470,845 )     (9,122,040 )
Distributions from net realized gains
          (30,798 )
Institutional Class:
               
Dividends from net investment income
    (2,210 )     (952 )
Decrease in net assets from distributions to shareholders
    (4,473,055 )     (9,153,790 )
                 
FROM CAPITAL SHARE TRANSACTIONS
               
Retail Class Shares:
               
Proceeds from shares sold
    88,805,906       454,813,230  
Net asset value of shares issued in reinvestment of distributions to shareholders
    4,108,227       8,714,151  
Payments for shares redeemed
    (110,028,001 )     (365,723,002 )
Net increase (decrease) in net assets from Retail Class capital share transactions
    (17,113,868 )     97,804,379  
                 
Institutional Class Shares:
               
Proceeds from shares sold
    228,000       101,150  
Net asset value of shares issued in reinvestment of distributions to shareholders
    2,210       952  
Net increase in net assets from Institutional Class capital share transactions
    230,210       102,102  
                 
TOTAL INCREASE IN NET ASSETS
    24,068,874       58,779,265  
                 
NET ASSETS
               
Beginning of period
    537,473,073       478,693,808  
End of period
  $ 561,541,947     $ 537,473,073  
                 
ACCUMULATED NET INVESTMENT INCOME (LOSS)
  $ 69,954     $ (80,686 )

11

 
JAMES BALANCED:  GOLDEN RAINBOW FUND
STATEMENTS OF CHANGES IN NET ASSETS (Continued)

 
   
Six Months
Ended
December 31,
2009
(Unaudited)
   
Year
Ended
June 30,
2009(A)
 
SUMMARY OF CAPITAL SHARE ACTIVITY
           
Retail Class:
           
Shares sold
    5,022,233       27,570,424  
Shares issued in reinvestment of distributions to shareholders
    229,124       523,588  
Shares redeemed
    (6,264,100 )     (22,359,235 )
Net increase (decrease) in shares outstanding
    (1,012,743 )     5,734,777  
Shares outstanding, beginning of period
    32,190,633       26,455,856  
Shares outstanding, end of period
    31,177,890       32,190,633  
Institutional Class:
               
Shares sold
    12,546       6,827  
Shares issued in reinvestment of distributions to shareholders
    123       59  
Net increase in shares outstanding
    12,669       6,886  
Shares outstanding, beginning of period
    6,886        
Shares outstanding, end of period
    19,555       6,886  
 
(A)
Institutional Class represents the period from commencement of operations (March 2, 2009) through June 30, 2009.
 
See accompanying Notes to Financial Statements.
 
12

 
JAMES SMALL CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS


   
Six Months
Ended
December 31,
2009
(Unaudited)
   
Year
Ended
June 30,
2009
 
FROM OPERATIONS
           
Net investment income
  $ 96,018     $ 438,753  
Net realized gains (losses) from security transactions
    626,854       (31,842,178 )
Net change in unrealized appreciation/depreciation on investments
    16,217,792       (18,301,880 )
Net increase (decrease) in net assets from operations
    16,940,664       (49,705,305 )
                 
FROM DISTRIBUTIONS TO SHAREHOLDERS
               
Dividends from net investment income
          (438,651 )
                 
FROM CAPITAL SHARE TRANSACTIONS
               
Proceeds from shares sold
    8,077,509       26,334,717  
Net asset value of shares issued in reinvestment of distributions to shareholders
          428,552  
Payments for shares redeemed
    (53,148,889 )     (54,733,126 )
Net decrease in net assets from capital share transactions
    (45,071,380 )     (27,969,857 )
                 
TOTAL DECREASE IN NET ASSETS
    (28,130,716 )     (78,113,813 )
                 
NET ASSETS
               
Beginning of period
    99,801,043       177,914,856  
End of period
  $ 71,670,327     $ 99,801,043  
                 
ACCUMULATED NET INVESTMENT INCOME (LOSS)
  $ 93,386     $ (2,632 )
                 
SUMMARY OF CAPITAL SHARE ACTIVITY
               
Shares sold
    515,200       1,814,020  
Shares issued in reinvestment of distributions to shareholders
          33,618  
Shares redeemed
    (3,276,951 )     (3,686,285 )
Net decrease in shares outstanding
    (2,761,751 )     (1,838,647 )
Shares outstanding, beginning of period
    7,040,584       8,879,231  
Shares outstanding, end of period
    4,278,833       7,040,584  

See accompanying Notes to Financial Statements.
 
13

 
JAMES MARKET NEUTRAL FUND
STATEMENTS OF CHANGES IN NET ASSETS


   
Six Months
Ended
December 31,
2009
(Unaudited)
   
Year
Ended
June 30,
2009
 
FROM OPERATIONS
           
Net investment loss
  $ (125,915 )   $ (343,366 )
Net realized gains (losses) from:
               
Security transactions
    (639,028 )     (8,083,799 )
Closed short positions
    (887,715 )     6,371,021  
Net change in unrealized appreciation/depreciation on investments
    293,509       (7,016,292 )
Net decrease in net assets from operations
    (1,359,149 )     (9,072,436 )
                 
FROM DISTRIBUTIONS TO SHAREHOLDERS
               
Dividends from net investment income
          (39,280 )
                 
FROM CAPITAL SHARE TRANSACTIONS
               
Proceeds from shares sold
    13,311,317       35,152,127  
Net asset value of shares issued in reinvestment of distributions to shareholders
          36,060  
Payments for shares redeemed
    (9,725,704 )     (43,020,847 )
Net increase (decrease) in net assets from capital share transactions
    3,585,613       (7,832,660 )
                 
TOTAL INCREASE (DECREASE) IN NET ASSETS
    2,226,464       (16,944,376 )
                 
NET ASSETS
               
Beginning of period
    33,344,829       50,289,205  
End of period
  $ 35,571,293     $ 33,344,829  
                 
ACCUMULATED NET INVESTMENT INCOME (LOSS)
  $ (122,825 )   $ (3,090 )
                 
SUMMARY OF CAPITAL SHARE ACTIVITY
               
Shares sold
    1,365,861       2,985,961  
Shares issued in reinvestment of distributions to shareholders
          3,082  
Shares redeemed
    (998,773 )     (3,748,604 )
Net increase (decrease) in shares outstanding
    367,088       (759,561 )
Shares outstanding, beginning of period
    3,330,129       4,089,690  
Shares outstanding, end of period
    3,697,217       3,330,129  

See accompanying Notes to Financial Statements.

14

 
JAMES EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS


   
Six Months
Ended
December 31,
2009
(Unaudited)
   
Year
Ended
June 30,
2009
 
FROM OPERATIONS
           
Net investment income
  $ 39,884     $ 72,912  
Net realized gains (losses) from security transactions
    130,863       (1,997,929 )
Net change in unrealized appreciation/depreciation on investments
    1,481,832       (2,845,949 )
Net increase (decrease) in net assets from operations
    1,652,579       (4,770,966 )
                 
FROM DISTRIBUTIONS TO SHAREHOLDERS
               
Dividends from net investment income
    (15,975 )     (73,673 )
Distributions from net realized gains
          (1,230,653 )
Decrease in net assets from distributions to shareholders
    (15,975 )     (1,304,326 )
                 
FROM CAPITAL SHARE TRANSACTIONS
               
Proceeds from shares sold
    770,169       3,055,227  
Net asset value of shares issued in reinvestment of distributions to shareholders
    15,536       1,296,378  
Payments for shares redeemed
    (1,877,072 )     (3,580,272 )
Net increase (decrease) in net assets from capital share transactions
    (1,091,367 )     771,333  
                 
TOTAL INCREASE (DECREASE) IN NET ASSETS
    545,237       (5,303,959 )
                 
NET ASSETS
               
Beginning of period
    10,909,649       16,213,608  
End of period
  $ 11,454,886     $ 10,909,649  
                 
ACCUMULATED NET INVESTMENT INCOME (LOSS)
  $ 23,704     $ (205 )
                 
SUMMARY OF CAPITAL SHARE ACTIVITY
               
Shares sold
    107,735       461,696  
Shares issued in reinvestment of distributions to shareholders
    2,182       236,210  
Shares redeemed
    (266,266 )     (502,065 )
Net increase (decrease) in shares outstanding
    (156,349 )     195,841  
Shares outstanding, beginning of period
    1,703,663       1,507,822  
Shares outstanding, end of period
    1,547,314       1,703,663  

See accompanying Notes to Financial Statements.
 
15

 
JAMES MID CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS

 
   
Six Months
Ended
December 31,
2009
(Unaudited)
   
Year
Ended
June 30,
2009
 
FROM OPERATIONS
           
Net investment income
  $ 6,263     $ 21,474  
Net realized losses from security transactions
    (165,725 )     (1,017,693 )
Net change in unrealized appreciation/depreciation on investments
    1,203,284       (915,550 )
Net increase (decrease) in net assets from operations
    1,043,822       (1,911,769 )
                 
FROM DISTRIBUTIONS TO SHAREHOLDERS
               
Dividends from net investment income
    (2,651 )     (21,999 )
                 
FROM CAPITAL SHARE TRANSACTIONS
               
Proceeds from shares sold
    139,821       1,257,054  
Net asset value of shares issued in reinvestment of distributions to shareholders
    2,646       21,942  
Payments for shares redeemed
    (872,147 )     (908,811 )
Net increase (decrease) in net assets from capital share transactions
    (729,680 )     370,185  
                 
TOTAL INCREASE (DECREASE) IN NET ASSETS
    311,491       (1,563,583 )
                 
NET ASSETS
               
Beginning of period
    4,438,294       6,001,877  
End of period
  $ 4,749,785     $ 4,438,294  
                 
ACCUMULATED NET INVESTMENT INCOME (LOSS)
  $ 3,592     $ (20 )
                 
SUMMARY OF CAPITAL SHARE ACTIVITY
               
Shares sold
    16,669       182,444  
Shares issued in reinvestment of distributions to shareholders
    320       3,373  
Shares redeemed
    (107,939 )     (118,959 )
Net increase (decrease) in shares outstanding
    (90,950 )     66,858  
Shares outstanding, beginning of period
    629,753       562,895  
Shares outstanding, end of period
    538,803       629,753  
 
See accompanying Notes to Financial Statements.
 
16

 
JAMES BALANCED:  GOLDEN RAINBOW FUND - RETAIL CLASS
FINANCIAL HIGHLIGHTS

 
         
 Per Share Data for a Share Outstanding Throughout Each Period
   
Six Months
Ended
December 31,
2009
   
Year Ended June 30,
 
    (Unaudited)    
2009
   
2008
   
2007
   
2006
   
2005
 
Net asset value at beginning of period
  $ 16.69     $ 18.09     $ 18.33     $ 17.32     $ 17.18     $ 15.28  
                                                 
Income (loss) from investment operations:
                                               
Net investment income
    0.15       0.28       0.40       0. 39       0.34       0.26  
Net realized and unrealized gains (losses) on investments
    1.31       (1.40 )     0.11       1. 34       0.75       1.95  
Total from investment operations
    1.46       (1.12 )     0.51       1. 73       1.09       2.21  
                                                 
Less distributions:
                                               
From net investment income
    (0.15 )     (0.28 )     (0.40 )     (0.40 )     (0.34 )     (0.26 )
From net realized gains on investments
          (0.00 )(A)     (0.35 )     (0.32 )     (0.61 )     (0.05 )
Total distributions
    (0.15 )     (0.28 )     (0.75 )     (0.72 )     (0.95 )     (0.31 )
                                                 
Net asset value at end of period
  $ 18.00     $ 16.69     $ 18.09     $ 18.33     $ 17.32     $ 17.18  
                                                 
Total return
    8.72 %(B)     (6.19 % )     2.76 %     10.13 %     6.48 %     14.56 %
                                                 
Net assets at end of period (000’s)
  $ 561,190     $ 537,358     $ 478,694     $ 341,664     $ 268,766     $ 147,605  
                                                 
Ratios/Supplemental Data:
                                               
Ratio of net expenses to average net assets
    1.18 %(C)     1.16 %     1.18 %     1.18 %     1.21 %     1.26 %
                                                 
Ratio of net investment income to average net assets
    1.67 %(C)     1.68 %     2.20 %     2.24 %     2.11 %     1.70 %
                                                 
Portfolio turnover rate
    33 %(C)     72 %     53 %     92 %     68 %     36 %
 
(A) Amount rounds to less than $0.005.
(B) Not annualized.
(C) Annualized.
 
See accompanying Notes to Financial Statements.
 
17

 
JAMES BALANCED: GOLDEN RAINBOW FUND -
INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS

 
  Per Share Data for a Share Outstanding Throughout the Period
   
Six Months
Ended
December 31,
2009
(Unaudited)
   
Period
Ended
June 30,
2009(A )
 
Net asset value at beginning of period
  $ 16.69     $ 14.80  
                 
Income from investment operations:
               
Net investment income
    0.15       0.09  
Net realized and unrealized gains on investments
    1.33       1.94  
Total from investment operations
    1.48       2.03  
                 
Less distributions:
               
From net investment income
    (0.17 )     (0.14 )
                 
Net asset value at end of period
  $ 18.00     $ 16.69  
                 
Total return (B)
    8.86 %     13.75 %
                 
Net assets at end of period (000’s)
  $ 352     $ 115  
                 
Ratios/Supplemental Data:
               
Ratio of net expenses to average net assets(C)
    0.93 %     0.95 %
                 
Ratio of net investment income to average net assets (C)
    1.94 %     1.63 %
                 
Portfolio turnover rate
    33 %     72 %
 
(A)  Represents  the period from commencement of operations (March 2, 2009) through June 30, 2009.
(B) Not annualized.
(C) Annualized.
 
See accompanying Notes to Financial Statements.
 
18

 
JAMES SMALL CAP FUND
FINANCIAL HIGHLIGHTS

 
         
  Per Share Data for a Share Outstanding Throughout Each Period
   
Six Months
Ended
December 31,
2009
   
Year Ended June 30, 
 
   
(Unaudited)
   
2009
   
2008
   
2007
   
2006
   
2005
 
Net asset value at beginning of period
  $ 14.18     $ 20.04     $ 24.56     $ 23.28     $ 20.46     $ 18.66  
                                                 
Income (loss) from investment operations:
                                               
Net investment income (loss)
    0.02       0.06       0.10       0.11       (0.04 )     0.05  
                                                 
Net realized and unrealized gains (losses) on investments
    2.55       (5.86 )     (4.52 )     1.50       3.19       2.65  
Total from investment operations
    2.57       (5.80 )     (4.42 )     1.61       3.15       2.70  
                                                 
Less distributions:
                                               
From net investment income
          (0.06 )     (0.10 )     (0.11  )     (0.04 )      
From net realized gains on investments
                      (0.22  )     (0.30 )     (1.00 )
Total distributions
          (0.06 )     (0.10 )     (0.33  )     (0.34 )     (1.00 )
                                                 
Paid-in capital from redemption fees (A)
                      0.00
(B)
    0.01       0.10  
                                                 
Net asset value at end of period
  $ 16.75     $ 14.18     $ 20.0 4     $ 24.56     $ 23.28     $ 20.46  
                                                 
Total return
    18.12 %(c)     (28.91 %)     (18.03 %)     6.97
%
    15.59 %     15.39 %
                                                 
Net assets at end of period (000’s)
  $ 71,670     $ 99,801     $ 177,915     $ 327,467     $ 170,490     $ 54,489  
                                                 
Ratios/Supplemental Data:
                                               
Ratio of net expenses to average net assets
    1.50 %(D)     1.50 %     1.50 %     1.50
%
    1.50 %     1.50 %
                                                 
Ratio of net investment income (loss) to average net assets
    0.19 %(D)     0.37 %     0.42 %     0.54
%
    (0.25 %)     0.45 %
                                                 
Portfolio turnover rate
    9 %(D)     46 %     54 %     104
%
    59 %     94 %
 
(A) Amount calculated based on average shares outstanding throughout the period.  Effective February 21, 2007, the redemption fee was eliminated.
(B) Amount rounds to less than $0.005.
(C) Not annualized.
(D) Annualized.
 
See accompanying Notes to Financial Statements.
 
19

 
JAMES MARKET NEUTRAL FUND
FINANCIAL HIGHLIGHTS

 
         
Per Share Data for a Share Outstanding Throughout Each Period
    Six Months
Ended

December 31,
2009
   
Year Ended June 30,
 
    (Unaudited)    
2009
   
2008
   
2007
   
2006
   
2005
 
Net asset value at beginning of period
  $ 10.01     $ 12.30     $ 12.17     $ 12.69     $ 12.27     $ 11.02  
                                                 
Income (loss) from investment operations:
                                               
Net investment income (loss)
    (0.03 )     (0.11 )     0.11       0.40       0.17       0.01  
Net realized and unrealized gains (losses) on investments
    (0.36 )     (2.17 )     0.20       (0.51 )     0.42       1.23  
Total from investment operations
    (0.39 )     (2.28 )     0.31       (0.11 )     0.59       1.24  
                                                 
Less distributions:
                                               
From net investment income
          (0.01 )     (0.18 )     (0.41 )     (0.18 )      
                                                 
Paid-in capital from redemption fees(A)
                      0.00 (B)     0.01       0.01  
                                                 
Net asset value at end of period
  $ 9.62     $ 10.01     $ 12.30     $ 12.17     $ 12.69     $ 12.27  
                                                 
Total return
    (3.90 %)(D)     (18.55 %)     2.60 %     (0.84 %)     4.94 %     11.34 %
                                                 
Net assets at end of period (000’s)
  $ 35,571     $ 33,345     $ 50,289     $ 51,527     $ 75,218     $ 47,303  
                                                 
Ratios/Supplemental Data:
                                               
Ratio of net expenses to average net assets, excluding dividends on securities sold short
    1.95 %(E)     1.95 %     1.91 %     1.94 %     1.95 %     1.95 %
Ratio of dividend expense on securities sold short
    0.11 %(E)     0.32 %     0.90 %     0.32 %     0.62 %     0.42 %
Ratio of net expenses to average net assets
    2.06 %(E)     2.27 %     2.81 %     2.26 %     2.57 %     2.37 %
                                                 
Ratio of net investment income (loss) to average net assets
    (0.73 %)(E)     (0.76 %)     0.74 %     3.21 %     1.52 %     0.11 %
                                                 
Portfolio turnover rate(C)
    29 %(E)     65 %     79 %     57 %     27 %     35 %
 
(A)
Amount calculated based on average shares outstanding throughout the period.  Effective February 21, 2007, the redemption fee was eliminated.
(B)
Amount rounds to less than $0.005.
(C)
Calculation does not include short positions or short transactions.  Portfolio turnover rate would be higher if included.
(D)
Not annualized.
(E)
Annualized.
 
See accompanying Notes to Financial Statements.
 
20

 
JAMES EQUITY FUND
FINANCIAL HIGHLIGHTS

 
         
Per Share Data for a Share Outstanding Throughout Each Period
    Six Months
Ended
December 31,
2009
   
  Year Ended June 30, 
 
   
(Unaudited)
   
2009
   
2008
   
2007
   
2006
   
2005
 
Net asset value at beginning of period
  $ 6.40     $ 10.75     $ 12.28     $ 11.04     $ 8.89     $ 7.36  
                                                 
Income (loss) from investment operations:
                                               
Net investment income
    0.03       0.04       0.03       0.04       0.01       0.01  
Net realized and unrealized gains (losses) on investments
    0.98       (3.48 )     (1.53 )     1.24       2.16       1.53  
Total from investment operations
    1.01       (3.44 )     (1.50 )     1.28       2.17       1.54  
                                                 
Less distributions:
                                               
From net investment income
    (0.01 )     (0.04 )     (0.03 )     (0.04 )     (0.01 )     (0.01 )
From net realized gains on investments
          (0.87 )                        
From distributions in excess of net investment income
                            (0.01 )      
Total distributions
    (0.01 )     (0.91 )     (0.03 )     (0.04 )     (0.02 )     (0.01 )
                                                 
Paid-in capital from redemption fees(A)
                      0.00 (B)     0.00 (B)     0.00 (B)
                                                 
Net asset value at end of period
  $ 7.40     $ 6.40     $ 10.75     $ 12.28     $ 11.04     $ 8.89  
                                                 
Total return
    15.79 %(C)     (30.54 %)     (12.20 %)     11.59 %     24.45 %     20.96 %
                                                 
Net assets at end of period (000’s)
  $ 11,455     $ 10,910     $ 16,214     $ 25,873     $ 33,792     $ 16,833  
                                                 
Ratios/Supplemental Data:
                                               
Ratio of net expenses to average net assets
    1.50 %(D)     1.50 %     1.50 %     1.50 %     1.50 %     1.50 %
                                                 
Ratio of net investment income to average net assets
    0.70 %(D)     0.63 %     0.23 %     0.30 %     0.06 %     0.22 %
                                                 
Portfolio turnover rate
    14 %(D)     81 %     50 %     58 %     43 %     33 %
 
(A) Amount calculated based on average shares outstanding throughout the period.  Effective February 21, 2007, the redemption fee was eliminated.
(B) Amount rounds to less than $0.005.
(C) Not annualized.
(D) Annualized.

See accompanying Notes to Financial Statements.
 
21


JAMES MID CAP FUND
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
     
Six Months
Ended
December 31,
2009
      Year Ended June 30,  
     
(Unaudited)
     
2009
     
2008
     
2007
 
Net asset value at beginning of period
  $ 7.05     $ 10.66     $ 11.70     $ 10.00  
Income (loss) from investment operations:
                               
 Net investment income
    0.01       0.03       0.00 (A)     0.04  
 Net realized and unrealized gains (losses) on investments
    1.76       (3.61 )     (1.01 )     1.70  
Total from investment operations
    1.77       (3.58 )     (1.01 )     1.74  
Less distributions:
                               
 From net investment income
    (0.00 )(A)     (0.03 )     (0.01 )      
 From net realized gains on investments
                (0.02 )     (0.04 )
Total distributions
    (0.00 )(A)     (0.03 )     (0.03 )     (0.04 )
                                 
Paid-in capital from redemption fees(B)
                      0.00 (A)
                                 
Net asset value at end of period
  $ 8.82     $ 7.05     $ 10.66     $ 11.70  
                                 
Total return
    25.18 % (C)     (33.51 %)     (8.61 %)     17.41 %
                                 
Net assets at end of period (000s)
  $ 4,750     $ 4,438     $ 6,002     $ 6,441  
                                 
Ratios/Supplemental Data:
                               
Ratio of net expenses to average net assets
    1.50 % (D)     1.50 %     1.48 %     1.49 %
Ratio of net investment income to average net assets
    0.27 % (D)     0.48 %     0.01 %     0.40 %
Portfolio turnover rate
    14 % (D)     38 %     55 %     53 %

(A)
Amount rounds to less than $0.005.
(B)
Amount calculated based on average shares outstanding throughout the period. Effective February 21, 2007, the redemption fee was eliminated.
(C)
Not annualized.
(D)
Annualized.

See accompanying Notes to Financial Statements.

 
22

 

JAMES BALANCED: GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS
December 31, 2009 (Unaudited)
 
Shares
 
COMMON STOCKS — 41.0%
 
Value
     
BASIC MATERIALS — 3.8%
   
 
85,000
 
Barrick Gold Corporation
$
3,347,300
 
116,800
 
FMC Corporation
 
6,512,768
 
6,000
 
Gold Trust SPDR*
 
643,860
 
20,000
 
iShares Silver Trust*
 
331,400
 
37,000
 
Kinross Gold Corporation
 
680,800
 
97,000
 
Newmont Mining Corporation
 
4,589,070
 
30,000
 
Olin Corporation
 
525,600
 
30,000
 
PPG Industries, Inc.
 
1,756,200
 
30,000
 
Terra Nitrogen Company, L.P.
 
3,122,400
         
21,509,398
     
CONSUMER, CYCLICAL — 5.5%
   
 
70,000
 
Best Buy Company, Inc.
 
2,762,200
 
100,000
 
BJ's Wholesale Club, Inc.*
 
3,271,000
 
100,000
 
Bob Evans Farms, Inc.
 
2,895,000
 
98,000
 
Central Garden & Pet Company*
 
1,048,600
 
135,000
 
Dollar Tree, Inc.*
 
6,520,500
 
15,000
 
Family Dollar Stores, Inc.
 
417,450
 
40,000
 
McDonald’s Corporation
 
2,497,600
 
58,000
 
Netflix, Inc.*
 
3,198,120
 
10,000
 
NIKE, Inc. - Class B
 
660,700
 
40,000
 
The Buckle, Inc.
 
1,171,200
 
105,000
 
The Gymboree Corporation*
 
4,566,450
 
30,000
 
Wal-Mart Stores, Inc.
 
1,603,500
         
30,612,320
     
CONSUMER, NON-CYCLICAL — 6.8%
   
 
100,000
 
Archer-Daniels-Midland Company
 
3,131,000
 
90,900
 
Darling International, Inc.*
 
761,742
 
110,000
 
Del Monte Foods Company
 
1,247,400
 
115,000
 
EZCORP, Inc. - Class A*
 
1,979,150
 
73,000
 
Fresh Del Monte Produce, Inc.*
 
1,613,300
 
42,700
 
Ingles Markets, Inc. - Class A
 
646,051
 
160,000
 
Kroger Company
 
3,284,800
 
154,000
 
Merck & Company, Inc.
 
5,627,160
 
13,000
 
Mylan, Inc.*
 
239,590
 
80,000
 
PepsiAmericas, Inc.
 
2,340,800
 
280,000
 
Pfizer, Inc.
 
5,093,200
 
120,000
 
Sara Lee Corporation
 
1,461,600
 
125,000
 
Tupperware Brands Corporation
 
5,821,250
 
92,700
 
Watson Wyatt Worldwide, Inc. - Class A
 
4,405,104
         
37,652,147


 
23

 

JAMES BALANCED: GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 41.0% (Continued)
 
Value
     
ENERGY — 3.6%
   
 
27,500
 
Apache Corporation
$
2,837,175
 
10,000
 
Bolt Technology Corporation*
 
110,200
 
69,140
 
Chevron Corporation
 
5,323,089
 
64,000
 
Devon Energy Corporation
 
4,704,000
 
64,300
 
Exxon Mobil Corporation
 
4,384,617
 
50,000
 
Imperial Oil, Ltd.
 
1,933,000
 
8,000
 
Noble Energy, Inc.
 
569,760
 
12,000
 
Suburban Propane Partners, L.P.
 
564,960
         
20,426,801
     
FINANCIAL — 4.2%
   
 
245,000
 
American Financial Group, Inc.
 
6,112,750
 
140,000
 
American Physicians Capital, Inc.
 
4,244,800
 
155,000
 
Amerisafe, Inc.*
 
2,785,350
 
109,346
 
AmTrust Financial Services, Inc.
 
1,292,470
 
100,000
 
Annaly Capital Management, Inc.
 
1,735,000
 
2,000
 
Euro Currency Trust
 
285,820
 
16,000
 
iShares Dow Jones U.S. Financial Sector Index Fund
 
828,480
 
57,000
 
Knight Capital Group, Inc. - Class A*
 
877,800
 
250,900
 
Rent-A-Center, Inc.*
 
4,445,948
 
37,000
 
Unum Group
 
722,240
         
23,330,658
     
INDUSTRIAL — 4.3%
   
 
102,000
 
AGCO Corporation*
 
3,298,680
 
115,000
 
Ampco-Pittsburgh Corporation
 
3,625,950
 
70,000
 
CSX Corporation
 
3,394,300
 
35,000
 
Cummins, Inc.
 
1,605,100
 
7,000
 
Fluor Corporation
 
315,280
 
243,000
 
GrafTech International Ltd.*
 
3,778,650
 
10,000
 
Granite Construction, Inc.
 
336,600
 
40,000
 
Greif, Inc. - Class A
 
2,159,200
 
5,000
 
Norfolk Southern Corporation
 
262,100
 
171,700
 
Owens-Illinois, Inc.*
 
5,643,779
         
24,419,639
     
TECHNOLOGY — 8.4%
   
 
30,000
 
Arrow Electronics, Inc.*
 
888,300
 
10,000
 
Avnet, Inc.*
 
301,600
 
14,000
 
Computer Sciences Corporation*
 
805,420
 
40,000
 
Deluxe Corporation
 
591,600
 
30,000
 
Goodrich Corporation
 
1,927,500
 
170,000
 
Hewlett-Packard Company
 
8,756,700
 
82,000
 
International Business Machines Corporation (IBM)
 
10,733,799
 
33,000
 
Lockheed Martin Corporation
 
2,486,550
 
57,500
 
Northrop Grumman Corporation
 
3,211,375
 
8,000
 
SYNNEX Corporation*
 
245,280

 

 
24

 

JAMES BALANCED: GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 41.0% (Continued)
 
Value
     
TECHNOLOGY — 8.4% (Continued)
   
 
130,000
 
Triumph Group, Inc.
$
6,272,500
 
239,500
 
Western Digital Corporation*
 
10,573,925
         
46,794,549
     
UTILITIES — 4.4%
   
 
115,000
 
American Electric Power Company, Inc.
 
4,000,850
 
185,000
 
AT&T, Inc.
 
5,185,550
 
180,000
 
CenturyTel, Inc.
 
6,517,800
 
20,000
 
DTE Energy Company
 
871,800
 
41,000
 
Edison International
 
1,425,980
 
16,700
 
FirstEnergy Corporation
 
775,715
 
87,000
 
MDU Resources Group, Inc.
 
2,053,200
 
14,000
 
ONEOK, Inc.
 
623,980
 
60,000
 
Sempra Energy
 
3,358,800
 
5,000
 
The Laclede Group, Inc.
 
168,850
         
24,982,525
           
     
TOTAL COMMON STOCKS
$
229,728,037
           
 
Shares
 
INTERNATIONAL EQUITY EXCHANGE TRADED FUNDS — 0.8%
 
Value
 
12,000
 
iShares FTSE/Xinhua China 25 Index Fund
$
507,240
 
20,000
 
iShares MSCI All Peru Capped Index Fund
 
654,000
 
39,000
 
iShares MSCI Canada Index Fund
 
1,026,870
 
20,000
 
iShares MSCI Chile Investable Market Index Fund
 
1,095,800
 
72,000
 
iShares MSCI Japan Index Fund
 
701,280
 
14,000
 
iShares MSCI South Korea Index Fund
 
666,960
           
     
TOTAL INTERNATIONAL EQUITY EXCHANGE TRADED FUNDS
$
4,652,150
           
 
Shares
 
INTERNATIONAL BOND EXCHANGE TRADED FUNDS — 0.2%
 
Value
 
20,000
 
SPDR Barclays Capital International Treasury Bond ETF
$
1,136,600
 

 

 
25

 

JAMES BALANCED: GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Par Value
 
U.S. GOVERNMENT & AGENCY BONDS — 38.8%
 
Value
$
674,796
 
Government National Mortgage Association, 5.500%, 6/15/23
$
716,844
 
868,579
 
Government National Mortgage Association, 5.000%, 10/15/38
 
894,877
 
1,921,239
 
Government National Mortgage Association, 4.500%, 2/15/39
 
1,925,926
 
3,496,195
 
Government National Mortgage Association, 4.000%, 3/20/39
 
3,374,084
 
4,962,447
 
Government National Mortgage Association, 4.500%, 6/15/39
 
4,974,555
 
2,980,769
 
Government National Mortgage Association, 4.500%, 7/15/39
 
2,988,041
 
9,907,235
 
Government National Mortgage Association, 4.000%, 9/15/39
 
9,589,045
 
500,000
 
Tennessee Valley Authority, 5.625%, 1/18/11
 
525,955
 
5,000,000
 
U.S. Treasury Bonds, 4.375%, 2/15/38
 
4,800,000
 
22,500,000
 
U.S. Treasury Bonds, 3.500%, 2/15/39
 
18,428,895
 
5,000,000
 
U.S. Treasury Inflation Indexed Note, 1.250%, 4/15/14
 
5,278,373
 
8,750,000
 
U.S. Treasury Inflation Indexed Note, 2.500%, 7/15/16
 
10,199,519
 
11,500,000
 
U.S. Treasury Inflation Indexed Note, 1.625%, 1/15/18
 
12,147,291
 
23,000,000
 
U.S. Treasury Notes, 1.250%, 11/30/10
 
23,161,713
 
10,000,000
 
U.S. Treasury Notes, 4.875%, 2/15/12
 
10,760,160
 
19,300,000
 
U.S. Treasury Notes, 3.875%, 2/15/13
 
20,554,500
 
48,000,000
 
U.S. Treasury Notes, 4.625%, 2/15/17
 
51,828,767
 
17,400,000
 
U.S. Treasury Notes, 3.500%, 2/15/18
 
17,257,268
 
20,000,000
 
U.S. Treasury Notes, 2.750%, 2/15/19
 
18,412,500
           
     
TOTAL U.S. GOVERNMENT & AGENCY BONDS
$
217,818,313
           
 
Par Value
 
CORPORATE BONDS — 3.7%
 
Value
$
500,000
 
Anheuser-Busch Companies, Inc., 6.000%, 4/15/11
$
527,243
 
1,000,000
 
Caterpillar, Inc., 7.900%, 12/15/18
 
1,219,932
 
1,000,000
 
Caterpillar, Inc., 8.250%, 12/15/38
 
1,334,614
 
2,500,000
 
Citigroup, Inc., 2.875%, 12/9/11
 
2,574,998
 
1,500,000
 
E.I. Du Pont De Nemours, 5.750%, 3/15/19
 
1,608,245
 
2,000,000
 
General Electric Capital Corporation, 6.875%, 1/10/39
 
2,065,370
 
785,000
 
McDonald's Corporation, 5.700%, 2/1/39
 
800,716
 
3,700,000
 
Microsoft Corporation, 5.200%, 6/1/39
 
3,623,399
 
5,000,000
 
U.S. Bancorp, 2.250%, 3/13/12
 
5,083,204
 
2,000,000
 
Walmart Stores, 5.250%, 9/1/35
 
1,966,638
           
     
TOTAL CORPORATE BONDS
$
20,804,359
           
 
Par Value
 
MUNICIPAL BONDS** — 4.5%
 
Value
$
1,000,000
 
Adams Co CO SD No 014 Ser 2006 UTGO, 5.000%, 12/1/26
$
1,053,690
 
1,000,000
 
Citrus CA Community College Ser 2007B UTGO, 4.750%, 6/1/31
 
980,200
 
4,620,000
 
Columbus OH CSD UTGO, 6.150%, 12/1/33
 
4,626,514
 
1,000,000
 
East Baton Rouge LA Swr Community Rev, 5.125%, 2/1/29
 
1,056,770
 
1,000,000
 
FL St Brd Ed Cap Outlay 2007 Ser D UTGO, 5.000%, 6/1/38
 
1,030,210
 
1,000,000
 
Friendswood TX ISD Ser 2008 UTGO (Schoolhouse), 5.000%, 2/15/37
 
1,046,120

 
26

 

JAMES BALANCED: GOLDEN RAINBOW FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Par Value
 
MUNICIPAL BONDS** — 4.5% (Continued)
 
Value
$
3,000,000
 
GA St Ser B UTGO, 4.500%, 1/1/29
$
3,154,140
 
1,000,000
 
Illinois St Ser A, 4.750%, 9/1/26
 
1,030,030
 
1,000,000
 
Judson TX ISD Ser 2008 UTGO, 5.000%, 2/1/37
 
1,016,650
 
500,000
 
Kane & DeKalb Cntys IL Community Unit SD Bldg No 302
   
     
Ser 2008 UTGO, 5.500%, 2/1/28
 
534,835
 
500,000
 
Lamar TX Consolidated ISD Ser 2008 UTGO (Schoolhouse), 5.000%, 2/15/38
 
521,875
 
1,000,000
 
MA St Consolidated Loan Ser 2007C UTGO, 5.250%, 8/1/22
 
1,119,530
 
1,000,000
 
Marysville MI Pub SD Ser 2007 UTGO, 5.000%, 5/1/32
 
1,015,880
 
125,000
 
Mesa AZ IDA Rev Ser A (Discovery Health Systems), 5.625%, 1/1/29
 
126,250
 
1,100,000
 
Miamisburg OH CSD UTGO, 5.000%, 12/1/33
 
1,165,692
 
500,000
 
Mt Healthy OH CSD Sch Impt Ser 2008 UTGO, 5.000%, 12/1/26
 
531,740
 
550,000
 
OH St Higher Ed Cap Fac Ser 2000A UTGO, 5.250%, 2/1/13
 
552,250
 
1,000,000
 
OH St Ser A, 5.375%, 9/1/28
 
1,106,680
 
1,000,000
 
OH St Univ Gen Rcpts Ser A, 5.000%, 12/1/28
 
1,066,620
 
500,000
 
Springboro OH Community CSD Ser 2007 UTGO, 5.250%, 12/1/23
 
569,175
 
1,000,000
 
Tyler TX ISD UTGO, 5.000%, 2/15/34
 
1,028,850
 
1,000,000
 
Will and DuPage Cntys IL Ser 2007 UTGO (Bolingbrook), 5.000%, 1/1/37
 
962,740
           
     
TOTAL MUNICIPAL BONDS
$
25,296,441
           
 
Par Value
 
FOREIGN BONDS — 8.6%
 
Value
$
10,000,000
 
Australian Government, 5.250%, 3/15/19
$
8,723,647
 
6,000,000
 
Bundesrepublik Deutschland, 3.750%, 1/4/19
 
8,880,292
 
10,000,000
 
Canada Government, 3.750%, 6/1/19
 
9,617,580
 
25,000,000
 
Denmark DGB, 4.000%, 11/15/19
 
4,927,847
 
6,000,000
 
Netherlands Government, 4.000%, 7/15/19
 
8,912,592
 
5,000,000
 
New Zealand Government, 6.000%, 12/15/17
 
3,666,727
 
21,000,000
 
Norwegian Government, 4.500%, 5/22/19
 
3,723,124
           
     
TOTAL FOREIGN BONDS
$
48,451,809
           
     
TOTAL INVESTMENTS SECURITIES — 97.6%
   
     
(Amortized Cost $497,481,417)
$
547,887,709
           
     
OTHER ASSETS IN EXCESS OF LIABILITIES — 2.4%
 
13,654,238
           
     
NET ASSETS — 100.0%
$
561,541,947
 
*   Non-income producing security.
** All municipal securities are rated A or higher (Unaudited).
†     Represents original purchase par.
CSD – City School District
IDA – Industrial Development Authority
ISD – Independent School District
SD – School District
UTGO – Unlimited Tax General Obligation
 
Foreign Bonds Securities Allocation
 
   
% of total
 
   
net assets
 
Asia - Pacific
    2.2 %
Europe- Euro
    3.2 %
Europe
    1.5 %
North America
    1.7 %
      8.6 %

See accompanying Notes to Financial Statements.
 
27

 


JAMES SMALL CAP FUND
SCHEDULE OF INVESTMENTS
December 31, 2009 (Unaudited)
 
Shares
 
COMMON STOCKS — 84.1%
 
Value
     
BASIC MATERIALS — 3.0%
   
 
107,820
 
Aurizon Mines Ltd.*
$
485,190
 
1,400
 
Hawkins, Inc.
 
30,562
 
1,900
 
Innophos Holdings, Inc.
 
43,681
 
191,600
 
Northgate Minerals Corporation*
 
590,127
 
2,800
 
Oil-Dri Corporation of America
 
43,400
 
6,550
 
ShengdaTech, Inc.*
 
40,152
 
24,580
 
Silver Standard Resources, Inc.*
 
537,565
 
12,420
 
Terra Industries, Inc.
 
399,800
         
2,170,477
     
CONSUMER, CYCLICAL — 18.9%
   
 
1,575
 
America's Car-Mart, Inc.*
 
41,470
 
18,860
 
Big Lots, Inc.*
 
546,563
 
28,120
 
BJ's Wholesale Club, Inc.*
 
919,805
 
16,560
 
Bob Evans Farms, Inc.
 
479,412
 
124,160
 
Central Garden & Pet Company*
 
1,328,512
 
31,188
 
Dollar Tree, Inc.*
 
1,506,380
 
4,000
 
Dorman Products, Inc.*
 
62,640
 
20,875
 
DreamWorks Animation SKG, Inc. - Class A*
 
833,956
 
1,075
 
Frisch's Restaurants, Inc.
 
25,639
 
42,060
 
Netflix, Inc.*
 
2,319,188
 
28,560
 
Polaris Industries, Inc.
 
1,246,073
 
25,220
 
RadioShack Corporation
 
491,790
 
1,150
 
Red Robin Gourmet Burgers, Inc.*
 
20,585
 
70,228
 
The Buckle, Inc.
 
2,056,276
 
36,940
 
The Gymboree Corporation*
 
1,606,521
 
1,675
 
True Religion Apparel, Inc.*
 
30,971
         
13,515,781
     
CONSUMER, NON-CYCLICAL — 12.2%
   
 
26,200
 
Allied Healthcare International, Inc.*
 
76,242
 
4,725
 
Allion Healthcare, Inc.*
 
30,996
 
2,000
 
ATC Technology Corporation*
 
47,700
 
18,560
 
Biovail Corporation
 
259,098
 
10,300
 
Compania Cervecerias Unidas S.A. ADR
 
401,906
 
184,000
 
Del Monte Foods Company
 
2,086,560
 
102,746
 
Fresh Del Monte Produce, Inc.*
 
2,270,687
 
7,300
 
Hanger Orthopedic Group, Inc.*
 
100,959
 
22,680
 
LifePoint Hospitals, Inc.*
 
737,327
 
9,625
 
NovaMed, Inc.*
 
37,345
 
4,100
 
Nutraceutical International Corporation*
 
50,717
 
9,200
 
Shamir Optical Industry Ltd.*
 
73,600
 
52,000
 
Tupperware Brands Corporation
 
2,421,639
 
3,400
 
Village Super Market, Inc. - Class A
 
92,888
 
2,025
 
Young Innovations, Inc.
 
50,180
         
8,737,844


 
28

 


JAMES SMALL CAP FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 84.1% (Continued)
 
Value
     
ENERGY — 1.3%
   
 
1,850
 
RGC Resources, Inc.
$
54,668
 
13,100
 
Sunoco Logistics Partners L.P.
 
876,259
         
930,927
     
FINANCIAL — 10.8%
   
 
71,880
 
American Financial Group, Inc.
 
1,793,406
 
72,153
 
American Physicians Capital, Inc.
 
2,187,678
 
4,750
 
ePlus, Inc.*
 
78,423
 
58,590
 
FPIC Insurance Group, Inc.*
 
2,262,745
 
2,375
 
Mercer Insurance Group, Inc.
 
43,154
 
4,725
 
QC Holdings, Inc.
 
22,727
 
75,880
 
Rent-A-Center, Inc.*
 
1,344,594
 
1,150
 
World Acceptance Corporation*
 
41,205
         
7,773,932
     
INDUSTRIAL — 8.6%
   
 
34,180
 
Beacon Roofing Supply, Inc.*
 
546,880
 
2,800
 
International Shipholding Corporation
 
86,996
 
1,250
 
Jinpan International Ltd.
 
59,588
 
450
 
K-Tron International, Inc.*
 
48,933
 
3,475
 
LSB Industries, Inc.*
 
48,998
 
406,146
 
North American Galvanizing & Coatings, Inc.*
 
1,969,807
 
4,550
 
Portec Rail Products, Inc.
 
48,731
 
1,625
 
Standex International Corporation
 
32,646
 
47,380
 
Tsakos Energy Navigation Ltd.
 
694,591
 
58,360
 
VSE Corporation
 
2,630,868
         
6,168,038
     
TECHNOLOGY — 19.7%
   
 
205,418
 
CGI Group, Inc. - Class A*
 
2,785,468
 
9,025
 
Computer Task Group, Inc.*
 
72,290
 
34,440
 
CSG Systems International, Inc.*
 
657,460
 
3,675
 
Ebix, Inc.*
 
179,450
 
38,640
 
EnerSys*
 
845,057
 
3,950
 
Formula Systems (1985) Ltd. ADR
 
43,806
 
10,300
 
GSI Technology, Inc.*
 
46,144
 
24,900
 
Preformed Line Products Company
 
1,090,620
 
37,200
 
Shanda Interactive Entertainment Ltd. ADR*
 
1,957,092
 
69,927
 
Sybase, Inc.*
 
3,034,831
 
33,780
 
Triumph Group, Inc.
 
1,629,885
 
2,325
 
USA Mobility, Inc.*
 
25,598
 
2,000
 
Versant Corporation*
 
30,520
 
64,236
 
WESCO International, Inc.*
 
1,735,014
         
14,133,235


 
29

 


JAMES SMALL CAP FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 84.1% (Continued)
 
Value
     
UTILITIES — 9.6%
   
 
48,051
 
Atlantic Tele-Network, Inc.
$
2,643,286
 
1,400
 
Chesapeake Utilities Corporation
 
44,870
 
925
 
Delta Natural Gas Company, Inc.
 
26,464
 
86,860
 
El Paso Electric Company*
 
1,761,521
 
5,375
 
HickoryTech Corporation
 
47,461
 
69,539
 
WGL Holdings, Inc.
 
2,332,338
         
6,855,940
           
     
TOTAL COMMON STOCKS
$
60,286,174
           
 
Par
 
SHORT TERM INVESTMENTS — 2.8%
 
Value
$
2,000,000
 
U.S. Treasury Notes, 4.000%, 4/15/10
$
2,021,562
           
     
TOTAL INVESTMENT SECURITIES — 86.9%
   
     
(Cost $50,333,557)
$
62,307,736
           
     
OTHER ASSETS IN EXCESS OF LIABILITIES — 13.1%
 
9,362,591
           
     
NET ASSETS — 100.0%
$
71,670,327

*  Non-income producing security.
ADR–American Depository Receipts.
 
See accompanying Notes to Financial Statements.
 

 
30

 


 
JAMES MARKET NEUTRAL FUND
SCHEDULE OF INVESTMENTS
December 31, 2009 (Unaudited)
 
Shares
 
COMMON STOCKS — 66.6%
 
Value
 
     
BASIC MATERIALS — 6.3%
     
 
10,100
 
FMC Corporation †
$
563,176
 
 
39,900
 
iShares Silver Trust
 
661,143
 
 
6,250
 
SPDR Gold Trust
 
670,688
 
 
3,430
 
Terra Nitrogen Company, L.P.
 
356,994
 
         
2,252,001
 
     
CONSUMER, CYCLICAL — 9.2%
     
 
22,440
 
Bob Evans Farms, Inc. †
 
649,638
 
 
14,650
 
Dollar Tree, Inc.*
 
707,595
 
 
4,275
 
McDonald’s Corporation
 
266,931
 
 
5,525
 
NIKE, Inc. - Class B
 
365,037
 
 
24,710
 
The Buckle, Inc.
 
723,508
 
 
12,575
 
The Gymboree Corporation*
 
546,887
 
         
3,259,596
 
     
CONSUMER, NON-CYCLICAL — 7.6%
     
 
8,725
 
Kroger Company †
 
179,124
 
 
25,070
 
Merck & Company, Inc.
 
916,058
 
 
19,897
 
Pfizer, Inc.
 
361,926
 
 
20,835
 
Tupperware Brands Corporation
 
970,286
 
 
5,700
 
Watson Wyatt Worldwide, Inc.
 
270,864
 
         
2,698,258
 
     
ENERGY — 6.5%
     
 
8,500
 
Apache Corporation †
 
876,944
 
 
25,900
 
Bolt Technology Corporation*
 
285,418
 
 
5,605
 
Devon Energy Corporation
 
411,968
 
 
5,225
 
Exxon Mobil Corporation
 
356,293
 
 
8,425
 
Suburban Propane Partners, L.P.
 
396,649
 
         
2,327,272
 
     
FINANCIAL — 4.3%
     
 
69,400
 
AmTrust Financial Services, Inc. †
 
820,308
 
 
20,200
 
Annally Capital Management, Inc.
 
350,470
 
 
21,125
 
Rent-A-Center, Inc.*
 
374,335
 
         
1,545,113
 
     
INDUSTRIAL — 10.0%
     
 
25,900
 
CSX Corporation †
 
1,255,891
 
 
18,600
 
Greif, Inc. - Class A
 
1,004,028
 
 
39,625
 
Owens-Illinois, Inc.*
 
1,302,474
 
         
3,562,393
 

 
31

 


JAMES MARKET NEUTRAL FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 66.6% (Continued)
 
Value
 
     
TECHNOLOGY — 9.8%
     
 
9,000
 
Hewlett-Packard Company †
$
463,590
 
 
6,500
 
International Business Machines Corporation (IBM)
 
850,850
 
 
14,190
 
Northrop Grumman Corporation
 
792,512
 
 
31,025
 
Symantec Corporation*
 
555,037
 
 
17,100
 
Triumph Group, Inc.
 
825,075
 
         
3,487,064
 
     
UTILITIES — 11.4%
     
 
28,275
 
American Electric Power Company, Inc. †
 
983,687
 
 
29,925
 
AT&T, Inc.
 
838,798
 
 
35,930
 
MDU Resources Group, Inc.
 
847,948
 
 
9,175
 
ONEOK, Inc.*
 
408,930
 
 
16,605
 
Sempra Energy
 
929,548
 
         
4,008,911
 
     
INTERNATIONAL EQUITY EXCHANGE TRADED FUNDS — 1.5%
     
 
10,775
 
Chile Fund, Inc. †
 
192,872
 
 
4,150
 
iShares FTSE/Xinhua China 25 Index Fund
 
175,421
 
 
7,075
 
iShares  MSCI Canada Index Fund
 
186,285
 
         
554,578
 
             
     
TOTAL COMMON STOCKS
$
23,695,186
 
             
     
TOTAL INVESTMENT SECURITIES — 66.6%
     
     
(Cost $20,153,775)
$
23,695,186
 
             
     
SEGREGATED CASH WITH BROKERS — 57.1%
 
20,325,019
 
             
     
SECURITIES SOLD SHORT—(70.3)% (Proceeds $24,537,363)
 
(25,033,787
)
             
     
OTHER ASSETS IN EXCESS OF LIABILITIES — 46.6%
 
16,584,875
 
             
     
NET ASSETS — 100.0%
$
35,571,293
 
 
*
Non-income producing security.
Security position is either entirely or partially held in a segregated account as collateral for securities sold short aggregating a total market value of $23,472,027.
 
See accompanying Notes to Financial Statements.
 

 


 
32

 

JAMES MARKET NEUTRAL FUND
SCHEDULE OF SECURITIES SOLD SHORT
December 31, 2009 (Unaudited)
 
Shares
 
COMMON STOCKS — 70.3%
 
Value
     
BASIC MATERIALS —3.9%
   
 
4,725
 
Agnico-Eagle Mines Limited
$
255,150
 
29,196
 
Fibria Celulose S.A. ADR
 
666,837
 
42,376
 
MAG Silver Corporation
 
254,256
 
21,800
 
Zoltek Companies, Inc.
 
207,100
         
1,383,343
     
CONSUMER, CYCLICAL — 12.4%
   
 
50,000
 
AMR Corporation
 
386,500
 
13,075
 
Cavco Industries, Inc.
 
469,654
 
17,910
 
Crocs, Inc.
 
102,983
 
26,925
 
Gaylord Entertainment Company
 
531,769
 
18,025
 
KB HOME
 
246,582
 
12,310
 
K-Swiss, Inc. - Class A
 
122,361
 
36,125
 
Live Nation, Inc.
 
307,424
 
9,075
 
M.D.C. Holdings, Inc.
 
281,688
 
68,650
 
Morgans Hotel Group
 
310,984
 
64,761
 
Pulte Homes, Inc.
 
647,610
 
24,900
 
The Ryland Group, Inc.
 
490,530
 
24,300
 
TiVo, Inc.
 
247,374
 
14,750
 
Toll Brothers, Inc.
 
277,447
         
4,422,906
     
CONSUMER, NON-CYCLICAL — 11.4%
   
 
6,680
 
AMAG Pharmaceuticals, Inc.
 
254,040
 
4,295
 
Auxilium Pharmaceuticals, Inc.
 
128,764
 
12,175
 
Cepheid, Inc.
 
151,944
 
7,150
 
Clinical Data, Inc.
 
130,559
 
37,500
 
Elan Corporation PLC ADR
 
244,500
 
28,225
 
Eurand NV
 
364,102
 
26,025
 
Hansen Medical, Inc.
 
78,857
 
22,258
 
Insulet Corporation
 
317,844
 
36,228
 
MDS, Inc.
 
277,144
 
28,900
 
Rigel Pharmaceuticals, Inc.
 
274,839
 
13,000
 
Salix Pharmaceuticals Ltd.
 
330,200
 
54,690
 
Senomyx, Inc.
 
206,181
 
19,020
 
Smithfield Foods, Inc.
 
288,914
 
16,175
 
Sotheby's
 
363,614
 
15,600
 
The Great Atlantic & Pacific Tea Company, Inc.
 
183,924
 
6,100
 
United Therapeutics Corporation
 
321,165
 
8,560
 
Volcano Corporation
 
148,773
         
4,065,364


 
33

 

JAMES MARKET NEUTRAL FUND
SCHEDULE OF SECURITY SOLD SHORT (Continued)
 
Shares
 
COMMON STOCKS — 70.3% (Continued)
 
Value
     
ENERGY — 2.4%
   
 
25,178
 
BPZ Resources, Inc.
$
239,191
 
38,950
 
Clean Energy Fuels Corporation
 
600,219
         
839,410
     
FINANCIAL — 12.7%
   
 
17,600
 
Bank of America Corporation
 
265,056
 
6,890
 
City National Corporation
 
314,184
 
24,725
 
East West Bancorp, Inc.
 
390,655
 
33,789
 
First Horizon National Corporation
 
452,777
 
30,000
 
KeyCorp
 
166,500
 
42,050
 
Kingsway Financial Services, Inc.
 
73,588
 
40,975
 
MBIA, Inc.
 
163,080
 
22,880
 
National Penn Bancshares, Inc.
 
132,476
 
24,025
 
Old Republic International Corporation
 
241,211
 
21,540
 
Pinnacle Financial Partners, Inc.
 
306,299
 
19,775
 
Stewart Information Services Corporation
 
223,062
 
12,950
 
SunTrust Banks, Inc.
 
262,755
 
23,960
 
TFS Financial Corporation
 
290,874
 
11,365
 
The St. Joe Company
 
328,335
 
16,675
 
UBS AG ADR
 
258,629
 
8,950
 
ViewPoint Financial Group
 
128,970
 
32,210
 
Whitney Holding Corporation
 
293,433
 
20,000
 
Zions Bancorporation
 
256,600
         
4,548,484
     
INDUSTRIAL — 4.0%
   
 
42,325
 
Golar LNG Ltd.
 
542,606
 
35,000
 
L-1 Identity Solutions, Inc.
 
262,150
 
8,350
 
Metabolix, Inc.
 
92,435
 
50,925
 
Taser International, Inc.
 
223,052
 
5,475
 
Vulcan Materials Company
 
288,368
         
1,408,611
     
TECHNOLOGY — 22.2%
   
 
29,042
 
3D Systems Corporation
 
328,175
 
6,874
 
Abraxis BioScience, Inc.
 
278,741
 
11,725
 
Acorda Therapeutics, Inc.
 
295,704
 
14,185
 
Affymax, Inc.
 
350,937
 
43,775
 
Airvana, Inc.
 
332,690
 
28,625
 
Amylin Pharmaceuticals, Inc.
 
406,189
 
62,765
 
Arena Pharmaceuticals, Inc.
 
222,816
 
43,025
 
bebe stores, inc.
 
269,767
 
27,600
 
Cavium Networks, Inc.
 
657,708
 
46,600
 
Clearwire Corporation - Class A
 
315,016
 
12,000
 
Crown Castle International Corporation
 
468,480
 
44,025
 
Cypress Bioscience, Inc.
 
253,584
 
14,500
 
Dendreon Corporation
 
381,060

 
34

 

JAMES MARKET NEUTRAL FUND
SCHEDULE OF SECURITY SOLD SHORT (Continued)
 
Shares
 
COMMON STOCKS — 70.3% (Continued)
 
Value
     
TECHNOLOGY — 22.2% (Continued)
   
 
16,500
 
Electronic Arts, Inc.
$
292,875
 
43,300
 
Ener1, Inc.
 
274,522
 
17,525
 
Infinera Corporation
 
155,447
 
14,150
 
International  Rectifier Corporation
 
312,998
 
20,800
 
Isis Pharmaceuticals, Inc.
 
230,880
 
19,275
 
Leap Wireless International, Inc.
 
338,276
 
20,350
 
Palm, Inc.
 
204,314
 
19,320
 
Rambus, Inc.
 
471,408
 
12,270
 
SBA Communications Corporation
 
419,143
 
22,525
 
Sequenom, Inc.
 
93,253
 
20,150
 
Vocus, Inc.
 
362,700
 
9,550
 
XenoPort, Inc.
 
177,248
         
7,893,931
     
UTILITIES — 1.3%
   
 
21,205
 
Cbeyond, Inc.
 
333,979
 
20,825
 
RRI Energy, Inc.
 
119,119
         
453,098
           
     
TOTAL COMMON STOCKS SOLD SHORT
$
25,015,147
           
 
Shares
 
RIGHTS — 0.1%
 
Value
 
46,600
 
Clearwire Corporation Rights
$
18,640
           
     
TOTAL SECURITIES SOLD SHORT  — 70.4% (Proceeds  $24,537,363)
$
25,033,787

 
ADR – American Depository Receipts.
PLC – Public Liability Company.
 
See accompanying Notes to Financial Statements.
 

 
35

 

JAMES EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 2009 (Unaudited)
 
Shares
 
COMMON STOCKS — 78.3%
 
Value
     
BASIC MATERIALS — 5.0%
   
 
2,440
 
Barrick Gold Corporation
$
96,087
 
5,840
 
FMC Corporation
 
325,638
 
150
 
Hawkins, Inc.
 
3,275
 
5,320
 
IAMGOLD Corporation
 
83,205
 
200
 
Innophos Holdings, Inc.
 
4,598
 
300
 
Oil-Dri Corporation of America
 
4,650
 
725
 
ShengdaTech, Inc.*
 
4,444
 
3,300
 
Silver Wheaton Corporation*
 
49,566
         
571,463
     
CONSUMER, CYCLICAL — 15.4%
   
 
175
 
America's Car-Mart, Inc.*
 
4,608
 
3,769
 
Big Lots, Inc.*
 
109,226
 
3,500
 
BJ's Wholesale Club, Inc.*
 
114,485
 
7,440
 
Bob Evans Farms, Inc.
 
215,388
 
20,820
 
Central Garden & Pet Company*
 
222,774
 
5,840
 
Dollar Tree, Inc.*
 
282,071
 
450
 
Dorman Products, Inc.*
 
7,047
 
6,760
 
Family Dollar Stores, Inc.
 
188,131
 
125
 
Frisch's Restaurants, Inc.
 
2,981
 
2,420
 
Netflix, Inc.*
 
133,439
 
125
 
Red Robin Gourmet Burgers, Inc.*
 
2,238
 
3,954
 
The Buckle, Inc.
 
115,773
 
8,160
 
The Gymboree Corporation*
 
354,877
 
175
 
True Religion Apparel, Inc.*
 
3,236
         
1,756,274
     
CONSUMER, NON-CYCLICAL — 13.6%
   
 
2,900
 
Allied Healthcare International, Inc.*
 
8,439
 
525
 
Allion Healthcare, Inc.*
 
3,444
 
1,700
 
Archer-Daniels-Midland Company
 
53,227
 
225
 
ATC Technology Corporation*
 
5,366
 
3,280
 
Biovail Corporation
 
45,789
 
9,500
 
ConAgra Foods, Inc.
 
218,975
 
16,920
 
Del Monte Foods Company
 
191,873
 
1,840
 
EZCORP, Inc. - Class A*
 
31,666
 
800
 
Hanger Orthopedic Group, Inc.*
 
11,064
 
3,140
 
LifePoint Hospitals, Inc.*
 
102,081
 
5,220
 
Merck & Company, Inc.
 
190,739
 
1,050
 
NovaMed, Inc.*
 
4,074
 
450
 
Nutraceutical International Corporation*
 
5,567
 
9,560
 
Pfizer, Inc.
 
173,896
 
19,820
 
Sara Lee Corporation
 
241,407
 
1,025
 
Shamir Optical Industry Ltd.
 
8,200

 
36

 

JAMES EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 78.3% (Continued)
 
Value
     
CONSUMER, NON-CYCLICAL — 13.6% (Continued)
   
 
2,380
 
Tupperware Brands Corporation
$
110,837
 
375
 
Village Super Market, Inc. - Class A
 
10,245
 
2,680
 
Watson Wyatt Worldwide, Inc. - Class A
 
127,354
 
225
 
Young Innovations, Inc.
 
5,576
         
1,549,819
     
ENERGY — 4.4%
   
 
1,410
 
Apache Corporation
 
145,470
 
2,280
 
Chevron Corporation
 
175,537
 
1,580
 
Devon Energy Corporation
 
116,130
 
200
 
RGC Resources, Inc.
 
5,910
 
940
 
Sunoco Logistics Partners L.P.
 
62,877
         
505,924
     
FINANCIAL — 10.6%
   
 
10,665
 
American Financial Group, Inc.
 
266,092
 
8,053
 
American Physicians Capital, Inc.
 
244,167
 
6,700
 
Amerisafe, Inc.*
 
120,399
 
525
 
ePlus, Inc.*
 
8,668
 
250
 
FPIC Insurance Group, Inc.*
 
9,655
 
6,490
 
Mercer Insurance Group, Inc.
 
117,923
 
525
 
QC Holdings, Inc.
 
2,525
 
11,160
 
Rent-A-Center, Inc.*
 
197,755
 
12,620
 
Unum Group
 
246,342
 
125
 
World Acceptance Corporation*
 
4,479
         
1,218,005
     
INDUSTRIAL — 4.9%
   
 
1,460
 
Cooper Industries PLC - Class A
 
62,254
 
3,100
 
CSX Corporation
 
150,318
 
1,960
 
Greif, Inc. - Class A
 
105,801
 
300
 
International Shipholding Corporation
 
9,321
 
150
 
Jinpan International Ltd.
 
7,151
 
50
 
K-Tron International, Inc.*
 
5,437
 
375
 
LSB Industries, Inc.*
 
5,288
 
925
 
North American Galvanizing & Coatings, Inc.*
 
4,486
 
1,820
 
Owens-Illinois, Inc.*
 
59,823
 
500
 
Portec Rail Products, Inc.
 
5,355
 
175
 
Standex International Corporation
 
3,516
 
1,320
 
The Black & Decker Corporation
 
85,576
 
1,220
 
Tidewater, Inc.
 
58,499
         
562,825


 
37

 

JAMES EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 78.3% (Continued)
 
Value
     
TECHNOLOGY — 13.3%
   
 
1,020
 
Affiliated Computer Services, Inc. - Class A*
$
60,884
 
4,400
 
Computer Sciences Corporation*
 
253,132
 
1,000
 
Computer Task Group, Inc.*
 
8,010
 
400
 
Ebix, Inc.*
 
19,532
 
425
 
Formula Systems (1985) Ltd. ADR
 
4,713
 
800
 
General Dynamics Corporation
 
54,536
 
2,800
 
Goodrich Corporation
 
179,900
 
1,125
 
GSI Technology, Inc.*
 
5,040
 
2,260
 
Hewlett-Packard Company
 
116,413
 
1,750
 
International Business Machines Corporation (IBM)
 
229,075
 
4,340
 
Northrop Grumman Corporation
 
242,389
 
14,360
 
Symantec Corporation*
 
256,899
 
1,400
 
SYNNEX Corporation*
 
42,924
 
920
 
Triumph Group, Inc.
 
44,390
 
250
 
USA Mobility, Inc.*
 
2,753
 
225
 
Versant Corporation*
 
3,434
         
1,524,024
     
UTILITIES — 11.1%
   
 
5,040
 
American Electric Power Company, Inc.
 
175,342
 
9,700
 
AT&T, Inc.
 
271,891
 
11,042
 
CenturyTel, Inc.
 
399,830
 
150
 
Chesapeake Utilities Corporation
 
4,808
 
100
 
Delta Natural Gas Company, Inc.
 
2,861
 
5,940
 
DTE Energy Company
 
258,925
 
1,580
 
Edison International
 
54,952
 
600
 
HickoryTech Corporation
 
5,298
 
1,800
 
Sempra Energy
 
100,764
         
1,274,671
           
     
TOTAL COMMON STOCKS
$
8,963,005
           
 
Shares/Par
 
SHORT TERM INVESTMENTS — 6.9%
 
Value
 
87,336
 
First American Treasury Money Market Fund
$
87,336
$
700,000
 
U.S. Treasury Notes, 4.000%, 4/15/10
 
707,547
           
     
TOTAL SHORT TERM INVESTMENTS
$
794,883
 

 

 
38

 

JAMES EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
PREFERRED STOCKS — 2.0%
 
Value
     
FINANCIAL — 0.8%
   
 
4,000
 
General Electric Capital Corporation, 6.00%, 4/24/47(4/24/12)**
$
96,720
           
     
UTILITIES — 1.2%
   
 
5,000
 
AT&T, Inc., 6.375%, 2/15/56 (2/15/12)**
 
133,450
           
     
TOTAL PREFERRED STOCKS
$
230,170
           
 
Shares
 
INTERNATIONAL EQUITY EXCHANGE TRADED FUNDS — 1.4%
 
Value
 
3,280
 
Chile Fund, Inc.
$
58,712
 
1,780
 
India Fund, Inc.*
 
54,646
 
1,240
 
iShares FTSE/Xinhua China 25 Index Fund
 
52,415
           
       
$
165,773
           
     
TOTAL INVESTMENT SECURITIES — 88.6%
   
     
(Cost $8,852,159)
$
10,153,831
           
     
OTHER ASSETS IN EXCESS OF LIABILITIES — 11.4%
 
1,301,055
           
     
NET ASSETS — 100.0%
$
11,454,886

 
*Non-income producing security.
**Date in parenthesis represents call date.
ADR – American Depository Receipts.
PLC – Public Liability Company.
 
See accompanying Notes to Financial Statements.
 

 

 
39

 

JAMES MID CAP FUND
SCHEDULE OF INVESTMENTS
December 31, 2009 (Unaudited)
 
Shares
 
COMMON STOCKS — 93.8%
 
Value
     
BASIC MATERIALS — 13.7%
   
 
2,500
 
FMC Corporation
$
139,400
 
12,500
 
IAMGOLD Corporation
 
195,500
 
6,000
 
Olin Corporation
 
105,120
 
14,000
 
Silver Wheaton Corporation*
 
210,280
         
650,300
     
CONSUMER, CYCLICAL — 9.3%
   
 
4,000
 
BJ's Wholesale Club, Inc.*
 
130,840
 
4,000
 
Darden Restaurants, Inc.
 
140,280
 
3,500
 
Dollar Tree, Inc.*
 
169,050
         
440,170
     
CONSUMER, NON-CYCLICAL — 22.4%
   
 
5,000
 
ConAgra Foods, Inc.
 
115,250
 
10,000
 
Del Monte Foods Company
 
113,400
 
3,000
 
Life Technologies Corporation*
 
156,690
 
4,000
 
LifePoint Hospitals, Inc.*
 
130,040
     
Sara Lee Corporation
 
152,250
 
4,500
 
Tupperware Brands Corporation
 
209,565
 
4,000
 
Watson Wyatt Worldwide, Inc. - Class A
 
190,080
     
 
 
1,067,275
     
ENERGY — 5.6%
   
 
1,600
 
Questar Corporation
 
66,512
 
3,000
 
Sunoco Logistics Partners L.P.
 
200,670
         
267,182
     
FINANCIAL — 6.3%
   
 
5,000
 
American Financial Group, Inc.
 
124,750
 
7,500
 
OneBeacon Insurance Group Ltd.
 
103,350
 
4,000
 
Rent-A-Center, Inc.*
 
70,880
         
298,980
     
INDUSTRIAL — 11.9%
   
 
2,500
 
AGCO Corporation*
 
80,850
 
7,500
 
GrafTech International Ltd.*
 
116,625
 
2,500
 
Granite Construction, Inc.
 
84,150
 
3,000
 
Greif, Inc. - Class A
 
161,940
 
2,500
 
Tidewater, Inc.
 
119,875
         
563,440


 
40

 

JAMES MID CAP FUND
SCHEDULE OF INVESTMENTS (Continued)
 
Shares
 
COMMON STOCKS — 93.8% (Continued)
 
Value
     
TECHNOLOGY — 12.4%
   
 
2,000
 
Affiliated Computer Services, Inc. - Class A*
$
119,380
 
2,500
 
Computer Sciences Corporation*
 
143,825
 
1,000
 
Goodrich Corporation
 
64,250
 
15,000
 
Qwest Communications International, Inc.
 
63,150
 
4,500
 
Western Digital Corporation*
 
198,675
         
589,280
     
UTILITIES — 12.2%
   
 
4,000
 
CenturyTel, Inc.
 
144,840
 
3,000
 
DTE Energy Company
 
130,770
 
3,500
 
Energen Corporation
 
163,800
 
6,000
 
MDU Resources Group, Inc.
 
141,600
         
581,010
           
     
TOTAL COMMON STOCKS
$
4,457,637
           
 
Shares
 
SHORT TERM INVESTMENTS — 0.5%
 
Value
 
22,166
 
First American Treasury Money Market Fund
$
22,166
           
     
TOTAL INVESTMENT SECURITIES — 94.3%
   
     
(Cost $3,815,450)
$
4,479,803
           
     
OTHER ASSETS IN EXCESS OF LIABILITIES — 5.7%
 
269,982
           
     
NET ASSETS — 100.0%
$
4,749,785

 
*Non-income producing security.
 
See accompanying Notes to Financial Statements.
 
 
 
41


 
JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 2009 (Unaudited)
 
1. General Information and Significant Accounting Policies
 
James Balanced:  Golden Rainbow Fund, James Small Cap Fund, James Market Neutral Fund and James Mid Cap Fund are each a diversified series of James Advantage Funds (the “Trust”), and James Equity Fund is a non-diversified series of the Trust (individually a “Fund,” collectively the “Funds”).  The Trust is an open-end management investment company that was organized as an Ohio business trust on August 29, 1997.  The Trust is registered under the Investment Company Act of 1940 (the “1940 Act”). James Balanced:  Golden Rainbow Fund was originally organized as a series of the Flagship Admiral Funds Inc., a Maryland corporation. On June 26, 1998, pursuant to an Agreement and Plan of Reorganization, James Balanced: Golden Rainbow Fund was restructured through a tax-free reorganization as a series of the Trust. The James Small Cap Fund and James Market Neutral Fund each commenced its public offering of shares on October 2, 1998.  The James Equity Fund commenced its public offering of shares on November 1, 1999.  The James Mid Cap Fund commenced its public offering of shares on June 30, 2006.  Each class represents an interest in the same portfolio of investments and has the same rights, but differs primarily in distribution fees and shareholder features.  The Retail Class shares are subject to distribution (12b-1) fees but have a lower minimum investment requirement and offer certain shareholder services not available to Institutional Class shareholders.  Institutional Class shares are not subject to 12b-1 fees and are  available only through investment advisers and bank trust departments that have made arrangements for shares of all of their clients investing in the Fund to be held in an omnibus account (as well as other entities that are approved by management of the Trust).
 
James Balanced:  Golden Rainbow Fund seeks to provide total return through a combination of growth and income and preservation of capital in declining markets. The Fund seeks to achieve its objective by investing primarily in common stocks and/or debt securities that the Fund’s adviser, James Investment Research, Inc. (“James”), believes are undervalued.
 
James Small Cap Fund seeks to provide long-term capital appreciation. The Fund seeks to achieve its objective by investing primarily in common stocks of small capitalization companies.
 
James Market Neutral Fund seeks to provide positive returns regardless of the direction of the stock markets. The Fund seeks to achieve its objective by investing in common stocks that James believes are undervalued and more likely to appreciate, and selling short common stocks that James believes are overvalued and more likely to depreciate.
 
James Equity Fund seeks to provide long-term capital appreciation and outperform the Standard & Poor’s 500 Index (the “S&P 500 Index”).  The Fund seeks to achieve its objective by investing primarily in equity securities without regard to the market capitalization of the stock. The Fund often buys stocks in the S&P 500 Index.
 
James Mid Cap Fund seeks to provide long-term capital appreciation.  The Fund seeks to achieve its objective by investing primarily in common stocks of mid capitalization companies.
 
The following is a summary of significant accounting policies followed by the Funds in preparation of their financial statements, in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
 

 
42

 


JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
Share Valuation
The net asset value per share of each Fund, other than the James Balanced: Golden Rainbow Fund, is calculated daily by dividing the total value of the Fund’s assets, less liabilities, by the number of shares outstanding. The net asset value per share of each class of shares of the James Balanced: Golden Rainbow Fund is calculated daily by dividing the total value of the Fund’s assets attributable to that class, less liabilities attributable to that class, by the number of outstanding shares of that class.
 
Securities Valuation
The Funds' portfolio securities are valued as of the close of the New York Stock Exchange (“NYSE”) (generally, 4:00 p.m., Eastern time) on each day that the NYSE is open for business, and on any other day on which there is sufficient trading in a Fund’s securities to materially affect the net asset value.  Securities that are traded on any exchange are valued at the last quoted sale price. Lacking a last sale price, a security is valued at its last bid price except when, in James’s opinion, the last bid price does not accurately reflect the current value of the security. Securities that are traded on the NASDAQ over-the-counter market are valued at their NASDAQ Official Closing Price (“NOCP”) for all NASDAQ National Market (“NNM”) and NASDAQ Capital Market® securities. When market quotations are not readily available, if an event occurs after the close of the trading market (but before the time as of which a Fund calculates its net asset value) that materially affects a security’s value, when James determines that the market quotation does not accurately reflect the current value or when a restricted security is being valued, that security will be valued at its fair value as determined in good faith in conformity with guidelines adopted by and subject to review of the Board of Trustees. The Funds may use pricing services to determine market value for securities. Debt securities are valued on the basis of valuations provided by dealers or by an independent pricing service that determines valuations based upon market transactions for normal, institutional-size trading units of similar securities. Short-term investments in fixed-income securities with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued by using the amortized cost method of valuation, which the Board has determined will approximate fair value.
 
For valuation purposes, quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents at the time of pricing the Funds.  In computing the net asset value of the Funds, the values of foreign portfolio securities are generally based upon market quotations which, depending upon the exchange or market, may be last sale price, last bid price, or the average of the last bid and asked prices as of, in each case, the close of the appropriate exchange or another designated time.
 
The calculation of the share price of the Funds holding foreign securities in its portfolio does not take place contemporaneously with the determination of the values of many of the foreign portfolio securities used in such calculation.  Events affecting the values of foreign portfolio securities that occur between the time their prices are determined and the calculation of the Fund’s share price will not be reflected in the calculation unless the Adviser determines, subject to review by the Board of Trustees, that the particular event would materially affect net asset value, in which case an adjustment will be made.
 

 
43

 


 
JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
 
In accordance with the Trust’s good faith pricing guidelines, James is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above.  There is no single standard for determining fair value, since fair value depends upon the circumstances of each individual case.  As a general principle, the current fair value of an issue of securities being valued by the adviser would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale.  Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.
 
The Funds have adopted Fair Value Measurements.  Fair Value Measurements  establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements.
 
Various inputs are used in determining the value of the Funds’ investments.  These inputs are summarized in the three broad levels listed below:
 
Level 1 – quoted prices in active markets for identical securities
 
Level 2 –other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
 
Level 3 –significant unobservable inputs (including a Fund’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.  For example, securities maturing within 60 days of the filing are valued using amortized cost, in accordance with rules under the Investment Company Act of 1940.  Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
 

 
44

 


 
JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)

 
The following is a summary of the inputs used to value the Funds’ net assets as of December 31, 2009:
 
         
Level 2 –
       
         
Other
   
Level 3 –
 
   
Level 1 –
   
Significant
   
Significant
 
   
Quoted
   
Observable
   
Unobservable
 
   
Prices
   
Inputs
   
Inputs
 
Investments in Securities                  
(Assets)
                 
James Balanced:  Golden Rainbow Fund
                 
Common Stock *
  $ 229,728,037     $     $  
Corporate Bonds
          20,804,359        
Foreign Government Bonds
          48,451,809        
Municipal Bonds
          25,296,441        
Exchange Traded Funds
    5,788,750              
U.S. Government Agencies
          24,989,327        
U.S. Treasuries
    192,828,986              
James Small Cap Fund
                       
Common Stock *
    60,286,174              
U.S. Treasuries
    2,021,562              
James Market Neutral Fund
                       
Common Stock *
    23,140,608              
Exchange Traded Funds
    554,578              
James Equity Fund
                       
Common Stock *
    8,963,005              
Mutual Funds
    87,336              
Preferred Stock
    230,170              
U.S. Treasuries
    707,547              
Exchange Traded Funds
    165,773              
James Mid Cap Fund
                       
Common Stock *
    4,457,637              
Mutual Funds
    22,166              
Investments in Securities Sold Short:
                       
(Liabilities)
                       
James Market Neutral Fund
                       
Common Stock *
  $ 25,015,147     $     $  
Rights
    18,640              
*
All equity securities are classified as Level 1.  See Schedule of Investments for industry classification.
 
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and losses from security transactions are determined using the specific identification method. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. Any securities so purchased are subject to market fluctuation during this period. The James Balanced:  Golden Rainbow Fund will instruct its custodian to segregate assets in a separate account with a current value at least equal to the amount of its when-issued and delayed delivery purchase commitments.
 
Withholding taxes on foreign dividends have been provided for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates.
 

 
45

 

JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)

 
Foreign Currency Translation
The market value of investment securities, other assets and liabilities of the James Balanced: Golden Rainbow Fund denominated in foreign currencies are translated into U.S. dollars at the current exchange rate at the close of each business day. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars based at the exchange rate on the date of the transaction.
 
Reported net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books, and the U.S. dollar equivalent of the amounts actually received or paid.  Net unrealized foreign exchange gains and losses arise from the changes in the value of assets and liabilities including investments in securities at the reporting period, resulting from changes in the exchange rate.
 
Short Sales and Segregated Cash
The James Market Neutral Fund actively sells short common stocks. Short sales are transactions in which the Fund sells a security it does not own in anticipation of a decline in the market value of that security. To complete such a transaction, the Fund must borrow the security to deliver to the buyer upon the short sale; the Fund is then obligated to replace the security borrowed by purchasing it in the open market at some later date.
 
The Fund will incur a loss if the market price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize a gain if the security declines in value between those dates. If a security sold short pays a dividend while the Fund is short that security, the Fund will pay the dividend and record that amount as an expense.
 
All short sales are collateralized, as required by the Fund’s prime broker. The Fund maintains the collateral in segregated accounts consisting of cash and/or high-grade liquid assets sufficient to collateralize the market value of its short positions.
 
Investment Income
Dividend income is recorded on the ex-dividend date. Interest income is determined on the basis of interest accrued, adjusted for amortization of premiums and accretion of discounts on all debt securities. Amortization and accretion is calculated using the effective yield method.
 
Dividends and Distributions to Shareholders
Net investment income, if any, is generally declared and distributed to shareholders of each Fund quarterly. Net realized capital gains from security transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to shareholders of net investment income and net realized capital gains are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.  Accordingly, temporary over distributions as a result of these differences may occur and will be classified as either distributions in excess of net investment income and/or distributions in excess of net realized gains from security transactions, where applicable.
 
Allocations
Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation for the James Balanced:  Golden Rainbow Fund is allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund.  Class specific expenses are charged directly to the class incurring the expense.  Common expenses, which are not attributable to a specific class, are allocated daily to each class of shares based upon its proportionate share of total net assets of the Fund. Expenses not directly billed to a particular Fund are allocated proportionally among all Funds daily in relation to net assets of each Fund or another reasonable measure.
 

 
46

 

JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
 
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period.  Actual results could differ from those estimates.
 
Federal Income Taxes
The Funds generally intend to distribute all taxable income and capital gains to shareholders, if any, and to otherwise continue to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal tax provision is required.
 
The tax character of distributions paid for the years ended June 30, 2009 and 2008 was as follows:

   
James Balanced:
Golden Rainbow Fund
   
James Small Cap Fund
 
   
2009
   
2008
   
2009
   
2008
 
From ordinary income
  $ 9,123,004     $ 8,530,879     $ 438,651     $ 1,055,734  
From long-term capital gains
    30,786       6,766,534              
    $ 9,153,790     $ 15,297,413     $ 438,651     $ 1,055,734  
                                 

   
James Market Neutral Fund
   
James Equity Fund
   
James Mid Cap Fund
 
   
2009
   
2008
   
2009
   
2008
   
2009
   
2008
 
From ordinary income
  $ 39,280     $ 629,826     $ 73,673     $ 47,752     $ 21,999     $ 18,785  
From long-term capital gains
                1,230,653       12,335              
    $ 39,280     $ 629,826     $ 1,304,326     $ 60,087     $ 21,999     $ 18,785  
                                                 

The following information is computed on a tax basis for each item as of June 30, 2009:

   
James
                         
   
Balanced:
   
James
   
James
       
James
 
   
Golden Rainbow
   
Small
Cap
   
Market Neutral
   
James
Equity
   
Mid
Cap
 
   
Fund
   
Fund
   
Fund
   
Fund
   
Fund
 
Tax cost of portfolio investments
  $ 505,955,774     $ 99,633,392     $ 26,263,802     $ 10,873,554     $ 4,698,008  
Gross unrealized appreciation
  $ 33,569,708     $ 9,029,355     $ 2,244,132     $ 927,958     $ 303,860  
Gross unrealized depreciation
    (22,165,416 )     (13,272,968 )     (3,559,729 )     (1,108,118 )     (842,791 )
Net unrealized appreciation
                                       
(depreciation)
    11,404,292       (4,243,613 )     (1,315,597 )     (180,160 )     (538,931 )
Net unrealized appreciation
                                       
on securities sold short
                4,070,164              
Capital loss carryforward
    (1,259,804 )     (37,540,261 )     (7,749,272 )     (527,658 )     (319,297 )
Post-October losses
    (9,087,338 )     (27,314,412 )     (2,124,646 )     (1,470,271 )     (985,864 )
Undistributed net investment income
    32,285                          
Other temporary differences
    (111,624 )     (2,632 )           (205 )     (20 )
Accumulated earnings (deficit)
  $ 977,811     $ (69,100,918 )   $ (7,119,351 )   $ (2,178,294 )   $ (1,844,112 )
                                         

 

 
47

 

JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
 
The difference between the cost of portfolio investments on a tax basis and financial statement cost for the Funds is due to certain timing differences in the recognition of capital losses under income tax regulations and GAAP.
 
The capital loss carryforwards remaining as of June 30, 2009 in the table below expire as follows:

   
Amount
 
Expiration Date
James Golden Rainbow Fund
  $ 1,259,804  
June 30, 2017
James Small Cap Fund
  $ 17,239,544  
June 30, 2016
    $ 20,300,717  
June 30, 2017
James Market Neutral Fund
  $ 194,196  
June 30, 2013
    $ 642,007  
June 30, 2014
    $ 6,457,028  
June 30, 2015
    $ 456,041  
June 30, 2017
James Equity Fund
  $ 527,658  
June 30, 2017
James Mid Cap Fund
  $ 47,388  
June 30, 2016
    $ 271,909  
June 30, 2017

The capital loss carryforwards may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.
 
The Funds have analyzed their tax positions taken on Federal income tax returns for all open tax years (tax years ended June 30, 2006 through 2009) and have concluded that no provision for income tax is required in their financial statements.
 
Reclassification of Capital Accounts
Reclassifications result primarily from the difference in the tax treatment of net investment losses and distributions in excess of net investment income.  The following reclassifications have been made on the Statements of Assets and Liabilities and have no impact on the net assets or net asset value of the Funds:
                   
   
Paid-In
Capital
   
Undistributed
Net
Investment
Income
   
Accumulated
Net
Realized
Gains (Losses)
 
James Balanced: Golden Rainbow Fund
  $     $ (2,865 )   $ 2,865  
James Small Cap Fund
  $ (2,951 )   $ 2,951     $  
James Market Neutral Fund
  $ (382,042 )   $ 383,773     $ (1,731 )
James Equity Fund
  $ (556 )   $ 556     $  
James Mid Cap Fund
  $ (796 )   $ (20 )   $ 816  
 
As of December 31, 2009, the James Advantage Funds had the following federal tax cost resulting in net unrealized appreciation/depreciation as follows:
                         
       
Gross
   
Gross
   
Net
Unrealized
 
   
Federal Tax
   
Unrealized
   
Unrealized
   
Appreciation/
 
   
Cost
   
Appreciation
   
Depreciation
   
Depreciation
 
James Balanced: Golden Rainbow Fund
  $ 497,533,976     $ 57,613,119     $ (7,259,386 )   $ 50,353,733  
James Small Cap Fund
  $ 50,333,557     $ 14,588,024     $ (2,613,845 )   $ 11,974,179  
James Market Neutral Fund
  $ 20,153,775     $ 8,484,243     $ (5,439,257 )   $ 3,044,986  
James Equity Fund
  $ 8,852,159     $ 1,703,242     $ (401,570 )   $ 1,301,672  
James Mid Cap Fund
  $ 3,815,450     $ 919,508     $ (255,155 )   $ 664,353  

 


 
48

 

JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)

 
2. Securities Transactions
 
Purchases and sales (including maturities) of investments in long-term U.S. Government obligations for the six months ended December 31, 2009 was as follows:
             
   
Purchases
   
Sales
 
James Balanced: Golden Rainbow Fund
  $ 33,758,198     $ 51,430,141  

Purchases and sales (including maturities) of investments in other securities for the six months ended December 31, 2009 were as follows:

   
Purchases
   
Sales
 
James Balanced:  Golden Rainbow Fund
  $ 54,432,266     $ 39,981,081  
James Small Cap Fund
    3,759,333       41,431,742  
James Market Neutral Fund
    3,729,998       9,204,058  
James Equity Fund
    687,379       2,014,162  
James Mid Cap Fund
    310,919       1,027,752  

For the six months ended December 31, 2009, the cost of securities purchased to cover short sales and the proceeds from securities sold short were $11,189,446 and $8,273,414 respectively, for the James Market Neutral Fund.
 
3. Management Fee and Other Transactions with Affiliates
 
A trustee and certain officers of the Trust were also officers of James or JPMorgan Chase Bank, N.A. (“JPMorgan”), the administrative services agent, shareholder services and transfer agent and accounting services agent for the Trust during the six months ended December 31, 2009.
 
Investment Management Agreement
The Funds retain James to manage the Funds’ investments. The investment decisions for the Funds are made by a committee of James’ personnel, which is primarily responsible for the day-to-day management of each Fund’s portfolio. James Balanced:  Golden Rainbow Fund is authorized to pay James a fee equal to an annual rate of 0.74% of its average daily net assets.  James Balanced:  Golden Rainbow Fund is responsible for the payment of all of its operating expenses.
 
James is authorized to receive a fee equal to (a) an annual rate of 1.25% of the average daily net assets of the James Small Cap Fund, James Equity Fund and James Mid Cap Fund, and 1.70% of James Market Neutral Fund; minus (b) the fees and expenses of the non-interested person trustees incurred by the applicable Fund.
 
James is responsible for the payment of all operating expenses of the James Small Cap Fund, James Market Neutral Fund, James Equity Fund, and James Mid Cap Fund, except for brokerage fees and commissions, taxes, interest (including dividend expense on securities sold short) and 12b-1 expenses.
 
Administrative Services Agreement
Under the terms of an Administrative Services Agreement with the Trust, JPMorgan supplies executive and regulatory services, supervises the preparation of tax returns, and coordinates the preparation of reports to shareholders and reports to and filings with the Securities and Exchange Commission and state securities authorities. For these services, JPMorgan receives a monthly fee paid by James Balanced:  Golden Rainbow Fund, and paid by James for the James Small Cap Fund, James Market Neutral Fund, James Equity Fund and James Mid Cap Fund, based on the Funds’ aggregate average daily net assets, subject to a minimum monthly fee.
 

 
49

 

JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)

 
Transfer Agent and Shareholder Service Agreement
Under the terms of the Transfer, Dividend Disbursing, Shareholder Service and Plan Agency Agreement with the Trust, JPMorgan maintains the records of each shareholder’s account, answers shareholder inquiries concerning their accounts, processes purchases and redemptions of each Funds’ shares, acts as dividend and distribution disbursing agent and performs other shareholder service functions. For these services, JPMorgan receives a monthly fee paid by James Balanced:  Golden Rainbow Fund, and paid by James for the James Small Cap Fund,  James Market Neutral Fund, James Equity Fund and James Mid Cap Fund, subject to a minimum monthly fee. In addition, James Balanced:  Golden Rainbow Fund and James pay JPMorgan out-of-pocket expenses including, but not limited to, postage and supplies.
 
Accounting Services Agreement
Under the terms of the Accounting Services Agreement with the Trust, JPMorgan calculates the daily net asset value per share and maintains the financial books and records of each Fund. For these services, JPMorgan receives a monthly fee from James Balanced:  Golden Rainbow Fund and from James with respect to each of the James Small Cap Fund, James Market Neutral Fund, James Equity Fund and James Mid Cap Fund. In addition, JPMorgan is reimbursed by James Balanced:  Golden Rainbow Fund and James for certain out-of-pocket expenses incurred by JPMorgan in obtaining valuations of the Funds’ portfolio securities.
 
Plan of Distribution
Each Fund (only the Retail Class of the James Balanced: Golden Rainbow Fund) has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (collectively, the “Plans”) under which each Fund may incur expenses related to distribution of its shares and for services provided to shareholders.  Payments under a Plan are made to the Adviser, which uses them to pay distribution and shareholder service expenses on behalf of and as agent of the Fund.  The amount payable by each Fund (the Retail Class of the James Balanced: Golden Rainbow Fund) under its Plan is 0.25% of its average daily net assets for the year.  The Plans are compensation plans, which mean that payments are made to the Adviser regardless of 12b-1 expenses actually incurred.  Therefore, payments under a Plan may exceed distribution and shareholder service expenses incurred pursuant to the Plan, and the Adviser is permitted to retain the excess.  It is also possible that 12b-1 expenses paid by the Adviser for a period will exceed the payments received by the Adviser, in which case the Adviser may pay such excess expenses out of its own resources.  Payments received by the Adviser under the Plans are in addition to the fees paid to the Adviser pursuant to the Management Agreements.  The Plans require that the Adviser act in the Funds’ best interests in expending the payments it receives from the Funds and use payments solely for the purpose of paying Distribution Expenses on behalf of the Funds. The Funds’ Distributor verifies all payment amounts to be made to brokers that have properly executed dealer agreements with the Funds before the Adviser will make such payments.
 
Compliance Services Agreement
Under the terms of the Compliance Services Agreement between the Trust and JPMorgan, JPMorgan provides certain compliance services to the Trust, including developing and assisting in implementing a compliance program for JPMorgan on behalf of the funds and providing administrative support services to the Funds’ Compliance Program and Chief Compliance Officer. The Adviser pays all fees under this agreement for the James Small Cap Fund, James Market Neutral Fund, James Equity Fund, and James Mid Cap Fund.


 
50

 

JAMES ADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)

 
Beneficial Ownership
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund under section 2(a)(9) of the Investment Company Act of 1940.  As of December 31, 2009, Charles Schwab & Co., Inc. owned, for the benefit of its customers, 32.80% of the James Balanced: Golden Rainbow Fund, Retail Class shares.  James, Dr. Frank James, and other affiliates of James owned 91.70%, 32.26%, and 62.56% of the James Balanced:  Golden Rainbow Fund, Institutional Class shares, James Equity Fund, and James Mid Cap Fund, respectively.
 
4. Commitments and Contingencies
 
The Funds indemnify the Trust’s officers and trustees for certain liabilities that might arise from their performance of their duties to the Funds.  Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and that provide general indemnifications.  The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred.  However, based on experience, the Funds expect the risk of loss to be remote.
 
5.  Subsequent Events
 
The Funds evaluated subsequent events from December 31, 2009, the date of these Schedules of Investments, through February 22, 2010, the date this report was issued and available.  There were no subsequent events to report that would have a material impact on the Funds’ Financial Statements.
 
The Board of Trustees has selected ALPS, Inc, Denver Colorado, as the Funds’ Transfer Agent, Fund Accountant and Fund Administrator. This change is expected to occur in the first quarter of 2010.

 
51

 

JAMES ADVANTAGE FUNDS
OTHER ITEMS (Unaudited)

 
Proxy Voting Guidelines
 
James is responsible for exercising the voting rights associated with the securities purchased and held by the Funds.  A description of the policies and procedures that James uses in fulfilling this responsibility and information regarding how those proxies were voted during the most recent twelve month period ended June 30 are available without charge upon request by calling toll free 1-800-995-2637.  These items are also available on the Securities and Exchange Commission’s website at http://www.sec.gov.
 
Quarterly Portfolio Disclosure
 
James files a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q.  The complete listing (i) is available on the Commission’s website; (ii) may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; and (iii) will be made available to shareholders upon request by calling 1-800-995-2637.  Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
 
Shareholder Expense Example
 
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including reinvested dividends or other distributions; and redemption fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses.  This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
 
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009).
 
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses.  You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period.  Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled  "Expenses Paid During the Six Months Ended December 31, 2009" to estimate the expenses you paid on your account during this period, if you held your shares for the entire period.

 

 
52

 

JAMES ADVANTAGE FUNDS
OTHER ITEMS (Unaudited) (Continued)

Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds' actual return.  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.  You may use this information to compare the ongoing costs of investing in the Funds and other funds.  To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
 
Note that expenses shown in the table are meant to highlight and help you compare ongoing cost only.  The calculations assume no shares were bought or sold during the period.  Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
 
   
Net Expense
Ratio
Annualized
December 31,
2009
   
 
Beginning
Account Value
July 1,
2009
   
 
Ending
Account Value
December 31,
2009
   
Expenses Paid During the Six Months
Ended
December 31,
2009*
 
James Balanced:  Golden Rainbow Fund
                       
Retail Class  Actual
   
1.18%
    $ 1,000.00     $ 1,087.20     $ 6.21  
Retail Class  Hypothetical
   
1.18%
    $ 1,000.00     $ 1,019.25     $ 6.01  
                                 
Institutional Class  Actual
   
0.93%
    $ 1,000.00     $ 1,088.60     $ 4.90  
Institutional Class  Hypothetical
   
0.93%
    $ 1,000.00     $ 1,020.51     $ 4.74  
                                 
James Small Cap Fund
                               
Actual
   
1.50%
    $ 1,000.00     $ 1,181.20     $ 8.26  
Hypothetical
   
1.50%
    $ 1,000.00     $ 1,017.63     $ 7.64  
                                 
James Market Neutral Fund
                               
Actual
   
2.06%
    $ 1,000.00     $ 961.00     $ 10.17  
Hypothetical
   
2.06%
    $ 1,000.00     $ 1,014.83     $ 10.45  
                                 
James Equity Fund
                               
Actual
   
1.50%
    $ 1,000.00     $ 1,157.90     $ 8.16  
Hypothetical
   
1.50%
    $ 1,000.00     $ 1,017.65     $ 7.63  
                                 
James Mid Cap Fund
                               
Actual
   
1.50%
    $ 1,000.00     $ 1,251.80     $ 8.51  
Hypothetical
   
1.50%
    $ 1,000.00     $ 1,017.65     $ 7.63  
 
*
Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
 

 
53

 

 
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INVESTMENT ADVISER
James Investment Research, Inc.
P.O. Box 8
Alpha, Ohio 45301
info@jamesfunds.com
CUSTODIAN
U.S. Bank
425 Walnut Street
Cincinnati, Ohio 45202
TRANSFER AGENT
JPMorgan Chase Bank, N.A.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
250 East Fifth Street
Suite 1900
Cincinnati, Ohio 45202
DISTRIBUTOR
Unified Financial Services, Inc.
2960 N. Meridian Street
Indianapolis, Indiana 46208
LEGAL COUNSEL
Thompson Hine LLP
312 Walnut Street
14th Floor
Cincinnati, Ohio 45202
 
www.jamesfunds.com
 
 
For information about the Funds, or to
make inquiries about the Funds, please call
1-800-99JAMES (1-800-995-2637).
 
 
FORM IFS-163-0201

 
Item 2. Code of Ethics.

Not Applicable

Item 3. Audit Committee Financial Expert.

Not Applicable

Item 4. Principal Accountant Fees and Services.

Not Applicable

Item 5. Audit Committee of Listed Companies.

Not applicable.

Item 6. Schedule of Investments.

The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed End Management Investment Companies.

Not Applicable.

Item 8. Portfolio Managers of Closed-End Funds.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Funds.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable

Item 11. Controls and Procedures.
 
 (a)           Based on an evaluation of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) the registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures are effective as of a date within 90 days of the filing date of this report.
 
(b)           There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 


Item 12. Exhibits.

(a)(1)
Not applicable.

(a)(2)
Certifications required by Item 12(a)(2) of Form N-CSR are filed herewith.








SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) The James Advantage Funds

By (Signature and Title)


/s/ Barry R. James                  
Barry R. James
President

Date:  March 2, 2010


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)


/s/ Barry R. James                  
Barry R. James
President

Date:  March 2, 2010

By (Signature and Title)


/s/ Thomas L. Mangan         
Thomas L. Mangan
Treasurer, Chief Financial Officer

Date:  March 2, 2010
 

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CERTIFICATIONS

I, Barry R. James, certify that:

1.           I have reviewed this report on Form N-CSR of the James Advantage Funds;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.           The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: March 2, 2010
/s/ Barry R. James             
 
Barry R. James, President
 
Chief Executive Officer
 
 
 

 
 
Exhibit 99.CERT

CERTIFICATIONS

I, Thomas L. Mangan, certify that:

1.           I have reviewed this report on Form N-CSR of the James Advantage Funds;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.           The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 
Date: March 2, 2010
/s/ Thomas L. Mangan             
 
Thomas L. Mangan, Treasurer
 
Chief Financial Officer
 
 
 

 
 
EX-99.906CERT 10 v176065_ex99-906cert.htm Unassociated Document
EX-99.906CERT

Certifications Under Section 906
of the Sarbanes-Oxley Act of 2002


Barry R. James, Chief Executive Officer, and Thomas L. Mangan, Chief Financial Officer of the James Advantage Funds (the “Registrant”), each certify to the best of his or her knowledge that:

1.           The Registrant’s periodic report on Form N-CSR for the period ended December 31, 2009 (the “Form N-CSR”) fully complies with the requirements of sections 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

2.           The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
 
Chief Executive Officer
Chief Financial Officer
James Advantage Funds
James Advantage Funds
   
   
/s/ Barry R. James
/s/ Thomas L. Mangan
Barry R. James
Thomas L. Mangan
Date: March 2, 2010
Date: March 2, 2010

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the James Advantage Funds and will be retained by the James Advantage Funds and furnished to the Securities and Exchange Commission (the “Commission”) or its staff upon request.

This certification is being furnished to the Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.


 
 

 
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