N-30D/A 1 0001.txt AMERIPRIME FUNDS COLUMBIA PARTNERS Equity Fund Dear Fellow Shareholders: We are pleased to present the investment results for the Columbia Partners Equity Fund. The Fund, in the six-month period since we last reported to you, March 31, 2000 to September 30, 2000, was down 2.91% and for the past twelve months ending September 30, 2000, was up 56.68%. The Fund's investment results are compared to the unmanaged S&P 500 Index and the Russell 2000 Index in the table and chart below. - Returns for Periods Ending September 30, 2000 - Average Annual 3rd QTR. Calendar Since Inception Fund/Index 2000 Year-To-Date 1 Year (April 1, 1999) -------------------- --------- -------------- --------- --------------- Columbia Partners 5.51% 23.50% 56.68% 43.23% Equity Fund S&P 500 -0.97% -1.39% 13.28% 8.93% Russell 2000 1.11% 4.18% 23.39% 21.28%
Columbia Partners Russell Equity Fund S&P 500 Index 200 Index $17,141 $11,369 $13,356 3/31/99 $ 10,000 $ 10,000 $ 10,000 6/30/99 10,980 10,705 11,510 9/30/99 10,940 10,036 10,746 12/31/99 13,880 11,530 12,694 3/31/00 17,656 11,794 13,558 6/30/00 16,246 11,480 13,210 9/30/00 17,141 11,369 13,356
The Columbia Partners Equity Fund's historical results are net of all expenses, and assume reinvestment of dividends and capital gains since April 1, 1999 (commencement of operations), versus the gross market benchmarks (the S&P 500 Index and the Russell 2000 Index), which assume all dividends are reinvested. When trying to achieve benchmark returns, investment management fees, transaction costs and execution costs will be incurred. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. Review & Outlook The equity markets hit a rough spot in the middle quarters of this year, with the S&P 500 retracing 4%, and the tech-heavy NASDAQ Index declining by 20%. Fears of a slowing economy were the culprit, as Alan Greenspan and the Federal Reserve boosted interest rates to control inflation. Investors fled growth oriented technology and consumer cyclical stocks, seeking stability in "safe haven" sectors, including health care and consumer staples. We anticipated that the technology correction, which began at the end of the first quarter, would carry though into the second quarter. We were, however, surprised by the duration and magnitude of the decline. Fortunately, our stock selection in the tech sector was very strong during the period, and we added a great deal of value relative to the S&P 500. Our emphasis on communications related chip companies, and relative underexposure to PC related companies was a positive stance. We also added value in the second worst performing sector in the benchmark, consumer cyclical, by focusing on retailers that have continued to execute and exceed sales expectations. Finally, our overweight in the energy sector proved beneficial, as this was one of the best performing sectors in the Index. At present, we are emphasizing technology stocks, where we find numerous stocks attractive at current valuations, energy stocks, where expected earnings growth is more attractive than it has been in years, and select consumer cyclical stocks. We will continue to look for companies with strong earnings growth whose stocks are selling at reasonable valuations. Very truly yours, Terence W. Collins President Columbia Partners Equity Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stock - 86.2% Shares Value Apparel Stores - 3.5% Chico's FAS, Inc. (a) 25,385 $ 863,090 ---------------- Autos & Auto Parts - 1.4% Gentex Corp. (a) 13,865 346,625 ---------------- Banks - 3.8% Chase Manhattan Corp. 7,217 333,335 Citigroup, Inc. 10,969 593,012 ---------------- 926,347 ---------------- Beverages - 1.6% Coca-Cola Co. 7,185 396,073 ---------------- Building Supplies - 2.1% Home Depot, Inc. 10,000 529,375 ---------------- Communications Equipment - 0.7% Terayon Communication Systems, Inc. (a) 4,895 166,124 ---------------- Computer Services & Software - 12.6% Ariba, Inc. (a) 4,195 600,999 Commerce One, Inc. (a) 6,030 473,355 Inktomi Corp. (a) 3,965 452,010 Microsoft Corp. (a) 7,405 446,614 Priceline.com, Inc. 10,995 130,566 Rational Software Corp. (a) 14,450 1,002,469 ---------------- 3,106,013 ---------------- Computers & Office Equipment - 9.7% Brocade Communications Systems, Inc. (a) 3,265 770,540 Cisco Systems, Inc. (a) 7,450 411,613 Seagate Technology, Inc. (a) 8,855 610,995 Wind River Systems, Inc. (a) 12,500 599,219 ---------------- 2,392,367 ---------------- Department & Discount Stores - 2.8% Target Corp. 13,940 357,213 Wal-Mart Stores, Inc. 6,970 335,431 ---------------- 692,644 ---------------- Diversified Services - Staffing - 2.5% Robert Half International, Inc. (a) 17,705 614,142 ---------------- Drugs & Pharmaceuticals - 4.0% Pfizer, Inc. 10,805 485,550 Shire Pharmaceutical Group Plc. (a) (c) 9,670 499,214 ---------------- 984,764 ---------------- Food - Dairy Products - 1.7% Suiza Foods Corp. (a) 8,275 422,542 ---------------- Grocery Stores - 2.2% Safeway, Inc. (a) 11,500 536,906 ----------------
Columbia Partners Equity Fund Schedule of Investments - September 31, 2000 (Unaudited) Common Stocks - continued Shares Value Health - Diversified - 6.0% American Home Products Corp. 6,535 $ 368,819 Johnson & Johnson 5,010 470,627 Orthodontic Centers of America, Inc. (a) 18,870 628,607 ---------------- 1,468,053 ---------------- Investment Banking & Brokerage - 2.2% Merrill Lynch & Co., Inc. 8,400 554,400 ---------------- Manufacturers - Diversified - 2.3% General Electric Co. 9,930 574,078 ---------------- Oil & Gas - 9.1% BJ Services Co. (a) 8,505 519,868 Nabors Industries, Inc. (a) 12,000 628,800 Schlumberger Limited 4,940 406,624 Trico Marine Services, Inc. (a) 44,030 698,976 ---------------- 2,254,268 ---------------- Retail Specialty Stores - 1.2% Costco Wholesale Corp.(a) 8,710 304,306 ---------------- Semiconductors - 9.9% Broadcom Corp. - Class A (a) 2,815 686,156 Intel Corp. 7,620 316,706 TranSwitch Corp. (a) 12,580 801,975 Vitesse Semiconductor Corp. (a) 7,225 642,573 ---------------- 2,447,410 ---------------- Telecommunications - 6.9% Avanex Corp. (a) 3,325 358,061 Metromedia Fiber Network, Inc., Class A (a) 12,320 299,530 ONI Systems Corp. (a) 4,845 418,184 Sonus Networks, Inc. (a) 3,310 418,301 Worldcom, Inc. (a) 6,532 198,409 ---------------- 1,692,485 ---------------- Total Common Stock (Cost $17,758,996) 21,272,012 ---------------- Principal Value Value Money Market Securities - 13.8% Firstar Treasury Fund, 5.47% (b) (Cost $3,416,296) 3,416,296 $ 3,416,296 ---------------- TOTAL INVESTMENTS (Cost $21,175,292) - 100.0% 24,688,308 ---------------- Other assets less liabilities - 0.0% 897 ---------------- Total Net Assets - 100.0% $ 24,689,205 ================
(a) Non-income producing (b) Variable rate security; the coupon rate shown represents the rate at September 30, 2000. (c) American Depository Receipt Columbia Partners Equity Fund September 30, 2000 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities (cost $21,175,292) $ 24,688,308 Dividends receivable 6,713 Interest receivable 7,880 Receivable for fund shares sold 60,943 ------------------ Total assets 24,763,844 Liabilities Accrued investment advisory fee $ 11,754 Payable for fund shares purchased 1,357 Payable to custodian 61,528 ----------------- Total liabilities 74,639 ------------------ Net Assets $ 24,689,205 ================== Net Assets consist of: Paid in capital 18,188,687 Accumulated undistributed net realized gain on investments 3,029,430 Accumulated net investment loss (41,928) Net unrealized appreciation on investments 3,513,016 ------------------ Net Assets, for 1,482,211 shares $ 24,689,205 ================== Net Asset Value Offering price and redemption price per share ($24,689,205 / 1,482,211 ) $ 16.66 ==================
Columbia Partners Equity Fund September 30, 2000 Statement of Operations (Unaudited) Investment Income Dividend income $ 57,534 Interest income 40,913 --------------- Total Income 98,447 Expenses Investment advisory fee $ 140,375 Trustees' fees 1,043 Total expenses before reimbursement 141,418 ------------------ Reimbursed expenses (1,043) ------------------ Total operating expenses 140,375 --------------- Net Investment Loss (41,928) --------------- Realized & Unrealized Gain (Loss) Net realized loss on investment securities (331,792) Change in net unrealized appreciation (depreciation) on investment securities (265,247) ------------------ Net gain on investment securities (597,039) ----------------- Derease in net assets resulting from operations $ (638,967) =================
Columbia Partners Equity Fund Statement of Changes in Net Assets For the six months ended For the year September 30, 2000 ended Increase in Net Assets (Unaudited) March 31, 2000 ---------------------- ------------------- Operations Net investment income (loss) $ (41,928) $ (34,929) Net realized gain (loss) on investment securities (331,792) 3,818,020 Change in net unrealized appreciation (depreciation) (265,247) 3,778,263 ---------------------- ------------------- Net increase (decrease) in net assets resulting from (638,967) 7,561,354 operations ---------------------- ------------------- Distributions to shareholders From net investment income 0 0 From net realized gain (loss) 0 (421,869) ---------------------- ------------------- Total distributions 0 (421,869) ---------------------- ------------------- Share Transactions Net proceeds from sale of shares 2,056,647 17,229,187 Shares issued in reinvestment of distributions 0 421,869 Shares redeemed (768,832) (750,184) ---------------------- ------------------- Net increase in net assets resulting from share transactions 1,287,815 16,900,872 ---------------------- ------------------- Total increase in net assets 648,848 24,040,357 ---------------------- ------------------- Net Assets Beginning of period 24,040,357 0 ---------------------- ------------------- End of period [including accumulated undistributed net investment loss of $41,928 & $0, respectively] $ 24,689,205 $ 24,040,357 ====================== ===================
Columbia Partners Equity Fund Financial Highlights Six months ended Year September 30, ended 2000 March 31, (Unaudited) 2000 ---------------- ------------------ Selected Per Share Data Net asset value, beginning of period $ 17.16 $ 10.00 ---------------- ------------------ Income from investment operations Net investment loss (0.03) (0.04) Net realized and unrealized gain (loss) (0.47) 7.59 ---------------- ------------------ Total from investment operations (0.50) 7.55 ---------------- ------------------ Less Distributions From net investment income 0.00 0.00 From net realized gain (loss) 0.00 (0.39) ---------------- ------------------ Total distributions 0.00 (0.39) ---------------- ------------------ Net asset value, end of period $ 16.66 $ 17.16 ================ ================== Total Return (2.91)(b) 76.56% Ratios and Supplemental Data Net assets, end of period (000) $24,689 $24,040 Ratio of expenses to average net assets 1.20% (a) 1.20% Ratio of expenses to average net assets before reimbursement 1.21% (a) 1.22% Ratio of net investment income (loss) to average net assets (0.36)(a) (0.31)% Ratio of net investment income (loss) to average net assets before reimbursement (0.37)(a) (0.34)% Portfolio turnover rate 89.30% (a) 215.08%
(a) Annualized (b) For a period of less than a full year, total return is not annualized. Columbia Partners Equity Fund Notes to Financial Statements September 30, 2000 (Unaudited) NOTE 1. ORGANIZATION Columbia Partners Equity Fund (the "Fund") was organized as a series of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on February 2, 1999 and commenced operations on April 1, 1999. The Fund is registered under the Investment Company Act of 1940, as amended, as a diversified open-end series of the Trust. The Fund's investment objective is to provide long-term capital growth. The Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. Securities Valuations- Securities, which are traded on any exchange or on the NASDAQ over-the-counter market, 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 the Advisor's opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the Advisor determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust (the "Board"). Fixed income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. When prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, subject to review of the Board. 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 represent fair value. Federal Income Taxes- The Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. By so qualifying, the Fund will not be subject to federal income taxes to the extent that it distributes substantially all of its net investment income and any realized capital gains. Dividends and Distributions- The Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on at least an annual basis. The Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Other- The Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Fund retains Columbia Partners, L.L.C. (the "Advisor") to manage the Fund's investments. The Advisor was organized in 1995 as an independent limited liability company owned 50% by its employees and 50% by Galway Capital Management, L.L.C., a venture capital firm. A team of the Advisor makes the investment decisions for the Fund, which is primarily responsible for the day-to-day management of the Fund's portfolio. Under the terms of the management agreement, (the "Agreement"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of the Fund except brokerage commissions, taxes, interest, fees and expenses of non-interested person trustees, and extraordinary expenses. As compensation for its management services and agreement to pay the Fund's expenses, the Fund is obligated to pay the Advisor a fee of 1.20% of the average daily net assets of the Fund. It should be noted that most investment companies pay their own operating expenses directly, while the Fund's expenses, except those specified above, are paid by the Advisor. For the six months ended September 30, 2000 the Advisor earned a fee of $140,375 from the Fund. The Advisor has contractedly agreed to permanently reimburse fees and other expenses of the trustees to the extent necessary to maintain total operating expenses at the rate of 1.20%. For the six months ended September 30, 2000, the Advisor reimbursed expenses of $1,043. The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage the Fund's business affairs and provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. The Administrator receives a monthly fee from the Advisor equal to an annual rate of 0.10% of the Fund's assets under $50 million, 0.075% of the Fund's assets from $50 million to $100 million, and 0.050% of the Fund's assets over $100 million (subject to a minimum fee of $2,500 per month). For the six months ended September 30, 2000, the Administrator received fees of $15,000 from the Advisor for administrative services provided to the Fund. The Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the Fund's transfer agent and fund accountant. For its services as transfer agent, Unified receives a monthly fee from the Advisor of $1.20 per shareholder (subject to a minimum monthly fee of $750). For the six months ended September 30, 2000, Unified received fees of $7,935 from the Advisor for transfer agent services. For its services as fund accountant, Unified receives an annual fee from the Advisor equal to 0.0275% of the Fund's assets up to $100 million, 0.0250% of the Fund's assets from $100 million to $300 million and 0.0200% of the Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 to $100 million). For the six months ended September 30, 2000, Unified received fees of $12,400 from the Advisor for fund accounting services. The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the principal distributor of the Fund's shares. There were no payments made to the Distributor for the six months ended September 30, 2000. Certain members of management of the Administrator and the Distributor are also members of management of the AmeriPrime Trust. Columbia Partners Equity Fund Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 4. SHARE TRANSACTIONS As of September 30, 2000 there was an unlimited number of authorized shares for the Fund. Paid in capital at September 30, 2000 was $18,188,687. Transactions in shares were as follows: For the six months ended For the fiscal year ended September 30, 2000 March 31, 2000 (Unaudited) Shares Shares Dollars Dollars Shares sold 128,088 128,088 $1,426,414 $17,229,187 Shares issued in reinvestment 0 0 30,997 421,869 Shares redeemed (46,433) (46,433) (56,855) (750,184) -------- --------- -------------- --------------- 81,655 81,655 $1,400,556 $16,900,872 ======== ========= ============== ===============
NOTE 5. INVESTMENTS For the six months ended September 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $11,798,992 and $9,328,286, respectively. As of September 30, 2000, the gross unrealized appreciation for all securities totaled $4,836,434 and the gross unrealized depreciation for all securities totaled $1,323,418 for a net unrealized appreciation of $3,513,016. The aggregate cost of securities for federal income tax purposes at September 30, 2000 was $21,175,292. NOTE 6. ESTIMATES Preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Dear Fellow Shareholders, The Martin Capital Opportunity Funds suffered from recent downturns in the technology sector. For the six months since March 31, 2000, the U.S. Opportunity Fund returned -12.6% vs. -3.61% for the S&P 500. The Austin Opportunity Fund returned -23.5% for the same period. The Texas Opportunity Fund returned +3.1% for the period from inception August 1, 2000 through September 30, 2000 vs. +0.6% for the S&P 500 during that same time frame. As we stated in our annual report, we remain committed to buying quality growth companies and holding them for the long-term. As witnessed these past few months, this "buy-and-hold" strategy hurt our short-term performance. However, we keep a five to ten year outlook on the stocks within these funds and we believe that long-term investors will be well rewarded. Because our investment discipline makes it unlikely for us to sell highly appreciated stocks, we will make additional investments in times of severe market weakness. The recent lows in the last few weeks have presented us with such special opportunities. There is a Wall Street saying that no one rings a bell at the bottom, meaning that it is difficult to know when the next rally will begin. We accept that it is impossible to know how low the market will go before it turns around; however, with current attractive valuation levels and the high probability of long-term strong economic growth with low inflation, we are very confident that somewhat higher exposure to the stock market today will be rewarded with better investment returns tomorrow. Economic Outlook The rate of growth in our economy, which peaked last fall and eased slightly in the first two quarters of this year, slowed further in the third quarter. The combination of higher interest rates and higher oil product prices has left consumers and businesses with less cash to spend, so sales of all kinds have been pinched. Manufacturing has slowed, as less production is needed to meet reduced demand, so fewer new jobs are created. The labor market shows signs of loosening up, so there is a slightly slower growth in new payrolls and therefore slightly slower growth in consumer spending. Added to all this is the fact that we're only four and a half months out from the last Fed rate hike, so that hasn't yet had time to produce a slowing effect on the economy. Thus, the outlook is one of continued slowing over the next few months. Nevertheless, we have an extraordinarily robust economy in this country. Most people who want to work have jobs and are earning good pay; few remain unemployed. Because of this employment situation, the strong flow of paychecks into consumer purchases will continue. As two-thirds of our economy is based on consumer spending, there is little to no chance of a recession. Although the labor market may be loosening a bit, the change is nowhere near being substantial enough to become a drain on the economy. We are fortunate because other countries around the world with less vigorous economies may have considerably more trouble coping with higher oil prices in the longer term. As the inflation rate eventually ebs and the economy slows, we predict that the Fed will need to lower rates early in 2001, which will bring a return to more rapid economic growth with low inflation. We appreciate your confidence in us. Sincerely, Paul B. Martin, Jr. U.S. Opportunity Fund The U.S. Opportunity Fund under-performed the S&P 500 as technology stocks sold off due to earnings concerns. As we stated in our annual report, it is unreasonable to expect the continuous spectacular returns we generated during our first full year of operations. Conversely, we recognize that sometimes the markets can become oversold. The current oversold conditions have presented us with a great opportunity for a short-term rebound in our performance numbers. Our ten largest holdings are listed below. Symbol Description Percent of Net Assets 9/30/00 ------ ----------- ----------------------------- EMC EMC Corp. 3.2% ADVS Advent Software, Inc. 3.0% PALM Palm Inc. Com. 2.8% SUNW Sun Microsystems, Inc. 2.7% ORCL Oracle Corp. 2.7% ALTR Altera Corp. 2.4% GLW Corning, Inc. 2.1% TIF Bear Stearns Cos., Inc. 1.9% BSC Tiffany & Co. 1.9% VIGN Vignette Corp. 1.9%
Returns for the Periods Ending September 30, 2000 Average Annual Since Inception Fund/Index 3rd Quarter 2000 6 Months 1 Year (April 1, 1999) ---------- ---------------- -------- ------ --------------- Martin Capital U.S. -8.89% -12.60% 35.41% 25.96% Opportunity Fund S&P 500 Index -0.98% -3.61% 13.26% 8.90%
Comparison of $10,000 Investment in the U.S. Opportunity Fund and S&P 500 Index U.S. Opportunity Fund S&P 500 Index $14,150 $11,368 --------------------- ------------- 4/1/99 $10,000 $10,000 6/30/99 10,560 10,705 9/30/99 10,450 10,037 12/31/99 14,630 11,529 3/31/00 16,190 11,794 6/30/00 15,530 11,480 9/30/00 14,150 11,368
This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on April 1, 1999 (commencement of operations) and held through September 30, 2000. The S&P Index is a widely recognized unmanaged index of common stock prices. Performance figures reflect the change in value of the stocks in the index, reinvestment of dividends and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS. Austin Opportunity Fund The Austin Opportunity Fund also under-performed the major indexes due to the high concentration of local companies in technology. Although weak in the short term, these same technology companies are poised for a nice turnaround as the global economy becomes ever more reliant on the goods and services these companies provide. The fund's largest positions are listed below. Symbol Description Percent of Net Assets 9/30/00 ------ ----------- ----------------------------- CRUS Cirrus Logic, Inc. 8.8% VIGN Vignette Corp. 5.3% AMD Advanced Micro Devices, Inc. 5.1% ERTS Electronic Arts, Inc. 4.3% WFMI Whole Foods Market, Inc. 4.2% SLR Solectron Corp. 3.7% HHS Harte-Hanks Communications, Inc. 3.7% AMAT Applied Materials, Inc. 3.5% CRUS Cirrus Logic, Inc. 8.8% VIGN Vignette Corp. 5.3%
Returns for the Periods Ending September 30, 2000 Average Annual Since Inception Fund/Index 3rd Quarter 2000 6 Months 1 Year (September 1, 1999) ---------- ---------------- -------- ------ ------------------- Martin Capital Austin -10.80% -23.50% 9.15% 6.82% S&P 500 Index -0.98% -3.61% 13.26% 9.33%
Comparison of a $10,000 Investment in the Austin Opportunity Fund and S&P 500 Index Austin Opportunity Fund S&P 500 Index $10,740 $11,016 --------------------- ------------- 9/1/99 $10,000 $10,000 9/30/99 9,840 9,726 10/31/99 10,490 10,341 11/30/99 12,000 10,552 12/31/99 13,210 11,173 1/31/00 11,350 10,611 2/29/00 14,520 10,412 3/31/00 14,040 11,429 4/30/00 13,110 11,085 5/31/00 11,050 10,858 6/30/00 12,040 11,125 7/31/00 11,180 10,950 8/31/00 12,120 11,629 9/30/00 10,740 11,016
This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on September 1, 1999 (commencement of operations) and held through September 30, 2000. The S&P Index is a widely recognized unmanaged index of common stock prices. Performance figures reflect the change in value of the stocks in the index, reinvestment of dividends and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS. Texas Opportunity Fund The brand-new Texas Opportunity Fund opened on August 1, 2000. It outperformed the S&P 500 during this short time frame. We have a slight over-weighting in technology issues in this fund due to our long-term bullish outlook for this sector. The fund also benefited from a significant exposure to energy stocks, a key component of the Texas economy. Our top holdings are listed below. Symbol Description Percent of Net Assets 9/30/00 ------ ----------- ----------------------------- ITWO i2 Technologies, Inc. 4.4% DYN Dynegy, Inc. - Cl A 4.3% REI Reliant Energy, Inc. 3.7% PRFT Perficient, Inc. 3.5% DELL Dell Computer Corp. 3.4% CRDS Crossroads Systems, Inc. 3.3% CPQ Compaq Computer Corp. 3.2% RIG Transocean Sedco Forex, Inc 3.2% TXI Texas Industries, Inc. 3.1% TXU TXU Corp. 3.1%
Returns for the Periods Ending September 30, 2000 Average Annual Since Inception Fund/Index (September 1, 1999) ----------- ------------------ Martin Capital Texas Opportunity Fund 3.10% S&P 500 Index 0.60%
Comparison of a $10,000 Investment in the Texas Opportunity Fund and S&P 500 Index Texas Opportunity Fund S&P 500 Index $10,310 $10,060 --------------------- ------------- 8/1/00 $10,000 $10,000 8/31/00 11,010 10,621 9/30/00 10,310 10,060
This chart shows the value of a hypothetical initial investment of $10,000 in the Fund and the S&P 500 Index on August 1, 2000 (commencement of operations) and held through September 30, 2000. The S&P Index is a widely recognized unmanaged index of common stock prices. Performance figures reflect the change in value of the stocks in the index, reinvestment of dividends and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. THE FUND'S RETURN REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS. Martin Capital U.S. Opportunity Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stocks - 97.0% Shares Value Apparel Stores - 0.3% Gap, Inc. 800 $ 16,100 --------------- Banks -1.8% Citigroup, Inc. 1,866 100,881 --------------- Building Supplies -1.2% Home Depot, Inc. 1,300 68,819 --------------- Communications Equipment & Services - 7.0% 3Com Corp. (a) 5,000 95,937 Exodus Communications, Inc. (a) 1,600 79,000 Lucent Technologies, Inc. 1,200 36,750 Motorola, Inc. 2,300 65,550 QUALCOMM, Inc. (a) 1,400 99,750 VTEL Corp. (a) 5,000 12,187 --------------- 389,174 --------------- Computer Services & Software - 19.8% Advent Software, Inc. (a) 2,420 169,097 BMC Software, Inc. (a) 2,400 45,900 Cadence Design Systems, Inc. (a) 1,900 48,806 Computer Associates International, Inc. 2,400 60,750 EMC Corp. (a) 1,800 179,100 Excite@home (a) 1,700 24,012 Microsoft Corp. (a) 1,200 72,375 Netsolve, Inc. (a) 3,000 21,375 Networks Associates, Inc. (a) 2,800 63,350 New Era of Networks (a) 3,000 72,984 Oracle Corp. (a) 1,900 149,625 Palm, Inc. (a) 2,900 153,526 Prodigy Communications Corp. (a) 1,500 7,687 Perficient, Inc. (a) 2,000 36,000 --------------- 1,104,587 --------------- Computers & Office Equipment - 11.9% Altera Corp. (a) 2,800 133,700 Apple Computer, Inc. 2,000 51,500 Cisco Systems, Inc. (a) 1,800 99,450 Dell Computer Corp. (a) 2,200 67,788 Hewlett-Packard Co. 800 77,500 Micron Technology, Inc. (a) 1,700 78,200 Sun Microsystems, Inc. (a) 1,300 151,775 --------------- 659,913 --------------- Construction - 0.6% Centex Corp. 1,000 32,125 --------------- Drugs & Pharmaceuticals - 4.3% Lilly (Eli) & Co. 1,000 81,125 Merck & Co., Inc. 1,000 74,438 Pfizer, Inc. 1,800 80,888 --------------- 236,451 ---------------
Martin Capital U.S. Opportunity Fund Schedule of Investments - September 30, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Electrical Equipment - 3.9% American Power Conversion Corp. (a) 2,700 $ 51,806 Applied Materials, Inc. (a) 1,300 77,106 General Electric Co. 1,500 86,719 --------------- 215,631 --------------- Electronic Instruments - 5.3% Advanced Micro Devices, Inc. (a) 4,200 99,225 Agilent Technologies, Inc. (a) 1,500 73,406 LSI Logic Corp. (a) 1,900 55,575 Texas Instruments, Inc. 1,400 66,500 --------------- 294,706 --------------- Entertainment - 2.5% Electronic Arts, Inc. (a) 2,000 98,750 Time Warner, Inc. 500 39,125 --------------- 137,875 --------------- Finance - Diversified - 1.6% American Express Co. 1,500 91,125 --------------- Grocery Stores - 1.6% Whole Foods Market, Inc. (a) 1,700 91,269 --------------- Industrial Machinery & Equipment - 1.4% Lam Research Corp. (a) 3,700 77,469 --------------- Insurance -1.5% Berkshire Hathaway Inc. - Cl B (a) 40 82,800 --------------- Integrated Circuits - 1.2% Dallas Semiconductor Corp. 2,000 65,750 --------------- Internet Services - 3.9% America Online, Inc. (a) 700 37,625 Vignette Corp. (a) 3,600 107,550 Yahoo! Inc. (a) 800 72,800 --------------- 217,975 --------------- Investment Banking & Brokerage Services - 7.3% Bear Stearns Cos., Inc. 1,700 110,500 E-Trade Group, Inc. (a) 3,000 49,312 Schwab (Charles) Corp. 2,600 92,300 Southwest Securities Group, Inc. 2,750 80,438 TD Waterhouse Group (a) 4,000 74,500 --------------- 407,050 --------------- Lodgings - 1.8% Four Seasons Hotels (a) 1,400 102,463 --------------- Long Distance Carriers - 0.5% Sprint Corp. 1,000 29,312 --------------- Medical Appliances & Equipment - 3.2% Medtronic, Inc. 1,900 98,444 Colorado Medtech, Inc. (a) 3,000 25,500 Visx, Inc. (a) 2,000 53,875 --------------- 177,819
Martin Capital U.S. Opportunity Fund Schedule of Investments - September 30, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Oil & Gas Pipelines & Storage - 1.6% Enron Corp. 1,000 $ 87,625 --------------- Restaurants - 1.9% Starbucks Corp. (a) 2,600 104,162 --------------- Retail & Wholesale - Specialty - 2.2% pcOrder.com, Inc. - Cl A (a) 4,000 14,250 Tiffany & Co. 2,800 107,975 --------------- 122,225 --------------- Semiconductors - 1.2% Intel Corp. 1,600 66,500 --------------- Semiconductor Equipment & Materials -1.5% Dupont Photomask, Inc. (a) 1,400 82,250 --------------- Switching & Transmission Equipment - 3.3% Corning, Inc. 400 118,900 JDS Uniphase Corp. (a) 700 66,281 --------------- 185,181 --------------- Telephone Services -2.1% AT&T Corp. 1,000 29,125 Qwest Communications International, Inc. (a) 1,800 86,625 --------------- 115,750 --------------- Wireless Communication Services - 0.6% Sprint PCS Group (a) 1,000 35,063 --------------- TOTAL COMMON STOCKS (Cost $ 4,996,270) 5,398,050 --------------- Principal U.S. Government Obligations - 3.6% Value U.S. Treasury Bond, 6.00%, 02/15/26 (Cost $ 194,416) 198,188 --------------- TOTAL INVESTMENTS - 100.6% (Cost $ 5,190,685) 5,596,238 Other assets less liabilities - 0.6% (31,041) --------------- TOTAL NET ASSETS -100% $ 5,565,197 ===============
(a) Non-income producing Written Put Options Common Stocks Index / Expiration Date @ Exercise Price to Put Value ------------------------------------------------------ ------------- --------------- Dell Computer Corp. / October 2000 @ 35 2500 $ 10,625 NASDAQ 100 Trust Unit / December 2000 @ 70 7000 8,750 NASDAQ 100 Trust Unit / November 2000 @ 80 7000 14,875 ------------- --------------- Totals (Premiums received $25,799) $ 34,250 ===============
Martin Capital U.S. Opportunity Fund September 30, 2000 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities (cost $5,190,685) $ 5,596,238 Dividends receivable 1,402 Interest receivable 1,470 Receivable for securities sold 669,625 Other receivables 84 ------------------ Total assets 6,268,819 Liabilities Put Options Written (Premium received $25,799) $ 34,250 Accrued investment advisory fee payable 5,906 Accrued other payables 100 Payable for fund shares redeemed 465 Payable for securities purchased 56,012 Payable to custodian 606,889 ----------------- Total liabilities 703,622 ------------------ Net Assets $ 5,565,197 ================== Net Assets consist of: Paid in capital 5,142,235 Accumulated net investment loss (17,915) Accumulated undistributed net realized gain on investments 43,775 Net unrealized appreciation on investments 397,102 ------------------ Net Assets, for 393,372 shares $ 5,565,197 ================== Net Asset Value Offering price and redemption price per share ($5,565,197/393,372) $ 14.15 ==================
Martin Capital U.S. Opportunity Fund Statement of Operations for the six months ended September 30, 2000 (Unaudited) Investment Income Dividend income $ 4,975 Interest income 8,635 --------------- Total Income 13,610 Expensesory fee $ 31,525 Trustees' fees 655 ------------------ Total expenses before reimbursement 32,180 Reimbursed expenses (655) ------------------ Total operating expenses 31,525 --------------- Net Investment Loss (17,915) --------------- Realized & Unrealized Gain (Loss) Net realized gain on: Investment securities 24,557 Option securities 19,218 Change in net unrealized depreciation on investment securities & option securities (650,236) ------------------ Net realized & unrealized loss on investment securities & option securities (606,461) --------------- Net increase in net assets resulting from operations $ (624,376) ===============
Martin Capital U.S. Opportunity Fund Statement of Changes in Net Assets (Unaudited) Six months ended September 30, 2000 Year ended (Unaudited) March 31, 2000 ----------------- ----------------- Increase (Decrease) in Net Assets From Operations Net investment loss $ (17,915) $ (6,151) Net realized gain on investments 0 5,598 Change in net unrealized appreciation/(depreciation) (650,236) 1,047,338 ----------------- ----------------- Net increase/(decrease) in net assets resulting from operations (668,151) 1,046,785 ----------------- ----------------- Share Transactions Net proceeds from sale of shares 2,596,345 2,694,998 Shares redeemed (120,007) 28,548 ----------------- ----------------- Net increase in net assets resulting from share transactions 2,476,338 2,666,450 ----------------- ----------------- ----------------- ----------------- Total Increase in Net Assets 1,808,187 3,713,235 ----------------- ----------------- Net Assets Beginning of period 3,713,235 0 ----------------- ----------------- End of period [including accumulated undistributed net investment loss of $17,915 and $0 respectively] $ 5,521,422 $ 3,713,235 ================= =================
Martin Capital U.S. Opportunity Fund Financial Highlights (Unaudited) Six months ended September 30, 2000 Year ended (Unaudited) March 31, 2000 ------------------- --------------------- Selected Per Share Data Net asset value, beginning of period $ 16.19 $ 10.00 -------------- --------------- Income from investment operations Net investment income (loss) (0.05) (0.04) Net realized and unrealized gain (loss) (1.99) 6.23 -------------- --------------- Total from investment operations (2.04) 6.19 -------------- --------------- Net asset value, end of period $ 14.15 $ 16.19 ============== =============== Total Return (12.60)(b) 61.90% (b) Ratios and Supplemental Data Net assets, end of period (000) $5,565 $3,713 Ratio of expenses to average net assets 1.25% (a) 1.25% (a) Ratio of expenses to average net assets before reimbursement 1.29% (a) 1.37% (a) Ratio of net investment income (loss) to average net assets (0.71)(a) (0.35)(a) Ratio of net investment income (loss) to average net assets before reimbursement (0.75)(a) (0.47)(a) Portfolio turnover rate 28.75% (a) 0.35% (a)
(a) Annualized (b) For periods of less than a full year, the total return is not annualized. Martin Capital Texas Opportunity Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stocks - 98.4% Shares Value Airlines - 6.7% AMR Corp. (a) 200 $ 6,550 Continental Airlines, Inc. - Cl B (a) 100 4,544 Southwest Airlines Co. 250 6,062 --------------- 17,156 --------------- Biotechnology & Drugs - 5.0% Lexicon Genetics, Inc. (a) 220 6,957 Texas Biotechnology Corp. (a) 350 5,691 --------------- 12,648 --------------- Communications Equipment - 1.9% Efficient Networks, Inc. (a) 130 4,851 --------------- Computer Services & Software - 12.9% BMC Software, Inc. (a) 300 5,738 i2 Technologies, Inc. (a) 60 11,224 Inet Technologies, Inc. (a) 110 3,217 NetSolve, Inc. (a) 500 3,562 Perficient, Inc. (a) 500 9,000 --------------- 32,741 --------------- Computers & Office Equipment - 12.2% Compaq Computer Corp. 300 8,256 Crossroads Systems, Inc. (a) 1,000 8,500 Dell Computer Corp. (a) 280 8,627 National Instruments Corp. (a) 130 5,736 --------------- 31,119 --------------- Concrete & Cement Producers - 3.1% Texas Industries, Inc. 250 7,969 --------------- Electronic Instruments - 1.9% Texas Instruments, Inc. (a) 100 4,750 --------------- Food Service Distributor - 2.4% Sysco Corp. (a) 130 6,021 --------------- Grocery Stores - 2.3% Whole Foods Market, Inc. (a) 110 5,906 --------------- Insurance - 2.5% American General Corp. 80 6,240 --------------- Intergrated Circuits - 1.8% Dallas Semiconductor Corporation 140 4,603 --------------- Internet Information Providers - 2.7% Vignette Corp. (a) 230 6,871 --------------- Investment Banking & Brokerage - 2.3% Southwest Securities Group, Inc. 200 5,850 --------------- Medical Equipment & Supplies - 2.2% Luminex Corp. (a) 150 5,700 -------------- Oil & Gas Operations - 5.2% Apache Corp. (a) 100 $ 5,913 Coastal Corp. 100 7,412 --------------- 13,325 --------------- Oil and Gas Services - 12.7% Dynegy, Inc. - Cl A 190 10,830 Enron Corp. 70 6,134 Transocean Sedco Forex, Inc. 140 8,207 Valero Energy Corp. 200 7,038 --------------- 32,209 --------------- Radio Broadcasting & Programming - 1.7% Clear Channel Communications (a) 75 4,249 --------------- Semiconductors - 1.6% Silicon Laboratories, Inc. (a) 100 4,100 --------------- Semiconductor Equipment & Materials - 2.3% DuPont Photomasks, Inc. (a) 100 5,875 --------------- Telecommunications - Miscellaneous - 1.9% Crown Castle International Corp. (a) 160 4,970 --------------- Telecommunications Services - 3.8% SBC Communications, Inc. 120 5,985 Allegiance Telecom, Inc. (a) 100 3,725 --------------- 9,710 --------------- Travel Services - 2.5% Sabre Holdings Corporation - Cl A (a) 220 6,366 --------------- Utilities - 6.8% Reliant Energy, Inc. 200 9,300 TXU Corp. 200 7,925 --------------- 17,225 --------------- TOTAL COMMON STOCKS (Cost $ 247,104) 250,454 --------------- TOTAL INVESTMENTS - 98.4% (Cost $ 247,104) 250,454 --------------- Other assets - 1.6% 4,106 --------------- TOTAL NET ASSETS - 100% $ 254,560 =============== (a) Non-income producing
Put Options Written September 30, 2000 Shares Subject Common Stocks / Expiration Date @ Exercise Price to Put Value Dell Computer Corp. / October 2000 @ 35 5,000 $ 2,125 NASDAQ 100 Trust Unit / December 2000 @ 70 3,000 375 NASDAQ 100 Trust Unit / November 2000 @ 80 3,000 638 --------------- Total (premiums received $1,869 ) $ 3,138 ===============
Martin Capital Texas Opportunity Fund September 30, 2000 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities (cost $247,104) $ 250,454 Dividends receivable 153 Interest receivable 33 Receivable for investments sold 29,378 ------------------ Total assets 280,018 Liabilities Put options written (premiums received $1,869) $ 3,138 Accrued investment advisory fee payable 252 Payable to custodian bank 22,068 ----------------- Total liabilities 25,458 ------------------ Net Assets $ 254,560 ================== Net Assets consist of: Paid in capital $ 251,593 Accumulated net investment loss (118) Accumulated undistributed net realized gain on investments 1,004 Net unrealized appreciation on investments 2,081 ------------------ Net Assets, for 24,686 shares $ 254,560 ================== Net Asset Value Offering price and redemption price per share ($ 254,560 / 24,686) $ 10.31 ==================
Martin Capital Texas Opportunity Fund Statement of Operations for the period August 1, 2000 (Commencement of Operations) through September 30, 2000 (Unaudited) Investment Income Dividend income $ 287 Interest income 65 --------------- Total Income 352 Expenses Investment advisory fee $ 470 Trustees' fees 362 ------------------ Total expenses before reimbursement 832 Reimbursed expenses (362) ------------------ Total operating expenses 470 --------------- Net Investment Loss (118) --------------- Realized & Unrealized Gain (Loss) Net realized gains 1,004 Change in net unrealized appreciation on investment securities 2,081 ------------------ Net realized & unrealized gain on investment securities 3,085 --------------- Net increase in net assets resulting from operations $ 2,967 ===============
Martin Capital Texas Opportunity Fund Statement of Changes in Net Assets for the period August 1, 2000 (Commencement of Operations) through September 30, 2000 (Unaudited) Increase (Decrease) in Net Assets From Operations Net investment loss $ (118) Net realized gain on investments 1,004 Change in net unrealized appreciation 2,081 ----------------- Net increase in net assets resulting from operations 2,967 ----------------- Share Transactions Net proceeds from sale of shares 251,593 Shares redeemed 0 ----------------- Net increase in net assets resulting from share transactions 251,593 ----------------- Total Increase in Net Assets 254,560 -----------------
Martin Capital Texas Opportunity Fund Financial Highlights for the period August 1, 2000 (Commencement of Operations) through September 30, 2000 (Unaudited) Selected Per Share Data Net asset value, beginning of period $ 10.00 -------------- Income from investment operations Net investment income (loss) (0.01) Net realized and unrealized gain 0.32 -------------- Total from investment operations 0.31 -------------- Net asset value, end of period $ 10.31 ============== Total Return 3.10% (b) Ratios and Supplemental Data Net assets, end of period (000) $255 Ratio of expenses to average net assets 1.25% (a) Ratio of expenses to average net assets before reimbursement 2.21% (a) Ratio of net investment income (loss) to average net assets (0.31)(a) Ratio of net investment income (loss) to average net assets before reimbursement (1.27)(a) Portfolio turnover rate 104.83% (a) (a) Annualized (b) For a period of less than a full year, the total return is not annualized.
Martin Capital Austin Opportunity Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stocks - 101.0% Shares Value Biotechnology & Drugs - 2.0% Pharmaceutical Product Development, Inc. (a) 700 $ 18,594 ---------- Business Services - 0.2% American Physicians Service Group, Inc. (a) 500 1,812 ---------- Cable & Other Pay Television Services - 0.3% Classic Communications, Inc. - Cl A (a) 600 3,038 ---------- Communications Equipment & Services - 2.8% Motorola, Inc. 750 21,375 Tellabs, Inc. (a) 30 1,432 VTEL Corp. (a) 1,100 2,681 ----------- 25,488 ----------- Computer Services & Software - 16.0% BMC Software, Inc. (a) 300 5,737 Computer Sciences Corp. (a) 370 27,473 Concero, Inc. (a) 1,090 4,905 Electronic Arts, Inc. (a) 780 38,513 Electronic Data Systems Corp. 200 8,300 eLoyalty Corp. (a) 1,000 12,750 Netpliance, Inc. (a) 1,000 1,500 NetSolve, Inc. (a) 1,100 7,837 Perficient, Inc. (a) 1,600 28,800 Pervasive Software, Inc. (a) 1,600 3,300 Prodigy Communications Corp. 1,000 5,125 ------------ 144,240 ------------ Computers & Office Equipment - 11.9% Apple Computer, Inc. (a) 1,000 25,750 Crossroads Systems, Inc. (a) 700 5,950 Dell Computer Corp. (a) 550 16,947 IKON Office Solutions, Inc. 200 788 International Business Machines Corp. 230 26,393 National Instruments Corp. (a) 710 31,329 ------------ 107,157 ------------ Electrical Equipment - 4.2% Active Power, Inc. (a) 100 6,200 Applied Materials, Inc. (a) 530 31,436 ------------ 37,636 ----------- Electronic Instruments - 10.2% Advanced Micro Devices, Inc. (a) 1,960 46,305 Electrosource, Inc. (a) 1,000 4,375 Solectron Corp. (a) 730 33,671 XeTel Corp. (a) 1,000 8,000 ------------ 92,351 ------------ Entertainment - 0.5% Grand Adventures Tour & Travel Publishing Corp. (a) 2,000 4,750 ------------ Common Stocks - continued Grocery Stores - 4.2% Whole Foods Market, Inc. (a) 710 38,118 ------------ Health Care Plans - 0.2 Humana, Inc. (a) 200 2,150 ------------ Health - Diversified - 3.4% Abbott Laboratories, Inc. 640 30,440 ------------- Healthcare Facilities - 0.6% Columbia/HCA Healthcare Corp. 100 3,713 Prime Medical Services, Inc. (a) 200 1,550 ------------- 5,263 -------------- Industrial Machinery - 1.3% DTM Corp. (a) 2,000 11,500 ------------- Insurance - 0.8% Citizens, Inc. (a) 300 2,006 Financial Industries Corp. 100 900 InterContinental Life Corp. (a) 200 1,950 National Western Life Insurance Co. - Cl A (a) 30 2,190 ----------------- 7,046 ----------------- Internet Information Providers - 8.0% Drkoop.com, Inc. (a) 1,500 1,734 Garden.com, Inc. (a) 1,500 1,359 Hoover's, Inc. (a) 1,830 11,666 ProsoftTraining.com (a) 700 9,975 Vignette Corp. (a) 1,600 47,800 --------------- 72,534 --------------- Investment Banking & Brokerage Services - 1.2% Schwab (Charles) Corp. 300 10,650 --------------- Manufacturers - Diversified - 0.3% Minnesota Mining & Manufacturing Co. 30 2,734 -------------- Medical Equipment & Supplies - 4.0% Arrhythmia Research Technology, Inc. (a) 2,000 3,625 Encore Medical Corp. (a) 2,000 4,500 Luminex Corp. (a) 400 15,200 Sulzer Medica Ltd. (a) (b) 500 13,000 -------------- 36,325 --------------- Natural Gas - 2.9% Southern Union Co. 1,300 25,756 --------------- Oil & Gas Operations - 0.7% Brigham Exploration Co. (a) 2,000 6,625 ----------------- Personal & Household Products - 0.1% Surrey, Inc. (a) 1,000 750 ----------------- Printing & Publishing - 3.7% EpicEdge, Inc. (a) 200 550 Harte-Hanks Communications, Inc. 1,220 33,245 ----------------- 33,795 ----------------- Real Estate Developers - 0.3% Stratus Properties, Inc. (a) 500 2,250 ----------------- Restaurants - 1.0% Schlotzky's, Inc. (a) 2,200 9,213 ----------------- Retail & Wholesale - Specialty - 1.0% EZCORP, Inc. - Cl A 500 625 pcOrder.com, Inc. - Cl A (a) 700 2,494 Travis Boats & Motors, Inc. (a) 1,600 5,900 ------------ 9,019 ------------ Semiconductors - 12.5% Cirrus Logic, Inc. (a) 1,980 79,819 Cypress Semiconductor Corp. (a) 200 8,312 Intel Corp. 400 16,625 Silicon Laboratories, Inc. (a) 200 8,200 ------------ 112,956 ------------ Semiconductor Equipment & Materials - 2.9% Dupont Photomasks, Inc. (a) 450 26,437 ------------ Telecommunications Services - 3.8% Aperian, Inc. (a) 334 2,125 Broadwing, Inc. 1,170 29,908 SBC Communications, Inc. 40 1,995 ------------- 34,028 ------------- TOTAL COMMON STOCKS (Cost $1,016,257) 912,655 ------------- TOTAL INVESTMENTS - 101.0% (Cost $1,016,257) 912,655 ------------- Liabilities in excess of other assets - (1.0)% (8,891) ------------- TOTAL NET ASSETS - 100.0% $ 903,764 ============== (a) Non-income producing (b) American Depository Receipt Put Options Written September 30, 2000 Shares Subject Common Stocks Index / Expiration Date @ Exercise Price to Put Value ------------------------------------------------------ -------------- ----------------- Dell Computer Corp. / October 2000 @ 35 1,000 $ 4,250 NASDAQ 100 Trust / December 2000 @ 70 1,200 1,500 NASDAQ 100 Trust / November 2000 @ 100 1,200 2,550 ----------------- ----------------- Total (premiums received $5,575) 3,400 $ 8,300 =================
Martin Capital Austin Opportunity Fund September 30, 2000 Statement of Assets & Liabilities (Unaudited) Assets Investment in securities (cost $1,016,257) $ 912,655 Dividends receivable 30 Receivable for securities sold 116,062 ------------------ Total assets 1,028,747 Liabilities Put options written (Premium received $5,575) 8,300 Accrued investment advisory fee payable 866 Payable to custodian bank 103,985 Payable for securities purchased 11,772 Payable for fund shares redeemed 60 --------------- Total liabilities 124,983 ------------------ Net Assets $ 903,764 ================== Net Assets consist of: Paid in capital $ 1,009,560 Accumulated net investment loss (4,929) Accumulated undistributed net realized gain 5,460 Net unrealized depreciation on investments (106,327) ------------------ Net Assets, for 84,174 shares $ 903,764 ================== Net Asset Value Offering price and redemption price per share ($903,764 / 84,174) $ 10.74 ====================
Martin Capital Austin Opportunity Fund Statement of Operations for the six months ended September 30, 2000 (Unaudited) Investment Income Dividend income $ 562 Interest income 591 --------------- Total Income 1,153 Expenses Investment advisory fee $ 6,082 Trustees' fees 655 ------------------ Total expenses before reimbursement 6,737 Reimbursed expenses (655) ------------------ Total operating expenses 6,082 --------------- Net Investment Loss (4,929) --------------- Realized & Unrealized Gain (Loss) Net realized gain on: Investment securities 5,048 Options securities 412 Change in net unrealized depreciation on investment securities & option securities (268,462) ------------------ Net realized & unrealized loss on investment (263,002) --------------- securities & option securities Net decrease in net assets $ (267,931) =============== resulting from operations
Martin Capital Austin Opportunity Fund Statement of Changes in Net Assets Six months ended September 30, 2000 Period ended (Unaudited) March 31, 2000 (a) ----------------- --------------------- Increase (Decrease) in Net Assets From Operations Net investment loss $ (4,929) $ (1,967) Net realized gain on investment securities 5,460 65 Change in net unrealized appreciation/depreciation (268,462) 162,135 ----------- ----------- Net increase/decrease in net assets resulting from operations (267,931) 160,233 ----------- ----------- Share Transactions Net proceeds from sale of shares 180,893 889,826 Shares redeemed (58,024) (1,233) ------------- ----------- Net increase in net assets resulting from share transactions 122,869 888,593 ------------- ----------- Total increase/decrease in net assets (145,062) 1,048,826 ------------- ----------- Net Assets Beginning of period 1,048,826 0 ------------ ----------- End of period [including accumulated undistributed net investment loss of $4,929 and $0] $ 903,764 $ 1,048,826 ============= ===========
(a) For the period September 1, 1999 (commencement of operations) through March 31, 2000 Martin Capital Austin Opportunity Fund Financial Highlights Six months ended September 30, Period ended 2000 March 31, (Unaudited) 2000 (c) ---------------- ------------ Selected Per Share Data Net asset value, beginning of period $ 14.02 $ 10.00 ------------ ------------ Income from investment operations Net investment loss (0.06) (0.04) Net realized and unrealized gain/loss (3.22) 4.06 ------------ ------------ Total from investment operations (3.28) 4.02 ------------ ------------ Net asset value, end of period $ 10.74 $ 14.02 ============ ============ Total Return (23.50) (b) 40.20% (b) Ratios and Supplemental Data Net assets, end of period (000) $904 $1,049 Ratio of expenses to average net assets 1.25% (a) 1.25% (a) Ratio of expenses to average net assets before reimbursement 1.38% (a) 1.51% (a) Ratio of net investment income (loss) to average net assets (1.01) (a) (0.55) (a) Ratio of net investment income (loss) to average net assets before reimbursement (1.15) (a) (0.81) (a) Portfolio turnover rate 25.19% (a) 0.80% (a) (a) Annualized (b) For a period of less than a full year, the total return is not annualized. (c) For the period September 1, 1999 (commencement of operations) through March 31, 2000.
Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 (Unaudited) NOTE 1. ORGANIZATION Martin Capital Austin Opportunity Fund (the "Austin Opportunity Fund"), Martin Capital U.S. Opportunity Fund (the "U.S. Opportunity Fund") and Martin Capital Texas Opportunity Fund (the "Texas Opportunity Fund") were organized as series of the AmeriPrime Funds, an Ohio business trust (the "Trust") on August 14, 1998 and commenced operations on September 1, 1999, April 1, 1999, and August 1, 2000 respectively. Each Fund is registered under the Investment Company Act of 1940, as amended, as a non-diversified series of the Trust. The investment objective of each Fund is to provide long-term capital appreciation. The Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by each Fund in the preparation of its financial statements. Securities Valuations- Securities, which are traded on any exchange or on the NASDAQ over-the-counter market, 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 the advisor's opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, when the advisor determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust (the "Board"). Fixed-income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the advisor believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. When prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the advisor, subject to review of the Board. 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 represent fair value. Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued Option writing- When a Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. Federal Income Taxes- Each Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. By so qualifying, each Fund will not be subject to federal income taxes to the extent that it distributes substantially all of its net investment income and any realized capital gains. Dividends and Distributions- Each Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on at least an annual basis. Each Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Other- Each Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. Generally accepted accounting principles require that permanent financial reporting tax differences relating to shareholder distributions be reclassified to net realized gains and paid-in capital. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Funds retain Martin Capital Advisors, L.L.P. (the "Advisor") to manage each Fund's investments. The Advisor is a Texas limited liability partnership organized on January 29, 1999. Paul Martin, President and controlling partner of the Advisor is primarily responsible for the day-to-day management of the Fund's portfolio. Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued Under the terms of each Fund's management agreement (the "Agreements"), the Advisor manages the Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of the Fund except brokerage, taxes, interest, fees and expenses of non-interested person trustees, and extraordinary expenses. As compensation, for its management services and agreement to pay each Fund's expenses, each Fund is authorized to pay the Advisor a fee computed and accrued daily and paid monthly at an annual rate of 1.25% of the average daily net assets of the Fund. It should be noted that most investment companies pay their own operating expenses directly, while the Fund's expenses, except those specified above, are paid by the Advisor. For the six months ended September 30, 2000, the Advisor received a fee of $6,082 and $31,525 from the Austin Opportunity Fund and the U.S. Opportunity Fund, respectively. For the period August 1, 2000 (commencement of operations) through September 30, 2000, the Advisor received a fee of $470 from the Texas Opportunity Fund. The Advisor has voluntarily agreed to reimburse other expenses to the extent necessary to maintain total operating expenses at the rate of 1.25% for each Fund through March 1, 2003. For the six months ended September 30, 2000, the Advisor reimbursed expenses of $655 and $905 for the Austin Opportunity Fund and the U.S. Opportunity Fund, respectively. For the period August 1, 2000 (commencement of operations) through September 30, 2000, the Advisor reimbursed expenses of $362 for the Texas Opportunity Fund. There is no assurance that such reimbursements will continue in the future. Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan") under which each Fund is authorized to incur distribution expenses at an annual rate of 0.25% of the average daily net assets of the Fund. The Advisor, pursuant to the management agreement, pays all distribution expenses incurred by a Fund under its plan. Each Fund retains AmeriPrime Financial Services, Inc. (the "Administrator"), a wholly owned subsidiary of Unified Financial Services, Inc., to manage each Fund's business affairs and to provide each Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. For the six months ended September 30, 2000, the Administrator received fees of $10,000 and $10,000 from the Advisor for administrative services provided to the Austin Opportunity Fund and the U.S. Opportunity Fund, respectively. For the period August 1, 2000 (commencement of operations) through September 30, 2000, the Administrator received fees of $3,333 from the Advisor for administrative services provided to the Texas Opportunity Fund. Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued Each Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as each Fund's transfer agent and to provide each Fund with fund accounting services. For its services as transfer agent, Unified receives a monthly fee from the Advisor of $1.20 per shareholder (subject to a minimum monthly fee of $750). For the six months ended September 30, 2000, Unified received fees of $8,356 and $8,789 from the Advisor for transfer agent services provided to the Austin Opportunity Fund and the U.S. Opportunity Fund, respectively. For the period August 1, 2000 (commencement of operations) through September 30, 2000, Unified received fees of $1,432 from the Advisor for transfer agent services provided to the Texas Opportunity Fund. For its services as fund accountant, Unified receives an annual fee from the Advisor equal to 0.0275% of each Fund's assets up to $100 million, and 0.0250% of each Fund's assets from $100 million to $300 million, and 0.0200% of each Fund's assets over $300 million (subject to various monthly minimum fees, the maximum being $2,000 per month for assets of $20 to $100 million). For the six months end September 30, 2000, Unified received fees of $5,200 and $6,400 from the Advisor for fund accounting services provided to the Austin Opportunity Fund and U.S. Opportunity Fund, respectively. For the period August 1, 2000 (commencement of operations) through September 30, 2000, Unified received fees of $900 from the Advisor for fund accounting services provided to the Texas Opportunity Fund. Each Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the principal distributor of each Fund's shares. There were no payments made to the Distributor for the six months ended September 30, 2000 for the Austin Opportunity Fund and U.S. Opportunity Fund, respectively. There were no payments made to the Distributor for the period August 1, 2000 (commencement of operations) through September 30, 2000 for the Texas Opportunity Fund. Certain members of Unified management and the Distributor are also members of management of the AmeriPrime Trust. NOTE 4. SHARE TRANSACTIONS Austin Opportunity Fund. As of September 30, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at September 30, 2000 was $1,009,560. Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 4. SHARE TRANSACTIONS- continued Transactions in shares were as follows: For the period end September 30, 2000 Shares Dollars Roll forward: 74,784 $886,691 Shares redeemed (5,262) (58,035) -------- --------- 84,174 $1,009,550 ========== ===============
U.S. Opportunity Fund. As of September 30, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at September 30, 2000 was $5,142,235. Transactions in shares were as follows: For the fiscal year ended September 30, 2000 Shares Dollars Shares sold 172,487.116 $2,296,345 Shares redeemed (8,528.696) (120,007) -------------------- --------------- 163,958.420 $2,476,338 ==================== ===============
Texas Opportunity Fund. As of September 30, 2000, there were an unlimited number of authorized shares for the Fund. Paid in capital at September 30, 2000 was $251,593. Transactions in shares were as follows: For the period ended September 30, 2000 (Unaudited) Shares Dollars Shares sold 24,686 251,593 Shares issued in reinvestment of dividends 0 0 Shares redeemed 0 0 ------------ ----------- 24,686 251,593 ============ ===========
NOTE 5. INVESTMENTS Austin Opportunity Fund. For the period end September 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $342,574 and $119,653, respectively. The gross unrealized appreciation for all securities totaled $194,917 and the gross unrealized depreciation for all securities totaled $301,243 for a net unrealized depreciation of $106,327. The aggregate cost of securities for federal income tax purposes at September 30, 2000 was $903,764. Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 5. INVESTMENTS- continued U.S. Opportunity Fund. For the fiscal year ended September 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $3,609,067 and $690,188 respectively. The gross unrealized appreciation for all securities totaled $998,646 and the gross unrealized depreciation for all securities totaled $601,544 for a net unrealized appreciation of $397,102. The aggregate cost of securities for federal income tax purposes at September 30, 2000 was $5,596,239. Texas Opportunity Fund. For the fiscal year ended September 30, 2000, purchases and sales of investment securities, other than short-term investments, aggregated $247,104 and $27,510 respectively. The gross unrealized appreciation for all securities totaled $26,319 and the gross unrealized depreciation for all securities totaled $24,238 for a net unrealized appreciation of $2,081. The aggregate cost of securities for federal income tax purposes at September 30, 2000 was $254,560. NOTE 6. ESTIMATES Preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 7. RELATED PARTY TRANSACTIONS The Advisor is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Funds. 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 September 30, 2000, National Investor Services owned of record in aggregate more than 33% of the Austin Opportunity Fund. As of September 30, 2000, National Investor Services owned of record in aggregate more than 66% of the U.S. Opportunity Fund. As of September 30, 2000, National Investor Services owned of record in aggregate more than 39% and Eileen Vanderlee owned of record in aggregate more than 40% of the Texas Opportunity Fund. Martin Capital Opportunity Funds Notes to Financial Statements September 30, 2000 - continued (Unaudited) NOTE 8. CALL OPTIONS WRITTEN Austin Opportunity Fund Transactions in options written for the period end September 30, 2000 were as follows: Number of Premiums Contracts Received Options written 3 $5,575 Options expired (3) (5,575) ------ ------- Options outstanding at September 30, 2000 0 0 ====== =======
U.S. Opportunity Fund Transactions in options written during the fiscal year ended September 30, 2000 were as follows: Number of Premiums Contracts Received Options written 237 $45,017 Options expired (72) (19,218) ------ ------- Options outstanding at September 30, 2000 165 25,799 ======= =========
Texas Opportunity Fund Transactions in options written during the fiscal year ended September 30, 2000 were as follows: Number of Premiums Contracts Received Options written 11 $1,869 Options expired (0) (0) ------ ------- Options outstanding at September 30, 2000 11 1,869 ======= ========
Six months ended September 2000 Dear Shareholder, The Shepherd Values Growth Fund performed well over the past six months on a relative basis, despite continued weakness in the U.S. equity markets. For the six months ended September 30, 2000, the Fund returned 4.92% versus a loss of -3.60% for the S&P 500. Listed below are comparative total return performance figures for the periods ended September 30, 2000: 6 Months YTD 2000 12 Months Life-of-Fund -------- -------- --------- ------------ Shepherd Values Growth Fund 4.92% 7.28% 27.63% 23.80% Standard & Poor's 500 Stock Index -3.60% -1.39% 13.28% 7.61% Source: Bloomberg, L.P. Month-End Shepherd Values Standard & Poor's Growth Fund 500 Stock Index Apr-99 $10,000.00 $10,000.00 Apr-99 $10,110.00 $9,831.00 May-99 $9,280.00 $9,599.18 Jun-99 $9,700.00 $10,131.48 Jul-99 $9,700.00 $9,815.43 Aug-99 $9,490.00 $9,766.85 Sep-99 $9,700.00 $9,499.41 Oct-99 $9,810.00 $10,100.30 Nov-99 $10,340.00 $10,305.62 Dec-99 $11,540.00 $10,912.21 Jan-00 $11,270.00 $10,364.01 Feb-00 $11,630.00 $10,168.02 Mar-00 $11,800.00 $11,162.11 Apr-00 $11,190.00 $10,826.42 May-00 $11,010.00 $10,604.17 Jun-00 $11,730.00 $10,865.64 Jul-00 $11,410.00 $10,695.90 Aug-00 $12,870.00 $11,359.89 Sep-00 $12,380.00 $10,760.30 This graph, prepared in accordance with SEC regulations, compares a $10,000 investment in the Fund with a similar investment in the unmanaged Standard & Poor's 500 Stock Index. Results for the Fund and the Standard & Poor's 500 Stock Index include the reinvestment of dividend and capital gain distributions. Investment returns and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than at their original cost. Total return represents past performance and is not predictive of future results. MARKET SYNOPSIS The market has been under intense selling pressure since early March, as investors once again focus on underlying fundamentals and valuations (following a multi-year vacation from traditional analysis). Investors have been infatuated with speculating on future revenue growth from innovations and productivity enhancements at the exclusion of valuation and actual business growth. However, with a lack of earnings visibility, such beneficiary stocks had earnings multiples stretched to astronomical valuations; simply unsustainable for any reasonable amount of time. The speculative "bubble" began to pop in March after the NASDAQ reached an all-time high, and has since pulled back nearly 30% from that high. There were many casualties along the way, particularly the over-hyped "dot-com" companies. Recently, we have witnessed a correction in many of the large-cap bellwethers such as Intel, Microsoft, Oracle, Sun Microsystems and EMC. These are positive signs that a bear market is reaching latter stages, but there are still "excesses" priced into many stocks. Wall Street analysts have been slashing expectations for future earnings growth, and it has been the overvalued tech stocks that have suffered most dramatically. With the threat of a slowing economy and contracting corporate profits, the Fed is now back in the limelight with a lowering of interest rates on the horizon. As a result, fixed income investors have been actively buying long-term instruments in anticipation of lower rates, and have created an "inverse yield curve", a situation where short-term interest rates are higher than long-term interest rates. With equity markets still feeling the pain of recent declines, the prospects of a slowing economy and contracting corporate profits, fixed income investments present an attractive reward-to-risk opportunity for investors. As a result, redemptions from equity mutual funds have been increasing in favor of money market funds and fixed income funds; another sign of weakening support for stocks. MANAGER STYLE REVIEW Our investment process combines both quantitative and qualitative rigor to identify "leadership" companies in growing industries trading at attractive valuations. As a "core" strategy, this includes both "growth" and "value" type stocks that are priced attractively relative to their industry group, the market in general and prospects for future growth. We also utilize technical analysis to help determine timely entry and exit points for each position. Once purchased, a stock is actively monitored for price performance and continued underlying quality. Our style of "core" investing focuses on underlying business models and valuation. We choose not to overpay for growth prospects and must have reasonable confidence in our forecasts before considering an investment. Thus, we avoid chasing over-hyped stocks, a strategy that has been in vogue over the past few years. With the epiphany of investors that fundamentals do matter, our discipline has paid off nicely for the Fund and continues to work well as the market capitulates. CURRENT INVESTMENT STRATEGY There are a wide range of opinions on Wall Street as to the direction and health of the market in the near-term. We continue to remain cautious and feel that there is more room to go on the downside. We are finding more and more stocks to buy as prices have come back to more reasonable levels, but the opportunity cost for many of those stocks is still quite high in relation to cash. Corporate earnings and economic growth are clearly slowing, in some cases much faster than investors are anticipating, leading to a "hard landing" scenario. The Federal Reserve will most likely change its stance on interest rates from an upside bias to a neutral bias, and will likely lower interest rates beginning in 2001. That bodes well for those sectors less dependent on economic growth, and adversely impacts sectors that rely heavily on economic growth and spending. As a result, we currently favor stocks in the energy, health care, financial and consumer staples sectors, while we are less optimistic on stocks in the technology, telecommunications and consumer cyclical sectors and will be reducing our exposure to these sectors in the near-term. As of September 30, 2000, the Fund's ten largest holdings were as follows: Stock (Ticker Symbol) Percentage of Net Assets Verisign (VRSN) 5.62% Duke Energy (DUK) 4.76% Bank of New York (BK) 4.70% CheckPoint Software (CHKP) 4.37% Informatica Corporation (INFA) 4.14% Broadcom Corporation (BRCM) 4.06% Ariba, Inc. (ARBA) 3.97% Amgen, Inc. (AMGN) 3.87% Orthodontic Centers of America (OCA) 3.70% PMC-Sierra (PMCS) 3.58% As always, it is a privilege serving as your investment manager and we appreciate your continued trust and confidence in the Shepherd Values Growth Fund. Warm Regards, Jason D. Huntley Chief Investment Officer jason@ccmadvisers.com Six months ended September 2000 Management Team: Mark Stuckelman Investment Objective: The Shepherd Values Small-Cap Fund uses a value discipline to maximize capital appreciation. The Fund invests in undervalued, fundamentally strong companies undergoing positive change. The Fund is built one stock at a time with a focus on individual companies, rather than on specific industries or macro-economic trends. Market Overview: The US stock market was turbulent during the six months ended September 30, 2000. In April and May, worries over rising interest rates, high valuations of technology stocks and signs of resurgent inflation sent equity prices lower. Stocks rallied in June and August, reflecting sentiment that the Federal Reserve's May interest rate increase was the last in its series of tightening moves. Despite August's rally, equities drifted lower during the last three months of the period due to the uncertain impact of rising oil prices and a weakening euro on corporate earnings. In addition, investors grew increasingly anxious about the outcome of upcoming US elections. Amid this volatile backdrop, there was a rotation from growth stocks to value stocks. Indicative of this shift in investor preference, value stocks posted gains during the period, driven by: o Increasing investor attention in response to the major sell-off within the high-growth technology sector o Expectations that the Federal Reserve was done raising interest rates o Consolidation within value-oriented industries like financial services, brokerage and insurance o The positive impact of rising oil prices on the energy sector, particularly oilfield service companies Performance: For the six-month period ended September 30, 2000, the portfolio gained 11.6% (net performance) versus 9.4% for the Russell 2000 Value Index. Stock selection was the main driver of the portfolio's outperformance versus the benchmark during the period, especially in the transportation, producers/manufacturing and energy sectors. Among the portfolio's best-performing holdings were: Swift Energy, an oil and gas exploration and production company with interests in more than 1,500 producing wells in eight states; Newport News Shipbuilding, the second-largest shipbuilder in the United States and the only builder of the US Navy's aircraft carriers; and Frontier Airlines, a budget carrier on high volume routes serving more than 20 US cities. Market Outlook: We believe value stocks will continue to attract increased investor recognition in light of their sound fundamentals and historically low valuations. However, amid changing conditions in the market, selectivity remains critical. "The material presented is for the adviser's use only and is not intended for distribution to the public or financial professionals without additional disclosure." Six months ended September 2000 Dear Shareholders: We are pleased to present you with this semi-annual report for the Shepherd Values Fixed Income Fund. For the six months period ended September 30, 2000, the fund generated a return of 5.80% versus 4.80% for the Lehman Aggregate Bond Index. For the brief history of the fund, we maintained a shorter duration than the Index, which had a negative impact on returns. However, an emphasis on intermediate maturities enhanced returns as intermediate maturities outperformed during the period. To review, our approach to managing the fund is to maximize the total return over the long-term, consistent with the preservation of capital. We achieve this by using an active approach and by investing in a broad range of investment grade fixed income securities. Returns for the Period Ended Shepherd Values Fixed Lehman Aggregate September 30, 2000 Income Fund Bond Index --------------------------------- ------------------------- ------------------- 3 Months 3.88 % 3.02 % --------------------------------- ------------------------- ------------------- 6 Months 5.80 % 4.80 % --------------------------------- ------------------------- ------------------- Since Inception 6.19 % 7.12 % --------------------------------- ------------------------- ------------------- Shepherd Values Fixed Income Lehman Aggregate 31-Dec 10,000 10,000 31-Jan 10,000 9,967 29-Feb 10,068 10,088 31-Mar 10,037 10,221 30-Apr 10,079 10,191 31-May 9,969 10,186 30-Jun 10,222 10,398 31-Jul 10,312 10,493 31-Aug 10,439 10,645 30-Sep 10,619 10,712 o The chart shows the value of a hypothetical investment of $10,000 in the Fund and the Lehman Aggregate Bond Index on December 31, 1999 (the inception of the Fund) and held through September 30, 2000. o Performance figures include the change in value of the securities in the indices and the reinvestment of dividends, and are not annualized. The index returns do not reflect expenses, which have been deducted from the Fund's return. o The Lehman Aggregate Bond Index is an unmanaged index and covers the U.S. investment grade fixed rate bond market, including government and corporate securities, agency mortgage pass-through securities, and asset-backed securities. o Past performance is not predictive of future performance. Commentary U.S. bond returns, on an absolute basis, have turned out to be better than expected this year thanks to the U. S. economic slowdown and the increases in short-term rates by the Federal Reserve (Fed) over the past year. So far, U. S. bond returns are even better than those for U.S. equities. For the six-month period ended September 30, 2000, the S&P Composite Index returned a -3.60% and the NASDAQ Composite Index returned -19.68%. In contrast, the Lehman Brother Aggregate Bond Index, generally regarded as representative of the bond market as a whole, was up 4.81% for the same period. During the period, the Fed raised the discount rate to a nine-year high of 6.5% from 6.00%. This was the sixth rate increase since June 1999. Since then, economic indicators clearly reveal that the U.S. economy has slowed down and that the Fed has concluded its tightening grip for 2000. Interest rates on U.S. Treasury securities continued to decline during the semi-annual period. Yields on the 2, 5 and 10-year notes retreated as much as 52 basis points, while yields on the 30-year remained essentially unchanged. As a result, for the fist time since January, the 10-year and 30-year part of the yield curve reverted to a positive slope in September. Shepherd Values Growth Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stocks - 94.3% Shares Value Banks - 6.7% Bank of New York, Inc. 1,500 $ 84,750 Citigroup, Inc. 667 36,042 ----------------- 120,792 ----------------- Biological Products - 3.9% Amgen, Inc. (a) 1,000 69,828 ----------------- Computer Communications Equipment - 1.2% Cisco Systems, Inc. (a) 400 22,100 ----------------- Ariba, Inc. (a) 500 71,633 Check Point Software Technologies Ltd. (a) (c) 500 78,750 Dell Computer Corp. (a) 500 15,406 EMC Corp. (a) 400 39,800 Maxtor Corp. (a) 2,000 21,000 ----------------- 226,589 ----------------- Informatica Corp. (a) 800 74,600 VeriSign, Inc. (a) 500 101,281 ----------------- 175,881 ----------------- Enron Corp. 600 52,575 ----------------- PMC Sierra, Inc. (a) 300 64,575 ----------------- Duke Energy Corp. 1,000 85,750 ----------------- Knight Trading Group, Inc. (a) 1,500 54,000 ----------------- Tyco International, Inc. 1,000 51,875 ----------------- Gentiva Health Services, Inc. (a) 4,000 51,000 Orthodontic Centers of America, Inc. (a) 2,000 66,625 ----------------- 117,625 ----------------- Industrial Instruments - 2.6% Emerson Electric Co. 700 46,900 ----------------- Aradigm Corp. (a) 1,500 34,406 ----------------- Schedule of Investments - September 30, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Motor Vehicles & Passenger Car Bodies - 2.1% Ford Motor Co. 1,500 $ 38,250 ----------------- Pharmaceuticals - 2.5% Pfizer, Inc. 1,000 44,938 ----------------- Fastenal Co. 500 28,812 Safeway, Inc. (a) 1,300 60,694 Walgreen Co. 1,000 37,938 ----------------- 127,444 ----------------- Broadcom Corp. (a) 300 73,125 JDS Uniphrase Corp. (a) 200 18,937 ----------------- 92,062 ----------------- Services-Management Services - 1.6% ServiceMaster Co. 2,900 28,638 ----------------- Comverse Technology, Inc. (a) 400 43,200 Exodus communications, Inc. (a) 1,000 49,375 Global Crossing Ltd. (a) 1,000 31,000 Nokia Corp. (c) 500 19,906 Nortel Networks Corp. 1,000 60,250 ----------------- 203,731 ----------------- Utilities - 2.4% Montana Power Co. 1,300 43,387 ----------------- TOTAL COMMON STOCKS (Cost $1,584,595) 1,701,346 ----------------- Amount Value Money Market Securities - 3.1% Firstar Treasury Fund, 5.47% (b) (Cost $68,854) 68,854 $ 68,854 ----------------- TOTAL INVESTMENTS - 98.1% (Cost $1,653,449) 1,770,200 ----------------- Other assets less liabilities - 1.9% 33,901 ----------------- Total Net Assets - 100.0% $ 1,804,101 =================
(a) Non-Income Producing. (b) Variable rate security; the coupon rate shown represents the rate at September 30, 2000. (c) American Depository Receipt. See accompanying notes which are in integral part of the financial statements Shepherd Values Fixed Income Fund Schedule of Investments - September 30, 2000 (Unaudited) Principal Value Amount Corporate Bonds - 32.0% Goldman & Sachs Group, 6.65% 5/15/2009 50,000 $ 47,372 Morgan Stanley Dean Witter & Co. 6.40% 04/28/2008 20,000 18,853 ----------------- TOTAL CORPORATE BONDS (Cost $65,076) 66,225 ----------------- Federal Home Loan Bank, 5.815% 07/13/2005 25,000 24,259 Federal Home Loan Bank, 5.125% 10/15/2008 25,000 22,455 Federal Home Loan Bank, 7.375% 02/12/2010 25,000 26,053 Federal Home Loan Bank, 6.500% 01/05/2009 25,000 23,822 Federal Home Loan Bank, 6.350% 02/01/2006 25,000 24,307 ----------------- TOTAL GOVERNMENT SECURITIES (Cost $117,025) 120,896 ----------------- Firstar Treasury Fund, 5.47% (a) (Cost $9,814) 9,814 $ 9,814 ----------------- TOTAL INVESTMENTS - 95.2% (Cost $191,915) 196,935 ---------------- Other assets less liabilities - 4.8% 9,928 ----------------- Total Net Assets - 100.0% $ 206,863
(a) Variable rate security; the coupon rate shown represents the rate at September 30, 2000. See accompanying notes which are in integral part of the financial statements Shepherd Values International Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stocks - 96.4% Shares Value Aerospace & Defense - 3.2% BAE Systems Plc. (c) 250 $ 5,438 Rolls Royce Plc. (c) 325 4,144 ----------------- 9,582 ----------------- Volvo AB - Class B (c) 240 3,870 Volkswagon AG (c) 830 7,678 ----------------- 11,548 ----------------- Nycomed Amersham (c) 145 7,033 ----------------- Basf AG (c) 165 6,012 Imperial Chemical Industry (c) 135 3,130 Norsk Hydro ASA (c) 165 6,982 ----------------- 16,124 ----------------- Australia & New Zealand Banking Group (c) 205 7,380 Credicorp Ltd. 275 1,994 Deutsche Bank AG (c) 75 6,422 ForeningsSparbanken AB (c) 635 9,128 HSBC Holdings (c) 95 6,783 ----------------- 31,707 ----------------- Fujitsu Ltd. (c) 50 6,037 ----------------- Construction Machinery - 2.1% Komatsu Ltd. (c) 270 6,176 ----------------- Michelin SA - Class B 150 4,170 ----------------- Electric Utilieies - 7.3% Centrais Electricas (c) 390 3,851 CLP Holdings Ltd. (c) 1,035 4,451 Gener SA (c) 215 2,808 Korea Electric Power (a) (c) 180 2,351 National Power Plc. (c) 122 8,418 ----------------- 21,879 ----------------- Schedule of Investments - September 30, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Electronic Equipment - 1.0% Koninklijke Philips (c) 70 $ 2,975 ----------------- Cheung Kong Holdings Ltd. (c) 560 6,748 First Pacific Co. Ltd. (c) 2,615 3,530 Nomura Securities (c) 35 7,350 Williams Plc. (c) 385 5,486 ----------------- 23,114 ----------------- Barrick Gold 170 2,592 ----------------- Allied Zurich Plc. (a) (c) 285 6,412 AXA-UAP (c) 100 6,469 ING Groep NV (c) 110 7,246 Scor (c) 40 1,725 XL Capital Ltd. - Class A 115 8,510 ----------------- 30,362 ----------------- Autoliv, Inc. 395 7,703 ----------------- E ON AG (c) 115 5,937 Eni Oil Co. (c) 110 5,823 Lasmo Plc. (c) 445 2,670 Perez Companies SA (c) 65 1,064 Repsol SA (c) 480 8,790 Shell Transportation & Trading Co. (c) 125 6,117 Total Fina Elf SA (c) 40 2,938 ----------------- 33,339 ----------------- Asia Pulp & Paper (a) (c) 685 1,199 ----------------- Teva Phamaceutical Industries Ltd. (c) 50 3,659 ----------------- Wolters Kluwer NV (c) 295 5,826 ----------------- KCI Konecranes 135 3,616 Marks & Spencer Plc. (c) 360 6,750 ----------------- 10,366 (Unaudited) Common Stocks - continued Shares Value Steel Works - 0.9% Pohang Iron & Steel Ltd. (c) 150 $ 2,794 ----------------- Alcatel Alsthom (c) 100 6,287 CIA De Telecom Chile (c) 210 3,649 Embratel Participacoes SA (c) 155 2,867 Nippon Telegraph & Telephone (c) 115 5,635 Philippine Long Distance Phone (c) 210 3,596 Portugal Telecom SA (c) 860 8,707 Telebras Holdings (c) 30 2,374 Telecom Corp of New Zealand Ltd (c) 330 6,600 Telefonos De Mexico SA (c) 55 2,922 ----------------- 42,637 ----------------- Grupo Carso SA (a) (c) 430 2,661 ----------------- Transportation - 0.6% TNT Post Group NV (c) 75 1,744 ----------------- Truck Trailers - 0.8% Desc SA de CV (a) (c) 225 2,320 ----------------- TOTAL COMMON STOCKS (Cost $309,922) 287,547 ----------------- Principal Amount Value Money Market Securities - 2.5% Firstar Treasury Fund, 5.47% (b) (Cost $7,500) 7,500 $ 7,500 ----------------- TOTAL INVESTMENTS - 98.9% (Cost $317,422) 295,047 ----------------- Other assets less liabilities - 1.1% 3,354 ----------------- Total Net Assets - 100.0% $ 298,401 ================
(a) Non-Income Producing. (b) Variable rate security; the coupon rate shown represents the rate at September 30, 2000. (c) American Depository Receipt. See accompanying notes which are in integral part of the financial statements Shepherd Values Small-Cap Fund Schedule of Investments - September 30, 2000 (Unaudited) Common Stocks - 95.1% Shares Value Commercial/Industrial Services - 10.2% Environmental Services - 1.1% Newpark Resources, Inc. 890 $ 8,233 ------------------ Industrial Engineering/Construction - 1.1% Emcor Group, Inc. (a) 320 8,320 ------------------ Other Commercial/Industrial Service - 3.6% Braun Consulting, Inc. (a) 250 4,953 E. Loyalty Corp. (a) 230 2,933 F Y I, Inc. (a) 100 3,737 FNB Corp. PA 370 7,909 Igate Capital Corp. (a) 120 645 NCO Group, Inc. (a) 290 3,444 Spherion Corp. (a) 330 3,939 ------------------ 27,560 ------------------ Telecommunications Services - 2.1% Boston Communication Group, Inc. (a) 390 7,507 Price Communications Corp. 420 8,216 ------------------ 15,723 ------------------ Wholesale Distribution - 2.3% Central Garden & Pet Co. (a) 920 6,382 Handleman Co. 830 10,271 ------------------ 16,653 ------------------ Total Commercial/Industrial Services 76,489 ------------------ Consumer Durables - 4.3% Home Furnishings - 0.4% Applica, Inc. 510 3,156 ------------------ Homebuilding - 1.3% Beazer Homes USA, Inc. (a) 340 9,265 ------------------ Other Consumer Durables - 1.0% American Greetings Corp. 440 7,700 ------------------ Recreational Products - 1.6% National R V Holdings, Inc. (a) 460 4,629 Toro, Inc. 230 7,245 ------------------ 11,874 ------------------ Total Consumer Durables 31,995 ------------------ Shepherd Values Small-Cap Fund Schedule of Investments - September 31, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Consumer Non -Durables - 1.1% Apparel - 1.1% Madden, Steven Ltd. International, Inc. (a) 620 $ 5,348 Wolverine World Wide, Inc. 300 2,794 ------------------ 8,142 ------------------ Total Consumer Non - Durables 8,142 ------------------ Consumer Services - 1.1% Publishing - 1.1% Valassis Communications, Inc. 370 8,233 ------------------ Total Consumer Services 8,233 ------------------- Energy - 5.7% Oil/Gas Production - 3.3% Noble Affiliates, Inc. 190 7,054 Swift Energy Co. (a) 210 8,728 Valero Energy Corp. 260 9,149 ------------------ 24,931 ------------------ Oilfield Services/Equipment - 2.4% Gulf Island Fabrication (a) 460 8,107 Varco International, Inc. (a) 470 9,782 ------------------ 17,889 ------------------ Total Energy 42,820 ------------------ Financial Services - 22.8% Money-center Banks - 0.8% Imperial Bancorp. 300 5,738 ------------------ Real Estate Development/Investment - 1.2% Fairfield Communities, Inc. (a) 900 9,112 ------------------ Regional / Commercial Banks - 8.2% Associated Bancorp. 300 7,875 Banknorth Group, Inc. 610 10,904 Colonial Banc Group, Inc. 540 5,603 Community Bank System, Inc. 310 8,041 First Merit Corp. 380 8,716 Greater Bay Bancorp. 130 9,027 Provident Financial Group, Inc. 250 7,344 West Coast Bancorp. 350 4,178 ------------------ 61,688 ------------------ Shepherd Values Small-Cap Fund Schedule of Investments - September 31, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Financial Services - continued REITS - 8.7% CarrAmerica Reality Corp. 260 $ 7,865 Centerpoint Properties Corp. 150 6,909 Colonial Properties Trust 230 5,908 Glimcher Realty Trust 380 5,676 Golf Trust American, Inc. 230 3,105 Innkeepers USA Trust 590 6,048 Macerich Corp. 260 5,525 Manufactured Home Communities, Inc. 250 6,250 Shurgard Storage Centers, Inc. 220 4,964 Summit Properties, Inc. 310 7,479 Taubman Centers, Inc. 510 5,897 ------------------ 65,626 ------------------ Rental/Leasing Companies - 1.0% Rent Way, Inc. 250 7,594 ------------------ Savings and Loan/Thrifts - 2.9% Astoria Financial Corp. 310 11,974 First Essex Bancorp, Inc. 240 5,070 Parkvale Financial Corp. 240 4,320 ------------------ 21,364 ------------------ Total Financial Services 171,122 ------------------ Healthcare Services - 6.8% Biotechnology - 1.7% Aurora Biosciences Corp. (a) 80 5,440 Invitrogen Corp. (a) 100 7,113 ------------------ 12,553 ------------------ Drugs / Pharmaceuticals - 2.1% Aradigm Corp. 400 9,175 Boron Lepore & Associates, Inc. (a) 610 6,252 ------------------ 15,427 ------------------ Medical Supplies - 3.0% ADAC Laboratories (a) 490 10,198 Owens & Minor, Inc. 770 12,128 ------------------ 22,326 ------------------ Total Healthcare Services 50,306 ------------------ Shepherd Values Small-Cap Fund Schedule of Investments - September 31, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Insurance Services - 3.6% Life Insurance - 1.6% Reinsurance Group American, Inc. 340 $ 11,645 ------------------ Multi - line Insurers - 1.4% Delphi Financial Group, Inc. 250 10,125 ------------------ Specialty Insurers - 0.6% Enhance Financial Services Group, Inc. 360 4,680 ------------------ Total Insurance Services 26,450 ------------------ Producers/Manufacturing - 15.6% Agriculture - 1.3% Delta & Pine LD Co. 370 9,504 ----------------- Building Materials - 3.2% Ameron International, Inc. 210 7,717 NCI Building System, Inc. 350 5,119 Nortek, Inc. 370 6,475 Quanex Corp. 230 4,384 ------------------ 23,695 ------------------- Chemicals - 4.1% Church & Dwight, Inc. 420 7,717 Engelhard Corp. 670 10,887 International Specialty Products, Inc. 710 3,816 OM Group, Inc. 200 8,725 ------------------ 31,145 ------------------ Machinery/Equipment - 1.0% NACCO Industries, Inc. 180 7,560 ------------------ Metals - 1.4% AK Steel Holding Corp. 500 4,687 Mueller Industries, Inc. (a) 260 5,834 ------------------ 10,521 ------------------ Other Producers/Manufacturing - 4.0% Newport News Shipbuilding, Inc. 220 9,543 Paxar Corp. (a) 1,040 9,295 SPS Technologies, Inc. 230 11,155 ------------------ 29,993 ------------------ Paper - 0.6% Pope & Talbot, Inc. 290 4,151 ------------------ Total Producers/Manufacturing 116,569 ------------------ Shepherd Values Small-Cap Fund Schedule of Investments - September 31, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Retail Trade - 2.1% Clothing Chains - 1.1% CATO Corp. 670 $ 8,375 ----------------- Specialty Chains - 1.0% Zale Corp. (a) 240 7,785 ------------------ Total Retail Trade 16,160 ------------------ Technology - 11.5% Aerospace - 1.3% Kaman Corp. 790 9,974 ------------------ Computers / Office Automation - 2.3% Quantum Corp. (a) 630 9,489 Splash Technology Holdings, Inc. (a) 800 7,400 ------------------ 16,889 ------------------ Electronic Data Processing - 0.6% Deltek System, Inc. (a) 590 4,517 ------------------ Electronics Instrument/Diversified - 0.5% Artesyn Technologies, Inc. (a) 120 3,495 ------------------ Military/Defense Technolody - 3.3% Alliant Tech Systems, Inc. (a) 130 10,676 Esterline Technologies Corp. 730 14,372 ------------------ 25,048 ------------------ Semiconductor / Electronic Component - 1.5% Pioneer Standard Electronic, Inc. 600 8,138 Kulicke & Soffa Industries, Inc. 260 3,461 ------------------ 11,599 ------------------ Software - 1.5% Great Plains Software, Inc. (a) 400 11,250 ----------------- ----------------- Telecommunications Equipment - 0.5% AVT Corp. (a) 710 3,949 ------------------ Total Technology 86,721 ------------------ Shepherd Values Small-Cap Fund Schedule of Investments - September 31, 2000 - continued (Unaudited) Common Stocks - continued Shares Value Transportation - 3.2% Airlines - 1.2% Frontier Airline, Inc. (a) 460 $ 8,941 ------------------ Trucking - 2.0% Arkansas Best Corp. 540 8,302 Heartland Express, Inc. 400 6,950 ------------------ 15,252 ------------------ Total Transportation 24,193 ------------------ Utilities - 7.1% Electric Utilities - 3.5% Alliant Energy Corp. 290 8,519 Idacorp, Inc. 170 7,862 Sierra Pacific Resources 560 10,080 ------------------ 26,461 ------------------ Gas Utilities - 3.6% Energen Corp. 380 11,305 NUI Corp. 190 5,736 UGI Corp. 400 9,700 ------------------ 26,741 ------------------ Total Utilities 53,202 ------------------ TOTAL COMMON STOCKS (Cost $643,573) 712,402 ------------------ Money Market Securities - 4.6% 34,000 $ 34,000 ------------------ Firstar Treasury Fund, 5.47% (b) (Cost $34,000) TOTAL INVESTMENTS - 99.7% (Cost $677,573) 746,402 ----------------- Other assets less liabilities - 0.3% 2,497 ------------------ Total Net Assets - 100.0% $748,899 ==================
(a) Non-Income Producing. (b) Variable rate security; the coupon rate shown represents the rate at September 30, 2000. See accompanying notes which are in integral part of the financial statements Shepherd Values VIF Equity Fund Schedule of Investments - September 30, 2000 (Unaudited) Principal Amount Value Money Market Securities - 4.7% Firstar Treasury Fund, 5.47% (a) (Cost 5,550) 5,550 $ 5,550 ----------------- TOTAL INVESTMENTS - 4.7% (Cost $5,550) 5,550 ----------------- Other assets less liabilities - 95.3% 113,040 ----------------- Total Net Assets - 100.0% $ 118,590 =================
(a) Variable rate security; the coupon rate shown represents the rate at September 30, 2000. See accompanying notes which are in integral part of the financial statements SHEPHERD VALUE FUNDS STATEMENTS OF ASSETS AND LIABILITIES September 30, 2000 (Unaudited) Growth Fixed-Income International Small-Cap VIF Fund Fund Fund Fund Fund ------------------------------------------------------------------------------------- ASSETS Investment in securities: At amortized cost $ 1,653,449 $ 191,915 $ 317,422 $ 677,573 $ 5,550 =============== =============== =============== =============== ============== At value $ 1,770,200 $ 196,935 $ 295,047 $ 746,402 $ 5,550 Cash 88,488 7,243 3,085 54,060 113,108 Dividend receivable 13 - 251 1,214 - Interest receivable 362 3,098 52 148 28 Receivable for fund shares sold - - - 4,096 146 Receivable for investments sold 76,347 - 115 - - Other accounts receivables - - 700 - - Withholding tax reclaim - - - - - --------------- --------------- --------------- --------------- -------------- TOTAL ASSETS 1,935,410 207,276 299,250 805,920 118,832 LIABILITIES Accrued investment advisory fee 2,541 368 834 1,769 167 Payable for fund shares redeemed 1,885 45 15 165 75 Payable for investments purchased 126,883 - - 55,087 - --------------- --------------- --------------- --------------- -------------- Total liabilities 131,309 413 849 57,021 242 NET ASSETS $ 1,804,101 $ 206,863 $ 298,401 $ 748,899 $ 118,590 =============== =============== =============== =============== ============== Net Assets consist of: Paid in capital 1,634,441 196,582 322,439 662,972 119,114 Accumulated undistributed net investment income (loss) (8,252) 5,676 537 619 (524) Accumulated undistributed net realized gain (loss) on investments 61,161 (415) (2,200) 16,479 - Net unrealized appreciation (depreciation) on investments 116,751 5,020 (22,375) 68,829 - --------------- --------------- --------------- --------------- -------------- Net Assets $ 1,804,101 $ 206,863 $ 298,401 $ 748,899 $ 118,590 =============== =============== =============== =============== ============== Shares of capital stock Outstanding (no par value, unlimited shares authorized) 145,414 19,616 32,594 65,398 11,897 =============== =============== =============== =============== ============== Net asset value and redemption price per share $ 12.41 $ 10.55 $ 9.16 $ 11.45 $ 9.97 =============== =============== =============== =============== ============== Maximum offering price per share (net assets value plus sales charge of 3.5%) 12.86 10.93 9.49 11.87 10.33 =============== =============== =============== =============== ==============
See accomanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS STATEMENTS OF OPERATIONS For the six months period ended September 30, 2000. (Unaudited) Growth Fixed - Income International Small-Cap VIF Fund Fund Fund Fund Fund ---------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend income $ 3,476 $ - $ 3,104 $ 5,959 $ - Interest income 1,421 6,355 355 691 161 --------------- --------------- --------------- --------------- -------------- TOTAL INCOME 4,897 6,355 3,459 6,650 161 --------------- --------------- --------------- --------------- -------------- EXPENSES: Investment advisory fee 13,203 1,219 2,847 5,979 613 Trustees' fees 947 21 21 21 21 --------------- --------------- --------------- --------------- -------------- TOTAL EXPENSES 14,150 1,240 2,868 6,000 634 Wavier & reimbursements (947) (21) (21) (21) (21) --------------- -------------- --------------- --------------- --------------- NET EXPENSES 13,203 1,219 2,847 5,979 613 --------------- --------------- --------------- --------------- -------------- NET INVESTMENT INCOME (LOSS) (8,306) 5,136 612 671 (452) =============== =============== =============== =============== ============== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments (16,631) - (2,200) 17,473 - Change in net unrealized appreciation (depreciation) on investment securities 116,751 4,998 (22,980) 51,343 - --------------- --------------- --------------- --------------- -------------- on investment securities 100,120 4,998 (25,180) 68,816 0 --------------- --------------- --------------- --------------- -------------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 91,814 $ 10,134 $ (24,568) 69,487 $ (452) =============== =============== =============== =============== ==============
See accompanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS STATEMENT OF CHANGES IN NET ASSETS Growth Fund Fixed-Income Fund ------------------------------- ------------------------------- six months period six months period ended ended ended ended Sept. 30, 2000 March 31, Sept. 30, 2000 March 31, (Unaudited) 2000 (a) (Unaudited) 2000 (b) --------------- -------------- -------------- --------------- Operations Net investment income (loss) $ (8,306) $ 54 5,136 $ 618 Net realized gain (loss) on investment securities (16,631) 77,792 - (415) Change in net unrealized appreciation (depreciation) 116,751 - 4,998 22 Net increase in net assets --------------- -------------- -------------- --------------- resulting from operations 91,814 77,846 5,136 225 --------------- -------------- -------------- --------------- From net investment income - - - (78) From net realized gain - - - - --------------- -------------- -------------- --------------- Total distributions - - - (78) --------------- -------------- -------------- --------------- Net proceeds from sale of shares 562,150 1,170,553 52,518 162,915 Net assets value of shares issued in reinvestment of distributions - - 0 71 Shares redeemed (62,668) (35,594) (8,649) (10,273) --------------- -------------- -------------- --------------- from share transactions 499,482 1,134,959 43,869 152,713 --------------- -------------- -------------- --------------- Total increase in net assets 591,296 1,212,805 49,005 152,860 --------------- -------------- -------------- --------------- Net Assets Beginning of period 1,414,670 201,865 152,860 - --------------- -------------- -------------- --------------- End of period $ 2,005,966 $ 1,414,670 201,865 $ 152,860 =============== ============== ============== =============== Undistributed Net Investement Income (8,252) 54 5,676 540 =============== ============== ============== =============== Shares of capital stock of the Fund sold and redeemed: Shares sold 48,125 105,767 5,233 16,275 Shares issued in reinvestment of distributions to shareholders - - - 7 --------------- -------------- -------------- --------------- Shares redeemed (5,382) (3,096) (872) (1,027) --------------- -------------- -------------- --------------- SHARES OUTSTANDING 42,743 102,671 4,361 15,255 =============== ============== ============== ===============
(a) For the period April 13, 1999 (commencement of operations) to March 31, 2000. (b) For the period October 22, 1999 (Commencement of operations) to March 31, 2000. See accompanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS STATEMENT OF CHANGES IN NET ASSETS International Fund Small-Cap Fund ------------------------------- ------------------------------- six months period six months period ended ended ended ended Sept. 30, 2000 March 31, Sept. 30, 2000 March 31, (Unaudited) 2000 (b) (Unaudited) 2000 (b) --------------- -------------- -------------- --------------- Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 612 $ (159) $ 671 $ (650) Net realized gain (loss) on investment securities (2,200) - 17,473 (994) Change in net unrealized appreciation (depreciation) (22,980) 605 51,343 17,486 --------------- -------------- -------------- --------------- resulting from operations (24,568) 446 69,487 15,842 --------------- -------------- -------------- --------------- From net investment income - (75) - (52) From net realized gain - - - - --------------- -------------- -------------- --------------- Total distributions - (75) - (52) --------------- -------------- -------------- --------------- Net proceeds from sale of shares 122,474 209,069 220,910 532,432 Net assets value of shares issued in reinvestment of distributions - 66 - 43 Shares redeemed (5,731) (3,280) (28,559) (61,204) --------------- -------------- -------------- --------------- Net increase in net assets resulting from share transactions 116,743 205,855 192,351 471,271 --------------- -------------- -------------- --------------- Total increase in net assets 92,175 206,226 261,838 487,061 --------------- -------------- -------------- --------------- Net Assets Beginning of period 206,226 - 487,061 - --------------- -------------- -------------- --------------- End of period $ 298,401 $ 206,226 $ 748,899 $ 487,061 =============== ============== ============== =============== Undistributed Net Investement Income 537 (75) 619 (52) =============== ============== ============== =============== Shares of capital stock of the Fund sold and redeemed: Shares sold 12,439 21,077 21,055 53,095 Shares issued in reinvestment of distributions to shareholders - 7 4 --------------- -------------- -------------- --------------- Shares redeemed (600) (328) (2,736) (6,020) --------------- -------------- -------------- --------------- NET INCREASE (DECREASE) IN NUMBER OF SHARES OUTSTANDING 11,839 20,756 18,319 47,079 =============== ============== ============== ===============
(b) For the period October 22, 1999 (Commencement of operations) to March 31, 2000. See accompanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS STATEMENT OF CHANGES IN NET ASSETS VIF Fund ------------------------------- six months period ended ended Sept. 30, 2000 March 31, (Unaudited) 2000 (b) --------------- -------------- Increase (Decrease) in Net Assets Operations Net investment income (loss) $ (452) $ 40 Net realized gain (loss) on investment securities - - Change in net unrealized appreciation (depreciation) - - Net increase in net assets --------------- -------------- resulting from operations (452) 40 --------------- -------------- Distributions to shareholders From net investment income - (112) From net realized gain - - --------------- -------------- Total distributions - (112) --------------- -------------- Share Transactions Net proceeds from sale of shares 14,316 173,645 Net assets value of shares issued in reinvestment of distributions - 100 Shares redeemed (10,941) (58,006) --------------- -------------- Net increase in net assets resulting from share transactions 3,375 115,739 --------------- -------------- Total increase in net assets 2,923 115,667 --------------- -------------- Net Assets Beginning of period 115,667 - --------------- -------------- End of period $ 118,590 $ 115,667 =============== ============== Undistributed Net Investement Income 524 40 =============== ============== Shares of capital stock of the Fund sold and redeemed: Shares sold 1,433 16,509 Shares issued in reinvestment of distributions to shareholders - 10 --------------- -------------- Shares redeemed (1,096) (4,959) --------------- -------------- NET INCREASE (DECREASE) IN NUMBER OF SHARES OUTSTANDING 337 11,560 =============== ==============
(b) For the period October 22, 1999 (Commencement of operations) to March 31, 2000. See accompanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS Financial Highthights C> Growth Fund Fixed-Income Fund --------------------------------- --------------------------------- six months period six months period ended ended ended ended Sept. 30, 2000 March 31, Sept. 30, 2000 March 31, (Unaudited) 2000 (a) (Unaudited) 2000 (b) -------------- --------------- --------------- --------------- Net asset value, beginning of period $ 11.81 $ 10.00 $ 10.02 $ 10.00 -------------- --------------- --------------- --------------- Net investment income (loss) (0.07) - 0.27 0.09 Net realized and unrealized gain (loss) 0.67 1.81 0.26 (0.03) -------------- --------------- --------------- --------------- Total from investment operations 0.60 1.81 0.53 0.06 -------------- --------------- --------------- --------------- From net investment income - - - (0.04) From net realized gain - - - - -------------- --------------- --------------- --------------- Total distributions - - - (0.04) Net asset value, end of period $ 12.41 $ 11.81 $ 10.55 $ 10.02 ============== =============== =============== =============== Total Return (c) (d) 5.17% 18.10% 5.29% 0.52% Ratios and Supplemental Data Net assets, end of period (000) $ 1,804 $ 1,213 $ 207 $ 153 Ratio of expenses to average net assets 1.75% (e) 1.03% (e) 1.25% (e) 1.25% (e) Ratio of expenses to average net assets before reimbursement 1.88% (e) 7.32% (e) 1.27% (e) 2.16% (e) Ratio of net investment income to average net assets (1.10)(e) 0.02% (e) 5.27% (e) 2.11% (e) Ratio of net investment income to average net assets before reimbursement (1.23)(e) (6.28)(e) 5.24% (e) 1.20% (e) Portfolio turnover rate 88.66% (e) 175.06% (e) 0.00% (e) 836.67% (e)
(a) For the period April 13, 1999 (commencement of operations) to March 31, 2000. (b) For the period October 22, 1999 (commencement of operations) to March 31, 2000. (c) For periods of less than a full year, total returns are not annualized. (d) Total return calculations exclude the effect of sales change. (e) Annualized. See accompanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS Financial Highthights International Fund Small-Cap Fund --------------------------------- --------------------------------- six months period six months period ended ended ended ended Sept. 30, 2000 March 31, Sept. 30, 2000 March 31, (Unaudited) 2000 (b) (Unaudited) 2000 (b) --------------- --------------- --------------- --------------- Net asset value, beginning of period $ 9.94 $ 10.00 $ 10.35 $ 10.00 --------------- --------------- --------------- --------------- Net investment income (loss) 0.02 (0.02) 0.01 (0.05) Net realized and unrealized gain (loss) (0.80) - 1.09 0.42 --------------- --------------- --------------- --------------- Total from investment operations (0.78) (0.02) 1.10 0.37 --------------- --------------- --------------- --------------- From net investment income - (0.04) - (0.02) From net realized gain - - - - --------------- --------------- --------------- --------------- Total distributions - (0.04) - (0.02) Net asset value, end of period $ 9.16 $ 9.94 $ 11.45 $ 10.35 =============== =============== =============== =============== Total Return (c) (d) (7.85)% (0.24)% 10.74% 3.70% Ratios and Supplemental Data $ 298 $ 206 $ 749 $ 487 Net assets, end of period (000) Ratio of expenses to average net assets 1.94% (e) 1.95% (e) 1.80% (e) 1.80% (e) Ratio of expenses to average net assets before reimbursement 1.96% (e) 2.75% (e) 1.81% (e) 2.30% (e) Ratio of net investment income to average net assets 0.42% (e) (0.48)(e) 0.20% (e) (1.23)(e) Ratio of net investment income to average net assets before reimbursement 0.40% (e) (1.28)(e) 0.20% (e) (1.74)(e) Portfolio turnover rate 10.08% (e) 0.00% (e) 97.59% (e) 41.01% (e)
(a) For the period April 13, 1999 (commencement of operations) to March 31, 2000. (b) For the period October 22, 1999 (commencement of operations) to March 31, 2000. (c) For periods of less than a full year, total returns are not annualized. (d) Total return calculations exclude the effect of sales change. (e) Annualized. See accompanying notes which are an integral part of the financial statements SHEPHERD VALUE FUNDS Financial Highthights VIF Fund -------------------------------- six months period ended ended Sept. 30, 2000 March 31, (Unaudited) 2000 (a) -------------- -------------- Net asset value, beginning of period $ 10.01 $ 10.00 -------------- -------------- Net investment income (loss) (0.04) 0.03 Net realized and unrealized gain (loss) 0.00 - -------------- -------------- Total from investment operations (0.04) 0.03 -------------- -------------- Less Distributions From net investment income - (0.02) From net realized gain(loss) - - -------------- -------------- Total distributions - (0.02) Net asset value, end of period $ 9.97 $ 10.01 ============== ============== Total Return (c) (d) (0.40)% 0.31% Ratios and Supplemental Data Net assets, end of period (000) $ 119 $ 116 Ratio of expenses to average net assets 1.00% (e) 1.00% (e) Ratio of expenses to average net assets before reimbursement 1.03% (e) 1.90% (e) Ratio of net investment income to average net assets (0.74)(e) 0.14% (e) Ratio of net investment income to average net assets before reimbursement (0.74)(e) (0.78)(e) Portfolio turnover rate (0.70)(e) 0.00% (e)
(a) For the period April 13, 1999 (commencement of operations) to March 31, 2000. (b) For the period October 22, 1999 (commencement of operations) to March 31, 2000. (c) For periods of less than a full year, total returns are not annualized. (d) Total return calculations exclude the effect of sales change. (e) Annualized. See accompanying notes which are an integral part of the financial statements Shepherd Values Funds Notes to Financial Statements September 30, 2000 (Unaudited) NOTE 1. ORGANIZATION The Shepherd Values Growth Fund was organized as a diversified series of AmeriPrime Funds (the "Trust") on February 2, 1999 and commenced operations on April 13, 1999. The VIF Equity Fund, Small-Cap Fund and Fixed Income Fund were organized as diversified series of the Trust on June 25, 1999 and commenced operations on October 22, 1999. The investment objective of the Growth, International, and Small-Cap Funds is long term capital appreciation. The investment objective of the Fixed Income Fund is a high level of income over the long term consistent with the preservation of capital. The investment objective of the VIF Equity Fund is to track the performance of the VIF 400 Values Index. The International Fund was organized as non-diversified series of the Trust on June 25, 1999 and commenced operations on October 22, 1999. The Trust is an open-end investment company established under the laws of Ohio by an Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement"). The Trust Agreement permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. Each series of the Trust is referred to herein as a "Fund" or collectively as the "Funds". Each Fund is one of a series of funds currently authorized by the Trustees. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by each Fund in the preparation of its financial statements. Securities Valuations- Securities which are traded on any exchange or on the NASDAQ over-the-counter market 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 the Advisor's opinion, the last bid price does not accurately reflect the current value of the security. All other securities for which over-the-counter market quotations are readily available are valued at their last bid price. When market quotations are not readily available, and the Advisor determines the last bid price does not accurately reflect the current value or when restricted securities are being valued, such securities are valued as determined in good faith by the Advisor, in conformity with guidelines adopted by and subject to review of the Board of Trustees of the Trust (the "Board"). Fixed-income securities generally are valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Advisor believes such prices accurately reflect the fair market value of such securities. A pricing service utilizes electronic data processing techniques based on yield spreads relating to securities with similar characteristics to determine prices for normal institutional-size trading units of debt securities without regard to sale or bid prices. When prices are not readily available from a pricing service, or when restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Advisor, subject to review of the Board. 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 represent fair value. Federal Income Taxes- Each Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue Code of 1986, as amended. By so qualifying, each Fund will not be subject to federal income taxes to the extent that it distributes substantially all of its net investment income and any realized capital gains. Dividends and Distributions- Each Fund intends to distribute substantially all of its net investment income as dividends to its shareholders on at least an annual basis. Each Fund intends to distribute its net long-term capital gains and its net short-term capital gains at least once a year. Shepherd Values Funds Notes to Financial Statements September 30, 2000 (Unaudited) - continued NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued Other- Each Fund follows industry practice and records security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective securities. NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES The Advisor. ----------- The investment advisor to the Shepherd Values Funds is Shepherd Advisory Services, Inc., 2505 21st Ave. South, Suite 204, Nashville, Tennessee 37212 ("Shepherd"). Shepherd is a wholly owned subsidiary of Shepherd Financial Services, Inc., a financial services company. Under the terms of the management agreements (the "Agreement"), Shepherd manages each Fund's investments subject to approval of the Board of Trustees and pays all of the expenses of each Fund except brokerage, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), fees and expenses of the non-interested person trustees and extraordinary expenses. As compensation for its management services and agreement to pay the Fund's expenses, each Fund is obligated to pay Shepherd a fee (based on average daily net assets) computed and accrued daily and paid monthly at the following annual rates: Fixed Income Fund, 1.25%; Growth Fund, 1.75%: International Fund, 1.95%; Small-Cap Fund, 1.80%; VIF Equity Fund, 1.00%. For the six months period ended September 30, 2000, the Advisor received a fee of $1,219 from the Fixed Income Fund, $13,203 from the Growth Fund, $2,847 from the International Fund, $5,979 from the Small-Cap Fund and $613 from the VIF Fund. The Advisor has contractually agreed to reimburse other expenses for the Fixed Income, Growth, International, Small-Cap, and VIF Funds to July 31, 2003 to the extent necessary to maintain total operating expenses at the rates of 1.25%, 1.75%, 1.95%, 1.80%, and 1.00%, respectively. For the six months period ended September 30, 2000, the Advisor reimbursed expenses of $21, $947, $21, $21, and $21 for the Fixed Income, Growth, International, Small-Cap, and VIF Funds. The Sub-Advisors. ---------------- Cornerstone Capital Management, Inc, 102 South Tejon, Suite 430, Colorado Springs, CO 80903 ("Cornerstone") is the Sub-Advisor to the Growth Fund, and the VIF Fund. Cornerstone Capital Management, Inc., is a registered investment advisory firm formed as a Colorado corporation on April 1, 1997. Cornerstone is a wholly owned subsidiary of The National Capital Companies, LLC. Darrl T. Uselton, a director of Cornerstone, is the controlling shareholder of The National Capital Companies, LLC. Nicholas-Applegate Capital Management ("Nicholas-Applegate") is the Sub-Advisor to the Small-Cap Fund. Potomac Asset Management Company, Inc. ("Potomac") is the Sub-Advisor to the Fixed Income Fund. Templeton Portfolio Advisory, a division of Templeton/Franklin Investment Services, Inc. ("TFIS"), is the Sub-Advisor to the International Fund. Subject always to the control of the Board of Trustees, each Sub-Advisor, at its expense, furnishes continuously an investment program for the Fund or Funds for which it acts as Sub-Advisor. Each Sub-Advisor must use its best judgments to make investment decisions, place all orders for the purchase and sale of portfolio securities and execute all agreements related thereto. Each Sub-Advisor makes its officers and employees available to the Fund's advisor from time to time at reasonable times to review investment policies and to consult with the Advisor regarding the investment affairs of the applicable Shepherd Values Funds Notes to Financial Statements September 30, 2000 (Unaudited) - continued NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued Fund. Each Sub-Advisor maintains books and records with respect to the securities transactions and renders to the Fund's advisor such periodic and special reports as the advisor or the Trustees may request. Each Sub-Advisor pays all expenses incurred by it in connection with its activities under the Sub-Advisory agreement other than the cost (including taxes and brokerage commissions, if any) of securities and investments purchased for a Fund. Each Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to manage each Fund's business affairs and to provide each Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. Each Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned subsidiary of Unified Financial Services, Inc., to act as the Fund's transfer agent and fund accountant. Each Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor") to act as the principal distributor of each Fund's shares. The Distributor, an affiliate of the Fund, received sales charges for selling shares of the Funds. For the six monthS period ended September 30, 2000 the Distributor received $472, $139, and $1,007, from the Growth Fund, the International Fund, and the Small Cap Fund respectively. Certain members of management of the Administrator and the Distributor are also members of management of the Trust. NOTE 4. INVESTMENTS The following information is based upon the federal income tax cost of portfolio investments as of September 30, 2000: ---------------------------------------------------------------------------------------------------------------- Fixed Income Growth International Small-Cap VIF Fund Fund Fund Fund Fund ---------------------------------------------------------------------------------------------------------------- Gross unrealized appreciation $ 5,020 $ 227,799 $ 14,161 $ 111,278 $ - Gross unrealized depreciation $ - $ 11,048 $ 36,536 $ 42,448 $ - --------------- -------------- --------------- -------------- --------------- Net unrealzied appreciation (depreciation) $5,020 $ 111,048 $ 22,375 $ 68,829 $ - =============== ============== =============== ============== =============== ----------------------------------------------------------------------------------------------------------------
Investment transactions, other than short-term investments, were as follows for the six months ended September 30, 2000: ------------------------------------------------------------------------------------------------------------------ Fixed Income Growth International Small-Cap VIF Fund Fund Fund Fund Fund ------------------------------------------------------------------------------------------------------------------ Purchases of portfolio $ 91,045 $ 934,192 $ 215,038 $ 551,272 $ - securities =============== =============== =============== ============== ============== Proceeds from sales and $ - $ 617,944 $ 11,133 $ 295,456 $ - maturities if portfolio securities =============== =============== =============== ============== ============== ------------------------------------------------------------------------------------------------------------------
Shepherd Values Funds Notes to Financial Statements September 30, 2000 (Unaudited) - continued NOTE 5. ESTIMATES Preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 6. RELATED PARTY TRANSACTIONS The Advisor is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Funds. 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 September 30, 2000, the Charles Schwab & Co. beneficially owned more than 26% of the Fixed Income Fund.